/raid1/www/Hosts/bankrupt/TCR_Public/040119.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, January 19, 2004, Vol. 8, No. 12
Headlines
360NETWORKS: Wants Pathnet Trustee to Assume Joint Build Pact
ADELPHIA COMMS: Completes Transition to New Board of Directors
ADELPHIA COMMS: Wins Nod to Expand Lazard Frere's Engagement
AGRI SYSTEMS: Case Summary & 20 Largest Unsecured Creditors
AIRTRAN HOLDINGS: Will Hold Q4 & FY 2003 Conference Call Thurs.
AK STEEL: Shirley D. Peterson Named to Co.'s Board of Directors
AK STEEL: Implementing Surcharges and Price Increases
ALAMOSA HOLDINGS: Selling 8.5% Senior Notes via Private Offering
ALLIANCE GAMING: December Quarter Results Show Strong Growth
AMERICA WEST: Fourth-Quarter Conference Call Slated for Thursday
AMERICAN HEALTHCHOICE: Gorman Trubitt Airs Going Concern Doubt
AMERICAN PLUMBING: Firms Up Sale of Unit to Sherwood Mechanical
AMKOR: Aligns Management Structure & Promotes Senior Executives
AMNIS SYSTEMS: Hires Investment Bank to Aid in Financing Efforts
ARVINMERITOR: Inks LOI to Sell Kenton, Ohio Facility to Sypris
AURORA FOODS: Details Plan's Claims Classification & Treatment
AUSAM BIOTECH.: Taps Jefferies to Explore Strategic Alternatives
AVONDALE MILLS: S&P Lowers Credit and Sub. Debt Ratings to B/CCC
BAYOU STEEL: Fiscal 2003 Operating Loss Balloons to $30 Million
BENZ ENERGY: Ch. 7 Trustee Prepares to Sell 8.5 Mill. HEC Shares
BUILDERS PLUMBING: Hires Piper Rudnick as Bankruptcy Counsel
CENTENNIAL COMMS: Secures Commitment on New $750M Credit Facility
CENTENNIAL COMMS: S&P Rates $250M Senior Unsecured Notes at CCC
CHESAPEAKE: Closes Common Stock Offering & Debt Exchange Offer
CONSECO/GREEN TREE: Fitch Takes Actions on 57 MH Transactions
CPT HOLDINGS: Secures Court Approval to Hire Greenberg Taurig
DELTA AIR LINES: Dec. 31 Balance Sheet Upside-Down by $862 Mill.
DII INDUSTRIES: Brings-In KPMG to Render Tax Accounting Services
DIRECTV LATIN: Court Okays Latham & Watkins as Special Counsel
DIVERSIFIED CORPORATE: Obtains Favorable Ruling in Ditto Lawsuit
EAGLE FOOD CENTERS: Overview & Summary of Proposed Chapter 11 Plan
EL PASO: Finalizes $246-Mill. Coastal Eagle Point Refinery Sale
EMMIS COMMS: Vanessa Oubre Promoted to VP & GM at Two TV Stations
ENRON: East Coast Power Asset Sale to Special Situations Okayed
ENRON CORP: Court Clears Sale of Metromedia Claims to Liquidity
FACTORY 2-U STORES: Receives Court Approval of First-Day Motions
FIRST CHICAGO: Fitch Affirms 1997-CHL1 Ratings at B/Junk Levels
FLEMING COS.: Asks Court to Clear Settlement with RLI Insurance
FUELNATION: Enters into Fuel Supply Agreement with Alkhalifa
GENERAL MEDIA: Hires Seneca Financial as Restructuring Advisor
GRAFTECH INT'L: Prices $180MM of 1.625% Conv. Senior Debentures
HAYES LEMMERZ: Buys Certain Assets from Hayes Wheels de Mexico
HAYES LEMMERZ: HLI Trust Wants Skadden Arps to Turn Over Docs.
IMC GLOBAL: Wants to Buy Phosphate Resource's Publicly Held Units
INFOUSA: Fourth-Quarter and Year-End Results Show Slight Decline
INSCI CORP: Annual Shareholders' Meeting to Convene on Jan. 29
IRON MOUNTAIN: Prices 7.25% Senior Subordinated Note Offering
ISLE OF CAPRI: Elects John Brackenbury to Board of Directors
ISTAR FINANCIAL: Agrees to Sell $350 Million of 4.875% Sr. Notes
IT GROUP: Court Sets Exclusivity Extension Hearing for Feb. 23
JACKSON PRODUCTS: Case Summary & 105 Largest Unsecured Creditors
JACKSON PRODUCTS: Court to Consider Prepack. Plan on January 28
KAISER ALUMINUM: Wants Go-Signal to Modify Retiree Benefits Plan
KB HOME: Fitch Assigns 'BB+' Rating to $250 Million Debt Issue
KMART CORP: Asks Court to Disallow $4.5MM of Unsupported Claims
KNIGHTHAWK INC: Subsidiaries File Proposal Under BIA in Canada
LAIDLAW INC: Provides Info About Ongoing Litigation & Disputes
LEGACY HOTELS: Appoints Robert Putman as Vice President and CFO
LES BOUTIQUES: Canadian Court Gives Restructuring Plan Green-Light
LNR PROPERTY: Declares Quarterly Cash Dividend Payable Feb. 27
LOEWEN: Alderwoods Directors Increase Personal Stock Holdings
MCCROF REALTY INC: Voluntary Chapter 11 Case Summary
MCGUFFEY'S RESTAURANTS: Case Summary & 19 Largest Unsec. Creditors
MCWATTERS: Intends to Make Proposal Under Canadian Bankruptcy Act
MIRANT: Court OKs Heller Ehrman's Engagement as Special Counsel
MULTICANAL S.A.: Turns to U.S. Court to Block W.R. Huff Litigation
MULTICANAL S.A.: Section 304 Petition Summary
NOVA Chemicals: Will Publish Fourth-Quarter Results on Jan. 28
OLYMPIC WORLD: Inks Settlement Pact with German Bank Lenders
OWENS CORNING: Judge Fitzgerald Approves Plan-Voting Procedures
PACIFIC GAS: Proposes to Reduce Electric Rates by $800MM in 2004
PARMALAT: Winding-Up Petition against Capital Finance Unit Filed
POLYONE: Will Report 3 Non-Core Units as Discontinued Operations
PRESIDENT CASINOS: Nov. 30 Net Capital Deficit Widens to $52MM
RCN CORP: Continues Restructuring Talks with Banks & Bondholders
RENAISSANCE COSMETICS: Converting Cases to Chapter 7 Liquidation
RICA FOODS: Makes Full $5.2 Million Debt Repayment to Citibank
SAFETY-KLEEN: Chairman, CEO & President Rittenmeyer Will Resign
SCARBOROUGH-ST. JAMES: Has Until February 16 to File Schedules
SEMINIS VEGETABLE: S&P Rates Proposed $140M Sr. Sub Notes at B-
SEROLOGICALS CORP: Completes Sale of Therapeutic Plasma Business
SIEBEL SYSTEMS: Look for Fourth-Quarter 2003 Results on Wednesday
SIX FLAGS: S&P Assigns B+ Senior Secured Bank Loan Rating
SOLUTIA INC: US Trustee Appoints Official Creditors' Committee
SO. CALIF. EDISON: Declares Quarterly Preferred Share Dividends
STAR ACQUISITION: Case Summary & 22 Largest Unsecured Creditors
STAR GAS PARTNERS; Fitch Expects to Rate $35M Senior Notes at BB
STAR GAS PARTNERS: Will Publish Q1 FY 2004 Results on January 29
STATION CASINOS: Affirms Existing Financial Guidance for Q4 2003
STATION CASINOS: Will Issue $400M 6.5% Senior Subordinated Notes
SUMMITVILLE TILES: Look for Schedules and Statements by Jan. 26
TIMKEN COMPANY: Will Publish Fourth-Quarter Results on Thursday
TORPEDO SPORTS USA: July 31 Balance Sheet Upside-Down by $2 Mil.
