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/raid1/www/Hosts/bankrupt/TCR_Public/040107.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, January 7, 2004, Vol. 8, No. 4 Headlines ADVANCED ENERGY: Will Webcast Q4 Conference Call on February 12 AEROCENTURY: First Bank Joins Credit Facility, Upping it to $50M AFC ENTERPRISES: Appoints Frederick Beilstein as New CFO ALAMOSA HOLDINGS: S&P Uprgades Corporate Credit Rating to CCC+ ALLIED WASTE: Completes Divestitures, Raising $176MM of Proceeds AMERICA WEST: Reports 5.3% Increase in December 2003 Traffic AMERICAN AIRLINES: Dec. Traffic Stays Flat Despite Capacity Drop AMERISOURCEBERGEN: Fitch Expects No Immediate Change to Ratings ANCHOR GLASS: Completes Upgrade Program in Salem, NJ Facility APARTMENT INVESTMENT: Forms Joint Venture with GE Real Estate ART FOUR HICKORY: Case Summary & 14 Largest Unsecured Creditors AURORA FOODS: Asking for Injunction against Utility Companies BETHLEHEM STEEL: Dissolved After Liquidation Plan Takes Effect BETHLEHEM STEEL: Asks Court to Fix Adversary Proceeding Protocol CARILION HEALTH: Fitch Withdraws Bq Insurer Fin'l Strength Rating CENTRAL WAYNE: Has Until Feb. 2 to File Schedules & Statements COMMONWEALTH ELECTRIC: Case Summary & Largest Unsecured Creditors CONGOLEUM CORP: Wants More Time to File Schedules & Statements CONTINENTAL AIRLINES: December 2003 Traffic Climbs by 7.6% COVAD COMMS: Confirms Fourth Quarter 2003 Financial Guidance COVANTA: Court to Consider DHC Disclosure Statement on Jan. 14 DALECO RESOURCE: Tri-Coastal Unit Restructures Outstanding Debt DII INDUSTRIES: Gets Nod to Pay Prepetition Employee Obligations DOBSON COMMS: Declares 13% Preferred Share Cash Dividend DOBSON: Issues Redemption Notice for Remaining 12-1/4% Sr. Notes DOW CORNING: Investing GBP100 Million in Dow Corning Limited DT INDUSTRIES: Defaults on Senior Credit Facility DYNEGY INC: Reaches Pact to End Batesville Tolling Arrangement EAST COUNTY MEDICAL: California Health Care Group Faces Bankruptcy ENRON CORP: Committee Sues Andrews & Kurth to Recoup $5.4 Mil. EXIDE: Solicitation Exclusivity Extension Hearing on January 22 FARMLAND INDUSTRIES: Claim Trading Activity Report FEDERAL-MOGUL: PD Committee Hires J.H. Cohn as Financial Advisor FMC CORP: Will Publish Fourth Quarter 2003 Results on February 2 GATEWAY INC: Lowers Previous Fourth Quarter Earnings Guidance GE COMM'L: S&P Assigns Preliminary Ratings to Ser. 2004-C1 Notes GEMSTAR-TV GUIDE: SEC Amends Suit Against Former Executives GLOBAL CROSSING: Wants Clearance for Qwest Settlement Agreement GOLDEN NORTHWEST: Look for Schedules & Statements by January 21 GRAPHIC PACKAGING: Will Publish Fourth-Quarter Results on Feb. 4 HANGER ORTHOPEDIC: Court of Appeals Affirms Calif. Suit Dismissal HAWK CORPORATION: Commences Trading on American Stock Exchange HILTON HOTELS: Look for Q4 and Year-End Results on January 26 HORSEHEAD: Suns Capital Unit Completes Purchase of All Assets IGAMES ENTERTAINMENT: Reaffirms Acquisition of Equitex Inc. Unit IGAMES ENTERTAINMENT: Completes Money Centers of America Merger INTERPUBLIC GROUP: Agrees to Sell Unit's Four MotorSports Tracks IT GROUP: Outlines Alternatives If Court Won't Confirm Plan JET 1 CENTER: Case Summary & 9 Largest Unsecured Creditors KAISER: Retirees' Committee Earns Nod to Hire Orrick as Counsel KRAVITZ BAGELS: Case Summary & 20 Largest Unsecured Creditors LES BOUTIQUES: G. Frigon Assumes Chief Restructuring Officer Post LTV: Wants Go-Signal to Settle Allocation Appeals and Disputes MAGELLAN HEALTH: Onex Invests $101 Million for New 24% Stake MCWATTERS: Closes Sale of Kiena Mine Complex to Wesdome Gold MERCY HOSPITAL: S&P Drops Revenue Bonds' Rating to Default Level MESA AIR GROUP: Reports 71.1% Increase In December 2003 Traffic MET-COIL: Wants Exclusive Plan-Filing Period Extended to April 30 MICRO INTERCONNECT: Keating Reverse Discloses 80% Equity Stake MIRANT CORP: Plan-Filing Exclusivity Extended Until April 30 MSW ENERGY: Completes Exchange Offer for 8.50% Sr. Secured Notes NATURADE: Extends Wells Fargo Credit Pact Until March 31, 2004 NEWPORT: Clinda Assumes Debt Owed to Investors and Ex-Employee NUEVO ENERGY: Closes Sale of Calif. Real Estate Assets for $47MM NUEVO ENERGY: Ups Realized Price for Calif. Crude Oil Production OFFSHORE LOGISTICS: Will Fall Short of Analysts' Q4 Estimates OMEGA HEALTHCARE: Arranges $50-Mill. Acquisition Line of Credit ORBIMAGE INC: Officially Emerges from Chapter 11 Proceedings OXFORD INDUSTRIES: Appoints S. Anthony Margolis to Board OXFORD IND.: Declares 14% Increase in Quarterly Cash Dividend PACIFIC GAS: Asks Court to OK Settlement with Santa Clara City PG&E NAT'L: Wants Court Nod for Modified Cash Management Order PREMCOR REFINING: Soliciting Proposals for Ethanol Supply REDBACK NETWORKS: Consummates Plan and Exits Chapter 11 Process REDBACK NETWORKS: Secures $30-Million Equity Funding from TCV ROGERS COMMS: Will Publish 4th Quarter Results on Feb. 12, 2004 SIEBEL SYSTEMS: Reports Preliminary Fourth Quarter Fin'l Results SMARTIRE SYSTEMS: Raises $2.7M via Private Placement Transaction SOLUTIA INC: Honoring & Paying Prepetition Employee Obligations SUBURBAN PRODUCTS: Case Summary & 20 Largest Unsecured Creditors TRANSWITCH CORP: Increases Fourth Quarter 2003 Earnings Guidance UNITED NATIONAL: Fitch Ups & Withdraws Ratings after PNC Merger UNITEDGLOBALCOM INC: Liberty Media Acquires Controlling Stake UNIVERSAL HEALTH: Closes Acquisition of 4 Acute Care Hospitals US AIRWAYS: Inks Lease Pacts for Pittsburgh Airport Facilities WALTER INDUSTRIES: Names Larry Comegys Pres. of Jim Walter Unit WESTAR: Protection One Sale Pact Spurs S&P's Outlook Revision WESTPOINT STEVENS: Court Okays American Appraisal as Consultants WEYERHAEUSER CO.: Will Host Annual Analyst Meeting on May 20 WINSTAR: Chapter 7 Trustee Taps Sklar & Paul as Special Counsel WIRELESS NETWORKS: Closes $10 Million Equity Financing Agreement WSI MFG.: Wants Nod for Dunlop's Engagement as Special Counsel * CLLA Supports State-Backed Student Loan Discharges * Upcoming Meetings, Conferences and Seminars ********* ADVANCED ENERGY: Will Webcast Q4 Conference Call on February 12 --------------------------------------------------------------- In conjunction with Advanced Energy's (Nasdaq: AEIS) fourth quarter and year end 2003 financial results, you are invited to listen to its conference call that will be broadcast live over the Internet on Thursday, February 12 at 5:00 pm ET with management of Advanced Energy. What: Advanced Energy Fourth Quarter and Year End 2003 Financial Results When: Thursday, February 12, 2004, 5:00 pm ET/3:00 pm MT/2:00 pm PT Where: http://www.advanced-energy.com/ How: Live and rebroadcast over the Internet: Simply log onto the web at the address above. Live call via telephone: 888-713-4717 International callers may dial 706-679-7720 Replay via telephone: 706-645-9291, code 4682617 (available for one week) Contact: Cathy Kawakami, 970-407-6732 ( cathy.kawakami@aei.com ) Kim Klenzak, 970-407-6305 ( kim.klenzak@aei.com ) Advanced Energy (S&P, B+ Corporate Credit and B- Subordinated Debt Ratings, Negative) is a global leader in the development and support of technologies critical to high-technology manufacturing processes used in the production of semiconductors, flat panel displays, data storage products, compact discs, digital video discs, architectural glass, and other advanced product applications. Leveraging a diverse product portfolio and technology leadership, AE creates solutions that maximize process impact, improve productivity and lower cost of ownership for its customers. This portfolio includes a comprehensive line of technology solutions in power, flow, thermal management, plasma and ion beam sources, and integrated process monitoring and control for original equipment manufacturers and end-users around the world. AE operates in regional centers in North America, Asia and Europe and offers global sales and support through direct offices, representatives and distributors. Founded in 1981, AE is a publicly held company traded on the Nasdaq National Market under the symbol AEIS. For more information, visit AE's corporate Web site: http://www.advanced-energy.com/ AEROCENTURY: First Bank Joins Credit Facility, Upping it to $50M ---------------------------------------------------------------- AeroCentury Corp., (Amex: ACY), an independent aircraft leasing company, announced that First Bank & Trust has joined the Company's credit facility. As a result, the credit facility has been increased from $40 million to $50 million. Neal D. Crispin, President of AeroCentury, said, "Having our facility back at $50 million gives us additional flexibility in pursuing acquisition opportunities. We look forward to working closely with First Bank & Trust and our other lenders." William G. Nelle, Jr., Senior Vice President, Commercial & Private Banking of First Bank & Trust, said, "We are pleased to join the AeroCentury facility. They are a local company with worldwide presence, ideally suited to our efforts to expand in the San Francisco Bay Area." First Bank, dba First Bank & Trust in California, is one of the largest privately owned banks in the country with more than $7 billion in assets and nearly 150 locations in California, Texas, Missouri and Illinois. The full text of the amendment to the credit agreement adding First Bank & Trust as a participant has been filed in a Form 8-K report with the Securities & Exchange Commission, and is available through the Internet at the SEC's EDGAR system. The filing can also be accessed by clicking "SEC Filings" on the Company's home page at http://www.aerocentury.com/ AeroCentury is an aircraft operating lessor and finance company specializing in leasing regional aircraft and engines utilizing triple net leases. The Company's aircraft and engines are on lease to regional airlines and commercial users worldwide. * * * As reported in Troubled Company Reporter's September 2, 2003 edition, AeroCentury Corp., obtained a waiver by lenders led by National City Bank of the Company's non-compliance with a financial ratio covenant, which non-compliance arose out of the default by a Haitian regional air carrier under a lease for two deHavilland Dash-7 aircraft. The aircraft were recently repossessed and are being prepared for re-lease or re-sale. The waiver was contained in the agreement reached with the lenders extending the maturity date of the Company's credit facility to August 31, 2003. AFC ENTERPRISES: Appoints Frederick Beilstein as New CFO -------------------------------------------------------- AFC Enterprises, Inc. (Ticker: AFCE), the franchisor and operator of Popeyes(R) Chicken & Biscuits, Church's Chicken(TM), Cinnabon(R) and the franchisor of Seattle's Best Coffee(R) in Hawaii, on military bases and internationally, appointed Frederick B. Beilstein as Chief Financial Officer effective immediately. In addition to overseeing the Company's financial matters, Beilstein will be responsible for determining and implementing the most effective strategies for AFC to leverage its financial flexibility and maximize shareholder value. "Fred has demonstrated a range and depth of management and financial experience that makes him the ideal person to assume the CFO position for AFC which is a role that I have held since April, in addition to my duties as Chairman and CEO," stated Frank Belatti. "Fred's extensive financial background will greatly assist us in our efforts to drive stakeholder value." Beilstein, age 56, joins AFC with considerable financial and transaction related experience having first been the CFO of Days Inn of America where he was instrumental to the company's initial public stock offering, private debt placements and public debt offerings. Following that responsibility, Blackstone Capital Partners, L.P. recruited Beilstein to critically evaluate Edgcomb Metals Company where he served as CFO and eventually spearheaded the sale of the business to Usinor Sacilor, a French steel company. Beilstein then became Treasurer and CFO of The Actava Group Inc. (formerly Fuqua Industries, Inc.), a diversified holding company with interests in the manufacturing and service industries, where he drove the company's acquisition and divesture related activities. He then became President and COO of the ERA Real Estate Division of Cendant Corporation assuming management responsibility of ERA that included the oversight of franchise support and sales initiatives. Most recently, Beilstein had been the Principal and founder of Beilstein & Company, a financial and operational consulting practice with concentration in advising companies on strategic issues such as refinancing and recapitalization opportunities. One of his clients included Americold Logistics, LLC where he formerly served as Treasurer and CFO, just prior to establishing Beilstein & Company. Beilstein holds a Bachelor of Science degree in accounting from Benjamin Franklin University, now a part of George Washington University, and is a Certified Public Accountant. AFC Enterprises, Inc. is the franchisor and operator of 4,077 restaurants, bakeries and cafes as of November 30, 2003, in the United States, Puerto Rico and 35 foreign countries under the brand names Popeyes(R) Chicken & Biscuits, Church's Chicken(TM), Cinnabon(R) and the franchisor of Seattle's Best Coffee(R) in Hawaii, on military bases and internationally. AFC's primary objective is to be the world's Franchisor of Choice(R) by offering investment opportunities in highly recognizable brands and exceptional franchisee support systems and services. AFC Enterprises had system-wide sales of approximately $2.7 billion in 2002 and can be found on the World Wide Web at http://www.afce.com/ * * * Credit Facility and Current Ratings The Company's outstanding debt under its credit facility agreement, net of investments, at the end of Period 9 of 2003 was approximately $125 million, down from approximately $218 million at the end of 2002 as a result of cash generated from ongoing operations and the sale of its Seattle Coffee Company subsidiary. On August 25, 2003, Standard & Poor's Ratings Services raised the Company's senior secured bank loan ratings to 'B' from 'CCC+' and on August 28, 2003, Moody's Investor Service lowered the Company's secured credit facility rating from Ba2 to B1. ALAMOSA HOLDINGS: S&P Uprgades Corporate Credit Rating to CCC+ -------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Sprint PCS affiliate Alamosa Holdings Inc. and subsidiaries to 'CCC+' from 'SD'. The rating was lowered to 'SD' (denoting a selective default on the debt of wholly owned subsidiary, Alamosa Delaware Inc.) on Nov. 12, 2003, after the company completed an exchange offer on its public debt for less than the accreted face amount of the securities. The outlook is developing. At the same time, a 'CCC' rating was assigned to the proposed $225 million senior notes due 2012 of Alamosa Delaware, which will be issued under Rule 144A with registration rights. Proceeds from the new notes will be used to repay the senior secured credit facility of wholly owned subsidiary Alamosa Holdings LLC. The 'CCC' rating on the senior notes, which is one notch below the corporate credit rating, is based on Standard & Poor's expectations that any increase in priority obligations, including structurally senior debt, will be substantially less than the $200 million of bank debt being repaid. The rating on the senior secured credit facility of Alamosa Holdings LLC was raised to 'CCC+' from 'CC' and was removed from CreditWatch, where it was placed with positive implications on Nov. 12, 2003, upon completion of the debt exchange offer by Alamosa Delaware. Ratings on the credit facility will be withdrawn after the facility is repaid. In addition, Alamosa Delaware's 12% senior discount notes due 2009 and its 11% senior notes due 2010 were rated 'CCC'. These notes and convertible preferred stock were issued earlier in the previously mentioned exchange offering for Alamosa Delaware's 12.875% senior discount notes, 12.5% senior notes, and 13.625% senior notes. Ratings on these three issues have been withdrawn. "The ratings on Alamosa reflect a weak business profile from the intensely competitive wireless industry, which is experiencing slowing demand because of rising penetration levels; high financial risk from minimal discretionary cash flow; a revenue- based franchise fee that limits margin potential; later market entry compared to that of competitors; and uncertain asset recovery values because the company does not hold its wireless licenses," said Standard & Poor's credit analyst Eric Geil. "These factors are partially offset by Alamosa's gradual improvement in operating performance, as well as brand recognition and operating benefits from the Sprint PCS affiliation." Eliminating the secured credit facilities will reduce financial pressure from rising debt amortization and covenants. The discounted debt exchange transaction, completed on Nov. 11, 2003, improved the company's financial profile by eliminating about $240 million in debt. In conjunction with the exchange, Alamosa amended its affiliation agreement with Sprint PCS to lower charges for administrative services provided by Sprint to Alamosa, and to permit Alamosa to more easily opt out of Sprint programs and promotions. Lubbock, Texas-based Alamosa is the largest Sprint PCS affiliate and provides wireless services to about 693,000 subscribers in markets with a combined covered population of about 11.9 million. The company had $704.5 million debt outstanding Sept. 30, 2003, pro forma for the exchange offering and proposed $225 million senior notes. ALLIED WASTE: Completes Divestitures, Raising $176MM of Proceeds ---------------------------------------------------------------- Allied Waste Industries, Inc. (NYSE: AW) announced that effective December 31, 2003, it had successfully completed its 2003 Divestiture Program aimed at generating $300 million of proceeds for debt repayment. Allied Waste completed portions of the previously announced divestiture of its northern and central Florida operations to Capital Environmental Resource, Inc. (Nasdaq: CERI), which generated approximately $76 million of proceeds. The sale of the remaining Florida operations is expected to close during the first quarter of 2004 and result in approximately $44 million of proceeds. The Company also has completed the sale of certain non-integrated operations in Virginia, Idaho and Wyoming to two separate private companies for combined proceeds of approximately $100 million. These operations represent approximately $58 million in annual revenue, and include collection, transfer and recycling operations. "We are pleased to have successfully completed the 2003 Divestiture Program, and to have done so at valuations exceeding our original expectations," said Tom Van Weelden, Chairman and CEO of Allied Waste. "The proceeds from the divestitures of these non-integrated operations have been used to repay debt." Allied Waste announced its Divestiture Program in March 2003 with stated goals of divesting $450 million of annual revenue and $75 million of annual operating income before depreciation and amortization for expected proceeds of $300 million. Upon the completion of the balance of the Florida divestiture, the Company will have completed the divestiture of approximately $335 million of annual revenue and approximately $65 million of annual operating income before depreciation and amortization for expected proceeds of approximately $330 million. Allied Waste Industries, Inc. (S&P, BB Corporate Credit Rating, Stable Outlook), is the second largest, non-hazardous solid waste management company in the United States, providing non-hazardous waste collection, transfer, disposal and recycling services to approximately 10 million customers. As of June 30, 2003, the Company operated 333 collection companies, 171 transfer stations, 171 active landfills and 64 recycling facilities in 39 states. AMERICA WEST: Reports 5.3% Increase in December 2003 Traffic ------------------------------------------------------------ America West Airlines (NYSE: AWA) reported traffic statistics for the month of December, fourth quarter and year-end 2003. Revenue passenger miles (RPMs) for December 2003 were a record 1.8 billion, an increase of 5.3 percent from December 2002. Capacity for December 2003 was a record 2.4 billion available seat miles (ASMs), up 4.8 percent from December 2002. The passenger load factor for the month of December was a record 74.6 percent vs. 74.2 percent in December 2002. The load factor for the fourth quarter 2003 was a record 75.5 percent, up 2.3 points from fourth quarter 2002. RPMs for the quarter increased 4.2 percent to a record 5.3 billion, and ASMs for the quarter increased to a record 7.0 billion vs. 6.9 billion in the fourth quarter of 2002. Year-to-date load factor was a record 76.4 percent, up 2.8 points from 2002. Year-to-date RPMs were a record 21.3 billion, a 7.1 percent increase from 2002. Available seat miles increased 3.3 percent for the current year to a record 27.9 billion. "December marks our ninth consecutive month of record traffic, which increased by 5.3 percent year-over-year, and outpaced our capacity growth of 4.8 percent. We are pleased with our unit revenue performance, particularly unit revenue generated during the holidays, and will continue to implement our 2004 growth plans that include increasing utilization, adding flight frequencies in existing markets as well as entering new routes, and aggressively exploring more future point-to-point flying," said Scott Kirby, executive vice president, sales and marketing. 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. AMERICAN AIRLINES: Dec. Traffic Stays Flat Despite Capacity Drop ---------------------------------------------------------------- American Airlines, the world's largest carrier, reported a monthly load factor of 73.7 percent, an increase of 0.5 points compared to last year. Year-over-year gains were achieved in both domestic and international markets, with a load factor increase of 0.2 points in domestic markets and 0.9 points in international markets. Despite a decline in capacity, December traffic was essentially unchanged compared to last year. Traffic grew 10.2 percent in international markets, with 8.9 percent more capacity year over year. In domestic markets, traffic was down 4.2 percent year over year on a capacity decline of 4.5 percent. American boarded 7.4 million passengers in November. American Airlines (Fitch, CCC+ Convertible Unsecured Note Rating, Negative) is the world's largest carrier. American, American Eagle and the AmericanConnection regional carriers serve more than 250 cities in over 40 countries with more than 3,900 daily flights. The combined network fleet numbers more than 1,000 aircraft. American's award-winning Web site, AA.com, provides users with easy access to check and book fares, plus personalized news, information and travel offers. American Airlines is a founding member of the oneworld Alliance. AMERISOURCEBERGEN: Fitch Expects No Immediate Change to Ratings --------------------------------------------------------------- Fitch Ratings does not expect an immediate change in the ratings or Rating Outlook for AmerisourceBergen Corp. following the company's recent announcement that it lost its contract with the U.S. Department of Veterans Affairs (VA), the company's largest customer. Fitch intends to meet with ABC management to more fully understand the credit implications stemming from the contract loss. ABC's current ratings are as follows: Bank Credit Facilities 'BBB-', Senior Unsecured Debt 'BB+', Subordinated Debt 'BB', Trust Originated Preferred Securities 'BB-'. ABC's current Rating Outlook is Positive. The VA contract represented approximately 7% of ABC's total revenue in 2003 (ABC's fiscal 2003 year ended Sept. 30, 2003). According to the company, no other customer represents more than 5% of total revenues (prior to the loss of the VA contract). According to ABC management, the contract loss was a pricing decision on the VA's part. Fitch is encouraged that ABC management appears disciplined in its sell-side contract negotiations. However, the loss of a significant, profitable customer is cause for concern and is expected to impact future profitability in a negative fashion. However, Fitch cites that ABC's credit statistics have exceeded Fitch's recent expectations and are strong for the rating category. The loss of the VA contract may be mitigated by the core strength of ABC's credit profile. Additionally, ABC has, generally speaking, been less aggressive than its peers in terms of buy- side, inventory contracting (speculative buying). Thus, the recent trend which has seen diminished buy-side opportunities is likely to impact ABC less than the other major industry participants. Given the complexity and depth of the VA contract Fitch intends to meet with ABC management within 30 days to fully understand credit related issues stemming from the contract loss including profitability, ABC's cost structure, working capital impact and effect on future contracting practices. Importantly, the loss of such a large contract plus less inventory speculation buying has significant working capital implications which need to be considered when assessing ABC's future credit profile. For fiscal year 2003 (ended Sept. 30, 2003) ABC's coverage (EBITDA/interest incurred) was 6.7 times, leverage (total debt/EBITDA) was 2.0x. Free cash flow (cash from operations less capital expenditures and dividends) was $254 million in 2003. ABC's liquidity position includes approximately $1.7 billion availability through various liquidity sources. ANCHOR GLASS: Completes Upgrade Program in Salem, NJ Facility ------------------------------------------------------------- Anchor Glass Container Corporation (Nasdaq:AGCC) completed two furnace rebuilds at its facility in Salem, New Jersey. "We are proud of the work done by our people in Salem," said Richard M. Deneau, president and chief executive officer. "They completed two major furnace rebuilds over the holiday period, on time and on budget." The Salem plant operates three furnaces and six forming machines. Approximately 310 people are employed at the plant, which manufactures flint glass containers for the beverage industry. Anchor Glass Container Corporation (S&P, B+ Corporate Credit Rating, Stable Outlook) is the third largest manufacturer of glass containers in the United States. It has nine strategically located facilities where it produces a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. APARTMENT INVESTMENT: Forms Joint Venture with GE Real Estate ------------------------------------------------------------- Apartment Investment and Management Company (NYSE: AIV) formed a joint venture (the "JV") with GE Real Estate. At closing on December 30, 2003, Aimco transferred to the JV interests in 33 of its apartment properties with a total of 9,534 units and GE Real Estate contributed cash. The 33 properties have a gross value estimated at approximately $346 million and currently have $204 million in mortgage debt that was assumed by the JV. GE Real Estate received a 75% non-managing member interest in the JV, and Aimco received a 25% managing member interest in the JV. Aimco will continue to manage the properties and will receive a promoted interest if leveraged returns to GE Real Estate exceed 11%. As a result of its control over day-to-day operations, Aimco will continue to consolidate in its financial statements the properties contributed to the JV. Aimco will not recognize any GAAP gain or loss as a result of this transaction. Aimco received approximately $107 million in cash proceeds at closing, before transaction costs and funding of reserves. Aimco intends to use the net proceeds to redeem preferred stock, to fund acquisitions of limited partnership interests, and for general corporate purposes. The annualized effect of the transaction on Aimco's Adjusted Funds from Operations and Funds from Operations is expected to be $0.00 per share and a reduction of $0.02 per share, respectively, assuming 75% of the proceeds isused to redeem preferred stock and 25% is used to fund acquisitions of limited partnership interests. Based on the expected timing of the preferred stock redemption, Aimco anticipates that there will be an incremental reduction in AFFO and FFO of $0.01 per share in the first quarter 2004. "We are pleased to expand our relationship with GE Real Estate through the formation of this joint venture," said Paul McAuliffe, Aimco's chief financial officer. "This transaction allows Aimco to raise equity capital at a competitive cost compared to property sales and to reduce mortgage and preferred leverage." The JV is expected to acquire additional apartment properties in 2004, including five properties that have been underwritten and are expected to close in the first and second quarter of 2004, bringing the total to 38 properties. GE Real Estate plans to invest up to $300 million of equity in the JV for investment in apartment properties, including the investment made to date, subject to its underwriting approval. "This JV brings together two organizations with significant complementary resources," said Rick Hurd, managing director, Institutional Equity Group at GE Real Estate. "GE Real Estate will provide a reliable source of capital while Aimco offers valuable experience in real estate operations to help maximize the value of these properties. We are pleased to partner with Aimco, and we look forward to adding properties to the joint venture over the coming months," he said. The 38 properties, which include 10,794 apartments units, are part of Aimco's core portfolio and are located as follows: Number of Number of Properties Units ---------- --------- Houston 14 3,101 Dallas 3 920 Nashville 1 300 Chicago 3 785 Cincinnati 3 666 Grand Rapids 1 1,710 Tampa 6 1,591 San Antonio 1 224 Washington D.C. 1 360 Virginia Beach 2 746 Southern California 3 391 -- ------ Total: 38 10,794 Aimco (Fitch, BB+ Preferred Share Rating, Negative) is a real estate investment trust headquartered in Denver, Colorado owning and operating a geographically diversified portfolio of apartment communities through 19 regional operating centers. Aimco, through its subsidiaries, operates approximately 1,685 properties, including approximately 300,000 apartment units, and serves approximately one million residents each year. Aimco's properties are located in 47 states, the District of Columbia and Puerto Rico. Aimco common shares are included in the S&P 500. GE Real Estate -- http://www.gerealestate.com/-- a business unit of GE Commercial Finance, is one of the world's leading resources for commercial real estate capital. Headquartered in Stamford, Connecticut, GE Real Estate has assets of nearly $28 billion and more than 30 offices throughout North America, Europe and Asia. GE Commercial Finance, with approximately $200 billion in assets, provides a broad range of financing products and services to businesses of all sizes throughout the world. GE is an AAA-rated, diversified services, technology and manufacturing company, with operations worldwide. ART FOUR HICKORY: Case Summary & 14 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Art Four Hickory Corporation 1750 Wittington Place Dallas, Texas 75234 Bankruptcy Case No.: 04-30104 Chapter 11 Petition Date: January 3, 2004 Court: Northern District of Texas (Dallas) Judge: Steven A. Felsenthal Debtor's Counsel: M. Bruce Peele, Esq. 1504 Westlake, Suite 101 Plano, TX 75075 Tel: 972-516-9884 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtor's 14 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Carrollton Farmers Branch $380,766 ISD Dallas County $219,615 Valwood Improvement $70,086 NE Construction Trade Debt $36,030 Simplex Grinnell LP Trade Debt $11,994 The Brickman Group, Ltd Trade Debt $6,610 TGS Architects, Inc. Trade Debt $2,741 Regis Property Management Trade Debt $2,235 International Building Trade Debt $1,744 Service Custom Specialties, Inc. Trade Debt $645 Lighting Supply, Inc. Trade Debt $504 AmAlloy, Inc. Trade Debt $128 Fast Signs Trade Debt $119 Orkin Exterminating Co. Trade Debt $65 AURORA FOODS: Asking for Injunction against Utility Companies ------------------------------------------------------------- Aurora Foods and its affiliated debtors use electricity, gas, water, telephone, telecommunications, and other utility services essential to their operations. The Debtors' corporate and administrative facilities are dependent on electricity for lighting and general office use. Moreover, telephone service is necessary to permit the Debtors to conduct sales and marketing functions and to communicate among the manufacturing plants' offices and facilities, and with customers and vendors. Continued water service is necessary to process the Company's finished products and to maintain sanitary lavatory facilities for employees. Maintenance of gas service is essential to provide power to the Debtors' equipment. Eric M. Davis, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, points out that any interruption of these services would severely disrupt the Debtors' day-to-day operations and diminish the likelihood of a successful reorganization. In view of their Chapter 11 filing, the Debtors acknowledge that the utility companies will be asking for adequate assurance of future payments in exchange for their uninterrupted services. To this end, the Debtors ask the Court to: (a) prohibit the Utility Companies from altering, refusing, or discontinuing services on account of unpaid prepetition invoices or prepetition claims; (b) deem the Utility Companies to have adequate assurance of future payment, but establish a procedure for Utility Companies to request that the Debtors provide additional adequate assurance of future payment; (c) authorize, but not direct, the Debtors to pay prepetition amounts owing to a Utility, and provide that if a Utility Company accepts the payment, the Utility Company will be deemed to be adequately assured of future payment and to have waived any right to seek additional adequate assurances in the form of a deposit or otherwise; (d) provide that if a Utility Company timely and properly requests from the Debtors additional adequate assurance that the Debtors believe is unreasonable, and the Debtors are unable to resolve the request consensually with the Utility Company, then on the request of the Utility Company, the Debtors will file a motion for determination of adequate assurance of payment and obtain a hearing thereon; (e) provide that any Utility Company having made a request for additional adequate assurance of payment, will be deemed to have adequate assurance of payment until the Court enters a final order in connection with the request, finding that the Utility Company is not adequately assured of future payment; and (f) provide that any Utility Company that does not timely, and in writing, request additional adequate assurance of payment, will be deemed to be adequately assured of payment under Section 366(b) of the Bankruptcy Code. The Debtors further ask Judge Walrath to require Utility Companies to include with any request for additional adequate assurance of payment: (1) the account number of each account for which the Utility Company is seeking additional adequate assurance; (2) the outstanding balance of each account for which the Utility is seeking additional adequate assurance; and (3) a summary of the Debtors' payment history. Mr. Davis asserts that, as of the Petition Date, the Debtors had no significant defaults or arrearages with respect to any utility bill, nor have there been any defaults historically. Substantially all of the Debtors' utility bills are current, with the possible exception of those bills received shortly before the Petition Date. Mr. Davis contends that the administrative expense priority provided under Sections 503(b) and 507(a)(1) of the Bankruptcy Code, the Debtors' past payment history and the Debtors' financial condition adequately assure payment to the Utility Companies without the need for deposits or other security. The Debtors have, or will continue to have, sufficient funds from operations to make timely payments to all Utility Companies for postpetition services. As a further commitment to the Utility Companies of prompt payment for services, the Debtors seek the Court's authority pay all undisputed prepetition amounts owed to the Utility Companies, if any are owed, in lieu of making deposits. The Debtors also ask Judge Walrath to deem: -- that any Utility Company accepting the payment on account of prepetition claims is adequately assured and has waived any right to additional adequate assurance, in the form of a deposit or otherwise; and -- that any Utility Company that does not timely request additional adequate assurance has adequate assurance under Section 366. The Utility Companies will be given time to make their requests for adequate assurance to the Debtors. Requests must be served both on the Debtors and on their counsel. * * * The Court will convene a hearing on the Debtors' request on January 9, 2004 at 11:00 a.m. In a Bridge Order, Judge Walrath extends the deadline for the Debtors to provide Utility Companies adequate assurance until the conclusion of that hearing. Section 366(b) of the Bankruptcy Code provides that utilities may alter, refuse or discontinue service if a debtor fails to provide adequate assurance of payment for service within 20 days after the Petition Date. Judge Walrath prohibits the Debtors' service providers from altering, refusing, or discontinuing services, and requiring adequate assurance of payment as a condition of receiving services during the Extension, on the condition that: (1) the Extension is without prejudice to the right of any Utility Company to request that the Extension be shortened; and (2) the Debtors will maintain the burden of proving that the Utility Companies are adequately assured of payment. (Aurora Foods Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000) BETHLEHEM STEEL: Dissolved After Liquidation Plan Takes Effect -------------------------------------------------------------- Bethlehem Steel Corporation announced that its Plan of Liquidation, which was confirmed by the United States Bankruptcy Court for the Southern District of New York on October 22, 2003, became effective on December 31, 2003, and, pursuant to that Plan, Bethlehem Steel Corporation and its remaining subsidiaries were dissolved on December 31, 2003. Additionally, all of the outstanding stock of Bethlehem Steel Corporation has been cancelled. State of Delaware Compelled to Effectuate Dissolution On December 11, 2003, the Debtors informed the Delaware Department of State of their intent to file a Certificate of Dissolution, in accordance with the Confirmation Order. The State, however, refused to give effect to the Certificate -- and thereby release the Debtors from franchise tax liability for the year 2004 -- until such time as the Debtors have paid $27,000 of unsecured, prepetition franchise taxes owing to Delaware. Under the terms of the Debtors' confirmed Liquidation Plan, George A. Davis, Esq., at Weil, Gotshal & Manges, LLP, in New York, relates that distributions to holders of general unsecured claims will not be made until after the occurrence of the effective date of the Plan, and will represent only a fraction of the total allowed amount of prepetition general unsecured claims. The Debtors sought and obtained a Court order directing the State of accept and effectuate the terms of the Certificate on or prior to December 31, 2003. Judge Lifland ruled that the Confirmation Order, which provides that a certificate of dissolution "shall be accepted by each of the respective state filing offices and recorded in accordance with applicable state law and shall become effective in accordance with their terms and the provisions of state law," is clarified so as not to require the payment of any Prepetition Franchise Taxes or other amounts as a condition to acceptance and compliance by any state filing office. BETHLEHEM STEEL: Asks Court to Fix Adversary Proceeding Protocol ---------------------------------------------------------------- The Bethlehem Steel Debtors, their counsel and counsel for the Creditors' Committee have worked over the past several months to determine whether any payments made by the Debtors to third parties within the 90-day period prior to the Petition Date, constitute preferential transfers that may be avoided and recovered by the Debtors. To that end, the Debtors have filed over 3,000 adversary proceedings, seeking recoveries totaling over $400,000,000. The Debtors have also sent demand letters seeking recoveries from additional parties who received preferential payments totaling less than $1,500. Pursuant to the Debtors' confirmed Liquidation Plan, there is a brief period of time between the Confirmation Date and the Plan's Effective Date, when the Debtors have the exclusive right to prosecute and resolve the Preference Actions. On the Effective Date, however, the Preference Actions will be assigned to a liquidating trust and a liquidating trustee will thereafter have the exclusive right to prosecute and resolve the Preference Actions. By this motion, the Debtors ask the Court to establish certain procedures governing all preference claims and actions asserted under Sections 547 and 550 of the Bankruptcy Code, whether via demand letter or lawsuit, including: (a) establishing procedures under which the Debtors would be permitted to settle Preference Actions, whether or not an adversary proceeding has been commenced, without the requirement of noticing all creditors or bringing each of the proposed settlements before the Court for approval; (b) eliminating the requirement of a scheduling conference pursuant; (c) modifying time limits with respect to certain service and filing requirements; (d) as of the Effective Date, substituting the Liquidating Trustee of the Liquidating Trust as plaintiff in all of the then pending Preference Actions, without the need for filing any further documentation; and (e) as of the Effective Date, substituting as plaintiff's counsel the law firm of Kramer Levin Naftalis & Frankel, LLP for the law firm of Weil, Gotshal & Manges LLP, with respect to certain cases without the need for filing any further documentation. Certain of the procedures apply to the pre-Effective Date period, while the rest apply to the post-Effective Date period. The proposed procedures are appropriate and will substantially aid in the efficient administration of the Preference Actions for both the Debtors and the Court, George A. Davis, Esq., at Weil, Gotshal & Manges, LLP, in New York, says. Without the proposed procedures, Mr. Davis continues, it will be extremely difficult for the Debtors to prosecute the Preference Actions in an efficient and timely manner, and equally difficult for the Court to administer the Debtors' Chapter 11 matters. The procedures will minimize the administrative costs to the estates and the administrative burden to the Court. A general order establishing streamlined settlement procedures, including a limited notice list, for the pre-Effective Date period will result in substantial financial savings for the estates because the cost of serving all interested parties with notice of every settlement will be prohibitive. Additionally, the streamlined settlement procedures -- particularly eliminating the need to seek Court approval of every settlement -- will promote settlements because they may obviate the need for defendants to retain outside counsel during the settlement process. Often, not having to expend substantial resources for outside counsel is a major consideration in a party's willingness to settle quickly, Mr. Davis remarks. A modification of the time restrictions applicable to certain service and filing requirements is likewise necessary for orderly prosecution of the Preference Actions. In particular, extending the time to: (a) serve a summons and complaint from 10 to 20 days from the date the summons is issued, and, concomitantly, extending the time for the defendant to answer from 30 to 40 days from the date the summons is issued; (b) file a proof of service from three to 30 days; and (c) serve the summons and complaint from 120 to 240 days after the date the complaint was filed. While the Debtors intend to make every effort to adhere to the time requirements in the Federal Rules of Bankruptcy Procedure, experience in other large bankruptcy cases with many preference actions teaches that compliance with the time restrictions in every single adversary proceeding is extremely difficult. Often, this is due to circumstances beyond the Debtors' control including, among other things, the Clerk's Office not being able to process the summonses as quickly as necessary and the inability to serve the defendant the first time around because it has moved and the new address, if any, is difficult to ascertain. Prosecution of Preference Actions Procedures With respect to the prosecution of any Preference Action where an adversary proceeding has been commenced, the Debtors seek an order providing that: A. Either the Debtors, or the Liquidating Trustee, as the case may be, may in their sole discretion, extend the time to take any action required under the Bankruptcy Rules, including but not limited to, the time to move or answer the complaint and no order of the Court is required to effectuate the extensions; B. With respect to any summons not already issued, the time limits set forth in Bankruptcy Rule 7004(e) with respect to service of the complaint will be increased from 10 days to 20 days from the date of issuance of the summons and the time for answering the complaint will be increased from 30 days to 40 days from the date of issuance of the summons; C. The time to file proof of service of the summons and complaint in any Preference Action under Local Bankruptcy Rule 9078-1 will be extended from three days to 30 days from the date of service; D. The time limit set forth in Rule 4(m) of the Federal Rules of Civil Procedure, made applicable by Bankruptcy Rule 7004(a), to effectuate service of the summons and complaint in any Preference Action, is extended from 120 days to 240 days from the date the complaint was filed; E. Mandatory meeting before scheduling conference/discovery plan, is not applicable in any Preference Action; and F. No motion may be made without the Court's prior approval, which may be sought, on notice, via telephone conference with the Court. Settlement Procedures Specifically with respect to the settlement of any Preference Action, the Debtors ask the Court to declare that: A. Through the Effective Date, with respect to the settlement of any Preference Action where the amount demanded is less than $10,000, the Debtors will be authorized to consummate the proposed settlement without Court order or giving notice to, or receiving consent from, any other party. B. Through the Effective Date, with respect to the settlement of any Preference Action where the amount demanded is greater than $10,000 but less than $1,500,000, the Debtors will provide 10 days' notice of any proposed settlement by overnight mail, fax, or e-mail solely to the Official Committee of Unsecured Creditors and the Office of the United States Trustee. If no written objection is received from the Committee or the U.S. Trustee within the 10-day period, the Debtors will be authorized to consummate the proposed settlement without Court order or consent of any other party. In the event the Committee or the U.S. Trustee serves a written objection within the requisite time, the Debtors may ask the Court to approve the settlement pursuant to Bankruptcy Rule 9019 upon limited notice to the Committee, the U.S. Trustee and the defendant in that particular Preference Action. Given the sheer volume of the Preference Actions, allowing the Debtors and, after the Effective Date, the Liquidating Trustee, to set discovery schedules and to extend deadlines where necessary without Court order, will provide them with needed flexibility to properly manage the adversary proceedings, Mr. Davis asserts. The Court will also be protected from being swamped with, and having to review and sign, scheduling orders and stipulations, in literally thousands of adversary proceedings. It is equally imperative that the time limitations for service of the summons and complaint -- 10 days from the date the summons is issued and 120 days from the date the complaint is filed -- be modified with respect to those cases where summons have not already been issued. The first Preference Actions were filed on September 22, 2003, which means that the 120-day period, with respect to those complaints, expires on January 20, 2004. The Debtors believe that a general order governing settlement procedures is imperative. Without the order, the Court's docket could be clogged with hearings on Bankruptcy Rule 9019 motions and the Debtors will incur unnecessary expenses in serving the motion papers on all creditors. Additionally, by allowing the Debtors to settle certain smaller Preference Actions without the need to notify any parties, the Debtors' counsel may devote their resources to resolving the next case, rather than tending to the administration of those cases that have already been settled. As the two-year limitation period for commencing avoidance actions expired on or about October 20, 2003, failure to comply with the 120-day service period might mean that any re-filed action could be dismissed as untimely. Were the Court to find that good cause has not been shown, the Debtors submit that the Court should exercise its discretion to grant the requested enlargements of time. (Bethlehem Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., 215/945-7000) CARILION HEALTH: Fitch Withdraws Bq Insurer Fin'l Strength Rating ----------------------------------------------------------------- Fitch Ratings has withdrawn its 'Bq' quantitative insurer financial strength rating on Carilion Health Plan, Inc. of Virginia. Effective 12/31/2003 Carilion Health Plan has stopped writing business due to a decision from parent company, Carilion Health Systems. Fitch's quantitative insurer financial strength ratings (Q-IFS ratings) are generated solely based on quantitative analysis of publicly available financial statement data filed by the HMO on a quarterly basis with its state regulator. Although the model's general assumptions are reviewed by Fitch's rating committee, the Q-IFS ratings generated by the model on individual HMOs are not reviewed by the rating committee. Rating Withdrawn Carilion Health Plan, Inc. -- Quantitative insurer financial strength - 'Bq' CENTRAL WAYNE: Has Until Feb. 2 to File Schedules & Statements -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Maryland granted Central Wayne Energy Recovery Limited Partnership an extension of time to file its schedules of assets and liabilities, statements of financial affairs and lists of executory contracts and unexpired leases required under 11 U.S.C. Sec. 521(1). The Debtor have until February 2, 2004 to file these required documents. Headquartered in Baltimore, Maryland, Central Wayne Energy Recovery LP owns a waste-to-energy system facility that converts the heat energy generated by incinerating waste to electricity, is a proven, environmentally sound technology that is helping to ensure the preservation of land and other natural resources. The Company filed for chapter 11 protection on December 29, 2003 (Bankr. Md. Case No. 03-82780). Maria Chavez Ruark, Esq., at Piper Rudnick LLP represents the Debtor in their restructuring efforts. When the Company filed for chapter 11 protection, it listed estimated assets of over $10 million and debts of over $100 million. COMMONWEALTH ELECTRIC: Case Summary & Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Commonwealth Electric of Minnesota, Inc. 2850 Anthony Lane South Minneapolis, Minnesota 55418 Bankruptcy Case No.: 03-38683 Type of Business: Electrical service provider for commercial and industrial building owners and managers. One of the leading electrical contractors. See http://www.cecomn.com/for more information. Chapter 11 Petition Date: December 31, 2003 Court: District of Minnesota (Minneapolis) Judge: Dennis D. O'Brien Debtor's Counsel: Thomas J. Flynn, Esq. Larkin, Hoffman, Daly & Lindgren, Ltd. 1500 Wells Fargo Plaza 7900 Xerxes Avenue South Minneapolis, MN 55431 Tel: 952-835-3800 Estimated Assets: $0 to $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Viking Electric Supply $697,237 451 Industrial Boulevard Minneapolis, MN 55413 Towey, Terry $490,000 5131 Wooddale Glen Edina, MN 55424 Electrical Industry $347,864 Fringe Benefit 110 1330 Conway Street, #130 St. Paul, MN 55106 Border States Electric SU $172,440 Sap Building, LLC $145,865 Mpls. Electrical $145,398 Modern Heating and Air $140,580 A.I. Credit $117,895 Werner Electric Supply Co. $113,078 Industrial Equities LLP $92,158 Thompson Electric Company $83,699 Graybar Electric Co., Inc. $75,589 Siegel Brill Greupner $65,201 LBP Mechanical, Inc. $61,002 Frederickson & Byron, PA $57,714 United Electric Co. $50,089 Lindquist, Dale $50,000 Nelson, Jim $46,161 Power/Mation $41,698 RSM McGladrey, Inc. $32,480 CONGOLEUM CORP: Wants More Time to File Schedules & Statements -------------------------------------------------------------- Congoleum Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of New Jersey to extend the time period within which they must file their schedules of assets and liabilities, statements of financial affairs and lists of executory contracts and unexpired leases required under 11 U.S.C. Sec. 521(1). The Debtors report that their efforts have been focused on negotiating their pending prepackaged Plan of Reorganization and soliciting votes supporting that Plan. Given the time necessary to accomplish the solicitation of the Plan and the size and complexity of their businesses, the Debtors have not had the opportunity to gather all of the information necessary to prepare their Schedules and Statements. The Debtors believe that an extension until March 1, 2004, will likely provide sufficient time to prepare and file the Schedules and Statements. Headquartered in Mercerville, New Jersey, Congoleum Corporation -- http://www.congoleum.com/-- manufactures and sells resilient sheet and tile floor covering products with a wide variety of product features, designs and colors. The Company filed for chapter 11 protection on December 31, 2003 (Bankr. N.J. Case No. 03-51524). Domenic Pacitti, Esq., at Saul Ewing, LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $187,126,000 in total assets and $205,940,000 in total debts. CONTINENTAL AIRLINES: December 2003 Traffic Climbs by 7.6% ---------------------------------------------------------- Continental Airlines (NYSE: CAL) reported a record December systemwide mainline load factor of 77.0 percent, 3.1 points above last year's December load factor. In addition, the airline had a record December domestic mainline load factor of 76.2 percent, 0.8 points above December 2002, and a record international mainline load factor of 78.1 percent, 6.7 points above December 2002. During the month, Continental recorded a U.S. Department of Transportation on-time arrival rate of 76.8 percent and a systemwide mainline completion factor of 99.1 percent. In December 2003, Continental flew 5.2 billion mainline revenue passenger miles (RPMs) and 6.7 billion mainline available seat miles (ASMs) systemwide, resulting in a traffic increase of 7.6 percent and a capacity increase of 3.3 percent as compared to December 2002. Domestic mainline traffic was 3.2 billion RPMs in December 2003, up 3.9 percent from December 2002, and domestic mainline capacity was 4.2 billion ASMs, up 2.7 percent from December 2002. Systemwide December 2003 passenger revenue per available seat mile (RASM) is estimated to have increased between 0.5 and 1.5 percent compared to December 2002. For November 2003, systemwide RASM increased 5.5 percent as compared to November 2002. If the Sunday immediately following Thanksgiving had occurred in December this year as it did last year, November 2003 systemwide RASM would have increased only about 3 percent year-over-year while December 2003 systemwide RASM would have increased between 3.0 percent and 4.0 percent year-over-year. Continental's regional operations (Continental Express) set a record December load factor of 70.6 percent, 3.1 points above last year's December load factor. Regional RPMs were 555.1 million and regional ASMs were 786.0 million in December 2003, resulting in a traffic increase of 46.3 percent and a capacity increase of 39.9 percent versus December 2002. Continental Airlines (S&P, B Corporate Credit Rating, Stable Outlook) is the world's seventh-largest airline with more than 2,200 daily departures to 127 domestic and 96 international destinations throughout the Americas, Europe and Asia. With 42,000 mainline employees, the airline has hubs serving New York, Houston, Cleveland and Guam, and carries approximately 41 million passengers per year. Fortune ranks Continental one of the 100 Best Companies to Work For in America, highest among major U.S. carriers in the quality of its service and products, and No. 2 on its list of Most Admired Global Airlines. For more company information, visit http://www.continental.com/ COVAD COMMS: Confirms Fourth Quarter 2003 Financial Guidance ------------------------------------------------------------ Covad Communications (OTCBB:COVD) ended 2003 with over 517,000 subscriber lines in service, representing 36 percent growth since December 31, 2002. Covad expects to meet or exceed the financial guidance provided for the fourth quarter of 2003, including: -- Broadband subscription billings in the range of $84-88 million; -- Revenue in the range of $101-105 million; -- Earnings before interest, taxes, depreciation and amortization (EBITDA) in the range of negative $2 million to positive $2 million; -- Net loss in the range of $18-23 million; and -- Net cash usage in range of $20-25 million. Net line count additions for the fourth quarter of 2003 were 26,000. Line-splitting, which Covad launched in the second half of 2003, made a quick contribution to growth by providing 29% of Covad's Q4 2003 net adds. Line-split lines are shared with a competitive voice service provider with Covad providing the DSL service. The company's ability to meet its fourth quarter of 2003 line count guidance was greatly affected by reduced pricing in the marketplace that resulted in lower than expected orders for stand- alone data services using line sharing, and higher churn rates. "While we expect to meet all financial guidance for the fourth quarter of 2003, we had lower than expected line count growth in both our wholesale and direct business units due to aggressive pricing strategies in the industry," said Charles Hoffman, Covad president and chief executive officer. "We are actively engaged with our competitive voice carrier partners to provide a voice and data bundled service that we believe should result in less price sensitivity and churn. In addition, we are working with our partners to reduce customer disconnects in the first 60 days of service and we have already begun to see the benefit of this program." Hoffman added, "It is important to note that we continue to run our business with the financial discipline necessary to achieve our goal of EBITDA profitability." Covad plans to announce 2003 year-end results in late February of 2004. Covad is a leading national broadband service provider of high- speed Internet and network access utilizing Digital Subscriber Line (DSL) technology. It offers DSL, T1, managed security, hosting, IP, dial-up services and bundled voice and data services directly through Covad's network and through Internet Service Providers, value-added resellers, telecommunications carriers and affinity groups to small and medium-sized businesses and home users. Covad operates the largest national DSL network with services currently available in 96 of the top Metropolitan Statistical Areas (MSAs). Covad's network currently covers more than 45 million homes and business and reaches approximately 45 percent of all U.S. homes and businesses. Corporate headquarters is located at 110 Rio Robles San Jose, CA 95134. For more information, visit the Company's Web Site at http://www.covad.com/ * * * Since inception, Covad Communications Group, Inc. has generated significant net and operating losses and continues to experience negative operating cash flow. As of September 30, 2003, the Company had an accumulated deficit of $1.6 billion, and expects operating losses and negative cash flow to continue at least into 2004. Shareholder equity on the company's $350 million balance sheet has narrowed to $4 million. Although the Company claims to currently have a plan in place that it believes will ultimately allow it to achieve positive cash flows from its operating activities without raising additional capital, its cash reserves are limited and its plan is based on assumptions, which the Company believes are reasonable, but some of which are out of Company control. If actual events differ from the Company's assumptions, Covad may need to raise additional capital on terms that are less favorable than it desires, which may have a material adverse effect on its financial condition and could cause significant dilution to its stockholders. In the past Covad has described its expectation of attaining cash flow sufficiency from its operating activities in mid-2004. Subsequent to its announcement of these expectations the FCC announced the results of its Triennial Review and on August 21, 2003, issued its order. The order may impact Covad's cash flow from operations and the manner in which the Company progresses towards cash flow sufficiency. In particular, Covad's ability to continue to sell stand-alone consumer-grade services to new customers will likely depend on its ability to negotiate with the telephone companies fair and reasonable prices for line-shared services that are substantially lower than the cost of a separate line. If it cannot reach reasonable terms with the telephone companies, the Company may be unable to sell stand-alone consumer- grade services to new customers. In that event, Covad would be required to, and the Company believes it can, adjust its business plan so that it can still reach cash flow sufficiency in mid-2004. However, in this event, its growth could be impaired because of reduced access to the consumer market. Nonetheless, adverse business, legal, regulatory or legislative developments, such as the inability to continue line-sharing, may require the Company to raise additional financing, raise its prices or substantially decrease its cost structure. Covad also recognizes that it may not be able to raise additional capital, especially under the current capital market conditions. If unable to acquire additional capital on favorable terms when needed, or are required to raise it on terms that are less satisfactory than the Company desires, its financial condition will be adversely affected. COVANTA: Court to Consider DHC Disclosure Statement on Jan. 14 -------------------------------------------------------------- At the Covanta Energy Debtors' behest, the U.S. Bankruptcy Court for the Southern District of New York established January 14, 2004 at 2:00 p.m. as the date and time for the Danielson Holding Corporation Disclosure Statement Hearing. Backgrounder Notwithstanding the filing of the Covanta Energy Debtors' First Amended Joint Plan of Reorganization and the Debtors' First Amended Joint Plan of Liquidation, and the mailing of solicitation packages for the purposes of soliciting votes on the Initial Plans, the Debtors have continued to consider proposals for alternative plans of reorganization. The continued consideration of alternative plans was explicitly contemplated by the Initial Plans and the First Disclosure Statement. In large part, the Debtors' ongoing effort in this regard has been at the request of its creditor constituencies. The Debtors have spent a significant amount of time engaging in extensive discussions and negotiations with representatives of Danielson Holding Corporation and D.E. Shaw Laminar Portfolios, LLC, regarding a potential alternative transaction, which would serve as the basis for alternative plans of reorganization and liquidation. As a result of the discussions and negotiations, Covanta and DHC have entered into an Investment and Purchase Agreement, dated December 2, 2003. The Debtors and DHC are currently working on the preparation of a new plan of reorganization and a revised plan of liquidation that would be premised on the implementation of the Purchase Agreement. In contrast to the ESOP structure contemplated under the First Amended Reorganization Plan, the Purchase Agreement provides for an equity investment by DHC and a concomitant deleveraging of the Reorganized Debtors. The Debtors anticipate that they will file: (a) the DHC Proposed Plans; (b) a new disclosure statement with respect to the DHC Proposed Plans; and (c) a new short-form disclosure statement with respect to the DHC Proposed Plans. The Debtors believe that the DHC Proposed Plans, if filed, would contain sufficient material modifications to the prior Initial Plans to require, pursuant to Section 1127 of the Bankruptcy Code and Rule 3019 of the Federal Rules of Bankruptcy Procedure, a hearing to consider approval of the DHC Disclosure Statement as well as subsequent solicitation of votes with respect to the DHC Proposed Plans. (Covanta Bankruptcy News, Issue No. 44; Bankruptcy Creditors' Service, Inc., 215/945-7000) DALECO RESOURCE: Tri-Coastal Unit Restructures Outstanding Debt --------------------------------------------------------------- Dov Amir, Chairman of Daleco Resources Corporation (OTC:DLOV) reported that its wholly owned subsidiary, Tri-Coastal Energy, LP has completed the refinancing and restructuring of its previously reported outstanding, non-recourse obligations under its Heller Project Funding through a private capital group. The specific terms of the transaction were not available for publication. He added that, subject to a