TURTLE SHELL: Case Summary & 6 Largest Unsecured Creditors
TXU ENERGY: Fitch Raises S-T Rating to F2 with Stable Outlook
UNITED AIRLINES: Wants to Pull Plug on 2 Boeing Aircraft Leases
US AIRWAYS: Reports Several Key Management Team Promotions
US AIRWAYS: Allows Voluntary Furloughs After Flight Attendant Suit
VAIL RESOURS: Caps Price of $390-Mill. Senior Sub. Note Offering
VAIL RESORTS: Planned $350M Senior Sub. Notes Get S&P's B Rating
VENTAS INC: Will Publish Q4 and 2003 Year-End Results on Feb. 26
WAVING LEAVES: Court Okays Critchfield as Compensation Counsel
WCI STEEL: Initiates Cost-Cutting Plan to Save $3 Mill. Annually
WEIRTON STEEL: Details Temporary Production Curtailment Program
WESTERN UNITED: A.M. Best Lowers Financial Strength Ratings to R
WISCONSIN AVE: Fitch Affirms Ser. 1996-M5 Class C Rating at BB-
WOMEN FIRST: Edward F. Calesa Returns to President & COO Posts
WOMEN FIRST HEALTHCARE: Strikes Strategic Partnership with PCOSA
WORLDCOM INC: Election Forms Expiry Date Extended to January 26
XTO ENERGY: Prices $500 Million of 4.9% Senior Notes Due 2014
* BOND PRICING: For the week of January 19 - 23, 2004
*********
360NETWORKS: Wants Pathnet Trustee to Assume Joint Build Pact
-------------------------------------------------------------
In Pathnet Operating, Inc.'s bankruptcy case, 360networks (USA),
Inc., formerly known as Pacific Fiberlink LLC, asks the
Bankruptcy Court for the Eastern District of Virginia to compel
the Pathnet Chapter 7 Trustee to assume a Joint Build Agreement
as a condition to the Trustee's sale of certain assets.
Philip C. Baxa, Esq., at Troutman Sanders LLP, in McLean,
Virginia, relates that on March 31, 1999, Pathnet, Inc. entered
into a Joint Build Agreement with 360networks, which provides,
inter alia, for 360networks to design, engineer, construct,
install and maintain a three conduit fiber optic communication
system between Aurora, Colorado and Chicago, Illinois. The Joint
Build Agreement also provides that Pathnet, Inc. will purchase
50% of the System.
By First Amendment on May 30, 2000, 360networks, Pathnet, Inc.
and Pathnet Operating agree that Pathnet Inc. is assigning its
rights under the Joint Build Agreement to Pathnet Operating.
Mr. Baxa reports that 360networks completed the design,
engineering, construction and installation of the System and
continues to maintain the System and perform in accordance with
the Joint Build Agreement. Pathnet Operating has accepted the
Purchaser System as being constructed in accordance with the
Project Specification.
According to Mr. Baxa, Pathnet Operating owes 360networks
$7,251,006 of the Purchase Price, plus accrued interest as
provided in the Joint Build Agreement. Daniel Gray, the former
Controller of Pathnet Operating, says that Pathnet Operating
withheld $6,373,823 of the Purchase Price for the Purchaser
System.
Mr. Baxa notes that the Joint Build Agreement requires Pathnet
Operating to pay for 50% of the System's total maintenance costs.
Pathnet Operating's share of the postpetition maintenance
expenses to date is $2,000,000, which continues to accrue. In
addition, the Joint Build Agreement also requires Pathnet
Operating to pay 360networks its share of the taxes on the
System. Pathnet Operating's share of postpetition taxes for 2001
to 2002 is about $1,270,000, which continues to accrue.
On April 2, 2001, Pathnet Operating filed for Chapter 11
protection. On July 24, 2001, the Virginia Court converted
Pathnet's case to a case under Chapter 7 of the Bankruptcy Code.
Since the conversion, the Trustee has requested nine extensions
of time in which to assume or reject the Joint Build Agreement on
the repeated representation that time is needed to sell the
Purchaser System.
Contrary to the Trustee's nine prior Court filings, Mr. Baxa
points out, the Trustee now asserts that the Joint Build
Agreement is not an executory contract and was never needed to
preserve the Trustee's ability to sell the Purchaser System for
the benefit of Pathnet's estate.
Citing "Gloria Manufacturing Corp. v. International Ladies'
Garment Workers' Union," Mr. Baxa argues that the Joint Build
Agreement is an executory contract because there are numerous,
substantial and ongoing obligations of the parties under the
Joint Build Agreement where a breach would defeat the purpose of
the contemplated transaction and would justify the other party's
suspension of performance.