final accounting review by the Company's auditors, the transaction would improve the "book value" of the Company's common stock by $0.20 to $0.25 per share. Gary Novinskie, Daleco's President, stated that the Company has been working on the transaction for some time to "clean up" its balance sheet. He noted that while the obligations associated with Heller Project Funding which amounted to roughly $6,700,000 in base principle and accrued interest were non-recourse to the Company, that fact that they were reported on the Company's financial filings had a significant psychological impact on how the financial community viewed stability of the Company. As a result of the restructuring transaction, the Company will instead record a residual obligation of $655,000 on its consolidated books. Mr. Novinskie added that in addition to very the favorable impact on the Company's financials, the restructuring should allow Tri-Coastal Energy, LP to be more aggressive in its efforts to exploit the yet unrealized value of its oil and natural gas properties Daleco Resources is an international asset and technology aggregation and monetization company with operating subsidiaries active in oil and gas, timber, minerals, environmental remediation and technology. Tri-Coastal Energy, LP is one of the wholly owned subsidiaries of Daleco Resources Corporation that are active in the development and production of oil and natural gas in Texas, Oklahoma, Alabama, Pennsylvania and West Virginia * * * Going Concern Uncertainty In a recent Form 10-Q filed with the Securities and Exchange Commission, Daleco Resources reported: "The [Company's] financial statements have been prepared on the basis of a going concern, which contemplates that the Company will be able to realize assets and discharge liabilities in the normal course of business. Accordingly, they do not give effect to adjustments that would be necessary should the Company be required to liquidate its assets. For the quarter ending June 30, 2003, the Company reported a loss of $488,035. The ability of the Company to meet its total liabilities of $11,412,116, of which $6,840,961 is nonrecourse to the Company and to continue as a going concern is dependent upon the availability of future funding, achieving profitable timber operations and successful development of its mineral assets. On July 24, 2002, the Company entered into a $10,000,000 Equity Line of Credit Agreement with Cornell Capital Partners, L.P. "As part of the transaction, the Company issued to CCP a two year convertible debenture in a face amount of $300,000. The debenture was convertible into common stock at a price equal to the lesser of 120% of the final bid price on the Closing Date or 80% of the average lowest three closing bid prices as reported by Bloomberg of the Company's common stock for the five trading days immediately preceding the date of the conversion. As on January 24, 2003, the entire debenture had been converted into the common stock of the Company. The equity line provides for the Company to draw down $75,000 per week over a three-year period. As of June 30, 2003, the Company had not utilized any portion of the Equity Line of Credit. In accordance with the provisions of the Equity Line of Credit, the Company filed a registration statement on Form SB-2 with the Securities and Exchange Commission, which became effect on November 7, 2002. "The Company will continue to seek and evaluate 'project specific' funding commitments and other capital funding alternatives if and as they become available. "As of June 30, 2003, the Company and certain of it subsidiaries were in default of certain debt obligations. The holders of these instruments are working with the Company to achieve the ultimate extinguishment of the obligations." DII INDUSTRIES: Gets Nod to Pay Prepetition Employee Obligations ---------------------------------------------------------------- The DII Industries Debtors seek the Court's authority to continue: (a) paying wage, salary, travel expense reimbursement and other compensation in the ordinary course of business including the payment of certain prepetition obligations; and (b) maintaining their benefit programs in the ordinary course of business, including the payment of certain prepetition obligations. Michael G. Zanic, Esq., at Kirkpatrick & Lockhart, in Pittsburgh, Pennsylvania, explains that any delay in paying the compensation due to the Debtors' employees will severely disrupt their relationships with their employees and may irreparably impair employee morale at a time when the employees' dedication, confidence, and cooperation are critical to consummate a successful reorganization. Wages, Salaries and Commissions Mr. Zanic states that, collectively, the Debtors employ 15,000 full-time active employees and 150 part-time active employees at their 165 locations in 27 states, as well as various foreign countries. Of the full-time active employees, 10,000 are paid hourly and 5,000 are salaried. In the ordinary course of business, the Debtors issue payroll checks to their employees, along with electronic fund and wire transfers. The employees are generally paid on a weekly and bi- weekly basis. The Debtors' payroll is $75,500,000 per month. The Debtors estimate that, as of December 16, 2003, $20,820,000 in accrued prepetition wages, salaries, and overtime earned by their employees before the Petition Date remains unpaid during their regular and customary salary and hourly wage payroll periods. Mr. Zanic notes that each of the Debtors' employees would have a priority claim of up to $4,650 with respect to all their accrued but unpaid prepetition wages or salaries and benefits earned within 90 days before the Petition Date pursuant to Section 507(a)(3) of the Bankruptcy Code. Before the Petition Date, the Debtors paid any identifiable employees with Wage Obligations over the priority amount. Consequently, to the extent the employees were identified, the Debtors are not seeking payment of wages over the priority amount, but only to pay those employees who are owed prepetition wages under the priority amount. Due to the priority status of the Wage Obligations and the likelihood that these obligations would be entitled to be paid in any event, the Debtors find it necessary to pay these prepetition Wage Obligations. The Debtors employ the services of 160 temporary employees engaged and paid through third party employment agencies. In preparation for their Reorganization Cases, the Debtors paid the Agencies for services that were fixed and determinable to the extent possible. As of the Petition Date, the Debtors owe the Agencies $300,000 for the services provided by the temporary employees before the Petition Date. The Debtors also employ 650 independent contractors. The Independent Contractors provide services that would otherwise be provided by the Debtors' regular employees, like financial services, information services, engineering, sales and security. The average monthly cost of these Independent Contractors is $5,100,000. In preparation for their Reorganization Cases, before the Petition Date, the Debtors paid the Independent Contractors for the services that were fixed and determinable to the extent possible. As of the Petition Date, Independent Contractors are owed $2,000,000 for the services rendered before the Petition Date. Mr. Zanic says that employing temporary employees and Independent Contractors is crucial to the Debtors' continuing business operations. Payment to the Agencies and Independent Contractors will allow the Debtors to continue utilizing their services on a going forward basis. Other Compensation The Debtors provide certain other compensation to their employees, including paid vacation, sick and personal days, pay for time dedicated to jury duty, expense reimbursement and severance. The Debtors intend to continue paying these obligations in the ordinary course of business: (1) Vacation Pay Employees are entitled to sick leave, vacation and holiday pay depending on the number of hours worked per year and years of employment. The amount of paid time off per year ranges from 112 to 240 hours for full time employees. Additionally, there are seven paid holidays provided each year. The Debtors estimate that the amount of sick and vacation pay earned but not taken by employees as of the Petition Date does not exceed $63,700,000. (2) Expenses Reimbursement Before the Petition Date, and in the ordinary course of business, the Debtors reimbursed employees for certain expenses incurred in the scope of their employment. These prepetition expenses relate to business travel, business meals, relocation allowances, telephone costs, car expenses, mileage reimbursement and other miscellaneous business expenses. All these expenses were incurred on the Debtors' behalf and with the understanding that these would be reimbursed. On average each week, the Debtors owe $750,000 to 650 employees for Reimbursable Expenses. The Debtors find it difficult to estimate the amount of Reimbursable Expenses outstanding as of the Petition Date because, not all employees have submitted expense reports. However, as of the Petition Date, the Debtors estimate that they have incurred Reimbursable Expenses in an amount not materially different from the weekly average. (3) Jury Duty and Other Miscellaneous Benefits The Debtors also provide other miscellaneous benefits to their employees, including jury duty payment, funeral leave, adoption assistance, out-placement benefits, employee assistance program, educational assistance, credit union, health or fitness, day care and relocation pay. The aggregate annual cost of these benefits is de minimis -- less than $100,000. (4) Incentive Programs The Debtors provide annual bonus and award opportunities for certain eligible employees. Awards are determined on a fiscal year basis and are paid annually. The Debtors estimate that the amount of unpaid bonuses earned by eligible employees under the Incentive Programs is $2,510,000. (5) Severance The Debtors provide severance benefits to all covered full time employees working on a U.S. payroll who are involuntarily terminated from employment in connection with a reduction in force or for the Debtors' convenience. The severance benefit is equal to one week of base pay for each full year of service up to a maximum of eight weeks pay for "exempt pay" employees and four weeks for "non-exempt pay" employees. These are not considered "Covered Employees" under the policy: -- employees assigned to construction, fabrication, or maintenance projects; -- employees classified as temporary, craft or inactive; or -- employees covered by a collective bargaining agreement. Annually, the Debtors are liable for $3,200,000 in severance and redundancy pay. As of the Petition Date, the Debtors are unaware of any significant severance obligations. Benefit Programs The Debtors implement various plans and policies to provide their employees with medical, dental, prescription drug, disability, life insurance, accidental death and dismemberment insurance, vision insurance, retirement savings, pension, stock and other similar benefits: (1) Medical Benefits The Debtors provide primary health coverage for all covered employees and their eligible dependents, including coverage for medical, dental, prescription drug and mental health expenses. This coverage is self-insured. The Debtors' self- insured plans are administered by Hewitt Associates, with Blue Cross Blue Shield and United Healthcare as the primary medical claim vendors. Presently, 11,000 employees and their eligible dependents are covered through the Debtors' self- insured plans. The Debtors' liability under the self-insured plans as of the Petition Date is $8,750,000. (2) Insurance The Debtors provide and make available certain life insurance and disability insurance to their employees: * Life Insurance The Debtors provide employer-paid basic life insurance to all covered employees equal to $50,000 or the amount of the individual employee's annual salary, whichever is less. The aggregate annual cost of the life insurance in 2002 was $1,200,000. The Debtors also offer optional life insurance and accidental death and dismemberment insurance for their employees, including spouses and dependents. Employees pay the full cost of the optional insurance. * Disability The Debtors provide various long-term and short-term disability benefits to their employees. Short-term benefits range between 60% and 100% of an employee's base pay, depending on the length of service, for a maximum benefit of 26 weeks. Long-term benefits range from 50% to 60% of base pay and may extend to age 65. The aggregate annual employer costs of the short-term benefits average $3,800,000 and the long-term benefits average $700,000. (3) Savings Plans The Debtors maintain several qualified defined contribution savings plans that meet the requirements of Section 401(a) and 401(k) of the Internal Revenue Code. Employees may elect to make before-tax contributions to the Savings Plans through payroll deductions, which are paid to a trust on a periodic basis. The Debtors also make contributions to the plans. The two primary Savings Plans are the KBR Retirement and Savings Plan, and the Brown & Root Employees' Retirement and Savings Plan. In 2003, the KBR Plan provided for matching employer contributions in the amount of 100% of the first 4% of employee contributions. For 2004, the KBR Plan provides for matching employer contributions in the amount of 100% of the first 3% of compensation, and 50% of the next 3% of compensation, for a maximum employer contribution of 4.5% of eligible employee compensation. In 2003, the Brown & Root Plan has a maximum matching employer contribution of $250. For 2004, the matching formula becomes 50% of the first 4% of employee deferrals, for a maximum match of 2% of employee compensation. Employee deferrals and employer matching contributions are funded weekly. (4) Retirement Plans The Debtors maintain several retirement plans that include qualified defined benefit plans under the Internal Revenue Code, as well as certain non-qualified plans. The Debtors are responsible for making minimum funding contributions to the Retirement Plans, based on annual actuarial calculations. * KBR Retirement and Savings Plan The plan covers the Debtors' engineering, technical and administrative employees and matches employee deferrals up to 4% of eligible compensation. The Debtors expect their plan obligation to be $700,000 as of the Petition Date. * Brown & Root Employees Retirement and Savings Plan The plan covers the Debtors' hourly workers who are located on each particular project site and matches employee deferrals up to a maximum of $250. The Debtors expect their plan obligation to be $2,000 as of the Petition Date. * Brown & Root Hourly Employees' Pension Plan The plan applies to government service employees covered under the Service Contract Act. The Debtors are unable to estimate the potential plan obligation as of the Petition Date since employer contributions are based on a formula determined in specific government contracts. However, contributions in 2002 were $350,000. The Debtors maintain several other non-qualified plans for pension and retirement purposes, including the Halliburton Elective Deferral Plan, the Senior Executive Deferred Compensation Plan, the MW Kellogg Long Term Performance Plan, the B&R Deferred Compensation Plan and the B&R Officers Supplemental Retirement Plan. (5) Employee Stock Purchase Plans The Debtors participate in an employee stock purchase plan, which is qualified under Section 401(a) of the Internal Revenue Code. The Debtors also participate in a restricted stock ownership plan, a non-qualified stock ownership plan. (6) Flexible Spending Program The Debtors maintain a "flexible spending program" that allows employees to make pre-tax premium payments to medical coverage, heath and dependant care accounts. Employee contributions to the flexible spending plan are made through payroll deductions. Funds are reimbursed to employees as receipts for health and dependant care expenses. Reimbursement to a given employee cannot exceed payroll deductions at any given point in time. The Debtors expect their obligation with respect to the flex accounts to be $600,000 as of the Petition Date. (7) Workers' Compensation Programs The Debtors provide certain workers' compensation programs for payment of workers' compensation benefits. Pursuant to state laws, the Debtors must maintain Workers' Compensation Programs in the ordinary course of business to ensure prompt and efficient payment and reimbursement of workers' compensation claims to their employees. The Workers' Compensation Programs are utilized to make payments as claims arise. Certain benefits under the Workers' Compensation Programs have been awarded before the Petition Date, but have yet to be fully paid. Certain claims that were filed prepetition have yet to be resolved. For the claims administration process to operate in an efficient manner, the Debtors believe that the claim assessment, determination and adjudication must continue. (8) Social Security, Income Taxes and Other Withholding The Debtors routinely withhold from employee paychecks amounts that they are required to transmit to third parties for purposes like credit union payments, insurance, union dues, savings plans deposits, wage garnishments, court ordered deductions, child support payments and other wage and salary check-offs and deductions. Withholdings include Social Security, FICA, federal and state income taxes, garnishments, health care benefits, union dues, retirement fund withholding and charitable donations. The Debtors believe that these withheld funds, to the extent that they remain in their possession, constitute amounts held in trust and, therefore are not property of their estates. The amount owed for ESPP, payroll and withholding taxes, and amounts owed to third parties on the Petition Date totals $6,420,000. * * * Judge Fitzgerald authorizes the Debtors to pay all wages, salaries, and commissions and other employee benefits, including prepetition amounts due, in the ordinary course of business, provided, however, that: * the Debtors establish a separate escrow account, the deposits of which will be invested in short-term investment grade securities pursuant to their standard investment practices and policies in an amount equal to any payments for prepetition amounts made to their employees to the extent these payments exceed $4,650 to any one employee. The Reserve will be distributed by further Court order; and * the Excess Payments are subject to the right of the Court to order that the Excess Payments be recovered for the estates' benefit. The Court also authorizes and empowers the Debtors to pay all amounts due to Agencies for services rendered by temporary employees and all amounts due to Independent Contractors. The Debtors may continue their Benefit Programs. The Court directs all banks to receive, process, honor and pay any and all checks drawn on the Debtors' payroll and general disbursement accounts related to the payment of obligations and benefits, provided that sufficient funds are on deposit in the applicable accounts to cover these payments. (DII & KBR Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945- 7000) DOBSON COMMS: Declares 13% Preferred Share Cash Dividend -------------------------------------------------------- Dobson Communications Corporation (Nasdaq:DCEL) declared a cash dividend on its outstanding 13% Senior Exchangeable Preferred Stock. The dividend will be payable on February 1, 2004 to holders of record at the close of business on January 15, 2004. The CUSIP for the 13% Senior Exchangeable Preferred Stock is 256 072 50 5. Holders of shares of 13% Senior Exchangeable Preferred Stock will receive a cash payment of $33.22 per share held on the record date. The cash dividend covers the period November 1, 2003 through January 31, 2004. The dividends have an annual rate of 13% on the $1,000 per share liquidation preference value of the preferred stock. 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: Issues Redemption Notice for Remaining 12-1/4% Sr. Notes ---------------------------------------------------------------- Dobson Communications Corporation (Nasdaq:DCEL) issued notice of redemption of the remaining $5.2 million in Dobson/Sygnet 12 1/4% Senior Notes due 2008 (CUSIP No. 25607PAB4). The redemption date will be February 5, 2004, and holders will receive $1,061.25 per note plus accrued interest to and including February 4, 2004. 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/ DOW CORNING: Investing GBP100 Million in Dow Corning Limited ------------------------------------------------------------ Doe Corning Limited is an English limited liability company based in Barry, Wales, and is a wholly owned subsidiary of Dow Corning Corporation. DCL's primary asset is a basic silicone manufacturing plan located in Barry -- DCC's only basic silicone plant in Europe. The Barry Plant employs over 600 people and provides intermediate products used by other Dow Corning plants around the world. In 1995, Dow Corning announced a major expansion of the Barry Plant that would more than double its size. With Bankruptcy Court approval, DCC provided the financing for that in the form of a GBP250 million revolving credit facility -- GBP200 million for the expansion and GBP50 million for working capital. DCL owes DCC approximately GBP175 million under the Revolver. The loan facility matures by its own terms on Dec. 31, 2005. DCC receives GBP750,000 ($1.3 million) monthly interest payments. Ordinarily, the U.S. income tax DCC would pay on the interest it receives would be offset by a corresponding income tax deduction by DCL in the U.K. DCL, however, is operating at a loss and doesn't have any income against which to deduct the interest it pays to DCC on the Revolver. As a result, the Revolver is a net tax burden and net cash loss to DCC. To change the drain to a gain, David Ellerbe, Esq., at Neligan Tarpley Andrews & Foley LLP, in Dallas, Texas, tells the Honorable Denise Page Hood presiding over Dow Corning's on-going chapter 11 case in the U.S. District Court for the Eastern District of Michigan, DCC proposes to invest GBP100 million of additional capital in DCL. DCL, in turn, will reduce the balance of the Revolver by GBP100 million. That will result in a substantial tax benefit to DCC by reducing DCC's taxable U.S. interest income while there's no corresponding deduction available U.K. deduction. Dow Corning filed for chapter 11 protection on May 15, 1995 (Bankr. E.D. Mich. Case No. 95-20512), to resolve silicone implant-related tort liability. Judge Spector confirmed Dow Corning's Plan of Reorganization in the bankruptcy court years ago. Judge Hood in the U.S. District Court for the Eastern District of Michigan now presides over Dow Corning's chapter 11 cases. Four appeals from the Dow Corning's bankruptcy cases remain to be resolved in the District Court or by the United States Court of Appeals for the Sixth Circuit. Mr. Ellerbe notes that this investment will have no impact on Dow Corning's ability to perform its obligations under the confirmed Amended Joint Plan of Reorganization. Dow Corning -- http://www.dowcorning.com-- develops, manufactures and markets diverse silicon-based products and services, and currently offers more than 7,000 products to more than 25,000 customers around the world. Dow Corning is a global leader in silicon-based materials with shares equally owned by The Dow Chemical Company and Corning Inc. More than half of Dow Corning's $2.7 billion in annual sales are outside the United States. DT INDUSTRIES: Defaults on Senior Credit Facility ------------------------------------------------- DT Industries, Inc. (Nasdaq: DTII), a designer, manufacturer and integrator of automation systems and related equipment used to manufacture, assemble, test or package industrial and consumer products, failed to make mandatory principal prepayments in the aggregate amount of approximately $2.7 million due on December 31, 2003 and is therefore in default under its senior credit facility. The company is in negotiations on a forbearance agreement with its senior lenders. The company also announced that it has entered into an agreement to sell its Converting Technologies division. The company expects the transaction to close by January 16, 2004. Net proceeds from the transaction will be used to reduce debt and satisfy the payment obligations described above. As previously reported, Standard & Poor's Ratings Services lowered its corporate credit rating on DT Industries Inc. to 'CCC+' from 'B-' and removed them from CreditWatch where they had been placed on Sept. 11, 2003. The outlook is negative. DYNEGY INC: Reaches Pact to End Batesville Tolling Arrangement -------------------------------------------------------------- Dynegy Inc. (NYSE:DYN) has reached an agreement with Virginia Electric and Power Company, a subsidiary of Dominion Resources Inc. (NYSE:D), to terminate a wholesale power tolling contract totaling approximately 110 megawatts. Under the terms of the agreement, which became effective on Dec. 29, 2003, Dynegy paid Virginia Power $34 million to end the arrangement. As a result, Dynegy eliminated approximately $63 million in future capacity payments as well as collateral obligations of $12.5 million. The contract, which was entered into in 2000, called for Virginia Power to buy the electricity produced at a Batesville, Miss., power generating station and sell the output to Dynegy through May 2010. Dynegy announced in October 2002 its intent to exit the third-party marketing and trading business. Consistent with this goal, Dynegy has since reached agreements to terminate four of eight tolling arrangements. Dynegy will record a fourth quarter pre-tax charge of $34 million (approximately $22 million after-tax) in its customer risk management segment associated with this termination. "The termination of the Batesville contract met our goal of eliminating at least half our tolls prior to the end of 2003," said Bruce A. Williamson, president and chief executive officer of Dynegy Inc. "It adds to the progress Dynegy has made in exiting tolling arrangements, which represent the most significant portion of the company's remaining third-party marketing and trading business. Our commitment is to continue to evaluate the remaining tolling arrangements on an individual basis, while maintaining our focus on liquidity and our operating energy businesses." Dynegy Inc. (S&P, B Corporate Credit Rating, Negative) provides electricity, natural gas and natural gas liquids to wholesale customers in the United States and to retail customers in the state of Illinois. The company owns and operates a diverse portfolio of energy assets, including power plants totaling approximately 13,00 megawatts of net generating capacity, gas processing plants that process more than 2 billion cubic feet of natural gas per day and approximately 40,000 miles of electric transmission and distribution lines. EAST COUNTY MEDICAL: California Health Care Group Faces Bankruptcy ------------------------------------------------------------------ California's East Contra Costa County's dominant medical group may be forced into bankruptcy early this year, several of its board members said, reported ContraCostaTimes.com. A series of financial setbacks have made the fate of East County Medical Group, consisting of 200 doctors and 18,700 patients, highly uncertain. The latest blow came last week, when health insurer Health Net said it was terminating its contract with the medical group, taking away 42 percent of East County's business. One board member estimated East County Medical Group is about $5 million in debt. Board members said a final decision will be made within the week. (ABI World, Jan. 5, 2004) ENRON CORP: Committee Sues Andrews & Kurth to Recoup $5.4 Mil. -------------------------------------------------------------- From September 4, 2001 through November 30, 2001, Enron Corporation made, or caused to be made, transfers totaling $5,438,531 to or for the benefit of Andrews & Kurth LLP. The Official Committee of Unsecured Creditors, on behalf of Enron Corporation, Enron North America Corporation, ECT Resources Corporation, Enron Energy Services Operations, Inc., Enron Property and Services Corporation, Enron Engineering & Construction Co., Enron Construction Management Services Co., Enron Industrial Markets LLC and Enron Broadband Services, Inc., seeks to recover the Transfers. Susheel Kirpalani, Esq., at Milbank Tweed Hadley & McCloy LLP, in New York, relates that the Transfers: (a) constitute transfers of interests of the Debtors' property; (b) were made for the benefit of a creditor; (c) were made on account of, antecedent debts owed to Andrews prior to the dates on which the Transfers were made; and (d) were made when the Debtors were insolvent for purposes of Section 547(b) of the Bankruptcy Code; and (e) enabled Andrews to receive more than it would have received if: -- these cases were administered under Chapter 7 of the Bankruptcy Code; -- the Transfers were not made; and -- Andrews had received payment of the Debt to the extent provided by the Bankruptcy Code. Thus, Mr. Kirpalani concludes that the Transfers constitute avoidable preferential transfers pursuant to Section 547(b). In accordance with Section 550(a) of the Bankruptcy Code, the Creditors' Committee may recover from Andrews, on behalf of the Debtors, the amount of the Transfers, plus interest. In the alternative, Mr. Kirpalani asserts that the Transfers may be avoided and recovered as fraudulent transfers since: (a) the Transfers constitute transfers of interests in the Debtor' property; (b) the Transfers were to or for the benefit of Andrews; (c) the Debtors received less than reasonable equivalent value in exchange for some or all of the Transfers; (d) the Debtors were insolvent, or became insolvent, or had unreasonable small capital in relation to its businesses or its transactions at the time or as the result of the Transfers; and (e) the Transfers were made within one year prior to the Petition Date. Furthermore, pursuant to Sections 544 and 550(a)(1) of the Bankruptcy Code, Sections 270-281 of the New York Debtor and Creditor Law and other applicable law, Mr. Kirpalani argues that, in the alternative, the Court should permit the Committee to avoid and recover the fraudulent transfers because: (a) the Debtors received less than fair consideration or less than reasonable equivalent value in exchange for some or all of the Transfers; (b) as a direct and proximate result of the Transfers, the Debtors and their creditors suffered losses amounting to at least the value of the Transfers; and (c) at the time of the Transfers, there were creditors holding unsecured claims and insufficient assets to pay the Debtors' liabilities in full. (Enron Bankruptcy News, Issue No. 92; Bankruptcy Creditors' Service, Inc., 215/945- 7000) EXIDE: Solicitation Exclusivity Extension Hearing on January 22 --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware will convene a hearing on January 22, 2004 to consider Exide Technologies' request to extend the Exclusive Period within which they may solicit acceptances of a chapter 11 Plan through and including February 15, 2004. By application of Del.Bankr.LR 9006-2, the Debtors' exclusive solicitation period is automatically extended through the conclusion of that hearing. As previously reported, the Bankruptcy Court denied Exide's lender-supported low-ball valuation-based Plan after strenuous opposition by unsecured creditors. The parties are attempting to negotiate new economic terms for a consensual plan between now and Jan. 22. (Exide Bankruptcy News, Issue No. 37; Bankruptcy Creditors' Service, Inc., 215/945-7000) FARMLAND INDUSTRIES: Claim Trading Activity Report -------------------------------------------------- Papers delivered to the U.S. Bankruptcy Court in Kansas City show purchases of unsecured claims against Farmaland Industries, Inc., and its debtor-subsidiaries by: Madison Liquidity Investors 6310 Lamar Ave., Suite 120 Overland Park, KS 66202 Attention: Kristy Stark Telephone (800) 896-8913 Debt Acquisition Company of America 2120 W. Washington Street San Diego, CA 92110 Attention: Traci J. Fette Telephone (619) 220-8900 Revenue Management One University Plaza, Suite 518 Hackensack, NJ 07601 Attention: Rocco Duardo Telephone (201) 968-0001 Next Factors, Inc. 72 Van Reipen Ave., Suite 37 Jersey City, NJ 07306 Attention: Santa Roman Telephone (201) 659-0209 Fair Harbor Capital, LLC 875 Avenue of the Americas, Suite 2305 New York, NY 10001 Attention: Joseph Grand Telephone (212) 967-4035 KT Trust One University Plaza, Suite 518 Hackensack, NJ 07601 Attention: Helena De Young Telephone (201) 968-0001 Longacre Master Fund, Ltd. 810 Seventh Avenue, 22nd Floor New York, NY 10019 Attention: Vladimir Jelisavcic Steven S. Weissman Telephone (212) 259-4350 Fax (212) 259-4345 http://www.longacrellc.com/ Allenwood Capital, LLC 1040 Ulmstead Circle Arnold, MD 21012 Attention: Victor Knox Telephone (410) 757-8180 