Moreover, Mr. Baxa contends, the provisions of the Joint Build
Agreement for Pathnet Operating's purchase of the Purchaser
System are not severable from the remainder of the Joint Build
Agreement. It is a well-settled law that a debtor-in-possession
cannot assume the benefits of an executory contract without
assuming its burdens as well. Also, there is no binding
authority in the Fourth Circuit that would permit the Trustee to
assume only a portion of the Joint Build Agreement on the ground
that it is severable from the other provisions in the Joint Build
Agreement.
Even assuming that authority existed for a partial assumption,
Mr. Baxa asserts that the provisions of the Joint Build Agreement
for the purchase of the Purchaser System are not severable from
the other provisions of the Joint Build Agreement under New York
law -- the governing law of the Joint Build Agreement.
Under New York law, whether a contract is severable is a question
of the parties' intention, to be determined from the language the
parties employed, viewed in light of the circumstances
surrounding them at the time they contracted. Applying this in
the Joint Build Agreement, the Agreement clearly demonstrates
that the parties did not intend the provisions regarding the
purchase of the Purchaser System to be severable from the
remaining provisions of the Joint Build Agreement. If the
Purchaser System is sold to a third party without assuming the
Joint Build Agreement, the provisions of the Joint Build
Agreement are rendered meaningless, and the Agreement becomes a
nullity. Obviously, that was not the intent of the parties.
In the Trustee's request to sell assets to Fiberlink, the Trustee
maintains that he can sell all of these Joint Build Agreement
assets and contract rights to Fiberlink, and thereby transfer the
benefits of the Joint Build Agreement without assuming any of the
obligations, including, without limitation, the obligation to pay
the Purchase Price.
The most significant contract right the Trustee seeks permission
to transfer to Fiberlink is the right of access to the Purchaser
System, which is inextricably interdependent on the provisions of
the Joint Build Agreement. The Trustee's apparent position is
that he can transfer access to the Purchaser System to Fiberlink
without regard to the provisions of the Joint Build Agreement.
"That position is contrary to the express terms of Section11.1.5,
which provides that the right of access to the Purchaser System
must be 'in accordance with the terms and conditions of this
Agreement'," Mr. Baxa remarks.
Among the "terms and conditions of this Agreement" with which
Pathnet Operating must comply in connection with the right of
access are the provisions relating to the Underlying Rights set
forth in the Joint Build Agreement. Absent the agreement of the
parties to comply with the Underlying Rights and perform their
obligations, Mr. Baxa says, neither party may be able to preserve
its right to access to the System. The right of access the
Trustee wants to sell to Fiberlink cannot be severed from the
ongoing obligations of Pathnet Operating under the Joint Build
Agreement with regard to Underlying Rights.
Similarly, Mr. Baxa informs the Virginia Bankruptcy Court that
Pathnet Operating's right to use the regeneration facilities is
subject to the provisions of Article 19 of the Joint Build
Agreement. Article 19 contains ongoing obligations regarding co-
location space in the regen facilities and sharing of revenues
from third parties. Once again, this contract right that the
Trustee seeks to sell without assuming the Joint Build Agreement
is a right that is expressly subject to the terms of the Joint
Build Agreement.
The Trustee also seeks to avoid the very substantial costs of
maintaining the System. Mr. Baxa recalls that Pathnet Operating
previously stipulated to the critical importance of the ongoing
maintenance to prevent the rapid deterioration of the System.
Recently, the entire line was cut and 360networks spent
approximately $60,000 to repair that cut, including repair of the
conduit and resplicing the fiber. If the cut had not been
repaired, the line could have become contaminated and non-
operational.
Accordingly, 360networks asks the Virginia Bankruptcy Court to:
(a) require the Trustee to comply with Section 365 of the
Bankruptcy Code with regard to the assumption and
assignment of the Joint Build agreement, including cure of
all defaults; and
(b) deny the Trustee's request to sell the Purchaser System if
the Trustee refuses to assume the Joint Build Agreement in
accordance with Section 365.
Headquartered in Vancouver, British Columbia, 360networks, Inc. --
http://www.360.net/-- is a leading independent provider of fiber
optic communications network products and services worldwide. The
Company filed for chapter 11 protection on June 28, 2001 (Bankr.
S.D.N.Y. Case No. 01-13721), obtained confirmation of a plan on
October 1, 2002, and emerged from chapter 11 on November 12,
2002. Alan J. Lipkin, Esq., and Shelley C. Chapman, Esq., at
Willkie Farr & Gallagher, represents the Company before the
Bankruptcy Court. When the Debtors filed for protection from its
creditors, they listed $6,326,000,000 in assets and $3,597,000,000
in liabilities. (360 Bankruptcy News, Issue No. 61; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
ADELPHIA COMMS: Completes Transition to New Board of Directors
--------------------------------------------------------------
Fulfilling its previously announced commitment and signaling
continued progress in its rebuilding effort, Adelphia
Communications Corporation (OTC: ADELQ) has completed its
transition to a new Board of Directors with broad expertise in
cable television, finance and corporate governance.
Anthony T. Kronman, dean of Yale Law School and a leading expert
on legal ethics and governance issues, has been elected by his
fellow board members as Lead Director. Mr. Kronman joined the
Adelphia Board in fall 2002. Philip R. Lochner Jr. has been
elected to chair the Board's corporate governance committee,
replacing Mr. Kronman in the position, due to Mr. Kronman's
election as Lead Director. Mr. Lochner is a former senior vice
president and chief administrative officer of Time Warner, Inc.,
and served as a commissioner of the U.S. Securities and Exchange
Commission from 1990 to 1991. He joined the Adelphia Board in May
2003.
Board members Dennis Coyle and Erland (Erkie) Kailbourne have
resigned after serving through most of 2003 to ensure a smooth
transition. Messrs. Coyle and Kailbourne had previously announced
their intention to resign. They were the last Adelphia board
members who had served before the company's Chapter 11 filing.
Announcing the changes, William T. Schleyer, chairman and chief
executive officer of Adelphia, said, "We are grateful to Dennis
Coyle and Erkie Kailbourne for the conscientious stewardship that
has brought us to this point in our progress, including Erkie's
dedicated efforts as interim CEO. Adelphia now has a board with
tremendous depth and breadth of experience in corporate
governance, finance and the cable television industry. The company
has taken critical steps to restore its reputation and we are in
an excellent position to move forward with plans to emerge from
Chapter 11 later this year and operate as a strong, vital and
independent organization."
Adelphia's new Board of Directors is as follows:
-- E. Thayer Bigelow
-- Rod Cornelius
-- Anthony T. Kronman
-- Philip R. Lochner Jr.
-- Susan Ness
-- William T. Schleyer (Chairman and CEO)
-- Kenneth L. Wolfe
Adelphia Communications Corporation is the fifth-largest cable
television company in the country. It serves 3,500 communities in
31 states and Puerto Rico, and offers analog and digital cable
services, high-speed Internet access (Adelphia Power Link), and
other advanced services.
ADELPHIA COMMS: Wins Nod to Expand Lazard Frere's Engagement
------------------------------------------------------------
Shelley C. Chapman, Esq., at Willkie Farr & Gallagher LLP, in New
York, recounts that under the September 27, 2002 Order, the
Adelphia Communications Debtors were authorized to employ Lazard
Freres & Co. LLC as investment bankers pursuant to the terms of an
engagement letter, dated as of June 1, 2002, and an
indemnification agreement, dated as of April 22, 2002. In
response to concerns articulated by certain of the Debtors'
creditor constituents, the Initial Order carves out those
provisions of the Engagement Letter relating to sale transactions.
The Debtors sought and obtained the Court's permission to expand
the scope of Lazard's employment to include services related to,
and compensation for, any sale transaction involving any of the
Debtors' non-core, non-cable domestic assets or their cable
assets located outside the United States pursuant to the terms
originally set forth in the Engagement Letter.
Ms. Chapman reports that Lazard is a financial advisory and
investment banking firm focused on providing financial and
investment banking advice and transaction execution on behalf of
its clients. Lazard's broad range of corporate advisory services
includes services pertaining to:
(1) general financial advice;
(2) corporate restructurings;
(3) domestic and cross-border mergers and acquisitions;
(4) divestitures;
(5) privatization;
(6) special committee assignments;
(7) takeover defenses; and
(8) strategic partnerships/joint ventures.
In addition, Lazard maintains a presence in capital markets and
has a significant asset management business. Lazard is a
registered broker-dealer and an investment adviser with the
United States Securities and Exchange Commission and is also a
member of the New York, American and Chicago Stock Exchanges, the
National Association of Securities Dealers and the SIPC.
With roots dating back to New Orleans, Louisiana in 1848, Lazard
and its affiliates are a private firm with 1,700 employees, with
25 offices in 16 countries, including U.S. offices in New York,
Chicago, San Francisco, Los Angeles and Houston.
In addition to those services Lazard was to perform pursuant to
the Initial Order, the Engagement Letter contemplates that Lazard
will:
(1) assist the Debtors in identifying and evaluating
candidates for potential Sale Transactions;
(2) advise the Debtors in connection with negotiations; and
(3) assist in the consummation of the Sale Transactions.
Lazard has substantial expertise in all these areas, and as a
result, Lazard is well qualified to perform these services and
represent the Debtors' interests in these cases.
According to Ms. Chapman, Lazard will be entitled to these forms
of compensation for its services in connection with Sale
Transactions:
(1) For any Sale Transaction consummated, Lazard will be paid
a cash Sale Transaction Fee on consummation, equal to the
applicable percentage of the Aggregate Consideration.
The Sale Transaction Fee may range from 2% of the
Aggregate Consideration for any Sale Transaction worth
$50,000,000 or less, to a maximum amount of 0.15% of the
Aggregate Consideration of a Sale Transaction worth more
than $20,000,000,000;
(2) Depending on the nature of the transactions, Lazard may
earn both a Restructuring Fee and Sale Transaction Fee;
and
(3) In addition to any fees that may be payable to Lazard and,
regardless of whether any transaction occurs, the Debtor
will promptly reimburse Lazard for all:
(a) reasonable out-of pocket expenses; and
(b) other reasonable fees and expenses, including expenses
of counsel, if any.
Lazard will apply to the Court for interim and final allowance of
compensation and reimbursement of expenses.
The Office of the United States Trustee retains all rights to
review Lazard's interim and final fee applications, including
expense reimbursement, on all grounds, including Section 330 of
the Bankruptcy Code.
Pursuant to the Initial Order, Ms. Chapman relates, Lazard is not
required to file time records in accordance with the United
States Trustee Guidelines, but in its fee applications filed with
the Court, Lazard will continue to present descriptions of those
services provided on behalf of the Debtors, the approximate time
expended in providing those services, and the individuals who
provided professional services on behalf of the Debtors.
David S. Kurtz, a managing director at Lazard, assures the Court
that Lazard did not represent and has no relationship with these
entities, in any matter relating to these cases:
(1) the Debtors;
(2) their creditors or equity security holders;
(3) any other parties-in-interest in this case;
(4) their attorneys and accountants; or
(5) the United States Trustee or any person employed in the
Office of the United States Trustee.
Mr. Kurtz further discloses that the principals and professionals
of Lazard:
(1) do not have any connection with the Debtors, their
creditors, or any party-in-interest, or their attorneys;
(2) do not hold or represent an interest adverse to the
estate; and
(3) are "disinterested persons" within the meaning of
Section 101(14) of the Bankruptcy Code.
The Debtors are authorized to indemnify and hold harmless Lazard
and its affiliates, their directors, officers, agents, employees
and controlling persons, subject to certain conditions. (Adelphia
Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
AGRI SYSTEMS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Agri Systems
1300 Minnesota Ave.
Billings, Montana 59101
Bankruptcy Case No.: 04-60069
Type of Business: The Debtor designs, develops and constructs
feed mills, grain elevators, steam flaking
operations, ethanol plants, and other bulk
material processing facilities. Agri Systems
also manufactures quality, high precision
automatic bulk weighing systems, rail road
scales, and truck scales. See
http://agrisystems.net/
Chapter 11 Petition Date: January 14, 2004
Court: District of Montana (Butte)
Judge: Ralph B. Kirscher
Debtor's Counsel: Jon E. Doak, Esq.
Doak & Associates, P.C.