Contrarian Funds, LLC Contrarian Capital Trade Claims, LP 411 West Putnam Avenue, S-225 Greenwich, CT 06830 Attention: Alpa Jimenez Janice Stanton Telephone (203) 862-8200 Carmine Funding c/o Heath Hardcastle, Esq. Albright, Rusher & Hardcastle 15 West 6th Street, Suite 2600 Tulsa, OK 74119-5434 Attention: Charles V. Pyle, Jr. President Telephone (918) 587-2627 Capital Investors, LLC One University Plaza, Suite 518 Hackensack, NJ 07601 Attention: Helena De Young Telephone (201) 968-0001 Sierra Liquidity Fund, LLC 2699 White Road, Suite 255 Irvine, CA 92614 Attention: J. Riley Telephone (949) 660-1144 ext. 10 Fax (949) 660-0632 jriley@sierrafunds.com Trade-Debt.Net P.O. Box 1487 West Babylon, NY 11704 Attention: Timothy McGuire ReGen Capital I, Inc. P.O. Box 626 Planetarium Station New York, NY 10024-0540 Attention: Neil H_________ Farmland Industries, Inc., and its debtor-affiliates, filed for Chapter 11 protection on May 31, 2002. Laurence M. Frazen, Esq., Cynthia Dillard Parres, Esq., and Robert M. Thompson, Esq., at Bryan Cave LLP represent the Debtors in their restructuring efforts. When the debtors filed for protection from its creditors, it listed total assets of $2.7 billion and total liabilities of $1.9 billion. On December 16, 2003, the Bankruptcy Court confirmed Farmland's Second Amended Joint Plan Of Reorganization, As Modified. The Company expects to consummate the Plan shortly after the sale of a refinery and nitrogen fertilizer facility located in Coffeyville, Kansas, in the first quarter of 2004. That condition may be waived with the consent of official Bondholders' and Unsecured Creditors' Committees. If Farmland is unable to complete the sale of the Coffeyville assets and if that condition is not waived, the Company anticipates that the Plan will nonetheless be consummated no later than June 13, 2004. FEDERAL-MOGUL: PD Committee Hires J.H. Cohn as Financial Advisor ---------------------------------------------------------------- Asbestos PD Committee Co-Chairman, Daniel Speights, informs the Court that J.H. Cohn LLP possesses experience and knowledge in the area of providing financial advisory and restructuring services needed by the Official Committee of Asbestos Property Damage Claimants of the Federal-Mogul Debtors. J.H. Cohn will principally focus its attention and provide services for the Debtors' reorganization and the treatment of asbestos property damage claims. The firm will assist and advise in: (a) understanding and evaluating the Debtors' corporate, operational, and financial structure; (b) identifying and evaluating the Debtors' assets by legal entity; (c) monitoring the Debtors' postpetition operating results and cash flows; (d) evaluating the Debtors' current and projected financial operations; (e) reviewing historical financial information of the Debtors; (f) reviewing the Debtors' proposed transactions and motions; (g) reviewing and evaluating claims against the Debtors by legal entity; (h) establishing an equitable process to quantify and resolve asbestos property damage claims; (i) preparing dividend analyses; and (j) identifying and evaluating strategies to maximize the value of the estate, including the proposed plan of reorganization. J.H. Cohn will also identify and evaluate the Debtors' insurance policies and ascertain whether coverage applies within the relevant time period. Furthermore, J.H. Cohn will render other bankruptcy and consulting services, attend hearings and meetings, and other assistance as the PD Committee and its counsel may deem necessary. J.H. Cohn will be compensated based on these hourly billing rates: Senior Partner $495 Partner 425 Director 385 Senior Manager 330 Manager 300 Supervisor 275 Senior Accountant 230 Staff 175 Paraprofessional 120 In the normal course of business, the firm revises the hourly rates every February 1 of each year. Expenses will be charged at actual costs incurred and will include charges for travel, messenger or express mail, copying, telephone, facsimile, etc. J.H. Cohn has indicated its willingness to act on the PD Committee's behalf and to be compensated in accordance with the requirements of the Court, the Bankruptcy Code and Bankruptcy Rules as to the fee and expense applications of professionals employed by bankruptcy estates. Bernard A. Katz, a member at J.H. Cohn, assures the Court that the firm is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code, and does not hold or represent any interest adverse to the Committee's estates. Accordingly, the PD Committee seeks the Court's authority to retain J.H. Cohn LLP, as its accountant and financial advisor, nunc pro tunc to December 3, 2003. (Federal-Mogul Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., 215/945- 7000) FMC CORP: Will Publish Fourth Quarter 2003 Results on February 2 ---------------------------------------------------------------- FMC Corporation (NYSE: FMC) announced the following schedule and teleconference information for its fourth quarter 2003 earnings release: -- Earnings Release: February 2, 2004, after close of market via PR Newswire and on the web at http://ir.fmc.com/ -- Teleconference: February 3, 2004, at 10:00 a.m. Eastern Standard Time (EST) hosted by Eric Norris, Director Investor Relations. Listen-only mode on the web at http://ir.fmc.com/ -- Webcast Replay: Available beginning at 4:00 p.m. on February 3, 2004 on the web at http://ir.fmc.com/ FMC Corporation (S&P, BB+ $300 Million Senior Secured Notes Rating, Negative) is a diversified chemical company serving agricultural, industrial and consumer markets globally for more than a century with innovative solutions, applications and quality products. The company employs approximately 5,500 people throughout the world. FMC Corporation divides its businesses into three segments: Agricultural Products, Specialty Chemicals and Industrial Chemicals. GATEWAY INC: Lowers Previous Fourth Quarter Earnings Guidance ------------------------------------------------------------- Gateway, Inc. (NYSE: GTW) said that later this month it expects to report an operating loss at the low end of its previous EPS guidance range, and revenue of approximately $880 million, compared with its previous guidance of $925 million to $975 million. EPS guidance does not include the impact of previously announced restructuring and transformation costs, which are currently estimated to be approximately $42 million to $45 million, compared with the company's original projection of $50 million to $60 million. These estimates are subject to finalization of results and year-end audit. The company said that sales of its new higher margin consumer electronics products, notably digital televisions and digital cameras, were strong over the holiday shopping season. For example, the company's digital camera unit sales increased more than 200% in the fourth quarter over the third quarter, largely resulting from the sales ramp of Gateway-branded digital cameras throughout the quarter. In addition, Gateway said its digital television revenue increased approximately 20% in the fourth quarter over the third quarter and that it set a company record for shipping digital TV units in the month of December, more than doubling the volume of any previous month since entering the market with its 42-inch plasma television in November 2002. As a result, Gateway said that it expects its CE revenue as a percentage of total revenue to increase significantly on a sequential basis in the fourth quarter and that the company's total gross margin percentage, including PC margins, will improve on a sequential basis. The company also said its selling, general and administrative (SG&A) cost savings in the quarter exceeded targets. The company's positive performance, however, was partially offset by other factors, primarily: constrained supply for the company's 610 Media Center PC, its FMC-901 Family Room Media Center PC and HDTV models; and increased competitive PC pricing promotions that impacted Gateway's ability to drive demand in certain PC segments, particularly the notebook and low-priced desktop categories. The company said its sales to professional segments, including small- and medium-sized businesses, government agencies, educational institutions and enterprise accounts, were in line with internal expectations for the fourth quarter. On the operations front, the fourth quarter of 2003 was the first period during which Gateway's new product fulfillment model became fully operational. This new go-to-market model contributed to the company's achievement of approximately $265 million in annual cost of goods sold savings in 2003, exceeding its original goal of $200 million. Gateway reaffirmed that it exited the year with more than $1 billion in cash and marketable securities. "We're pleased with the progress we're making in driving improvements in our business each quarter," said Ted Waitt, Gateway Chairman and CEO. "Our branded integrator strategy is working and in 2004, we intend to continue leveraging that strategy to drive further improvement in our results." Gateway will provide more detail on its performance in the quarter when the company releases its fourth quarter and full year results on January 29. Since its founding in 1985, Gateway (NYSE: GTW) (S&P, B+ Corporate Credit Rating, Stable) has been a technology and direct-marketing pioneer, using its call centers, web site and retail network to build direct customer relationships. As it transforms itself from being a leading PC company into a branded integrator of personalized technology solutions, the company's line of Gateway- branded products is expanding to include digital TVs, DLP projectors, tablet PCs and systems and networking products and services. Gateway is America's second most admired computer company, according to Fortune magazine, and its products and services received more than 125 awards and honors last year. For more information, visit http://www.gateway.com/ GE COMM'L: S&P Assigns Preliminary Ratings to Ser. 2004-C1 Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to GE Commercial Mortgage Corp.'s $1.3 billion commercial mortgage pass-through certificates series 2004-C1. The preliminary ratings are based on information as of Jan. 5, 2004. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the trustee, the economics of the underlying loans, and the geographic and property type diversity of the loans. Classes A-1, A-2, A-3, B, and C are currently being offered publicly. Standard & Poor's analysis determined that, on a weighted average basis, the pool has a debt service coverage of 1.57x, a beginning loan-to-value (LTV) of 90.7%, and an ending LTV of 77.5%. PRELIMINARY RATINGS ASSIGNED GE Commercial Mortgage Corp. Commercial mortgage pass-through certs series 2004-C1 Class Rating Amount ($) A-1 AAA 112,709,000 A-2 AAA 280,168,000 A-3 AAA 380,472,000 B AA 38,724,000 C AA- 16,136,000 A-1A AAA 304,489,000 D A 30,657,000 E A- 14,522,000 F BBB+ 20,975,000 G BBB 12,909,000 H BBB- 17,749,000 J BB+ 9,681,000 K BB 9,681,000 L BB- 6,454,000 M B+ 8,068,000 N B 4,840,000 O B- 3,227,000 P N.R. 19,363,213 X-1* AAA 1,290,824,213 X-2* AAA 1,237,532,000 *Interest-only class. GEMSTAR-TV GUIDE: SEC Amends Suit Against Former Executives ----------------------------------------------------------- Gemstar-TV Guide International, Inc. (NASDAQ: GMST) issued the following statement regarding the SEC's amended civil complaint filed Monday in which certain former Company executives are charged with fraud: "None of the individuals named in [Mon]day's SEC filing currently serves Gemstar-TV Guide in any capacity. Following the completion of a comprehensive management and corporate governance restructuring in November 2002, an entirely new senior management team was put into place at Gemstar-TV Guide. "Since the management restructuring, the Company's current management has worked closely in cooperation with the SEC in connection with this investigation. The Company believes that it has resolved its past accounting issues and has taken significant steps towards the resolution of associated regulatory issues. Further, the new management team is implementing revised operating plans across the Company." Gemstar-TV Guide International, Inc. (S&P, BB- Corporate Credit Rating, Stable Outlook), is a leading media and technology company that develops, licenses, markets and distributes technologies, products and services targeted at the television guidance and home entertainment needs of consumers worldwide. The Company's businesses include: television media and publishing properties; interactive program guide services and products; and technology and intellectual property licensing. Additional information about the Company can be found at http://www.gemstartvguide.com/ GLOBAL CROSSING: Wants Clearance for Qwest Settlement Agreement --------------------------------------------------------------- The Global Crossing Debtors are party to a number of agreements with Qwest Transoceanic Inc., Qwest Communications Corporation, and certain Qwest affiliates. Following lengthy negotiations, the Debtors and Qwest have agreed to restructure their various contractual relationships by amending and assuming one of the Agreements, abandoning certain assets to QTI pursuant to Section 554 of the Bankruptcy Code, and terminating the other Agreements. To facilitate the restructuring of their relationships, the Debtors and Qwest entered into a settlement agreement. During the period between March, 2001 and June, 2001, the Debtors and Qwest entered into a number of agreements wherein the Debtors purchased from QTI an indefeasible right of use in certain telecommunications fibers and related assets. Pursuant to the European Agreements, QTI is obligated to provide the Debtors with telecommunications capacity, dark fiber, and certain specified telecommunications ducts, all located in Europe. The aggregate purchase price of European Assets pursuant to the European Agreements is $110,000,000. The Debtors paid the European Asset Purchase Price in full upon execution of the European Agreements. The Debtors entered into the European Agreements to integrate the European Assets into their Network and therefore expanding the Network throughout Europe. On September 30, 2001, the Debtors and QTI entered into a number of agreements wherein the Debtors agreed to sell telecommunications capacity to QTI in the South American portion of the Debtors' Network. The aggregate purchase price under the SAC Agreements is $78,000,000. QTI paid the SAC Purchase Price in full upon execution of the SAC Agreements. The Debtors and QCC are party to a certain agreement dated as of June 27, 2001. Pursuant to the Atlantic Agreement, QCC purchased from the Debtors an IRU in certain telecommunications fibers on the Debtors' Network between London and New York for $8,000,000, which was paid in full by QTI upon execution of the Atlantic Agreement. The Atlantic Agreement provides the Debtors with $320,000 revenue per year. Pursuant to the European Agreements, QTI agreed to deliver the European Assets to the Debtors for integration into the Debtors' Network. QTI purchased the Assets from KPN Qwest, which, at that time, was an affiliate of QTI. During the period of time following the execution of the European Agreements, the Debtors made numerous attempts to obtain all technical and logistical information from KPNQ necessary to integrate the European Assets into the Network. KPNQ, however, did not respond to the requests and the Debtors were unable to access the European Assets. In May, 2002, KPNQ filed for bankruptcy protection in the Netherlands. Following the KPNQ Bankruptcy, the Debtors informed QTI that it was in default under the European Agreements and that they intended to exercise their legal remedies. The Debtors and QTI subsequently entered into negotiations in an attempt to resolve the Debtors' claim against QTI. QTI denies any liability to the Debtors. Following extensive arm's-length negotiations, the Debtors and Qwest agreed and the Court approved that: (a) The European Assets will be deemed abandoned to QTI pursuant to Section 554 of the Bankruptcy Code. Each of the European Agreements is terminated as of December 11, 2003. All rights and obligations of the Parties pursuant to the European Agreements will terminate and cease to be of any effect; (b) As of December 11, 2003, the SAC Assets purchased by QTI will be deemed returned to the Debtors. Each of the SAC Agreements is terminated. All rights and obligations of the Parties pursuant to the SAC Agreements will terminate and cease to be of any effect; (c) A portion of the Atlantic Agreement is modified so that the Annual Maintenance Costs payable by Qwest to GC Bandwidth under the Atlantic Agreement will be reduced to $240,000 per annum. The Atlantic Agreement is otherwise affirmed in all respects by the Parties and remains fully enforceable and deemed assumed by the Debtors as of December 9, 2003; (d) The Qwest Entities and the Debtors agree to waive any amounts due, and withdraw any default notices or payment requests previously issued with respect to the Agreements; (e) On December 11, 2003, the Debtors and QCC will enter into a new lease for 1 STM-1 between Buenos Aires, Argentina and Miami, Florida, which will be for a term ending March 31, 2005; and (f) The Debtors and Qwest agree to fully and finally release the other from any and all Claims relating to or arising out of the Agreements. The Debtors assert that the Settlement Agreement is fair and equitable and falls well within the range of reasonableness as it enables the parties to avoid the costs of litigation relating to QTI's breach of the European Agreements. Given the nature of the European Assets, litigation of the factual issues relating to the European Assets could be lengthy and expensive. These undertakings would continue to be a drain on the Debtors' monetary resources. In addition, notwithstanding the veracity of their claim against QTI, the Debtors believe they would face a number of risks in commencing litigation against QTI. Given the complex factual issues, the Debtors determined that the outcome of any litigation regarding the European Assets is far from clear. Furthermore, integration of the European Assets into the Network would require significant capital expenditures and the incurrence of ongoing maintenance costs. Also, due to their Chapter 11 cases, the profound and unforeseen changes in the telecommunications marketplace since the purchase of the European Assets and, as a result of these two developments, the Debtors' adoption of a revised business plan, the Debtors no longer have a need for the European Assets. By entering into the Settlement Agreement the Debtors will relinquish ownership of the European Assets but will retain ownership of the SAC Assets, which are already integrated into the Network. Although the original contract price of the SAC Assets is less than the contract price of the European Assets, the prices were calculated at a time when the telecommunications industry was experiencing unprecedented growth and neither the SAC Assets nor the European Assets are currently valued at their contract price. The Settlement Agreement also provides for the assumption of the Atlantic Agreement, which provides the Debtors with ongoing income for maintenance. (Global Crossing Bankruptcy News, Issue No. 53; Bankruptcy Creditors' Service, Inc., 215/945- 7000) GOLDEN NORTHWEST: Look for Schedules & Statements by January 21 --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Oregon gave Golden Northwest Aluminum, Inc., and its debtor-affiliates an extension of time to file their schedules of assets and liabilities, statements of financial affairs and lists of executory contracts and unexpired leases required under 11 U.S.C. Sec. 521(1). The Debtors have until January 21, 2004 to file the required documents. Headquartered in The Dalles, Oregon, Golden Northwest Aluminum, Inc., is a primary aluminum producer. The Company, together with three affiliates filed for chapter 11 protection on December 22, 2003 (Bankr. Or. Case No. 03-44107). Richard C. Josephson, Esq., represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed debts and assets of more than $100 million each. GRAPHIC PACKAGING: Will Publish Fourth-Quarter Results on Feb. 4 ---------------------------------------------------------------- Graphic Packaging Corporation (NYSE: GPK) will release results for the fourth quarter and full year 2003 on Wednesday, Feb. 4th after the close of the market. The following day, the company will host a conference call for analysts, investors and other interested parties to discuss the fourth quarter results. At 10:00 a.m. EST on Thursday, Feb. 5th, individuals are invited to dial in to listen live to the broadcast. To access the conference call, listeners calling from within North America should dial 800-726-5281 at least 15 minutes prior to the start of the conference call. Replays of the call will be available for one week following the completion of the call and can be accessed at 800-633-8284 (Access #21177757). Graphic Packaging Corporation was formed in August 2003 as a result of the merger of Riverwood Holding, Inc. and Graphic Packaging International Corporation. Graphic Packaging is a leading provider of paperboard packaging solutions to the beverage, food and other consumer product industries. Additional information about Graphic Packaging, its business and its products is available on the Company's Web site at http://www.graphicpkg.com/ Graphic Packaging International Corporation (NYSE: GPK) (S&P, B+ Corporate Credit Rating), with 2002 revenues of approximately $1.1 billion, is America's leading folding carton packaging supplier to the food, beverage and other consumable products markets. The company's customers include some of the most instantly recognized companies in the world. Graphic Packaging operates one large recycled paperboard mill and 19 modern converting facilities as well as three research and design centers located throughout the nation. The company holds over 150 U.S. patents for its printing and package converting processes. Additional information about the company can be found at http://www.graphicpkg.com/ HANGER ORTHOPEDIC: Court of Appeals Affirms Calif. Suit Dismissal ----------------------------------------------------------------- Hanger Orthopedic Group, Inc. (NYSE: HGR) announced that the United States Court of Appeals for the Fourth Circuit has affirmed the dismissal by the United States District court for the District of Maryland of the complaint in Ottmann v. Hanger Orthopedic Group, Inc., et al. In a unanimous decision issued December 22, 2003, the three judge panel affirmed the dismissal of the complaint, which had alleged that Company officials had made misleading statements relating to the impact of Hanger's acquisition of NovaCare in 1999. The opinion concluded that the allegations did not support "the reckless or intentional conduct" required to support liability. Ivan R. Sabel, Chairman of Hanger, and a defendant in the lawsuit, along with Hanger's former Chief Financial Officer, observed, that "While we were always comfortable that our statements relating to the NovaCare merger were forthright, we are obviously pleased to have the Court of Appeals endorse the prior two District Court dismissals of the complaint." Hanger Orthopedic Group, Inc. (S&P, B+ Corporate Credit Rating), headquartered in Bethesda, Maryland, is the world's premier provider of orthotic and prosthetic patient-care services. Hanger is the market leader in the United States, owning and operating 591 patient-care centers in 44 states and the District of Columbia, with 3,139 employees including 875 certified practitioners. Hanger is organized into two business segments: patient-care, which consists of nationwide orthotic and prosthetic practice centers, and distribution, which consists of distribution centers managing the supply chain of orthotic and prosthetic componentry to Hanger and third party patient-care centers. In addition, Hanger operates the largest orthotic and prosthetic managed care network in the country. HAWK CORPORATION: Commences Trading on American Stock Exchange -------------------------------------------------------------- Hawk Corporation (NYSE: HWK) announced that its Class A common stock has been approved for listing on the American Stock Exchange (AMEX). The Company's Class A common stock is expected to commence trading on the AMEX today at the opening of the market and will continue to trade under "HWK", its current ticker symbol. Trading of Hawk's Class A common stock on the New York Stock Exchange will be discontinued at the close of the market on Tuesday January 6, 2004, because, as previously announced by Hawk, the Company does not presently meet the NYSE's continued listing criteria for market capitalization and stockholders' equity. Additionally, the Company announced that it has filed an application with AMEX to have its 12% Senior Notes due December 1, 2006 listed on the exchange. The Company expects the listing to be approved shortly. Ronald E. Weinberg, Chairman and Chief Executive Officer of Hawk, said, "We are pleased to make this move to the American Stock Exchange. This listing will allow us to continue to provide an efficient trading market in our stock and at the same time, we believe it will provide enhanced market awareness for our shareholders." Mr. Weinberg added, "Hawk Corporation looks forward to a great relationship with AMEX as our trading partner." Hawk Corporation -- whose Corporate Credit Rating has been upgrade by Standard & Poor's to 'single-B' -- is a leading worldwide supplier of highly engineered products. Its friction products group is a leading supplier of friction materials for brakes, clutches and transmissions used in airplanes, trucks, construction equipment, farm equipment and recreational vehicles. Through its precision components group, the Company is a leading supplier of powder metal and metal injected molded components for industrial applications, including pump, motor and transmission elements, gears, pistons and anti-lock sensor rings. The Company's performance automotive group manufactures clutches and gearboxes for motorsport applications and performance automotive markets. The Company's motor group designs and manufactures die-cast aluminum rotors for fractional and subfractional electric motors used in appliances, business equipment and HVAC systems. Headquartered in Cleveland, Ohio, Hawk has approximately 1,700 employees and 16 manufacturing sites in five countries. Hawk Corporation is online at: http://www.hawkcorp.com/ HILTON HOTELS: Look for Q4 and Year-End Results on January 26 ------------------------------------------------------------- Hilton Hotels Corporation (NYSE:HLT) has scheduled Monday, January 26, 2004 for the release of the company's fourth quarter/year-end financial results and conference call. The results will be issued prior to the opening of the market on January 26, with a conference call to follow that day at 12 p.m. Eastern time (9 a.m. Pacific). The dial in numbers are 800-299- 0433 (domestic)/617-801-9712 (international), passcode #44271061. Forward-looking statements and other material information concerning anticipated future events and expectations may be discussed on this conference call. The conference call will also be webcast simultaneously via Hilton's investor relations Web site. Investors wishing to access the call on the web should log on to http://www.hiltonworldwide.com/click the investor relations tab and click on the quarterly conference call link. A replay of the call will be available by telephone until February 2nd at 8 p.m. Eastern (5 p.m. Pacific). To access, dial 888-286- 8010 (domestic)/617-801-6888 (international), passcode #44271061. Additionally, a replay will be available indefinitely on Hiltonworldwide.com. As previously reported, Fitch Ratings affirmed the senior unsecured ratings of Hilton Hotels Corporation at 'BB+' and revised the Outlook to Stable from Negative. HORSEHEAD: Suns Capital Unit Completes Purchase of All Assets ------------------------------------------------------------- Horsehead Corp., an affiliate of Sun Capital Partners, has completed the process of acquiring substantially all of the operating assets of Horsehead Industries, Inc., including its Zinc Corporation of America (ZCA) and Horsehead Resource Development Co., operations. The purchase was completed on December 23, 2003. Horsehead is the largest zinc producer in the United States and the world's largest recycler of zinc bearing materials, including the steel industry's EAF Dust. The company annually produces over 165,000 tons of zinc products and recycles more than 450,000 tons of EAF Dust. Horsehead conducts its business under the Zinc Corporation of America and Horsehead Resource Development (HRD) brands and employs over 1000 people in six states. Sun Capital Partners, Inc. is a leading private investment firm focused on leveraged buyouts. Sun has invested in more than 50 companies during the past several years with combined sales in excess of $8.0 billion. Sun has more than $700 million under management and is making new investments through Sun Capital Partners III QP, LP, a $500 million fund raised in January 2003. Participating in Sun's fund are leading fund-of-funds investors, university endowments, pension funds, financial institutions and high net worth individuals, families and trusts. For more information about Sun, visit http://www.SunCapPart.com/ As reported in Troubled Company Reporter's December 17, 2003 edition, Chief Judge Stuart M. Bernstein of the U.S. Bankruptcy Court (Southern District of New York) approved the sale of substantially all of Horsehead Industries's operating assets to an affiliate of Sun Capital Partners. IGAMES ENTERTAINMENT: Reaffirms Acquisition of Equitex Inc. Unit ---------------------------------------------------------------- iGames Entertainment, Inc. (OTCBB: IGME) and Equitex, Inc. (NASDAQ: EQTX) have reaffirmed their transaction announced on November 12, 2003, for the acquisition of Equitex subsidiary, Chex Services, Inc., by iGames Entertainment under the previously outlined terms. The companies stated they are moving forward in the most expeditious manner to file the appropriate proxy statements and bring the transaction to a vote of stockholders as quickly as possible. Christopher Wolfington, Chairman and Chief Executive Officer of iGames Entertainment stated: "The synergies and merits of the Chex Services transaction were never dependent on any one contract for its success. We remain committed to the transaction and look forward to closing as soon as possible. We are confident that Chex Services has more than sufficient remedies to vindicate the wrongful action taken against them. From a business perspective, the recent events have allowed Chex Services to accelerate cost- cutting measures we otherwise had to postpone until our transaction closed," continued Mr. Wolfington. "Despite the loss of the Seminole Tribe of Florida contract, Chex Services remains a strong vibrant company with our dozens of other contracts," stated Henry Fong, President of Equitex, Inc. "We are confident the cost-savings measures we are currently finalizing along with new product introductions for 2004 will minimize the effect of this loss and help position Chex for further success. I believe the combination of Chex with iGames and Money Centers of America will only strengthen the combined companies' position within the industry. We intend to outline the Chex Services cost- savings measures in a press release later this week," stated Mr. Fong. Closing of the Chex Services - iGames Entertainment transaction is subject to certain requirements including necessary stockholder approval, completion of final documentation, due diligence and other customary pre-closing conditions. iGames Entertainment, Inc. develops, manufactures and markets technology-based products for the gaming industry. The Company's growth strategy is to become the innovator in cash access and financial management systems for the gaming industry. The business model is specifically focused on specialty transactions in the cash access segment of the funds transfer industry. For a complete corporate profile on iGames Entertainment Inc., please visit the Company's corporate Web site at http://www.igamesentertainment.com/ Equitex, Inc. is a holding company operating through its wholly owned subsidiary Chex Services of Minnetonka, Minnesota, as well as its majority owned subsidiary Denaris Corporation. Chex Services provides comprehensive cash access services to casinos and other gaming facilities. Denaris was formed to provide stored value card services. * * * Going Concern Uncertainty In its most recent Form 10-Q filed with the Securities and Exchange Commission, iGames Entertainment reported: "The [Company's] financial statements have been prepared assuming that the Company will continue as a going concern. The Company has a net loss of $940,395 for the six months ended September 30, 2003, an accumulated deficit of $3,808,343 at September 30, 2003, cash used in operations of $576,088 for the six months ended September 30, 2003, and requires additional funds to implement our business plan. These conditions raise substantial doubt about the Company's ability to continue as a going concern. "Management is in the process of implementing its business plan and has begun to generate revenues. Management believes that sales of its Protector and placement of new table games will continue to contribute to its operating cash flows. Additionally, management is actively seeking additional sources of capital, but no assurance can be made that capital will be available on reasonable terms. Management believes the actions it is taking allow the Company to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern." IGAMES ENTERTAINMENT: Completes Money Centers of America Merger --------------------------------------------------------------- iGames Entertainment Inc. (OTC Bulletin Board: IGME) announced that the previously announced merger with Money Centers of America closed on Friday, January 2, 2004. Following closing, iGames Entertainment appointed Christopher M. Wolfington as its new Chairman & CEO. Christopher Wolfington, Chairman & CEO of iGames Entertainment stated, "This is just the first step in executing our business plan. We will continue to aggressively pursue sales and acquisitions to build our platform for the future." "We are extremely excited about the closing with Money Centers and combining our efforts in one focused direction. We look forward to a profitable and rewarding future and will give our newly appointed Chairman and CEO, Chris Wolfington, the support needed to accomplish it," stated Jeremy Stein, President of iGames Entertainment. iGames Entertainment, Inc. develops, manufactures and markets technology-based products for the gaming industry. The Company's growth strategy is to become the innovator in cash access and financial management systems for the gaming industry. The business model is specifically focused on specialty transactions in the cash access segment of the funds transfer industry. For a complete corporate profile on iGames Entertainment Inc., please visit the Company's corporate Web site at http://www.igamesentertainment.com/ INTERPUBLIC GROUP: Agrees to Sell Unit's Four MotorSports Tracks ---------------------------------------------------------------- The Interpublic Group of Companies (NYSE: IPG) agreed to sell the four automobile racing tracks owned by its Brands Hatch Circuits unit to MotorSport Vision Limited for an undisclosed sum. The sale includes Brands Hatch, Oulton Park, Cadwell Park and Snetterton. As a result of the sale, Interpublic's interest in UK motorsport will now be limited to its obligations related to the Formula One British Grand Prix and the lease of the Silverstone track. Brands Hatch Circuits has therefore been re-named Silverstone Motorsport Limited. Today's sale of the four tracks does not affect Interpublic's interests and commitments in relation to Silverstone, including the remaining payments under an executory contract and an operating lease. MotorSport Vision Limited is a new company led by Jonathan Palmer that has been established for the purposes of owning and developing the four circuits. This new company will be added to Mr. Palmer's existing motorsport activities which operate under the Bedford Motorsport Limited brand name and provides motorsport experiences focussed on the corporate market. Interpublic (Fitch, BB+ Senior Unsecured Debt and BB- Convertible Subordinated Debt Ratings, Negative Outlook) is one of the world's leading organizations of advertising agencies and marketing services companies. Major global brands include Draft, Foote, Cone & Belding Worldwide, Golin/Harris International, Initiative Media, Lowe & Partners Worldwide, McCann-Erickson, Universal McCann and Weber Shandwick Worldwide. Leading domestic brands include Campbell-Ewald, Deutsch and Hill Holliday. IT GROUP: Outlines Alternatives If Court Won't Confirm Plan ----------------------------------------------------------- If the IT Group Debtors' plan is not confirmed and consummated, the theoretical alternatives include: (a) seeking a liquidation of the Debtors under Chapter 7 of the Bankruptcy Code; and (b) the preparation and presentation of an alternative Chapter 11 plan. Liquidation Under Chapter 7 If no Chapter 11 plan can be confirmed, these Chapter 11 Cases may be converted to cases under Chapter 7 in which a trustee would be elected or appointed to liquidate the assets of the Debtors. The Debtors and the Committee believe that liquidation under Chapter 7 would result in: -- smaller distributions being made to Creditors than those provided for in the Plan because of the additional administrative expenses involved in the appointment of a trustee and attorneys and other professionals to assist the trustee; and -- additional expenses and claims, some of which would be entitled to priority, which would be generated during the liquidation and from the rejection of unexpired leases and executory contracts in connection with the cessation of the Debtors' operations. Alternative Plan of Reorganization The Debtors and the Committee or any other party-in-interest could attempt to formulate a different Chapter 11 plan. However, both the Debtors and the Committee believe that the proposed Plan provides and enables creditors to realize the highest recoveries under the circumstances. Accordingly, the Creditors' Committee "strongly recommends" that creditors vote to accept the Plan. (IT Group Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service, Inc., 215/945-7000) JET 1 CENTER: Case Summary & 9 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Jet 1 Center, Inc. 377 Citation Point Naples, Florida 34104 Bankruptcy Case No.: 03-26514 Type of Business: The Debtor operates car rentals, limousines, hotel reservations, catering and other services. See http://www.jet1.net/for more information on the Debtor. Chapter 11 Petition Date: December 29, 2003 Court: Middle District of Florida (Ft. Myers) Judge: Alexander L. Paskay Debtor's Counsel: Lori V. Vaughan, Esq. Foley & Lardner P.O. Box 3391 Tampa, Florida 33601 Tel: 813-229-2300 Fax: 813-221-4210 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 9 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Air BP Aviation Services $309,760 P.O. Box 4700, Unit 3 Portland, OR 97208 Conroy, Coleman & Hazzard $71,516 Jet 1, Inc. $2,497 State Farm Insurance $533 N Magazine $361 Follage Design Systems $69 Fantozzi's of Olde Naples $68 Internal Revenue Service Unknown Naples Airport Authority Landlord/Rent Unknown KAISER: Retirees' Committee Earns Nod to Hire Orrick as Counsel --------------------------------------------------------------- The Official Committee of Retired Employees of the Kaiser Aluminum Debtors obtained the Court's authority to retain Orrick, Herrington & Sutcliffe LLP as its bankruptcy counsel. Orrick Herrington will replace Brobeck, Phleger & Harrison LLP -- the Retirees Committee's original bankruptcy counsel. Brobeck dissolved in February 2003 and Frederick D. Holden, the Brobeck partner responsible for representing the Retirees' Committee in the Debtors' cases, became a partner with Orrick Herrington. Barbara P. Pletcher, the other Brobeck attorney, who extensively represented the Retirees' Committee in these cases, also became a partner with Orrick Herrington in September 2003. Orrick Herrington will prosecute the interest of salaried retirees in the Debtors' bankruptcy cases. Orrick Herrington will be compensated in accordance with its current standard hourly rates: Frederick D. Holden, Jr., bankruptcy partner $520 Barbara P. Pletcher, employee benefits partner 525 Eric M. Frater, associate 305 Linda Sigler, bankruptcy paralegal 200 Orrick Herrington will also be reimbursed for its actual and necessary expenses incurred in the duration of the cases. (Kaiser Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service, Inc., 215/945-7000) Kaiser Aluminum Corporation filed for chapter 11 protection on February 12, 2002 (Bankr. Del. Case No. 02-10429). Through Kaiser Aluminum & Chemical Corporation, and other subsidiaries, affiliates and joint ventures, the company operates in all principal aspects of the aluminum industry. Kaiser's $3 billion of assets and 5,800 employees generate over $1.5 billion in annual revenue. Corinne Ball, Esq., at Jones Day serves as lead counsel in Kaiser's restructuring and Lazard Freres & Co. provides financial advisory services to the Company. Kaiser's exclusive period to propose a chapter 11 plan expires on February 20, 2004. Bank of America leads a consortium of lenders providing $285 million of DIP Financing through February 13, 2005. KRAVITZ BAGELS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Lead Debtor: Kravitz Bagels, Inc. 12485 Commissioner Dr. North Jackson, Ohio 44451 Bankruptcy Case No.: 04-40006 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Kravitz Land Corp. 04-40008 Type of Business: The Debtor is a manufacturer of food products. Chapter 11 Petition Date: January 3, 2004 Court: Northern District of Ohio (Youngstown) Judge: Successor to Judge Bodoh Debtors' Counsel: Melissa M. Macejko, Esq. Suhar & Macejko, LLC 1101 Metropolitan Tower P.O. Box 1497 Youngstown, OH 44501-1497 Tel: 330-744-9007 Total Assets Total Debts ------------ ----------- Kravitz Bagels, Inc. $549,443 $2,941,146 Kravitz Land Corp. $640,000 $1,992,461 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ National City Bank Equipment $1,006,290 1900 E. Ninth St. ($314,000 Cleveland, OH 44114-3484 secured.) Mahoning Valley Industrial Equipment $120,000 Loan Fund Cereal Food Processors, Inc. Trade debt $76,139 General Mills Finance Trade debt $37,492 Ohio Edison Co. Utilities $29,258 Pliant Corp. Bags $26,662 Ohio Farmers, Inc. Trade debt $26,656 Fleischer's Bagels, LLC Trade debt $24,348 Caravan Products Co., Inc. Trade debt $19,711 Quaker Capital Management Professional fee $18,000 Zilka & Co. Trade debt $17,874 The Callos Group Temp labor $17,521 Randstad Temp labor $17,100 Ohlson Packaging Equipment $15,200 Citicorp. Del Lease, Inc. Caterpillar forklift $13,500 ($5,000 secured.) Revent Incorp. Oven parts $13,035 Great American Line, Inc. Freight $9,326 Yurchyk & Davis Professional fee $8,447 Lesaffre Yeast Corp. Trade debt $8,295 Kandal Cold Storage Frozen storage $8,058 LES BOUTIQUES: G. Frigon Assumes Chief Restructuring Officer Post ----------------------------------------------------------------- Les Boutiques San Francisco Incorporees announces that Mr. Gaetan Frigon has agreed to act as Chief Restructuring Officer of the Corporation. In this function, Mr. Frigon will be responsible for preparing a restructuring plan, as stipulated in the Court Order issued December 17, 2003, under the Companies' Creditors Arrangement Act. Mr. Frigon has had extensive experience in the business world, including senior administrative positions in a number of large retail businesses. His mandate will be to draw up, in cooperation with Richter & Associes Inc., the Court-appointed monitor, an operational, commercial, financial and corporate restructuring plan. This plan must be presented to the Court by January 15, 2003. "Even though the context is not easy, it is important to do everything necessary to preserve the maximum number of jobs for the 2,500 people presently employed by the Corporation. That is why, at the request of the Board of Directors, I have agreed to take on this mandate to introduce corrective measures. Due to the seriousness of the situation, difficult decisions will have to be made and that is what I will set out to do in the best interests of employees, suppliers, creditors, shareholders and other partners," Mr. Frigon stated. San Francisco Group operates 117 stores, located in Quebec and Ontario, grouped under four banners, all aimed at targeting different market segments. The Company also operates Les Ailes de la Mode, a chain of four large specialized stores. At November 1, 2003, the Company's balance sheet shows a working capital deficit of about $18 million and a total shareholders' equity deficit of about $433,000. LTV: Wants Go-Signal to Settle Allocation Appeals and Disputes -------------------------------------------------------------- The Official Committee of Administrative Claimants and LTV Steel Company, Inc., seek Judge Bodoh's permission to enter into a multiparty settlement agreement that resolves: (i) appeals related to the wind down of the LTV Steel bankruptcy case; (ii) all of the appeals of the Order allocating the proceeds of the sale of LTV Steel to ISG related to LTV Steel's former Indiana Harbor facilities; and (iii) prospective litigation over the Lake County, Indiana Administrative Tax Claim. The Prospective Lake County Dispute Lake County asserts $23,750,000 in administrative claims against the Debtors' estates. The Debtors dispute the validity and amount of the claims. The Settlement Agreement reduces, fixes and allows Lake County's administrative tax claim, without the need for the commencement of litigation, and permits settlement of the appeals. The Settlement Pursuant to the Settlement Agreement, Lake County, Appellants JWP/Hyre, Hunter, Calumet, Didier, Hasse, and Foster, the ACC and LTV Steel agree that: (1) The Settling Appellants will dismiss, with prejudice their appeals. (2) In exchange for the Settling Appellants' dismissals, Lake County's administrative claim for taxes will be fixed and allowed for $8,100,000 against the LTV Steel estate. Lake County's allowed administrative claim will be paid or otherwise satisfied in accordance with the treatment accorded to other allowed administrative claims in the LTV Steel case. Lake County will have no other administrative or priority claim of any kind in any of the Debtors' bankruptcy cases. (3) Lake County will receive $250,000 cash on account of its first-priority lien on real property at Debtors' former Indiana Harbor facility. The $250,000 represents the settlement amount of Lake County's lien on the Indiana Harbor real property. The $250,000 allocation will reduce the amount allocable to the Hennepin Works under the Allocation Order. The allocation will not otherwise modify in any manner the allocation set forth in the Allocation Order for any of the other property sold in the ISG Sale. (4) The Settling Appellants will enter into a separate agreement -- to which neither the Debtors nor the ACC are parties -- that: (i) allocates the initial $250,000 payment on account of Lake County's first priority lien on the Debtors' former Indiana Harbor facility's real property among themselves, as the Settling Appellants see fit; (ii) provides that Lake County will receive and retain the first $2,500,000 in cash that is to be distributed on account of its allowed administrative claim [Lake County's portion of the $250,000 initial payment will be included in the $2,500,000 for purposes of determining the overall amounts to be retained by Lake County]; and (iii) Lake County's retained portion of the distributions on account of its allowed administrative claim and the Allocation Payment will be capped at $2,500,000, and it will retain no further portion of the distributions on account of its allowed administrative claim and the Allocation Payment. The remaining amounts to be distributed on account of Lake County's allowed administrative claim and the Allocation Payment will be redistributed by Lake County to the other Settling Appellants pursuant to the terms of their independent Inter-Appellant Agreement. (5) All amounts to be distributed to the Settling Appellants pursuant to the Settlement Agreement and Inter-Appellant Agreement will be in addition to the amounts to be distributed on account of the Settling Appellants' allowed administrative claims in LTV Steel's Chapter 11 case pursuant to any separate plan or motion to distribute estate assets that is approved by the Court. However, the total amount to be distributed to the Settling Appellants on account of Lake County's allowed administrative claim and the $250,000 Allocation Payment on account of Lake County's first-priority lien will not exceed a combined total of $4,300,000. Any amounts that would otherwise be distributable to the Settling Appellants on account of Lake County's allowed administrative claim and its first priority lien claim -- that is, the Allocation Payment -- pursuant to the Term Sheet and which would exceed the $4,300,000 maximum distribution amount on such claims will not be distributed to the Settling Appellants by the LTV Steel Estate. Those excess amounts will, instead, remain in the LTV Steel Estate and will be distributed to administrative claimants other than the Settling Appellants. (6) The Settling Appellants will release all claims against all of the Debtors, other than: (a) the previously allowed administrative claims and the payments to be made with respect to the administrative claims; (b) the Lake County administrative claim; and (c) the Allocation Payment to be made pursuant to the Settlement. (LTV Bankruptcy News, Issue No. 59; Bankruptcy Creditors' Service, Inc., 215/945-7000) MAGELLAN HEALTH: Onex Invests $101 Million for New 24% Stake ------------------------------------------------------------ Onex Corporation has completed the purchase of its equity investment in Magellan Health Services, Inc. This is the first investment through Onex' new fund, Onex Partners LP. Onex Partners' investment was US$101 million for an approximate 24% ownership interest. Onex has control of Magellan and is expected to itself be a 25% Limited Partner in Onex Partners. Magellan Health Services is the leading behavioral managed healthcare organization in the United States. Its customers include health plans, corporations and government agencies. Onex' investment in Magellan was an integral part of the financial reorganization plan of Magellan approved by the Bankruptcy court. Today, Magellan emerges from bankruptcy with a reduction in debt of approximately US$600 million, which combined with the total investment in new equity of US$150 million from Onex and Magellan's creditors, places Magellan in a very strong financial position. Magellan's common equity is expected to begin trading on the Nasdaq stock exchange under the trading symbol MGLN on January 6, 2004. "Magellan represents an outstanding platform in the healthcare industry for Onex," said Robert Le Blanc, an Onex Managing Director. "We look forward to working in partnership with Magellan's management team to grow the business and build value for all shareholders." Onex Partners LP is a private equity fund established by Onex Corporation. The Fund has closed on over US$1.2 billion in commitments and is targeting total commitments of US$1.6 billion by early 2004. The Fund is to provide capital for new Onex- sponsored acquisitions not related to Onex' existing operating companies or ONCAP. Onex has committed US$400 million to the Fund and controls the General Partner. Onex Corporation is a diversified company with annual consolidated revenues of approximately $18 billion and consolidated assets of approximately $15 billion. Onex is one of Canada's largest companies with global operations in service, manufacturing and technology industries. Its subsidiaries include Celestica Inc., Loews Cineplex Entertainment Corporation, ClientLogic Corporation, Dura Automotive Systems, Inc., J.L. French Automotive Castings, Inc., Bostrom Holding, Inc., InsLogic Corporation, Performance Logistics Group, Inc. and Radian Communication Services Corporation. Onex shares trade on the Toronto Stock Exchange under the stock symbol OCX. For more information on Onex Corporation, visit its Web site at http://www.onex.com/ Onex Corporation's security filings can also be accessed at http://www.sedar.com/ MCWATTERS: Closes Sale of Kiena Mine Complex to Wesdome Gold ------------------------------------------------------------ McWatters (TSX: MWA, MWA.DB) completed the sale of its Kiena Mine Complex situated in Val-d'or, Quebec, to Wesdome Gold Mines Inc. The aggregate consideration paid to McWatters was $3 million cash, a 4% NSR on existing resources from the Kiena property and a further 2% NSR on any new resources found on the Kiena property. Moreover, Wesdome will pay McWatters a further $1 million if, as and when the Kiena mill resumes commercial production. Wesdome will also pay McWatters $1.50 per tonne for ore processed at Kiena from any source for up to 5 million tonnes with $1.00 per tonne payable on ore processed from any source thereafter. The majority of the proceeds of the sale were used for the final repayment of McWatters' bank term loan and obligations arising from the gold hedging program of its Sigma-Lamaque Limited Partnership. Outlook In the near term, McWatters intends to focus all of its energies towards the resumption of the Sigma-Lamaque open pit operation. At September 30, 2003, the McWatters Mining's balance sheet discloses a working capital deficit of about $1 million. MERCY HOSPITAL: S&P Drops Revenue Bonds' Rating to Default Level ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating to 'D' from 'CCC' on the Illinois Health Facilities Authority's outstanding $45.9 million series 1992 revenue bonds and $19.2 million series 1996 bonds, issued for Mercy Hospital and Medical Center. The rating was lowered due to a missed principal payment that was required to bondholders on Jan. 1, 2004. The trustee did, however, make the necessary interest payment to bondholders that was due Jan. 1, 2004. "As Standard & Poor's most recent review, dated Dec. 8, 2003, indicated, the weak 'CCC' credit rating, with a negative outlook stemmed from the tenuous unrestricted cash position, missed quarterly payments to the trustee in calendar year 2003, as well as failure to replenish the debt service reserve after the trustee drew down on the DSR to make semi-annual interest payments on July 1, 2003," said Standard & Poor's credit analyst Suzie Desai. "At the time of our last review, management was not able to definitively state that sufficient funds were available to make the next payment. In addition, Mercy was in technical default on its loan agreements that required it to make trustee payments and replenish its debt service reserve fund," she added. MESA AIR GROUP: Reports 71.1% Increase In December 2003 Traffic --------------------------------------------------------------- Mesa Air Group, Inc. (Nasdaq: MESA) reported its preliminary traffic figures, on-time performance, and completion rate figures for December 2003. Year-over-year revenue passenger miles increased 71.1% in December 2003 to 350.5 million, compared to 204.9 million in December 2002. Total available seat miles increased 56.1% in December 2003 to 503.7 million from 322.7 million in December 2002 and passengers carried increased 49.3% to 722,500 from 483,993 a year ago. Load factor increased to 69.6% in December 2003 versus 63.5% in December 2002, an increase of 6.1 points. Mesa's controllable completion rate, which excludes weather-related cancellations, was 98.9% in December. Mesa Air Group's on-time arrival performance for the month of December was 74.9%. "Our business is built upon providing a reliable and cost efficient product to our mainline partners and our operational performance in December was superb. I would like to thank all of our employees for making the holiday season a safe and happy one for our passengers," said Jonathan Ornstein, Mesa's Chairman and Chief Executive Officer. Mesa currently operates 155 aircraft with 975 daily system departures to 153 cities, 40 states, the District of Columbia, Canada, Mexico and the Bahamas. It operates in the West and Midwest as America West Express; the Midwest and East as US Airways Express; in Denver as United Express; in Kansas City with Midwest Express and in New Mexico and Texas as Mesa Airlines. The Company, which was founded in New Mexico in 1982, has approximately 4,000 employees. Mesa is a member of the Regional Airline Association and Regional Aviation Partners. MET-COIL: Wants Exclusive Plan-Filing Period Extended to April 30 ----------------------------------------------------------------- Met-Coil Systems Corporation asks the U.S. Bankruptcy Court for the District of Delaware to extend its exclusive periods to file a chapter 11 Plan and to solicit acceptances of that Plan. The Debtor has, in fact, prepared and filed a Plan, Disclosure Statement and Solicitation Procedures Motion. Nevertheless, the Debtor wants to extend the Exclusive Periods to protect its exclusive rights under Sec. 1121 of the Bankruptcy Code in the event it files an amended plan of reorganization after the initial Exclusive Filing Period or if solicitation of the Plan doesn't begin until after the initial Exclusive Solicitation Period. Met-Coil wants its exclusive plan-filing period extended to April 30, 2004, and its solicitation period to run through June 30, 2004, without prejudice to the company's right to seek further extensions of the Exclusive Periods. The Debtor argues that the size and complexity of its business and financing arrangements compel the requested extension of the Exclusive Periods. Met-Coil is party to various environmental disputes that must be considered in reaching a consensual plan. The Debtor believes that the varied and often competing interests of its creditor constituencies makes its case one in which it is especially appropriate to extend the exclusive periods. Headquartered in Westfield, Massachusetts, Met-Coil Systems Corporation manufactures coil sheet metal processing equipment and integrated systems for producing blanks from sheet metal coils. The Company filed for chapter 11 protection on August 26, 2003 (Bankr. Del. Case No. 03-12676). James C. Carignan, Esq., and Jason W. Harbour, Esq., at Morris Nichols Arsht & Tunnell represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed more than $10 million in assets and more than $50 million in debts. MICRO INTERCONNECT: Keating Reverse Discloses 80% Equity Stake -------------------------------------------------------------- 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 its 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 the Company'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. Micro Interconnect Technology, Inc., whose September 30, 2003 balance sheet shows a total shareholders' equity deficit of about $350,000, was organized under the laws of the State of Nevada on February 11, 1998. The Company's planned principal operations are to license patented processes that improve the production of printed circuit boards. The Company has not generated any revenue from its planned principal operations and is considered a development stage company. The Company has, at the present time, not paid any dividends and any dividends that may be paid in the future will depend upon the financial requirements of the Company and other relevant factors. MIRANT CORP: Plan-Filing Exclusivity Extended Until April 30 ------------------------------------------------------------ U.S. Bankruptcy Court Judge Lynn extends the Mirant Debtors' exclusive period to file a plan until April 30, 2004 and the exclusive period to solicit acceptances of that plan until June 30, 2004. Moreover, the Court rules that the Creditors Committees may file a motion to shorten the Exclusive Periods if the Debtors fail to deliver to the Committees by March 1, 2004: (1) their business plan with five-year financial projections; and (2) a report on intercompany claims and transactions, direct or indirect, between Mirant Americas Generation LLC and Mirant Corporation. In addition, the Debtors will: (a) provide the Committees ongoing access to and input in the development of the business plan; (b) use best efforts to provide the Committees with a draft of qualitative business plan, without projections, by January 15, 2004; and (c) provide each Committee as promptly as reasonably possible all information and data requested by the Committees relating to intercompany claims; provided that the Debtors and each of the Committees will reserve all of their rights with respect to the production of witnesses in connection with the examination of intercompany claims. (Mirant Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000) MSW ENERGY: Completes Exchange Offer for 8.50% Sr. Secured Notes ---------------------------------------------------------------- MSW Energy Holdings LLC announces the closing of the offer to exchange $200 million aggregate principal amount of 8-1/2% Series A Senior Secured Notes Due 2010 for 8-1/2% Series B Senior Secured Notes Due 2010. All of the Old Notes were exchanged. The offer to exchange the Old Notes for the Exchange Notes expired on December 22, 2003. The Old Notes and the Exchange Notes are substantially identical in all material respects, except that the Exchange Notes have been registered under the Securities Act of 1933, as amended. MSW Energy owns a 49.8% interest in Ref-Fuel Holdings LLC. Ref- Fuel Holdings owns 100% of American Ref-Fuel Company LLC. American Ref-Fuel Company is an owner and operator of six waste-to-energy facilities and related businesses in the United States. MSW Energy and MSW Energy Finance Co., Inc., its wholly owned subsidiary, issued the Old Notes on June 25, 2003 to finance MSW Energy's acquisition of its 49.8% interest in Ref-Fuel Holdings. As previously reported, Standard & Poor's Ratings Services assigned its preliminary 'BB-' rating to the proposed $225 million senior secured notes due 2010 issued by MSW Energy Holdings II LLC and co-issued by MSW Energy Finance Co. II LLC. The outlook is stable. NATURADE: Extends Wells Fargo Credit Pact Until March 31, 2004 -------------------------------------------------------------- On January 27, 2000, Naturade Inc., entered into a three year Credit and Security Agreement with Wells Fargo Business Credit, which initially provided for a $3 million secured line of credit at the prime rate plus 1.5% to be used for working capital, including inventory and receivables. On December 20, 2001, the terms of the Credit and Security Agreement were modified to include waiving the enforcement of existing defaults, increasing the credit available to the Company to a maximum of $4,500,000 with an inventory maximum subline of $2,000,000, increasing the floating rate to the prime rate plus 2% and extending the maturity date to December 31, 2003. On September 19, 2002, the terms of the Credit and Security Agreement were modified to include waiving the enforcement of existing defaults, reducing the credit availability of the Company to a maximum of $4,325,000, requiring that the Company maintain certain minimum levels of cash, and reducing the covenants regarding minimum net income and minimum book net worth. On March 24, 2003, the terms of the Credit and Security Agreement were further amended to include waiving the enforcement of existing defaults, increasing the floating rate to the prime rate plus 4.5% and reducing the covenants regarding minimum net income and minimum book net worth. Borrowings under this agreement totaled $1,786,998 at December 31, 2002. On April 15, 2003, the terms of the agreement were further modified to provide approval for the Loan Agreement entered into with Health Holdings & Botanicals, LLC and David A. Weil and provide a Special Revolving Advance to the Company in the amount of $175,000 available upon certain conditions after June 30, 2003 and expiring on December 15, 2003. On November 6, 2003, the terms of the Credit and Security agreement were further modified by the Eighth Amendment to Loan and Security Agreement and Waiver, to provide an extension of the expiration date of the agreement from December 31, 2003 until March 31, 2004 and release a $175,000 Availability Reserve. Borrowings under the Credit and Security Agreement, which totaled $1,368,227 at September 30, 2003, are collateralized by substantially all the assets of the Company. At September 30, 2003, the prime rate was 4.0% and the interest charge under the Credit and Security Agreement was 8.5%. The Credit and Security Agreement contains covenants which, among other things, require that certain financial ratios be met. Naturade Inc. -- whose September 30, 2003 balance sheet shows a total shareholders' equity deficit of about $3 million -- is a branded natural products marketing company focused on high growth, innovative products designed to nourish the health and well being of consumers. The Company concentrates on the rapidly expanding soy food market, which reached sales of almost $2.5 billion in 2002 and is expected to grow 15% to 20% per year reaching $5 to $6 billion by 2005, according to Soyatech market research dated February 2001. The Company has purposely avoided the vitamin category, where growth has been flat, as well as the herbal category, which has experienced 15% to 25% declines per year since the late nineties. The Company's products include Naturade Total Soy, a full line of nutritionally complete meal replacements available in several flavors of powders, ready-to-drink products and bars, Naturade Low Carb protein boosters, Aloe Vera 80 health and beauty care products and other niche dietary supplements. The Company's products are sold in over 10,000 supermarkets and drug stores (e.g., Kroger, Fred Meyer, Safeway and Albertson's, Longs Drug and Sav On Drug), mass merchants (e.g., Wal*Mart and Kmart), club stores (e.g., Sam's Clubs and Costco), natural food supermarkets (e.g., Whole Foods and Wild Oats) and over 5,000 independent health food stores. * * * Liquidity and Capital Resources The Company used cash of $521,960 from operating activities in the nine months ended September 30, 2003, compared to a use of cash of $990,144 in operating activities for the nine months ended September 30, 2002. This decrease in cash used from operating activities is primarily due to the reduction in the Company's operating loss of $1,144,796 combined with a reduction in inventories of $489,979 partially offset by a volume related increase in receivables of $1,128,873 compared to the same period in 2002. Net cash provided by inventories was $607,574 for the nine months ended September 30, 2003 compared to net cash provided by inventories of $117,595 for the nine months ended September 30, 2002 primarily due to lower December sales in 2002 and higher inventories at the end of the period resulting in an increase in cash provided when inventories were reduced to normal levels. Net cash provided by accounts receivable was $95,516 for the nine month period ended September 30, 2003 compared to net cash provided from accounts receivable of $1,224,353 for the same period of 2002, principally due to increased sales volume in 2003 compared to the same period in 2002. Customer terms have remained constant however, there is a slight increase in days sales outstanding due to increased volume in the mass market channel which generally pays more slowly than the Health channel. Net cash used in accounts payable and accrued expenses was $420,101 for the nine month period ended September 30, 2003 compared to net cash used of $799,924 the same period of 2002, principally due a higher level of accrued insurance related to premium increases for director's and officer's insurance and workers compensation insurance. The provision for excess and obsolete inventory used $0 in cash for the nine month period ended September 30, 2003 compared to $30,000 the same period of 2002, principally due to the disposal of excess product lines in 2002 and the implementation of an inventory management system in 2003 decreasing excess inventory levels. Net cash used by prepaid expenses was $200,905 for the nine month period ended September 30, 2003 compared to net cash provided in the same period of 2002 of $174,070, principally due to increased prepaid insurance costs related to directors' and officers' insurance premiums. The Company's working capital decreased $181,693 from ($1,429,771) at December 31, 2002 to ($1,611,464) at September 30, 2003. This decrease was largely due to a decrease in inventory as a result of a concentrated inventory reduction program partially offset by a decrease in accounts payable and borrowings on the Company's credit facility. Cash used in investment activities during the nine months ended September 30, 2003 was $3,797 compared to $7,289 for the nine months ended September 30, 2002. The Company's cash used in financing activities was $10,796 for the nine months ended September 30, 2003, compared to cash provided by financing activities of $1,759,174 for the same period of 2002. The September 30, 2003 amount was the result of the Loan Agreement (described in Note 5) partially offset by net pay downs on the Company's line of credit. The September 30, 2002 amount was the result of the $2.5 million from the Private Equity Transaction, conversion into equity of the Health Holdings debt, and a decrease in borrowings under the Credit Agreement. As of September 30, 2003, the Company was in compliance with all of the covenants of the Credit and Security Agreement with Wells Fargo. 