100 North 27th Street, Suite 200
Billings, MT 59101
Tel: 406-896-8904
Fax: 406-896-8937
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Sargent Electric Subcontractor $119,248
(trade debt)
Arrow Concrete Supplier (trade debt) $112,967
PA Unemployment Compensation Unemployment Tax $111,000
Main Electric Subcontractor $100,000
(trade debt)
Hydacrete Pumping Co. Subcontractor $89,005
(trade debt)
Muth Electric Subcontractor $65,000
(trade debt)
Scanada Supplier (trade debt) $42,064
North Star Supply Co. Supplier (trade debt) $27,027
PA Tool Sales & Service Supplier (trade debt) $24,187
STS Consultants Subcontractor $22,833
(trade debt)
Neff Rental Supplier (trade debt) $22,000
Van Sickle Allen Subcontractor $21,406
(trade debt)
Dakota Supply Supplier (trade debt) $18,790
Sheesley Supply Supplier (trade debt) $15,733
American Mast Climbers, LLC Supplier (trade debt) $14,000
LaFarge West Inc. Supplier (trade debt) $13,532
U Rent Sales Supplier (trade debt) $12,671
ID Corporation Subcontractor $10,910
(trade debt)
CO Dept. of Rev. Govt. Contract $10,539
Seneca Wholesale Supplier (trade debt) $6,538
AIRTRAN HOLDINGS: Will Hold Q4 & FY 2003 Conference Call Thurs.
---------------------------------------------------------------
AirTran Holdings, Inc., (NYSE:AAI) will provide an online, real-
time webcast of its fourth-quarter and FY 2003 earnings conference
call on Thursday, January 22, 2004, at 10 a.m. (EST). Beginning
approximately two hours after the initial conference call is
completed, a replay of the webcast will be available.
To access the webcast, go to the "Investor Relations" area of
AirTran Airways' Web site -- http://www.airtran.com/-- accessible
from the homepage. Once there, click on either the "Overview" or
"Calendar" buttons, and follow the prompts for the webcast. The
broadcast will also be available at http://www.streetevents.com/
AirTran Airways (S&P/B-/Negative) is one of America's largest low-
fare airlines - employing more than 5,400 professional Crew
Members and serving 492 flights a day to 43 destinations. The
airline's hub is at Hartsfield Atlanta International Airport, the
world's busiest airport (by passenger volume), where it is the
second largest carrier operating 189 flights a day. The airline
never requires a roundtrip purchase or Saturday night stay, and
offers an affordable Business Class, assigned seating, easy online
booking and check-in, the A-Plus Rewards frequent flier program,
and the A2B corporate travel program. AirTran Airways, a
subsidiary of AirTran Holdings, Inc., (NYSE:AAI), is the world's
largest operator of the Boeing 717, the most modern,
environmentally friendly aircraft in its class. In 2004, the
company will begin taking delivery of 100 Boeing 737-700s, one of
the most popular and reliable jet aircraft in its class. For more
information, visit http://airtran.com/
AK STEEL: Shirley D. Peterson Named to Co.'s Board of Directors
---------------------------------------------------------------
AK Steel (NYSE: AKS) said that Shirley D. Peterson has been
elected to its board of directors, effective January 13, 2004.
Mrs. Peterson is a former president of Hood College in Frederick,
Maryland. Prior to her service at Hood College, she was a partner
and the head of tax practice at Steptoe and Johnson, a Washington,
DC law firm.
From 1989 to 1992 Mrs. Peterson was assistant attorney general in
the Tax Division of the U.S. Department of Justice. She was
appointed in February 1992 by President George H.W. Bush as
commissioner of the Internal Revenue Service, U.S. Department of
Treasury. She served as IRS commissioner until January 1993.
"Shirley Peterson has had a distinguished career in both the
public and private sectors," said James L. Wainscott, president
and chief executive officer of AK Steel. "She brings a unique
blend of talent, knowledge and leadership that will be a great
asset to AK Steel and we welcome her to our board."
Mrs. Peterson is also currently a member of the boards of Scudder
Mutual Funds, Federal Mogul Corporation and Bryn Mawr College, as
well as the board of advisors of the American University Tax
Clinic. She is a past director on the boards of Bethlehem Steel
Corporation and the National Legal Center for the Public Interest.
Mrs. Peterson is the recipient of the Distinguished Service Award
from the U.S. Department of Treasury, the Edmund J. Randolph Award
for outstanding service from the U. S. Department of Justice, and
the Luther Institute's National Laywoman Wittenberg Award. She
has served as chair of the Commission on Government and Public
Affairs of the American Council on Education, and also as a member
of the Commission on Maryland Ethics. She is a graduate of Bryn
Mawr College and the New York University School of Law.
AK Steel (S&P, B+ Corporate Credit Rating, Negative Outlook)
produces flat-rolled carbon, stainless and electrical steel
products for automotive, appliance, construction and manufacturing
markets, as well as tubular steel products. The company has about
10,000 employees in plants and offices in Middletown, Coshocton,
Mansfield, Walbridge and Zanesville, Ohio; Ashland, Kentucky;
Rockport and Columbus, Indiana; and Butler, Pennsylvania. In
addition, the company produces snow and ice control products and
operates an industrial park on the Houston, Texas ship channel.
AK STEEL: Implementing Surcharges and Price Increases
-----------------------------------------------------
AK Steel (NYSE: AKS) will add a $30 per ton ($1.50/cwt.) surcharge
to its electrical steel sheet and strip products, effective with
shipments on February 1, 2004. The company also said it had added
a $30 per ton surcharge to its carbon steel products, effective
with January 2004 shipments.
The surcharges have been implemented because of extraordinary
increases in raw material costs. Surcharges for both carbon and
electrical steel products will be adjusted monthly, based upon
changes in raw material costs.
In addition, AK Steel said it had notified carbon steel customers
last week that it was increasing transaction prices for new orders
of hot-rolled, cold-rolled and coated steel products. Hot-rolled
steel prices were increased by $50 per ton. Cold-rolled and
coated steel prices were increased by $60 per ton.
AK Steel (S&P, B+ Corporate Credit Rating, Negative Outlook)
produces flat-rolled carbon, stainless and electrical steel
products for automotive, appliance, construction and manufacturing
markets, as well as tubular steel products. The company has about
10,000 employees in plants and offices in Middletown, Coshocton,
Mansfield, Walbridge and Zanesville, Ohio; Ashland, Kentucky;
Rockport and Columbus, Indiana; and Butler, Pennsylvania. In
addition, the company produces snow and ice control products and
operates an industrial park on the Houston, Texas ship channel.
ALAMOSA HOLDINGS: Selling 8.5% Senior Notes via Private Offering
----------------------------------------------------------------
Alamosa Holdings, Inc. (OTC Bulletin Board: ALMO) announced that
Alamosa (Delaware), Inc., its wholly owned subsidiary, has agreed
to sell $250 million in aggregate principal amount of its 8.5%
senior notes due 2012. Alamosa (Delaware) intends to complete the
transaction on or about January 20, 2004.
The notes are being sold in the United States only to qualified
institutional buyers pursuant to Rule 144A under the Securities
Act of 1933, as amended, and to non-U.S. persons in accordance
with Regulation S under the Securities Act. The notes have not
been registered under the Securities Act and may not be offered or
sold in the United States absent registration or an applicable
exemption from registration requirements.
Alamosa intends to use the net proceeds of this sale to
permanently repay and terminate its senior secured credit facility
and for general corporate purposes. Approximately $200 million in
borrowings is currently outstanding under this credit facility. No
assurance can be given that the sale will be completed, and the
sale is subject to market and other customary conditions.
Alamosa Holdings, Inc. (S&P, CCC+ Corporate Credit Rating,
Developing Outlook) is the largest (based on number of
subscribers) PCS Affiliate of Sprint (NYSE: FON, PCS), which
operates the largest all-digital, all-CDMA Third-Generation (3G)
wireless network in the United States. Alamosa has the exclusive
right to provide digital wireless mobile communications network
services under Sprint's PCS division throughout its designated
territory located in Texas, New Mexico, Oklahoma, Arizona,
Colorado, Utah, Wisconsin, Minnesota, Missouri, Washington,
Oregon, Arkansas, Kansas, Illinois and California. Alamosa's
territory includes licensed population of 15.8 million residents.
ALLIANCE GAMING: December Quarter Results Show Strong Growth
------------------------------------------------------------
Alliance Gaming Corporation (NYSE: AGI) announced earnings for its
second fiscal quarter ending December 31, 2003. Second quarter
income from continuing operations totaled $14.2 million, or $0.28
per diluted share, on revenues of $108.6 million. For the
comparable quarter ended December 31, 2002, the Company reported
income from continuing operations of $8.6 million or $0.17 per
diluted share, on revenues of $98.2 million. The results for the
Company's continuing operations for the current and prior year
periods are presented after classifying the results of the Rail
City Casino as discontinued operations, which had the effect of
reclassifying EPS of $0.02 in both quarters from income from
continuing operations to income from discontinued operations.
Consolidated results for the December 31, 2003 quarter include:
-- Revenues from continuing operations of $108.6 million, an
increase of 11% from the $98.2 million in the prior year
quarter.
-- Operating income from continuing operations of $27.5
million, an increase of 30% from the $21.2 million in the
prior year quarter.
-- EBITDA from continuing operations of $34.0 million, an
increase of 30% from the $26.1 million in the prior year
quarter.
-- Total net income, including discontinued operations, of
$0.37 per diluted share, an increase of 56%, compared to
$0.24 in the prior year quarter.
Cash and Capital Expenditures:
-- As of December 31, 2003, cash and cash equivalents for our
continuing operations totaled $72.3 million, which
included approximately $2.7 million held for operational
purposes in vaults, cages and change banks and $13.7
million held in jackpot reserve accounts. These amounts
exclude cash and cash equivalents of the discontinued
operations, which are included in assets held for sale.
-- For the quarter ended December 31, 2003, consolidated
capital expenditures for our continuing operations,
including costs to produce proprietary games, totaled
$13.2 million compared to $7.7 million for the prior year
quarter. The current period capital expenditures were
driven by the continued deployment of wide-area
progressive and daily-fee games. We also incurred $1.7
million for capital expenditures for our discontinued
operations.
Other financial highlights:
-- Consolidated net interest expense for the current quarter
totaled $3.8 million compared to $6.5 million in the prior
year period. The Company currently has $70.0 million
outstanding on its $125 million revolving credit facility,
unchanged from September 2003 quarter end. During the
December 2003 quarter we increased the Term Loan by $75
million, to a total of $350 million outstanding. The
proceeds were used primarily to fund loans made to Sierra
Design Group in advance of the previously announced
acquisition of SDG that is anticipated to close before
March 31, 2004.
-- The Company has advanced loans totaling $61 million to SDG
to repay certain creditors.
Fiscal Year 2004 Guidance
-- The Company is updating its fiscal year 2004 guidance for
continuing operations from $1.10 per diluted share, to at
least $1.04, reflecting the reclassification of $0.06 of
EPS for Rail City Casino to discontinued operations. This
guidance also reflects the inclusion of SDG's results that
we are now forecasting will not be dilutive to our fiscal
year 2004 results, which we had previously guided could
have been dilutive by as much as $(0.10). The comparative
EPS for the prior fiscal year 2003 was $0.74, which has
also been adjusted to reclassify the Rail City Casino as
discontinued operations.
Fiscal Year 2005 Guidance
-- For fiscal 2005, the Company expects EPS for continuing
operations of at least $1.40, representing an increase of
35% compared to fiscal year 2004.
Alliance Gaming (S&P, BB- Senior Secured Credit Facility Rating)
is a diversified gaming company with headquarters in Las Vegas.
The Company is engaged in the design, manufacture, operation and
distribution of advanced gaming devices and systems worldwide, and
is the nation's largest gaming machine route operator and operates
two casinos. Additional information about the Company can be found
at http://www.alliancegaming.com/
AMERICA WEST: Fourth-Quarter Conference Call Slated for Thursday
----------------------------------------------------------------
America West Holdings Corporation (NYSE: AWA) will conduct a live
audio webcast of its fourth quarter 2003 financial results
conference call with the financial community on Thursday, Jan. 22,
2004 at 1:00 p.m. EDT (10:00 a.m. PDT).
The webcast will be available to the public on a listen-only basis
at the company's Web site -- http://www.americawest.com/ An
archive of the webcast will be available on the site through Jan.
28, 2004. Listeners to the webcast will need a current version of
Windows MediaPlayer software and at least a 28.8 kbps connection
to the Internet.