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. At September 30, 2003, the Company has an accumulated deficit of $21,982,924, a net working capital deficit of $1,611,465 and a stockholders' capital deficiency of $2,991,001, and has incurred recurring net losses. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company's independent auditors qualified their opinion on the Company's December 31, 2002 financial statements by including an explanatory paragraph in which they expressed substantial doubt about the Company's ability to continue as a going concern The Company believes that its existing cash balances and financing arrangements will provide it with sufficient funds to finance its operations during the next twelve months, provided that Wells Fargo does not exercise its right to terminate, or demand immediate payment of all amounts outstanding under the Credit Agreement. However, the Company may seek to raise additional funds through the sale of public or private equity and/or debt financings or from other sources. No assurance can be given that additional financing will be available in the future or that, if available, such financing will be obtainable on terms acceptable to the Company or its stockholders. NEWPORT: Clinda Assumes Debt Owed to Investors and Ex-Employee -------------------------------------------------------------- Newport International Group Inc. (OTCBB:NWPO) signed an agreement to sell certain assets to Clinda Development, a privately owned real estate development company affiliated with a minority shareholder and creditor, in exchange for the assumption of certain debts owed by the company to investors and a former employee. The debts total approximately $110,000. As part of the agreement Newport will pay to Clinda or its designees, $11,000. Newport is retaining certain rights it may have to properties in Wellington, Florida. The transaction is expected to close on or before January 31, 2004. Separately, the company has entered into negotiations with its secured debt holder. The secured debt holder represents the remaining notes outstanding of Newport's debt. The debt holder has agreed to temporarily waive a default provision as Newport seeks possible strategic alternatives. Newport has been unable to secure financing for its land projects as of this date and does not at this time believe it will be able to secure such financing in the foreseeable future. Newport is actively pursuing all alternatives including possible mergers and acquisitions. While the secured debt holder can exercise the default provision at any time, Newport believes that it will have adequate time to explore all possibilities currently available. NUEVO ENERGY: Closes Sale of Calif. Real Estate Assets for $47MM ---------------------------------------------------------------- Nuevo Energy Company (NYSE:NEV) announced the sale of Tonner Hills, an 810-acre real estate development project located in Orange County, California, to affiliates of Shea Homes Limited Partnership and Standard Pacific Corp. for approximately $47 million. Pursuant to terms of the purchase and sale agreement, $16 million of the purchase price has been received by Nuevo, $22.5 million will be received within 90 days and the remaining $8.5 million will be received upon completion of certain habitat restoration work performed by Nuevo. In addition, the buyers have assumed the obligation to perform the oil field accommodation necessary to render Tonner Hills suitable for a residential housing development. Tonner Hills overlays the Brea-Olinda Field, a producing oil and gas field, sold in February 2003. In a separate transaction, Nuevo sold an office building and contiguous acreage located in Orcutt, California, to a California- based private entity for approximately $2.9 million. As of September 30, 2003, both Tonner Hills and the Orcutt property were included in assets held for sale on Nuevo's balance sheet. "Our top priority in 2003 was to monetize non-core assets and reduce debt outstanding, both of which were accomplished," stated Jim Payne, Chairman, President and CEO. "In 2003, we sold $132 million of non-core assets, including the aforementioned properties. Free cash flow from operations combined with proceeds from non-core asset sales enabled us to eliminate $185 million of high coupon debt in 2003. The full impact of actions taken in 2003, including a dramatic reduction in debt outstanding and higher negotiated California crude oil price differentials, will flow to the bottom-line in 2004. As we enter 2004, we will continue our strategy of financial discipline as well as seek growth opportunities using proceeds from the most recent real estate sales and free cash flow from operations for these purposes." Nuevo Energy Company (S&P, BB- Corporate Credit Rating, Stable) is a Houston, Texas-based company primarily engaged in the acquisition, exploitation, development, exploration and production of crude oil and natural gas. Nuevo's domestic producing properties are located onshore and offshore California and in West Texas. Nuevo is the largest independent producer of oil and gas in California. The Company's international producing property is located offshore the Republic of Congo in West Africa. To learn more about Nuevo, please refer to the Company's internet site at http://www.nuevoenergy.com/ NUEVO ENERGY: Ups Realized Price for Calif. Crude Oil Production ---------------------------------------------------------------- Nuevo Energy Company (NYSE:NEV) announced that higher crude oil price differentials have been established for approximately 85% of its California crude oil production, or 30,500 barrels per day, which is sold to ConocoPhillips (formerly Tosco) under an existing long-term contract. For each type of crude oil that Nuevo produces in California, this contract provides pricing related to a percentage of the NYMEX price based on crude oil quality and location differences. Based upon Nuevo's current crude oil production mix, its new weighted average crude oil price will be approximately 81.6% of the NYMEX crude oil price compared to 73.6% under existing pricing terms. The new crude oil price differentials will be effective January 1, 2004 until December 31, 2005. Subsequent to this date, periodic pricing adjustments will be made every two years as provided for in the contract until the contract expires on January 1, 2015. "The new crude oil price differentials for our California crude oil production are reflective of the current pricing environment," stated Jim Payne, Chairman, President and CEO. "As an example, at a NYMEX crude oil price of $27.50 a barrel and a California production level similar to 2003, the new crude oil price differentials will generate an incremental $25 million in cash flow in 2004 compared to 2003." In 2004, approximately 15% of Nuevo's crude oil production in California will be sold at market prices under separate contracts. Nuevo Energy Company (S&P, BB- Corporate Credit Rating, Stable) is a Houston, Texas-based company primarily engaged in the acquisition, exploitation, development, exploration and production of crude oil and natural gas. Nuevo's domestic producing properties are located onshore and offshore California and in West Texas. Nuevo is the largest independent producer of oil and gas in California. The Company's international producing property is located offshore the Republic of Congo in West Africa. To learn more about Nuevo, please refer to the Company's internet site at http://www.nuevoenergy.com/ OFFSHORE LOGISTICS: Will Fall Short of Analysts' Q4 Estimates ------------------------------------------------------------- Offshore Logistics, Inc. (NYSE:OLG) announced that its third quarter financial results will be below current analysts' earnings expectations. For the three months ended December 31, 2003, the Company estimates it will generate diluted earnings per share in the range of $0.18 to $0.25. The Company's Gulf of Mexico operations were stable during the December quarter. However, flight activity declines coupled with higher costs in the North Sea are expected to result in close to breakeven operating earnings from that market. Cost savings from the Company's previously announced North Sea restructuring program will not have an impact on earnings until the fourth fiscal quarter. Continued poor results on certain contracts in Nigeria also exerted significant downward pressure on fiscal third quarter International operating results and margins. These contracts are under close management review, and negotiations with customers relating to rate increases are ongoing. However, it will likely take several months to improve Nigerian margins and return the Company's International business unit profitability to historical levels. Foreign exchange transaction losses due to the weakening of the U.S. dollar are also expected to negatively impact consolidated earnings. The Company will release its December 31, 2003 earnings results in early February 2004 and will announce the day and time of the release and related conference call at a later date. Offshore Logistics, Inc. (S&P, BB+ Corporate Credit Rating, Stable Outlook) is a major provider of helicopter transportation services to the oil and gas industry worldwide. Through its subsidiaries, affiliates and joint ventures, the Company provides transportation services in most oil and gas producing regions including the United States Gulf of Mexico and Alaska, the North Sea, Africa, Mexico, South America, Australia, Egypt and the Far East. The Company's Common Stock is traded on the New York Stock Exchange under the symbol OLG. OMEGA HEALTHCARE: Arranges $50-Mill. Acquisition Line of Credit --------------------------------------------------------------- Omega Healthcare Investors, Inc. (NYSE:OHI) has closed on a new $50 million acquisition line of credit. The Company has also re- leased six skilled nursing facilities, sold two SNFs and sold its investment in an Australian asset. Acquisition Line of Credit Effective December 31, 2003, the Company closed on a four-year, $50 million revolving acquisition line of credit arranged by GE Healthcare Financial Services. The acquisition line of credit will be secured by first liens on potential facilities acquired or assignments of mortgages made on new acquisitions. The interest rate of LIBOR plus 3.75% with a 6% floor on the revolving acquisition line of credit is identical to the Company's existing Credit Facility also arranged by GE Healthcare Financial Services. "The combination of our current revolver availability and cash on hand of approximately $39 million, coupled with the new GE revolving acquisition line provides the Company with a great deal of flexibility to initiate a growth strategy in 2004. The Company is actively reviewing a number of skilled nursing facility and assisted living facility acquisition opportunities," said Taylor Pickett, President and CEO of Omega Healthcare Investors, Inc. Sun Healthcare Group, Inc. Effective January 1, 2004, the Company re-leased five SNFs to an existing operator under a new Master Lease, which has a 5-year term and has an initial annual lease rate of $0.75 million. Four SNFs formerly leased by Sun Healthcare Group, Inc. ("Sun"), three located in Illinois and one located in Indiana, representing 449 total beds, were part of this transaction. The fifth SNF in the transaction, located in Illinois, representing 128 beds, was the last remaining owned and operated facility in the Company's portfolio. Also on December 1, 2003 the Company re-leased one SNF, formerly leased by Sun, located in California and representing 59 beds, to a new operator under a lease, which has a ten-year term and has an initial annual lease rate of $0.12 million. Separately, the Company continues its ongoing restructuring discussions with Sun. At the time of this press release, the Company cannot determine the timing or outcome of these discussions. There can be no assurance that Sun will continue to pay rent at the current level, although, the Company believes that alternative operators would be available to lease or buy the remaining Sun facilities if an appropriate agreement is not completed with Sun. As a result of the above-mentioned transitions of the five former Sun facilities, Sun now operates 35 of the Company's facilities, down from 50 facilities one year ago. The Company is in the process of negotiating terms and conditions for the re-lease of five additional Sun properties with new operators. For the month of January, Sun remitted approximately $1.55 million in lease payments or $18.6 million on an annual basis. Claremont Healthcare Holdings, Inc. Effective December 1, 2003, the Company sold one SNF formerly leased by Claremont Healthcare Holdings, Inc., located in Illinois and representing 150 beds, for $9.0 million. The Company received net proceeds of approximately $6.0 million in cash and a $3.0 million, five-year, 10.5% secured note for the balance. This transaction results in a non-cash, non-FFO accounting loss of approximately $3.8 million, which will be recorded in the fourth quarter of 2003. On November 7, 2003, the Company re-leased two SNFs formerly leased by Claremont, located in Ohio and representing 270 beds, to a new operator under a Master Lease, which has a ten-year term and has an initial annual lease rate of $1.2 million. Separately, the Company continues its ongoing restructuring discussions with Claremont regarding the five facilities Claremont currently leases from the Company. At the time of this press release, the Company cannot determine the timing or outcome of these discussions. Claremont failed to pay base rent due during the fourth quarter of 2003 in the amount of $1.5 million. During the fourth quarter of 2003, the Company applied security deposits in the amount of $1.0 million to pay Claremont's rent payments and the Company demanded that Claremont restore the $1.5 million security deposit. As of the date of this press release, the Company has no additional security deposits with Claremont. The Company is recognizing revenue from Claremont on a cash-basis as it is received. Other Assets On December 4, 2003, the Company sold its investment in Principal Healthcare Finance Trust realizing proceeds of approximately $1.5 million, net of closing costs, resulting in a gain of approximately $0.1 million. Also in December, the Company sold one closed facility located in Massachusetts, realizing proceeds of approximately $0.4 million, net of closing costs, resulting in a gain of approximately $0.1 million. At the time of this press release, the Company has six closed facilities remaining with a total net book value of $2.4 million. Omega (S&P, B+ Corporate Credit Rating, Stable) is a Real Estate Investment Trust investing in and providing financing to the long- term care industry. At June 30, 2003, the Company owned or held mortgages on 221 skilled nursing and assisted living facilities with approximately 21,900 beds located in 28 states and operated by 34 third-party healthcare operating companies. ORBIMAGE INC: Officially Emerges from Chapter 11 Proceedings ------------------------------------------------------------ ORBIMAGE Inc. (formerly Orbital Imaging Corporation) officially emerged from bankruptcy protection effective December 31, 2003. As previously announced, ORBIMAGE's final plan of reorganization was confirmed on October 24, 2003 by the United States Bankruptcy Court for the Eastern District of Virginia. The company also officially changed its name to ORBIMAGE Inc. "Our emergence from bankruptcy protection marks the final milestone in the new beginning for ORBIMAGE. Not only do we have a much stronger balance sheet, we also have a new satellite that's performing exceptionally well, over $250 million in sales backlog, an exceptional team of experienced professionals, and solid business partnerships," said Matt O'Connell, ORBIMAGE's Chief Executive Officer. "In addition to ORBIMAGE's bright future, I am also confident in the growth trend of the commercial remote sensing industry overall." As part of the final reorganization, on December 31, 2003 all existing notes and shares of capital stock of Orbital Imaging Corporation were cancelled. Holders of the Company's old notes and the Company's other general unsecured creditors received $50 million in new Senior Subordinated Notes due 2008 and 6 million shares of common stock, representing approximately 99% of the outstanding capital stock of ORBIMAGE Inc. Holders of certain debt obligations incurred during the Company's bankruptcy received approximately $19 million in new Senior Notes due 2008. Additionally, holders of the Company's Series A Preferred Stock received warrants to purchase up to approximately 319,000 shares of common stock of ORBIMAGE Inc. ORBIMAGE is a leading global provider of Earth imagery products and services, with a constellation of digital remote sensing satellites and a worldwide integrated image receiving, processing and distribution network. The company currently operates the new OrbView-3 high-resolution satellite launched on June 26, 2003 which offers one-meter panchromatic (black and white) and four- meter multispectral (color) digital imagery on a global basis and the OrbView-2 ocean and land multispectral imaging satellite that was launched in 1997. For more information about ORBIMAGE, visit its Web site at http://www.orbimage.com/ OXFORD INDUSTRIES: Appoints S. Anthony Margolis to Board -------------------------------------------------------- Oxford Industries, Inc. (NYSE: OXM) announced the appointment of S. Anthony Margolis to the company's Board of Directors. Mr. Margolis is Group Vice President of Oxford Industries as well as co-founder and Chief Executive Officer of Tommy Bahama. "The Tommy Bahama business has been a great addition to Oxford and Tony has been a great addition to the Oxford's senior management team," commented J. Hicks Lanier, Chairman and President of Oxford Industries. "We are delighted to have Tony join our board and we look forward to benefiting from his broad experience in marketing and brand building." 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/ OXFORD IND.: Declares 14% Increase in Quarterly Cash Dividend ------------------------------------------------------------- Oxford Industries' Board of Directors declared a 14% increase in the quarterly cash dividend from $0.105 to $0.12 per share of common stock payable February 28, 2004 to shareholders of record on February 17, 2004. This is the 175th consecutive quarterly cash dividend since Oxford became publicly-owned in 1960. 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 GAS: Asks Court to OK Settlement with Santa Clara City -------------------------------------------------------------- On March 8, 1990, Pacific Gas and Electric Company and the City of Santa Clara, California, entered into the Grizzly Development and Mokelumne Settlement Agreement. Under the Grizzly Agreement, PG&E sells, inter alia, capacity and energy to Santa Clara at prices reflected in the Grizzly Agreement. On October 3, 2001, Santa Clara filed a timely proof of claim asserting -- in addition to "reserved claims" -- prepetition "known claims" amounting $3,285,612 for the energy sold to PG&E by the City under an Interconnection Agreement among the parties and for certain royalties owed by PG&E to Santa Clara. In May 2003, the parties entered into a stipulation, pursuant to which Santa Clara partially withdrew $44,514 of its Known Claims, reducing its Known Claims to $3,241,097. William J. Lafferty, Esq., at Howard, Rice, Nemerovski, Canady, Falk & Rabkin, in San Francisco, California, says that, because PG&E has not completed its review and investigation of Santa Clara's claim, PG&E has not yet determined whether or not it will object to the claim. Accordingly, the parties agreed that Santa Clara's offset rights under Section 553 of the Bankruptcy Code need not be effectuated until any disputes regarding Santa Clara's prepetition claims are resolved. Mr. Lafferty also relates that, as a result of a billing error that went undetected for several years, PG&E under-billed Santa Clara for the Power Sale for the period January 1, 1998 through August 31, 2001. On November 30, 2001, PG&E filed a Proof of Claim against Santa Clara, pursuant to Section 900 of the California Government Code, amounting to $10,419,766 for the Under-billed Amount. PG&E subsequently recalculated the Under- billed Amount and determined that it should be reduced to $8,458,653. Santa Clara denies that it is liable for the Under- billed Amount. To resolve all outstanding issues without expending the time and resources associated with further legal proceedings, the parties stipulate and agree that: (a) Santa Clara will pay $4,200,000 to PG&E, in exchange for PG&E's release of Santa Clara for all claims arising out of the Dispute -- $2,100,000 of the Settlement Payment is based on the power sold to Santa Clara by PG&E under the Grizzly Agreement before the Petition Date, while the remaining $2,100,000 is based on the power sold to Santa Clara after the Petition Date; (b) Without further delay, Santa Clara will pay to PG&E the postpetition amount; (c) At the same time, Santa Clara will deposit the prepetition amount in a mutually agreeable interest bearing escrow account. The prepetition amount will remain in the escrow account until the parties have resolved Santa Clara's Proof of Claim, whether by agreement, through settlement or other Bankruptcy Court process. Once Santa Clara's Proof of Claim is resolved, the funds in the escrow account will be distributed to the parties in the amounts that reflect the Settlement. The cost of establishing and maintaining the escrow account will be shared equally by the parties; and (d) PG&E will withdraw its Claim against Santa Clara, with prejudice. PG&E agrees not to reassert the Claim. By this motion, PG&E asks the Court to approve the Settlement Agreement. (Pacific Gas Bankruptcy News, Issue No. 68; Bankruptcy Creditors' Service, Inc., 215/945-7000) PG&E NAT'L: Wants Court Nod for Modified Cash Management Order -------------------------------------------------------------- On the Petition Date, the PG&E National Energy Group Debtors obtained permission from the Court to continue using their existing Cash Management System, Bank Accounts and Checks and other Business Forms. The Court also waived the Investment and Deposit Guidelines established in Section 345 of the Bankruptcy Code. Subsequently, the United States Trustee asked for certain modifications to the form of the Cash Management Order. The U.S. Trustee and the NEG Debtors negotiated extensively with respect to how best to modify the Cash Management Order so as to satisfy the U.S. Trustee's policy goals while avoiding unnecessary burdens on the Debtors' estates. As a result of these negotiations, the U.S. Trustee and the NEG Debtors agreed on a modified form of Cash Management Order, which embodies four principal changes or clarifications requested by the U.S. Trustee: (1) The first change requires the Debtors to obtain Court approval for the transfer of any funds to non-debtor affiliates outside the ordinary course of the Debtors' businesses. This change modifies the language in the Cash Management Order providing for administrative expense status pursuant to Sections 503(b)(1) and 507(a)(1) for inter-debtor transfers. The NEG Debtors find this change acceptable because they do not intend to make any transfers outside the ordinary course of business without seeking prior Court approval. Moreover, the Debtors believe that all transfers in the ordinary course of business would, by law, enjoy the administrative status referenced in the prior version of the Cash Management Order. (2) The next change replaces the language allowing the Debtors to continue utilizing existing forms without labeling the forms with a "debtor-in-possession" designation with the language stating that the Debtors are required to comply with the Section 345(b) provisions with respect to their operating bank accounts. This change is also acceptable to the Debtors because they already added "debtor-in-possession" to their checks when they changed their names. (3) The third change adds the requirement that the Debtors provide certain additional information in their monthly operating reports. The U.S. Trustee requested this additional information as part of its review of the Debtors' monthly operating reports. The Debtors are more than willing to accommodate this request and have, in fact, already begun doing so in the September operating reports. (4) The final modification spells out certain requirements with which the Debtors must comply related to their institutional investment policy, rather than simply providing for an objection period to their investment policy. The Debtors reviewed the clarification sought by the U.S. Trustee and find it acceptable because their existing investments already comply with the clarified standards. By this motion, the Debtors ask the Court to approve the amendments to the Cash Management Order. (PG&E National Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., 215/945- 7000) PREMCOR REFINING: Soliciting Proposals for Ethanol Supply --------------------------------------------------------- The Premcor Refining Group Inc., a wholly-owned subsidiary of Premcor Inc. (NYSE: PCO), is soliciting proposals from qualified ethanol suppliers. PRG is one of the largest independent petroleum refiners and suppliers of unbranded petroleum products in the United States. The company owns and operates refineries in Texas, Ohio and Tennessee with a combined crude oil throughput capacity of approximately 610,000 barrels per day. PRG sells refined products through its proprietary distribution system, extensive third-party arrangements, in the bulk market, and through a variety of product exchanges. Products are marketed in the Midwest, Gulf Coast, Eastern and Southeastern United States. As a result of its activity in the marketing of transportation fuels, PRG is a significant consumer of ethanol at its various locations throughout the Midwest and Southeastern regions of the United States. PRG will issue a tender to qualified suppliers requesting proposals to supply PRG's ethanol requirements. The company intends to award one supplier with the entire demand. The winning supplier will be required to provide product and inventory management at the company's designated locations. Qualified suppliers will be requested to submit proposals for consideration. For additional information, interested parties should contact the company as shown below. Contact: Proposal Information Bernie Topper (203) 698-7517 Bob Luby (203) 698-7516 Media Joe Watson, (203) 698-7510 * * * As previously reported, Fitch Ratings assigned the senior unsecured debt rating of 'BB-' of Premcor Refining Group to the proposed offering by the company of $210 million of 6-3/4% senior notes due 2011. Fitch also assigned the rating of 'B' to the proposed offering of $175 million of 7-3/4% senior subordinated notes by the company due 2012. The Rating Outlook for PRG remains Positive. Fitch Ratings rates the debt of Premcor Refining Group, as follows: PRG -- $760 million secured credit facility 'BB'; -- Senior unsecured notes 'BB-'; -- Senior subordinated notes 'B'. REDBACK NETWORKS: Consummates Plan and Exits Chapter 11 Process --------------------------------------------------------------- Redback Networks Inc. (Nasdaq:RBAKD), a leading provider of broadband networking systems, announced that its plan of reorganization as confirmed by the U.S. Bankruptcy Court for the District of Delaware on December 19, 2003 became effective at 6:00 PM Pacific Time on January 2, 2004, and it has exited from Chapter 11. "Redback Networks has emerged as a powerful, new company with the products, technologies, partnerships and customers of a well- established firm," said Kevin DeNuccio, president and chief executive officer of Redback Networks. "We successfully completed the crucial step of financial restructuring in near record time and are now free to more confidently compete in the dynamic, growing market for strategic broadband infrastructure." Redback Networks filed its financial restructuring plan on November 3, as a "pre-packaged" plan for "fast track" approval by the court. The court confirmed it 49 days later, on December 19, 2003. During the Chapter 11 process, the company has maintained all of its normal business operations seamlessly and without interruption. This schedule meets with NASDAQ's listing requirements, which include confirmation of the plan of reorganization by December 23, 2003 and emergence from bankruptcy by January 6, 2004, and now Redback Networks will face NASDAQ's minimum bid price conditions. The company's ticker symbol will include a "D" for the next ten trading days to indicate it has executed a reverse stock split as a part of its financial restructuring. This major step in the restructuring process comes at an opportune time, as the importance of DSL in the product portfolio of service providers is on the rise, and many major carriers around the world are currently contemplating their next-generation broadband DSL network architectures. Redback has eliminated approximately $467 million of its existing debt and has eliminated $44M in annual expenses from its expense model, resulting in a stronger financial model between revenue and expenses. This financial restructuring gives Redback the ability to address the long-term needs of existing and potential customers and to participate fully in these new market growth opportunities. Redback Networks Inc. enables carriers and service providers to build profitable next-generation broadband networks. The company's User Intelligent Networks(TM) product portfolio includes the industry-leading SMS(TM) family of subscriber management systems, and the SmartEdge(R) Router and Service Gateway platforms, as well as a comprehensive User-to-Network operating system software, and a set of network provisioning and management software. Founded in 1996 and headquartered in San Jose, Calif., with sales and technical support centers located worldwide, Redback Networks maintains a growing and global customer base of more than 500 carriers and service providers, including major local exchange carriers (LECs), inter-exchange carriers (IXCs), PTTs and service providers. REDBACK NETWORKS: Secures $30-Million Equity Funding from TCV ------------------------------------------------------------- Redback Networks Inc. (Nasdaq:RBAKD), a leading provider of broadband networking systems, received $30 million in equity funding from Technology Crossover Ventures (TCV), a premier provider of growth capital to technology companies. In addition, the company announced that its plan of reorganization became effective at 6:00 p.m. Pacific Time on January 2, and it has successfully completed the Chapter 11 process (please see separate story). "Having successfully completed our financial restructuring and having built a strong and unique position in the growing market for strategic broadband infrastructure, we are moving down the path towards profitability and long-term growth," said Kevin DeNuccio, president and chief executive officer of Redback Networks. "The funding and endorsement from TCV will ensure uninterrupted momentum as we continue to move forward and should serve as a significant sign of progress, furthering the confidence of our customers and partners." "We believe that Redback Networks holds an important position in the quickly expanding market for strategic broadband infrastructure," said John Drew, General Partner, Technology Crossover Ventures. "TCV is committed to the long-term success of our investments, and we're excited to contribute to Redback's future in a promising market." In return for their $30 Million investment TCV received 651,749 shares of Series B convertible preferred shares that can be converted into common stock at a one for ten ratio. TCV also received warrants exercisable for 1,629,373 shares of common stock at an exercise price of $5.00 per common share. The shares of preferred stock and warrants sold to the investors have not been registered under the Securities Act of 1933. Accordingly, these securities may not be offered or sold in the United States, except pursuant to the effectiveness of a registration statement or an applicable exemption from the registration requirements of the Securities Act. Redback has agreed to file a registration statement covering resales of the common stock issuable upon conversion of the Series B preferred stock and exercise of the warrants by TCV. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the common stock. Redback Networks Inc. enables carriers and service providers to build profitable next-generation broadband networks. The company's User Intelligent Networks(TM) product portfolio includes the industry-leading SMS(TM) family of subscriber management systems, and the SmartEdge(R) Router and Service Gateway platforms, as well as a comprehensive User-to-Network operating system software, and a set of network provisioning and management software. Founded in 1996 and headquartered in San Jose, Calif., with sales and technical support centers located worldwide, Redback Networks maintains a growing and global customer base of more than 500 carriers and service providers, including major local exchange carriers (LECs), inter-exchange carriers (IXCs), PTTs and service providers. ROGERS COMMS: Will Publish 4th Quarter Results on Feb. 12, 2004 --------------------------------------------------------------- Rogers Communications Inc. disclosed selected preliminary subscriber results for the fourth quarter ended December 31, 2003 and initial financial and operating guidance for 2004. "Rogers' cable and wireless subscriber results in both the fourth quarter and for the full year 2003 clearly reflect our continued success in providing innovation, convenience and value for our customers," said Ted Rogers, President and CEO of Rogers Communications. "As our guidance for 2004 suggests, we will remain disciplined in the execution of our strategy of profitable growth." Rogers Communications expects to release fourth quarter 2003 financial and operating results, including full subscriber results, on or about February 12, 2004. Guidance The following initial 2004 guidance for revenue, operating profit, subscriber and capital expenditure levels is forward looking information. Operating profit is defined as operating income before depreciation, amortization, interest, income taxes, non- operating items and non-recurring items, and is a standard measure that is commonly reported and widely used in the communications industry to assist in understanding and comparing operating results. Operating profit is not a defined term under generally accepted accounting principles. Accordingly, this measure should not be considered as a substitute or an alternative for net income (loss) or cash flow, in each case as determined in accordance with GAAP. Operating profit guidance reflects the Company's planned adoption of accounting to expense stock options as required under Canadian GAAP effective January 1, 2004. The Company estimates that the additional expense that will be recorded in 2004 on a consolidated basis associated with this accounting change is approximately $13 million, of which $6 million is expected at Cable, $5 million is expected at Wireless (before giving effect to the 44% non-controlling interest elimination), and $2 million is expected at Media. Rogers Cable expects to generate revenue in the $1,910 million to $1,950 million range and operating profit before management fees in the $710 million to $730 million range for full year 2004. Cable estimates it will add between 120,000 and 150,000 net broadband Internet subscribers and between 100,000 and 120,000 net digital cable subscribers (households) by the end of 2004. Basic cable subscriber levels are expected to be flat to a decline of up to 1%. Total capital expenditures at Cable in 2004 are expected to be between $440 million and $465 million. Rogers Wireless expects to report network revenues (excluding revenue from equipment sales) of approximately $2,240 million to $2,280 million for the full year 2004. Operating profit before management fees is expected to be in the $820 million to $845 million range in 2004. Total wireless voice and data net subscriber additions in 2004 are expected to be approximately 350,000 to 400,000. Total capital expenditures at Wireless in 2004 are expected to be between $400 million and $425 million. Rogers Media expects to report revenue of approximately $920 million to $940 million and operating profit before management fees of between $115 million to $120 million in 2004. Rogers Communications Inc. (TSX: RCI.A and RCI.B; NYSE: RG) (S&P, BB+ L-T Corporate Credit Rating, Negative) is Canada's national communications company, which is engaged in cable television, broadband Internet access and video retailing through Rogers Cable Inc.; digital PCS, cellular, wireless data communications and paging through Rogers Wireless Communications Inc.; and radio, television broadcasting, televised shopping and publishing businesses through Rogers Media Inc. For more information about the Company and its products, visit http://www.rogers.com/ SIEBEL SYSTEMS: Reports Preliminary Fourth Quarter Fin'l Results ---------------------------------------------------------------- Siebel Systems, Inc. (Nasdaq:SEBL), a leading provider of eBusiness applications software, announced preliminary results for the fourth quarter ended December 31, 2003. The company expects total revenues for the fourth quarter of 2003 to be approximately $365 million and license revenues to be approximately $150 million. Earnings per share for the fourth quarter of 2003 are expected to be approximately $0.08 per share. The company's estimated cash, cash equivalents, and short-term investments are approximately $2.02 billion as of December 31, 2003, the net result of over $40 million in cash generated from operations during the quarter offset by a reduction for acquisitions and other investments including the UpShot and Motiva transactions which closed in the fourth quarter. Previous management guidance provided on October 15, 2003 had been for total revenues for the fourth quarter of 2003 to be in the range of $335 million to $355 million, license revenues to be in the range of $120 million to $140 million, and earnings per share to be $0.05-$0.06 per share. In addition, Siebel announced the completion of its 2003 reorganization and restructuring activities with the realignment of its worldwide sales organization into three geographic operating units -- the Americas, Europe Middle East and Africa, and Asia Pacific. Each of these units will be headed by veteran Siebel sales executives with broadened operational responsibilities who will report directly to the CEO. No additional charges are expected as a result of this realignment. Siebel Systems will announce final results for the fourth quarter of 2003 and for the full year 2003 on January 21, 2004. Siebel Systems, Inc. (Nasdaq:SEBL) (S&P, BB Corporate Credit and B+ Subordinated Ratings), is a leading provider of eBusiness applications software, enabling corporations to sell to, market to, and serve customers across multiple channels and lines of business. With more than 3,500 customer deployments worldwide, Siebel Systems provides organizations with a proven set of industry-specific best practices, CRM applications, and business processes, empowering them to consistently deliver superior customer experiences and establish more profitable customer relationships. Siebel Systems' sales and service facilities are located in more than 28 countries. SMARTIRE SYSTEMS: Raises $2.7M via Private Placement Transaction ---------------------------------------------------------------- SmarTire Systems Inc. (OTCBB: SMTR) realized net proceeds of $2.725 million from a private placement of discounted unsecured convertible debentures and warrants to an investment group consisting primarily of current institutional shareholders. Complete terms of the financing will be released in the Company's 8-K filing. Robert Rudman, President and Chief Executive Officer of SmarTire stated, "This is the fourth significant financing that has been arranged by our investment bankers and increases the total 2003 financings to approximately $10 million. The net proceeds of this most recent financing will enable the Company to build inventory levels and to execute on certain strategic business development initiatives. Our investment bankers were also instrumental in arranging our $15 million equity line of credit, which we previously announced on July 28, 2003. We are very pleased with the ongoing commitment and support that our financial partner has demonstrated during this past year." SmarTire Systems Inc. develops and markets proprietary tire monitoring systems for the transportation industry worldwide. Incorporated in 1987, SmarTire is a public company with offices in North America and Europe. Additional information can be found at http://www.smartire.com/ * * * Capital Resources and Going Concern Uncertainty In a Form 10-QSB filed with Securities and Exchange Commission, SmarTire Systems reported: "The Company requires additional financing to fund its operations. The Company has incurred recurring operating losses and has a deficit of $51,294,373. Although the Company has working capital of $1,662,348 as at October 31, 2003, during the three month period ended October 31, 2003, the Company used cash of $1,748,529 in operating activities. "The Company is pursuing various alternatives to meet its intermediate and long-term financial requirements. During fiscal 2003, the Company realized gross proceeds of $8,078,000 from financing activities and arranged a $15 million equity line of credit to fund its operations. In addition, during the quarter ended October 31, 2003, the Company realized gross proceeds of $698,799 from financing activities and subsequent to the end of the quarter ended October 31, 2003, the Company realized additional gross proceeds of $1,324,466 from financing activities to fund its operations. There can be no assurance that additional financing will be available to the Company when needed or, if available, that it can be obtained on commercially reasonable terms. These consolidated financial statements have been prepared on the going concern basis which assumes that adequate sources of financing will be obtained as required and that the Company's assets will be realized and liabilities settled in the ordinary course of business. Accordingly, these consolidated financial statements do not include any adjustments related to the recoverability of assets and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern. "We have continued to finance our activities primarily through the issuance and sale of securities. We have incurred losses from operations in each year since inception. As at October 31, 2003, we had an accumulated deficit of $51,294,373. Our net loss for the quarter ended October 31, 2003 was $3,263,143 compared to $2,070,373 for the quarter ended October 31, 2002. As of October 31, 2003, our stockholders' equity was $5,605,947 and we had working capital of $1,662,348. "Our cash position at October 31, 2003 was $749,304 as compared to $1,843,694 at July 31, 2003. This decrease was due to the net cash used in operations partially offset by financing and investing activities, each as described below. "Our net loss of $3,263,143 for the quarter ended October 31, 2003 includes non-cash charges of $314,952 for depreciation and amortization, $120,882 for compensation expense, $1,350,445 for finance and interest expense and $46,810 for shares and warrants issued for services received. Decreases in non-cash working capital during this period amounted to $285,558. Non-cash working capital changes included decreases in receivables, deferred revenue, inventory and prepaid expenses and an increase in accounts payable and accrued liabilities." SOLUTIA INC: Honoring & Paying Prepetition Employee Obligations --------------------------------------------------------------- The Solutia Debtors currently employ 5,415 full-time and part-time hourly and salaried employees, including 740 union employees who are represented under seven different collective bargaining agreements. About 35 of the Employees are employed by Debtor Axio Research Corporation. The remainder of the Employees primarily is employed by Solutia Inc., although Solutia seconds 570 of these Employees to Debtor CPFilms Inc. and allocates the costs of these Employees to CPFilms. Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher LLP, in New York, relates that the Debtors depend on the Employees to oversee virtually every aspect of their businesses, in an extremely wide range of activities, from product development to distribution, from finance to human resources, and from manufacturing to management. The Employees' skills, their specialized knowledge and understanding of the Debtors' business operations, their relationships with customers, vendors and other third parties are all essential to the Debtors' ability to continue their operations and reorganize successfully. Put simply, a significant unplanned loss of Employees would result in significant loss on the Debtors' value as a going concern. The Debtors also rely on the services of 1,632 independent contractors and temporary employees to perform essential functions on a cost-effective basis. Around 50 of the contractors and temporary employees are employed directly by the Debtors, and the remainder is employed through contractual arrangements with 50 temporary employment agencies. The Debtors carefully reviewed the functions of each of their temporary employees and independent contractors, as well as the potential alternate sources of personnel to fulfill those functions. The Debtors identified 315 temporary employees and independent contractors who provide services that are essential to the functioning of their businesses, who are not likely to be easily replaceable and who may not be bound by applicable law to continue providing services to them after the Petition Date. The Critical Contractors, who include highly skilled professionals as well as workers who are deeply familiar with the Debtors' businesses, provide essential labor to the Debtors primarily with respect to manufacturing, maintenance, security, legal, sales and distribution services. The Debtors rely on the Critical Contractors to operate and maintain their complex manufacturing facilities located throughout the United States and perform pharmaceutical consulting services. In this regard, the Critical Contractors are essential to maintaining the going concern value of the Debtors' business operations. Many of the Critical Contractors have worked exclusively for the Debtors for a substantial period of time and are now functioning as employee- equivalent personnel who have acquired substantial knowledge of the Debtors' business systems and particularized needs. The Debtors also believe that there is a substantial risk of losing some or all of the Critical Contractors if they cannot timely pay their obligations for the Critical Contractors' prepetition services. If that were to occur, the Debtors would experience disruptions in critical operations until replacement personnel could be identified, trained and become familiar with the operations -- all of which would likely involve significant cost. The Debtors cannot use their Employees to replace the lost services, both because they do not have enough Employees for that purpose and because the Critical Contractors have specialized knowledge of aspects of the operations that the Employees do not possess. Accordingly, the Debtors need to maintain the services of the Critical Contractors to continue their business operations without interruption. Amounts due to Employees and Critical Contractors As of the Petition Date, Mr. Reilly reports that many of the Employees and the Critical Contractors were owed or had accrued amounts due for wages, salaries, overtime pay, sales commissions, contractual compensation, sick pay, vacation pay, holiday pay and other compensation and for reimbursement of business expenses that the Employees have paid directly. The Debtors also had outstanding obligations to their Employees related to: (a) periodic payroll deductions for 401(k) savings programs, benefit plans, charitable contributions, garnishments, support payments, flexible spending accounts, an employee stock purchase plan and other similar programs; (b) withholdings from the Employees' paychecks for federal, state and local income, Social Security, Medicare and other taxes; and (c) the employer portion of payroll-related taxes. Mr. Reilly explains that the Prepetition Compensation, Prepetition Business Expenses, Deductions, Withholdings and Taxes were unpaid as of the Petition Date because: (i) the Debtors maintain 12 different payrolls and some of these payroll periods were interrupted by the Chapter 11 filing; (ii) certain checks issued to the Employees and Critical Contractors before the Petition Date have not yet been presented for payment or have not yet cleared the banking system and, accordingly, were not honored and paid as of the Petition Date; (iii) the Employees and Critical Contractors have not yet been paid certain of their salaries, contractual compensation and wages for services previously rendered to the Debtors or have not yet been reimbursed for business expenses previously advanced on the Debtors' behalf; and (iv) certain other forms of compensation, including sick pay, vacation pay and holiday pay, relate to prepetition services which, although earned in whole or in part prepetition, will become payable in the future in the ordinary course of business. The Debtors estimate that, as of the Petition Date, $5,030,000 in Prepetition Compensation, $100,000 in Prepetition Business Expenses and $950,000 in Deductions had accrued but remained unpaid. About $1,430,000 of the Prepetition Compensation relates to obligations to the Critical Contractors that had accrued but remained unpaid. The Debtors estimate that the Withholdings total $800,000 and the Taxes attributable to the Prepetition Compensation total $250,000. Obligations under Benefit Programs The Debtors maintain employee benefit programs for their hourly, salaried, nonunion Employees and union Employees, including programs for health, dental, life and disability insurance, a defined-benefit pension plan, a 401(k) savings plan and other similar programs. As of the Petition Date, Mr. Reilly reports that obligations under the Benefit Program had accrued but remained unpaid because they will become payable in the ordinary course of business on a later date. The obligations are: 1. Self-Insured Plans The Debtors maintain self-insured plans that provide medical, dental, prescription drug, mental health and disability benefits. Third parties serve as claims agents for, and process and pay, claims by the Employees under the Self-Insured Plans. The Debtors anticipate that the claims that accrued under the Self- Insured Plans before the Petition Date will be submitted postpetition. Based on historical levels, the Debtors estimate that $5,423,000 in prepetition claims and related administrative charges under the Self-Insured Plans will be submitted. 2. Third-Party Insured Plans The Debtors maintain certain insured benefit plans under which they or their Employees contribute to the payment of premiums for insurance or other coverage provided by third parties. The Insured Plans include: -- term life insurance, -- business travel accident insurance, -- accidental death and dismemberment insurance, and -- an HMO medical plan. Based on the historical levels of premiums, the Debtors estimate that the accrued but unpaid share of premium contributions under the third-party plans, as of the Petition Date, total $132,000. 3. Company-Sponsored Benefit Programs The Debtors sponsor other Benefit Programs under which they or their Employees contribute to the Benefits provided to the Employees. The Benefit Programs include: -- 401(k) savings plans, -- a defined benefit pension plan, -- flexible spending accounts, -- an adoption assistance program, and -- an Employee assistance program. Based on the historical levels of participation in the Non-insured Programs, the Debtors estimate that, as of the Petition Date, the accrued but unpaid obligation under the Non- insured Programs aggregate $160,000. Amounts due on account of Severance Benefits In the ordinary course of business, the Debtors maintain a severance program for eligible non-union Employees pursuant to which terminated Employees are entitled to: (a) lump-sum separation cash payments under a Separation Pay Plan in exchange for providing the Debtors with a release of any claims; (b) the continuation of medical and dental insurance for up to four months under the Separation Pay Plan; (c) health insurance in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985; and (d) benefits from an Employee assistance program. The Debtors also provide Severance Benefits to former union Employees in accordance with the applicable collective bargaining agreements. According to Mr. Reilly, the Debtors are in the process of developing a postpetition employee retention program. Before the program is developed and presented to the Court for approval, however, the Debtors find it is necessary to continue to honor their obligations with respect to the Severance Benefits for the Employees terminated before the Petition Date. Payment of the Severance Benefits without interruption is necessary to avoid the disruption to the Debtors' businesses that would occur as a result of the negative effect on the morale of the current Employees if the Severance Benefits promised to their former co- workers were not made and the resulting potential attrition of current Employees. As of the Petition Date, the Debtors had obligations with respect to the Severance Benefits for 55 former Employees terminated before the Petition Date totaling $53,000. These obligations resulted primarily from workforce reductions related to the Debtors' ongoing cost reduction initiatives. Processing Costs The Debtors incur external costs incident to the Prepetition Compensation, the Deductions, the Benefit Programs and the Severance Benefits, including processing costs and administrative charges. The Debtors estimate that, as of the Petition Date, the aggregate Processing Cost total $1,070,000. The Debtors believe that the failure to pay the Prepetition Processing Costs would disrupt the services from third-party providers. Any delay or disruption in the payment of the Prepetition Compensation, Deductions, Prepetition Business Expenses, Prepetition Benefits and Prepetition Severance Benefits likely would significantly impair Workforce morale at the very time when the Debtors have a critical need for dedication, confidence and cooperation from their Workforce to ensure a smooth transition into operations under Chapter 11. At the First Day Hearing, Judge Beatty authorizes the Debtors to pay their prepetition Employee and Contractor Obligations as well as the Obligations under the Employee Benefit Plans and related expenses. The Court directs all banks and other financial institutions doing business with the Debtors to receive, process, honor and pay any and all checks drawn on the Debtors' accounts for any authorized payments, whether the checks were presented before or after the Petition Date, provided that sufficient funds are available. (Solutia Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000) SUBURBAN PRODUCTS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Suburban Products, Inc. 672 Fuller Road Chicopee, Massachusetts 01020 Bankruptcy Case No.: 04-40005 Type of Business: The Debtor manufactures and distributes plastic products. Chapter 11 Petition Date: January 4, 2004 Court: District of Massachusetts (Worcester) Judge: Henry J. Boroff Debtor's Counsel: Francis Lafayette, Esq. P.O. Box 1020 Palmer, MA 01069 Tel: 413-283-7785 Total Assets: $1,100,000 Total Debts: $1,932,981 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Donold O. Connor Term Note $387,593 37 Alderbrook Land West Springfield, MA 01089 City of Chicopee taxes $97,256 Internal Revenue Service taxes $70,000 James O' Connor vendor $45,167 Steven P. Roberts vendor $45,006 VEMS Enterprises vendor $31,431 Westbank loan $30,433 Frame Master Incorporate vendor $26,708 Lynne O'Connor vendor $26,497 Bacon & Wilson legal services $15,391 J.M. O'Brien vendor $13,129 East Coast Trading, Inc. vendor $9,000 Bay State Gas Utility Service $8,052 Halcyon Waterbed Corp. vendor $7,406 Advantage Business Cards vendor $6,353 Mass. Dept. of Revenue vendor $6,133 USF Red Star vendor $5,736 SI-CAL. Inc. vendor $5,151 Aaron Industries Corp. vendor $4,257 Sterling Commerce vendor $3,773 TRANSWITCH CORP: Increases Fourth Quarter 2003 Earnings Guidance ---------------------------------------------------------------- TranSwitch Corporation (NASDAQ:TXCC), a leading developer and global supplier of innovative high-speed VLSI solutions for communications applications, updated the outlook of its financial performance for the fourth quarter, which ended December 31, 2003. TranSwitch expects fourth quarter net revenues to be approximately $6.5 million to $7.0 million, as compared to the previous guidance of approximately $5.3 million. Stronger demand across the Company's established product lines contributed to the better than expected net revenues this quarter. The Company continues to work with its customers to assess first quarter demand. Additional information will be provided as part of the Company's fourth quarter financial conference call. TranSwitch will be releasing its financial results for the fourth quarter, 2003, on January 20, 2004 at approximately 4:15 pm Eastern time. A conference call to discuss these results will be held on that day at 5:30 pm Eastern time. To listen to the live call, investors can dial (706) 679-0410 and reference leader Peter Tallian. The call will be recorded and a replay will be available two hours after the conclusion of the live broadcast through January 30, 2004. To access the replay, dial (706) 645-9291 and enter conference ID number: 4801244. Investors can also access an audio webcast via http://www.vcall.com/by clicking on the TranSwitch Corporation conference call link. This audio webcast will also be available on a replay basis for 10 business days. TranSwitch Corporation (S&P, B- Corporate Credit Rating, Negative), headquartered in Shelton, Connecticut, is a leading developer and global supplier of innovative high-speed VLSI semiconductor solutions - Connectivity Engines(TM) - to original equipment manufacturers who serve three end-markets: the Worldwide Public Network Infrastructure, the Internet Infrastructure, and corporate Wide Area Networks. Combining its in-depth understanding of applicable global communication standards and its world-class expertise in semiconductor design, TranSwitch Corporation implements communications standards in VLSI solutions which deliver high levels of performance. Committed to providing high- quality products and service, TranSwitch is ISO 9001 - 2000 registered. Detailed information on TranSwitch products, news announcements, seminars, service and support is available on TranSwitch's home page at the World Wide Web site - http://www.transwitch.com/ UNITED NATIONAL: Fitch Ups & Withdraws Ratings after PNC Merger --------------------------------------------------------------- Fitch Ratings has upgraded the ratings for United National Bancorp following its acquisition by PNC Financial Services Group, Inc. UNBJ's ratings are removed from Rating Watch Positive where they were listed effective August 21, 2003, and aligned with PNC's ratings. At the same time, Fitch has withdrawn UNBJ's ratings in recognition of the fact that UNBJ has been fully merged with and into PNC. Ratings Upgraded, Removed from Rating Watch Positive and Withdrawn: United National Bancorp -- Long-term Senior to 'A' from 'BBB-'; -- Short-term Senior to 'F1' from 'F3'; -- Individual to 'B/C' from 'C'. Rating Upgraded and Removed from Rating Watch Positive: UNB Capital Trust I -- Trust Preferred to 'A-' from 'BB+'. UNITEDGLOBALCOM INC: Liberty Media Acquires Controlling Stake ------------------------------------------------------------- UnitedGlobalCom, Inc. (Nasdaq: UCOMA), and Liberty Media Corporation (NYSE: L, LMC.B) announced that Liberty Media has acquired all of the outstanding shares of Class B common stock of UnitedGlobalCom, Inc. from United's founding shareholders. All of United's holders of its 8,198,016 outstanding shares of Class B common stock have transferred their Class B shares to Liberty Media in exchange for 12,576,968 shares of Liberty Media Series A Common Stock and a cash payment of approximately 50% of the Founders' estimated federal and state income tax liability arising from the transaction. The combination of the Class B shares with the 307.5 million shares already owned by Liberty Media gives Liberty Media ownership of approximately 53.6% of United's common stock representing approximately 92% of the voting power of United's shares. In addition, under the Standstill Agreement entered into by Liberty Media and United, Liberty Media has the pre-emptive right to purchase an additional 15,173,898 Class A shares. The restrictions on the exercise by Liberty Media of its voting power with respect to United have terminated. The Standstill Agreement with United limits Liberty Media's ownership of United common stock to 90 percent of the outstanding common stock unless it makes an offer or effects another transaction to acquire all outstanding United common stock. Under certain circumstances, such an offer or transaction would require an independent appraisal to establish the price to be paid to stockholders unaffiliated with Liberty Media. Gene W. Schneider has resigned as Chief Executive Officer of United, but will remain as Chairman of the Board. Michael T. Fries, currently President, Chief Operating Officer and a director of United, has been appointed Chief Executive Officer effective immediately. He will also