America West Holdings Corporation is an aviation and travel
services company. Wholly owned subsidiary America West Airlines
is the nation's second-largest low-fare carrier with 13,000
employees serving nearly 55,000 customers a day in 93 destinations
in the U.S., Canada, Mexico and Central America.
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 HEALTHCHOICE: Gorman Trubitt Airs Going Concern Doubt
--------------------------------------------------------------
For American HealthChoice Inc.'s fiscal year ended September 30,
2003, net cash provided by operating activities was $36,000 as
compared to $25,000 net cash used in operating activities for the
fiscal year ended September 30, 2002. Net cash provided by
operating activities in the 2003 period is primarily attributable
to non-cash expenses in the amount of $3,952,000 for allowance for
doubtful accounts and goodwill impairment of $1,000,000 offset by
a net loss of $1,791,000 and a $3,661,000 increase in accounts
receivable. Net cash used in operating activities in the 2002
period is primarily attributable to a net loss of $3,053,000 plus
an increase in accounts receivable in the amount of $3,700,000
offset by non-cash expenses in the amount of $5,300,000 for
doubtful accounts and goodwill impairment of $900,000.
Net cash used in investing activities for the years ended
September 30, 2003 and September 30, 2002 was attributable to the
acquisition of property and equipment in the amounts of $11,000
and $34,000, respectively.
Net cash provided by (used in) financing activities for the years
ended September 30, 2003 and September 30, 2002 was the net
difference of proceeds from new notes payable and payments on
notes payable and capital leases in the amounts of minus $15,000
and $33,000, respectively.
During the year ended September 30, 2003, cash generated from
operations was not sufficient to meet current obligations by
approximately $200,000. Since the Company has no outside source of
funds, at September 30 2003, the President and Chief Executive
Officer was owed approximately $100,000 in unpaid wages and the
Internal Revenue Service was due approximately $125,000 in
delinquent payroll taxes. As a result of the shortfall in cash
from operations, funds were not available to satisfy payments due
in September 2001, 2002 and 2003, under a chapter 11 plan
confirmed on August 8, 2000.
At September 30, 2003, the Company was delinquent on payments due
to unsecured creditor claims and insider claims in the amounts of
$528,000 and $625,000, respectively. In addition, the loan in the
amount of $837,000 issued in connection with the acquisition of
three clinics in September 2000 was due and payable on
September 1, 2002. The amount past due including unpaid interest
is approximately $1,040,000 at September 30, 2003.
In the case of the bankruptcy payments, less than five creditors
have pursued collection of claims due as of September 30, 2003.
The Company was able to meet these payments of approximately
$25,000 during the 2003 fiscal year and avoid legal action on the
part of these creditors. At the present time, Management does not
foresee any individual creditors initiating legal action in
regards to past due payment of claims. However, there are no
assurances that an individual creditor or group of creditors will
not pursue legal action which could result in adverse consequences
to the Company.
The Company must achieve net revenue of approximately $400,000 per
month to meet current obligations. For the six month period ended
September 30, 2003, net revenue was approximately $2,100,000,
which resulted in a $300,000 shortfall from the $400,000 per month
target to meet current obligations. Since the period from revenue
recognition to collection is approximately 180 days, collections
for the five month period ended November 30, 2003 were
$1,650,000, which is a $350,000 shortfall. As a result, the
amount of delinquent payroll taxes has increased by $85,000 and
certain other obligations including wages due to executive
officers and rent payments to insiders have increased in the
amounts of $80,000 and $35,000, respectively.
During the same five month period ended November 30, 2003, net
revenue has increased to an average of $400,000 per month. Taking
into consideration the 180 day collection cycle, Management
believes collections should increase to $400,000 monthly beginning
in January 2004. However, there are no assurances that the
increased collections will provide funds necessary to pay the
delinquent payroll taxes. To provide an additional source of
cash, the Company is considering the closure of one clinic that is
not generating sufficient operating profit. If the clinic is
closed, the collection of accounts receivable, net of collection
expenses, should generate approximately $200,000 in excess cash,
which can be used to pay the delinquent payroll taxes.
The holders of the acquisition notes payable have agreed to
postpone any actions to collect the past due principal and
interest until March 31, 2004. Management will have a revised
payment plan in place, which may include the sale of clinics to
satisfy obligations to the note holders.
Management does not anticipate any material capital expenditures
requiring cash in the next twelve months.
However, in the Auditors Report to the Board of Directors of
American HealthChoice Inc., Gorman Trubitt, L.L.P., the Company's
independent auditor stated in its report dated December 12, 2003,
in part:
"[C]onsolidated financial statements as of and for the year ended
September 30, 2003 have been prepared assuming that American
HealthChoice, Inc. will continue as a going concern. . . . [T]he
Company is in default on a note payment and certain scheduled
payments under the Bankruptcy Plan of Reorganization. This
condition raises substantial doubt about the Company's ability to
continue as a going concern...The consolidated financial
statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets
or the amounts and classification of liabilities that may result
from the outcome of this uncertainty."
AMERICAN PLUMBING: Firms Up Sale of Unit to Sherwood Mechanical
----------------------------------------------------------------
American Plumbing & Mechanical, Inc., announced the closing of an
agreement to sell AMPAM Commercial Sherwood Mechanical, Inc.
("Sherwood") to Sherwood Mechanical, Inc., which was formed under
the existing local management group. This sale is part of AMPAM's
corporate restructuring strategy to improve its capital structure
and focus on its core competency -- residential plumbing and
mechanical contracting. Located in Poway, CA, Sherwood was one of
the largest mechanical contractors in Southern California,
providing full service commercial plumbing and utility services.
The transaction was previously approved by AMPAM's Board of
Directors and supported by AMPAM's senior lenders and the Official
Unsecured Creditors' Committee. On January 8, 2004, the Bankruptcy
Court authorized the sale of Sherwood pursuant to Section 363 of
the U.S. Bankruptcy Code.
"AMPAM believes this transaction is the best option to deliver
maximum value to our economic stakeholders and will have minimal,
if any, impact on our core businesses," stated Robert
Christianson, AMPAM's Chairman of the Board and CEO. "With this
sale, we have now successfully divested all of our commercial
operations which will allow us to concentrate on our core
strengths -- residential single and multi-family plumbing, heating
ventilation and air conditioning contracting. The sale of
Sherwood's assets is an important piece in finalizing our plan for
reorganization."