retain the title of President and become a member of a newly established Executive Committee of the Board consisting of Mr. Fries, Robert Bennett and John Malone. Al Carollo, Curt Rochelle and Tina Wildes have resigned from the board of directors of United. Paul Gould was appointed to United's board to fill one of the vacancies. Mr. Gould is currently a director of Liberty Media and a Managing Director of Allen & Company Incorporated, an investment banking services company. Mr. Robert Bennett, President and CEO of Liberty Media stated, "The addition of United makes Liberty Media one of the largest broadband distribution companies in the world. United's global presence, particularly in Europe, provides a distribution platform from which we can pursue expansion opportunities and launch new value-added services over United's substantially upgraded broadband networks." Mr. Bennett went on to say, "We are looking forward to working more closely with Mike Fries and the rest of the management team and we are also very pleased that Gene Schneider has agreed to remain as Chairman of the company he helped create." UnitedGlobalCom -- whose June 30, 2003 balance sheet shows a total shareholders' equity deficit of about $2.7 billion -- is the largest international broadband communications provider of video, voice, and Internet services with operations in numerous countries. Based on the Company's operating statistics at June 30, 2003, United's networks reached approximately 12.6 million homes passed and 8.9 million RGUs, including approximately 7.4 million video subscribers, 704,200 voice subscribers, and 825,600 high speed Internet access subscribers. United's major operating subsidiaries include UGC Europe, a leading pan-European broadband communications company; VTR GlobalCom, the largest broadband communications provider in Chile; as well as several strategic ventures in video and broadband businesses around the world. Visit http://www.unitedglobal.com/for further information about the company. Liberty Media Corporation (NYSE: L, LMC.B) owns interests in a broad range of companies operating primarily in the areas of interactive television, international distribution and content, and television networks. Liberty Media and its affiliated companies operate in the United States, Europe, South America and Asia with some of the world's most recognized and respected brands, including QVC, Encore, STARZ!, Discovery, UnitedGlobalCom, Inc., IAC/InterActiveCorp, and The News Corporation. UNIVERSAL HEALTH: Closes Acquisition of 4 Acute Care Hospitals -------------------------------------------------------------- Universal Health Services, Inc. (NYSE: UHS) completed the previously announced acquisition of four acute care hospitals effective January 1, 2004. Three hospitals were acquired from Vista Health System and its affiliate including 228-bed Corona Regional Medical Center located in Corona, California, 112-bed French Medical Center located in San Luis Obispo, California and 65-bed Arroyo Grande Community Hospital located in Arroyo Grande, California. The Company also competed the acquisition of a 90% controlling interest in the 306- bed Pendleton Methodist Hospital in East New Orleans, Louisiana. The combined 2004 net revenue of these acquisitions is expected to be approximately $280 million. Universal Health Services, Inc. is one of the nation's largest hospital companies, operating acute care and behavioral health hospitals, ambulatory and radiation centers nationwide, Puerto Rico and in France. It acts as the advisor to Universal Health Realty Income Trust, a real estate investment trust (NYSE: UHT). For additional information on the Company, visit http://www.uhsinc.com/ Universal Health Services' 0.426% bonds due 2020 are currently trading way below par at about 66 cents-on-the-dollar. US AIRWAYS: Inks Lease Pacts for Pittsburgh Airport Facilities -------------------------------------------------------------- US Airways (Nasdaq: UAIR) signed a long-term lease agreement for 10 gates and related terminal and support facilities at Pittsburgh International Airport, to replace the lease that was rejected as part of the company's Chapter 11 reorganization. Under the agreement, US Airways will lease 10 gates and associated operations and ticketing space on a signatory basis through 2018. The balance of 40 gates and other facilities currently used by US Airways and its US Airways Express carriers at Pittsburgh will be leased on a month-to-month, non-signatory basis. Additionally, US Airways has signed a three-year lease agreement for its current on-airport support facilities, including maintenance hangars, cargo, mail sorting and foodservice facilities. This includes an option for either party to terminate the agreement with respect to all or part of the facilities after the first year. The company said that it will continue to negotiate with the Allegheny County Airport Authority, Allegheny County and the Commonwealth of Pennsylvania in the hope that a broader agreement can be reached in order to maintain its hub operations at Pittsburgh. State and local officials are exploring whether new revenue sources can be devoted to relieve airlines operating at Pittsburgh of some of the cost of servicing the $640 million debt load the airport carries. In the meantime, US Airways has agreed to operate a schedule close to its existing service at Pittsburgh through September 2004, in order to allow negotiations to continue. "We are quite appreciative of the leadership Allegheny County Executive Dan Onorato has already demonstrated in reaching an alternative agreement for facilities while we collectively explore all other options," said Christopher Chiames, US Airways' senior vice president of corporate affairs. "We remain optimistic that Mr. Onorato can work constructively with Governor Rendell and the Airport Authority to identify new sources of revenue for the airport. Our discussions over the past several months have demonstrated that all parties recognize that this is about new revenue and lowering the cost of doing business at the airport for all airlines, and not a subsidy targeted to US Airways." Chiames said that US Airways officials recognize that a budget crisis in the state, and competing state and local fiscal priorities have extended the process beyond what was originally envisioned. "When we rejected the leases last March, effective Jan. 5, 2004, we believed it gave all parties plenty of time to find a solution that would allow us to cost-effectively maintain our Pittsburgh hub," said Chiames. "Despite the lengthy process, our conversations with public officials remain constructive, and at the same time, they recognize that we are trying to complete a financial restructuring that did not end with our emergence from Chapter 11 last year. We understand that public officials have some difficult choices to make, and in turn, they understand that we must begin making business decisions very soon and that these negotiations must be concluded quickly." As a signatory for 10 gates and related facilities, US Airways still has the largest financial commitment to the Allegheny County Airport Authority of any airline serving Pittsburgh. US Airways currently serves nearly 100 destinations nonstop with approximately 375 daily flights from Pittsburgh International Airport. WALTER INDUSTRIES: Names Larry Comegys Pres. of Jim Walter Unit --------------------------------------------------------------- Walter Industries, Inc. (NYSE: WLT) announced that Larry Comegys, a homebuilding executive with extensive experience in the industry, has been named President of its Jim Walter Homes subsidiary. Mr. Comegys, 52, was the Florida Region President for Pulte Homes in 1997-2002, heading an operation that built over 2,800 homes a year and generated approximately $500 million in revenue per year. Prior to that, he served as West Florida Division President for Pulte Homes, as Vice President/General Manager for UDC Homes in San Francisco, and as Manager of Planning for Mobil Land Development Corp. in San Francisco. Most recently, Mr. Comegys has been a partner in the Wilherst Group, a commercial and residential developer based in Tampa. He holds an undergraduate degree from Drew University in Madison, N.J., and a master's in business administration from the Wharton School of Business at the University of Pennsylvania. "We are extremely pleased to have an executive with Larry's credentials to help us deliver on our growth objectives within the homebuilding business," said Don DeFosset, Chairman and Chief Executive Officer of Walter Industries. "His significant experience at several major homebuilders will be invaluable as he directs our initiatives beyond traditional on-your-lot homebuilding." Mr. Comegys succeeds Mike Roberts, who is retiring after a distinguished 36-year career with the company. Mr. Roberts, who was named President of Jim Walter Homes in August 2001, had previously been Executive Vice President of Jim Walter Homes, and prior to that, served as Senior Vice President of Field Operations and Senior Vice President of Construction. During his tenure as President, Mr. Roberts launched a number of significant initiatives designed to grow the homebuilding operation's sales, including the Company's first subdivisions in Alabama and Louisiana. Jim Walter Homes, based in Tampa, builds approximately 4,100 affordable homes per year across the South. The company builds stick-built homes under the Jim Walter Homes, Dream Homes and Neatherlin Homes brands, and also builds modular homes under the Crestline Homes brand. Walter Industries, Inc. (S&P, BB Corporate Credit Rating, Stable) is a diversified company with five principal operating businesses and annual revenues of $1.9 billion. The Company is a leader in homebuilding, home financing, water transmission products, energy services and specialty aluminum products. Based in Tampa, Florida, the Company employs approximately 6,300. WESTAR: Protection One Sale Pact Spurs S&P's Outlook Revision ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB+' corporate credit ratings on electric generation and transmission company Westar Energy Inc. and subsidiary Kansas Gas & Electric Co. and revised the outlook on the companies to positive from developing. Approximately $2.67 billion of total debt was outstanding at Sept. 30, 2003. The outlook revision results from meaningful actions that Westar has taken to strengthen its aggressively leveraged balance sheet and improve its overall financial profile, as well as continued expectations for additional credit enhancing initiatives. "As expected, the company has entered into a definitive agreement to sell its 88% stake in Protection One Inc., its monitored security business. Importantly, this critical step moves Westar closer to becoming a pure vertically integrated electric utility," said Standard & Poor's credit analyst Barbara Eiseman. The sale, which is expected to close this quarter, is subject to Kansas Corporation Commission approval. Since KCC has already approved a settlement agreement regarding Westar's restructuring plan, Standard & Poor's expects the commission to endorse the divestiture. "The sale price, while lower than originally envisioned, still enables Westar to reduce its heavy debt burden, but increases the future amount of common stock issuances needed to achieve investment-grade ratings," said Ms. Eiseman. The positive outlook assumes that the sale of Protection One is actually consummated and reflects the possibility for credit improvement following completion of Westar's restructuring plan. Standard & Poor's expects that additional balance sheet improving initiatives, such as sizable common stock offerings with proceeds applied toward debt reduction, will be needed to achieve investment-grade ratings. WESTPOINT STEVENS: Court Okays American Appraisal as Consultants ---------------------------------------------------------------- The WestPoint Stevens sought and obtained the Court's authority to employ American Appraisal Associates, Inc. as their consultants to assist in the valuation and restatement of assets and liabilities as they emerge from their Chapter 11 cases. John J. Rapisardi, Esq., at Weil, Gotshal, Manges LLP, in New York, relates that the Debtors will employ American Appraisal as Asset Valuation Consultants in accordance with the terms of a certain letter of agreement dated September 23, 2003. American Appraisal will obtain a valuation of all tangible and intangible assets to enable the Debtors to restate their assets and liabilities at the appropriate fair value for fresh start accounting purposes in accordance with Statement of Position 90- 7, Financial Reporting by Entities in Reorganization Under the Bankruptcy Code, as issued by the American Institute of Certified Public Accountants. The Debtors believe that American Appraisal is uniquely qualified to serve as their Asset Valuation Consultants because the firm has considerable experience in the area, which will inure to the benefit of their creditors and estates. Mr. Rapisardi states that American Appraisal is one of the largest independent valuation firms in the world and maintains expertise in the valuation of intangible assets, real property and equipment. American Appraisal provides independent opinions of the value of assets of companies around the world for a wide range of purposes, including financial reporting, federal taxation, collateral financing, corporate restructuring, bankruptcy, property insurance and general corporate planning purposes. Specifically, American Appraisal will: (a) assist the Debtors in determining, asset by asset, the value of certain tangible and intangible assets, excluding working capital assets, leased equipment and personal property owned by their employees, appearing on their books and records at 45 locations; (b) physically inspect assets, which the Debtors believe to have a fair market value greater than $25,000 at 28 of their locations; (c) incorporate into the Valuation the Debtors' intended use and associated costs, including the sale of each individual asset; and (d) provide the Debtors with a Summary Appraisal Report intended to comply with the reporting requirements under the Uniform Standards of Professional Appraisal Practice. American Appraisal will be compensated for its Asset Valuation Services at its customary hourly rates, which vary depending on the experience level of the engagement team, plus reimbursement of actual and necessary expenses incurred. The customary hourly rates, subject to periodic adjustments, charged by American Appraisal's personnel anticipated to be assigned to these cases currently range between $250 and $275 per hour. American Appraisal estimates that professional fees for the Asset Valuation Services incurred during the pendency of the Debtors' Chapter 11 cases will be $487,000, excluding other necessary expenses. Mike Rathburn, Associate General Counsel for American Appraisal, assures the Court that: (a) American Appraisal is not employed by, and has not been employed by, any entity other than the Debtors in matters related to the Chapter 11 cases; and (b) American Appraisal has about 1,000 employees worldwide. It is possible that certain of its employees hold securities of the Debtors or interests in mutual funds or other investment vehicles that may own the Debtors' securities. Mr. Rathburn lists certain interested parties that are current or former clients of American Appraisal: Bank of America Morgan Stanley & Co., Inc. General Electric Capital Corporation Cognis Canada Corporation Sears, Roebuck & Co. ABN AMRO Advisory, Inc. Sun Trust Bank Wachovia Bank Soceite Generale Fidelity Credit Suisse Dan River, Inc. Oxford Industries, Inc. Mr. Rathburn explains that services currently provided to these parties are wholly unrelated to any claims that these entities may have against the Debtors. None of these relationships or services currently provided has any relation to the Debtors' bankruptcy proceedings. Mr. Rathburn attests that American Appraisal does not have any connection with, or any interest adverse to, the Debtors, their creditors, or any other parties- in-interest. (WestPoint Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000) WEYERHAEUSER CO.: Will Host Annual Analyst Meeting on May 20 ------------------------------------------------------------ Weyerhaeuser Company (NYSE: WY) will issue quarterly earnings reports before the market opens on these dates: Jan. 23 - 2003 fourth quarter and year-end results April 23 - 2004 first quarter results July 23 - 2004 second quarter results Oct. 22 - 2004 third quarter results The company will hold a live conference call and webcast at 7 a.m. Pacific (10 a.m. Eastern) the day it announces quarterly earnings. Additional details on call-in procedures will be provided prior to the release of each quarter's results. Weyerhaeuser also said that it will host its annual analyst meeting at the Waldorf Astoria in New York on May 20 beginning at 8:30 a.m. Additional information on the conference will be provided later. Weyerhaeuser Company (Fitch, BB+ Senior Unsecured Long-Term Ratings, Stable Outlook), one of the world's largest integrated forest products companies, was incorporated in 1900. In 2002, sales were $29.1 billion ($18.5 billion US). It has offices or operations in 18 countries, with customers worldwide. Weyerhaeuser is principally engaged in the growing and harvesting of timber; the manufacture, distribution and sale of forest products; and real estate construction, development and related activities. Weyerhaeuser Company Limited, a wholly owned subsidiary, has Exchangeable Shares listed on the Toronto Stock Exchange under the symbol WYL. Additional information about Weyerhaeuser's businesses, products and practices is available at http://www.weyerhaeuser.com/ WINSTAR: Chapter 7 Trustee Taps Sklar & Paul as Special Counsel --------------------------------------------------------------- Christine C. Shubert, Winstar Communications' Chapter 7 Trustee, seeks the Court's authority to employ Sklar & Paul PC as special counsel to assist her in specific tasks of collecting judgments in the Debtors' Chapter 7 cases. The Trustee recognizes Sklar's extensive experience and knowledge in the field of collection law. Sklar will be paid a contingency fee based on one-third of collected judgments, plus reimbursement of all costs. Andrew Sklar, Esq., assures the Court that the firm does not hold or represent any interest materially adverse to the Debtors' estates or any class of creditors. The firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. (Winstar Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service, Inc., 215/945-7000) WIRELESS NETWORKS: Closes $10 Million Equity Financing Agreement ---------------------------------------------------------------- Wireless Networks Inc. closed its previously announced $10 million financing pursuant to an agreement with a syndicate led by Acumen Capital Finance Partners Limited and including Emerging Equities Inc. and Leede Financial Markets Inc. Following the closing, Wireless has approximately $10.1 million in working capital, no debt, and 5.49 million post-consolidation shares outstanding. In addition, Wireless has available $5.25 million of non-capital tax losses which can be applied against future income through 2010. This successful financing completes the initial recapitalization and reorganization of Wireless Networks Inc. In early 2004 the company intends to change its name to "Spry Energy Ltd." and will complete the consolidation of its outstanding shares on a 95 old shares for 1 new share basis. Spry Energy Ltd. will operate as a private oil and gas company focused on opportunities in Western Canada. The management team currently includes Mr. Ken Bowie, President and CEO; Mr. Kevin Adair, Vice President Engineering; Mr. Jeff Screen, Vice President Operations; and Mr. Vince Ekvall, Vice President Exploration. Mr. Gary Bugeaud from the law firm Burnet, Duckworth & Palmer LLP is the Corporate Secretary. * * * As previously reported, Wireless Networks Inc. effected a further round of layoffs implemented with a view to reducing overhead to the skeletal level. The Corporation has been unable to secure further financing from any source and, accordingly, is not able to proceed with its business plan. Delays in the delivery of commercial versions of the Corporation's product have exacerbated the problem as sales have been nominal. Additionally, the TSX Venture Exchange has advised the Corporation that it does not meet the minimum listing requirements, a risk that was disclosed in the Corporation's January 28, 2003 prospectus. The Corporation is working toward marshalling its remaining resources in an orderly fashion to address the claims of outstanding creditors. In that regard, the Corporation is seeking purchasers of its technology and associated products and looking for opportunities to combine with other companies who may wish to take advantage of its tax pools and shareholder base. WSI MFG.: Wants Nod for Dunlop's Engagement as Special Counsel -------------------------------------------------------------- WSI Manufacturing, Inc., asks for authority from the U.S. Bankruptcy Court for the District of Minnesota to continue its employment of Dunlop, Codding & Rogers, P.C. as special counsel in on-going patent-related litigation. Since February 2002, Dunlop Codding has represented WSI in a patent lawsuit initiated by Petitioners Mark Cheatwood and Chad Strickland lodged in the U.S. District Court for the Western District of Oklahoma. A federal jury found that WSI infringed the Plaintiffs' patent and awarded the plaintiffs $602,570. The judgment can now be appealed and WSI wants Dunlop Codding to prosecute that appeal. As of the filing date, WSI owed Dunlop Codding approximately $100,000 for services rendered in the Patent Litigation. Although this is a claim against the debtor's estate, the Debtor asserts that it is not an interest adverse to WSI in the Patent Litigation, which is the matter on which the firm is employed. Pursuant to 11 USC Sec. 1107, WSI argues, a firm is not disqualified solely because it represented a debtor before the commencement of the bankruptcy case. Dunlop Codding's will be paid on an hourly basis under a general retainer agreement. The hourly rates of those likely to perform legal services in the Patent Litigation are: Attorney Position Hourly Rate ------- -------- ----------- G. Neal Rogers Shareholder $250 Joseph P. Titterington Shareholder $250 Robert Trent Pipes Shareholder $250 The Debtor believes that the firm is disinterested within the meaning of Section 327(e) of the Bankruptcy Code. WSI Manufacturing, Inc., filed for Chapter 11 relief on September 19, 2003 (Bankr. Minn. Case No. 03-46641). Heather Brown Thayer, Esq., at Fredrikson & Byron PA represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets of $500,000 to $1 Million and estimated debts of $1 Million to $10 Million. * CLLA Supports State-Backed Student Loan Discharges ---------------------------------------------------- The Commercial Law League of America delivered an amicus brief in support of the Sixth Circuit's decision in Hood v. Tennessee Student Assistance Corp., 319 F.3d 755 (6th Cir. 2003). There the Sixth Circuit rejected the State's assertion of sovereign immunity as a defense to a debtor's complaint to have a student loan discharged. A CLLA summary of that ruling is available at no charge at http://www.cllabankruptcy.org/bankruptcy/march2003.htm#6 Laurence Kaiser, Esq., prepared the League's amicus brief. Mr. Kaiser graduated from Georgetown University Law Center in 1975 and has been in private practice in New York City since then. He has specialized in bankruptcy since 1980, and was one of the founders of Piliero Goldstein Kaiser & Mitchell, LLP. Mr. Kaiser helped represent six bankruptcy judges during the Marathon constitutional crisis in 1984. Louis S. Robin, Esq., at Fitzgerald, O'Brien, Robin & Shapiro, in Longmeadow, Mass. (louis.robin@prodigy.net), provides a summary of the Commercial Law League's arguments to the United States Supreme Court: The CLLA has long represented and advocated creditor interests, but its members recognize that the fair, equitable, uniform and efficient administration of bankruptcy cases and debtor-creditor relations requires that all parties, including the States, participate in the bankruptcy process. Had the States retained sovereign immunity from the discharge of indebtedness (or from other generally applicable bankruptcy court powers) that would have perpetuated the very disunity, disorder and uncertainty which the Framers and the People confronted and rectified when they granted Congress the power to enact uniform laws on the subject of bankruptcies. Mr. Kaiser's discussion turns to the background of bankruptcy at the end of the 18th Century. When the Constitution was enacted, debtors and creditors confronted differing State laws, rights and remedies. The hodgepodge of laws and their uneven enforcement offered debtors no assurance that the protections afforded by the bankruptcy law of one state would be enforced in another state: a state cannot by such a law discharge one of its own citizens from his contracts with citizens of other states, though made after the passage of the law, unless they voluntarily became parties to the proceedings in insolvency. Brown v. Smart, 145 U.S. 454, 457 (1892). The disparate laws and multiple jurisdictions also adversely affected creditors. The Colonies began to recognize that the property of an insolvent belonged to all creditors, not simply the quickest (Mann at 47-48), but the realization of that ideal was difficult. The Framers' response to these problems was two- fold: * First, of course, was to grant Congress the power to enact uniform laws on the subject of bankruptcies. * Second, was the early bankruptcy legislation enacted under that power. Congress turned to bankruptcy legislation in the first session of the 1st Congress and returned to the subject of bankruptcy in each of the next four Congresses [enacting bankruptcy legislation in 1800]. Three aspects of the Bankruptcy Act of 1800 provide compelling evidence that the States did not retain -- and were understood at the time as having not retained -- sovereign immunity over the subject of bankruptcies: * First, the Bankruptcy Act of 1800 was enacted only three years after the enactment of the Eleventh Amendment and only seven years after Chisolm v. Georgia, 2 Dall. 419 (1793) -- the decision that shocked the nation into enacting that amendment. College Savings Bank v. Florida Prepaid Postsecondary Education Expense Board, 527 U.S. 666, 669 (1999). It is illogical -- if not extraordinary -- to assume that the Congress in 1800 disregarded or ignored the recent reaffirmation of the States' sovereignty immunity. Yet, the 1800 Act expressly made debts owed to the States immune from discharge. Bankruptcy Act of 1800, Sec. 62. That affirmative statutory grant of immunity would have been superfluous if the States had retained sovereign immunity in bankruptcy. * Second, the 1800 Act contained uniform exemptions for debtors. Id., Sec. 34. Nothing in the Act suggests an individual debtor could not enforce those exemptions against the States or recover exempt property in the possession of the State. Congress must have understood that that would be the result and that debtors would be without a remedy if the States -- as they argue today -- enjoyed sovereign immunity. * Third, the 1800 Act expressly authorized federal courts to issue writs of habeas corpus to free debtors from state prisons. Id., Sec. 38. That provision uniquely conferred federal jurisdiction over the States and their conduct. The inclusion of the writ of habeas corpus -- without recorded dissent or concern -- in the 1800 Act demonstrates compellingly that the Framers understood that the power to enact uniform laws on the subject of bankruptcies was intended to invade the usual prerogatives and protections of State sovereignty. Mr. Kaiser also focuses on the language of the Constitution, noting the language and placement of the bankruptcy clause (it is a cardinal principle of statutory construction that a statute ought to be so construed that no clause, sentence, or word shall be superfluous, void, or insignificant). Further, the bankruptcy discharge is enforced by private suits, ordinarily subject to sovereign immunity defenses, as opposed to the federal government bringing suit to enforce the discharge, which might not be subject to sovereign immunity defenses. Lastly, the dignity of the states is not affected because the discharge is not utilized to collect any debts from the states, the uniform application of the discharge against all creditors, and that the action in the case at bar is an action to determine whether the discharge applies to a particular debt. Although Mr. Kaiser concentrates on the discharge issues at bar, the history of the Constitution, the language of the clause, and other related historical issues, he notes the scope of the states' sovereign immunity arguments. Taken to an extreme, the States could avoid automatic stay violations, circumvent fraudulent transfer and preference actions, frustrate sales free and clear of liens, and evade turnover actions. All would deny creditors and debtors necessary remedies for effective bankruptcy relief. A full-text copy of the League's Amicus Brief is available at no charge at: http://www.cllabankruptcy.org/bankruptcy/TNStud.v.Hood-AmBrofCommercialLaw.pdf * Upcoming Meetings, Conferences and Seminars --------------------------------------------- February 5-7, 2004 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Westin Tabor Center, Denver, CO Contact: 1-703-739-0800 or http://www.abiworld.org March 5, 2004 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West The Century Plaza, Los Angeles, CA Contact: 1-703-739-0800 or http://www.abiworld.org March 18-19, 2004 BEARD GROUP & RENAISSANCE AMERICAN MANAGEMENT Healthcare Transactions The Millennium Knickerbocker Hotel, Chicago Contact: 1-800-726-2524; 903-592-5168; dhenderson@renaissanceamerican.com April 15-18, 2004 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting J.W. Marriott, Washington, D.C. Contact: 1-703-739-0800 or http://www.abiworld.org April 29-May 1, 2004 ALI-ABA Partnerships, LLCs, and LLPs: Uniform Acts, Taxation, Drafting, Securities, and Bankruptcy Fairmont Hotel, New Orleans Contact: 1-800-CLE-NEWS or http://www.ali-aba.org May 3, 2004 AMERICAN BANKRUPTCY INSTITUTE New York City Bankruptcy Conference Millennium Broadway Conference Center, New York, NY Contact: 1-703-739-0800 or http://www.abiworld.org June 2-5, 2004 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, MI Contact: 1-703-739-0800 or http://www.abiworld.org June 17-18, 2004 BEARD GROUP & RENAISSANCE AMERICAN MANAGEMENT Corporation Reorganizations The Millennium Knickerbocker Hotel, Chicago Contact: 1-800-726-2524; 903-592-5168; dhenderson@renaissanceamerican.com June 24-26,2004 AMERICAN BANKRUPTCY INSTITUTE Hawaii Bankruptcy Workshop Hyatt Regency Kauai, Kauai, Hawaii Contact: 1-703-739-0800 or http://www.abiworld.org July 15-18, 2004 AMERICAN BANKRUPTCY INSTITUTE The Mount Washington Hotel Bretton Woods, NH Contact: 1-703-739-0800 or http://www.abiworld.org July 28-31, 2004 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Reynolds Plantation, Lake Oconee, GA Contact: 1-703-739-0800 or http://www.abiworld.org September 18-21, 2004 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference The Bellagio, Las Vegas, NV Contact: 1-703-739-0800 or http://www.abiworld.org October 10-13, 2004 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES Seventy Seventh Annual Meeting Nashville, TN Contact: http://www.ncbj.org/ November 2004 BEARD GROUP & RENAISSANCE AMERICAN MANAGEMENT Distressed Investing 2004 The Plaza Hotel, New York Contact: 1-800-726-2524; 903-592-5168; dhenderson@renaissanceamerican.com December 2-4, 2004 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Marriott's Camelback Inn, Scottsdale, AZ Contact: 1-703-739-0800 or http://www.abiworld.org April 28- May 1, 2005 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting J.W. Marriot, Washington, DC Contact: 1-703-739-0800 or http://www.abiworld.org July 14 -17, 2005 AMERICAN BANKRUPTCY INSTITUTE Ocean Edge Resort, Brewster, MA Contact: 1-703-739-0800 or http://www.abiworld.org July 27- 30, 2005 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop Kiawah Island Resort and Spa, Kiawah Island, SC Contact: 1-703-739-0800 or http://www.abiworld.org November 2-5, 2005 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES Seventy Eighth Annual Meeting San Antonio, TX Contact: http://www.ncbj.org/ December 1-3, 2005 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Hyatt Grand Champions Resort, Indian Wells, CA Contact: 1-703-739-0800 or http://www.abiworld.org The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L. Metzler, Bernadette C. de Roda, Donnabel C. Salcedo, Ronald P. Villavelez and Peter A. Chapman, Editors. Copyright 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 ***