American Plumbing & Mechanical, Inc. and subsidiaries, is the
largest company in the United States focused primarily on the
residential plumbing, heating ventilation and air conditioning
(HVAC) contracting services industry. AMPAM provides plumbing,
HVAC and mechanical installation services to single and multi-
family residential construction customers. Additional information
and press releases about AMPAM are available on the Company's web
site at http://www.ampam.com/
AMKOR: Aligns Management Structure & Promotes Senior Executives
---------------------------------------------------------------
Amkor Technology, Inc., (Nasdaq: AMKR) announced several senior
executive actions designed to align its management structure for
the next phase of the company's growth.
The company has created the Office of the Chairman; elevated John
Boruch to the position of vice chairman; and promoted Bruce
Freyman to president and chief operating officer. Mr. Freyman was
most recently executive vice president, operations. Reporting to
the Office of the Chairman are Mr. Freyman and three executive
vice presidents: Kenneth Joyce (chief financial officer), Oleg
Khaykin, (corporate development), and JooHo Kim, (worldwide
manufacturing). James Kim remains Amkor's chairman and chief
executive officer.
"Amkor is in the midst of a semiconductor industry upturn that
presents an exceptional number of growth opportunities for our
company," said CEO James Kim. "During the past year we have
embarked on a series of strategic initiatives that position Amkor
to achieve above-industry growth. The actions announced today are
designed to strengthen what I believe is the deepest management
team and strongest operational organization in our industry."
Mr. Boruch joined Amkor in 1984 and has been president and chief
operating officer since 1999. Mr. Freyman joined Amkor in 1992.
Amkor Technology, Inc. (S&P, B Corporate Credit and Senior Debt
Ratings, Stable) is the world's largest provider of contract
semiconductor assembly and test services. The company offers
semiconductor companies and electronics OEMs a complete set of
microelectronic design and manufacturing services. More
information on Amkor is available from the company's SEC filings
and on Amkor's Web site: http://www.amkor.com/
AMNIS SYSTEMS: Hires Investment Bank to Aid in Financing Efforts
----------------------------------------------------------------
Amnis Systems Inc. (OTC Bulletin Board: AMNM), a global provider
of networked streaming video systems, retained an investment
banking firm to assist it in securing up to $5 million in
financing of which the Company cannot provide assurance it will be
able to finalize.
The new infusion of capital will be used for working capital and
to complete the build out of its next generation of products.
Additionally, in conjunction with this proposed financing, Amnis
and its current investors are currently negotiating to restructure
approximately $3.5 million of existing convertible debt with the
goal of including a fixed conversion price for this convertible
debt The Company cannot guarantee that it will be successful in
negotiating the restructuring of its current convertible debt.
"This is an exciting day in the history of Amnis Systems," stated
Scott Mac Caughern, Chairman of Amnis Systems Inc. "We believe
this comprehensive restructuring will give us a new beginning and
provide flexibility to raise additional capital. In addition, the
restructuring and proposed financing will enable us to focus all
of our energy on growing the business and maximizing shareholder
value."
"New video standards are being implemented that will increase our
national security and improve the way that students learn," said
Mac Caughern. "This additional financing will help Amnis Systems
to productize the new standards in order to bring real world
solutions to our customers." In November, the company raised
$1.1M from its existing investors as a result of the recent sales
wins and visible progress on the development of new products.
Amnis Systems Inc., which acquired Optivision, Inc. in 2001, is
engaged in the networked streaming video market. The company
develops, manufactures and delivers MPEG network video products
for high-quality video creation, management and distribution
worldwide both directly and through leading industry partners.
Based in Palo Alto, California, Amnis Systems products are used in
diverse applications such as such as surveillance, distance
learning, content distribution, corporate training, telemedicine,
video-on-demand and high-quality video conferencing. To find out
more about Amnis Systems Inc., visit its Web site at
http://www.amnisinc.com/
Amnis Systems is not affiliated or related to Amnis Corporation of
Seattle, Washington.
At September 30, 2003, Amnis Systems' balance sheet shows a total
shareholders' equity deficit of about $8 million.
ARVINMERITOR: Inks LOI to Sell Kenton, Ohio Facility to Sypris
--------------------------------------------------------------
ArvinMeritor, Inc. (NYSE: ARM) announced its decision, through a
letter of intent, to sell its Kenton, Ohio, facility to Sypris
Solutions of Louisville, Ky. The sale is anticipated to be
completed by the end of March.
The sale of the facility, which employs more than 200 persons,
will allow ArvinMeritor to focus strategically within trailer
products on its core processes for the design and assembly of
complete systems, which consist of axles, brakes, suspension and
ride control.
The prospective owner, Sypris Solutions, would become a long-term,
key supplier of trailer axle beams to ArvinMeritor's trailer
assembly facility in Frankfort, Ky. In recent years, ArvinMeritor
has invested substantially in the Frankfort facility, focusing on
quality assembly processes and production capacity expansion.
"This divestiture facilitates our long-term growth strategy for
the trailer systems business, and permits us to serve and supply
our valued customers with technologically advanced trailer axle-
brake-suspensions systems," said Sergio Carvalho, vice president
and general manager of ArvinMeritor's Braking Systems, Suspension
Systems, Trailer Products and Ride Control businesses.
The transaction remains subject to the satisfactory completion of
due diligence and the execution of definitive agreements. The
sale of the facility is conditioned upon the ratification of a new
collective bargaining agreement between Sypris Solutions and the
members of the local union.
ArvinMeritor, Inc. (S&P, BB+ Corporate Credit Rating, Negative
Outlook) is a premier $8-billion global supplier of a broad range
of integrated systems, modules and components to the motor vehicle
industry. The company serves light vehicle, commercial truck,
trailer and specialty original equipment manufacturers and related
aftermarkets. Headquartered in Troy, Mich., ArvinMeritor employs
approximately 32,000 people at more than 150 manufacturing
facilities in 27 countries. ArvinMeritor common stock is traded
on the New York Stock Exchange under the ticker symbol ARM. For
more information, visit the company's Web site at
http://www.arvinmeritor.com/
AURORA FOODS: Details Plan's Claims Classification & Treatment
--------------------------------------------------------------
Aurora Foods Chief Restructuring Officer and Assistant Secretary,
Ronald B. Hutchison tells the Court that the Amended Joint Plan
provides for the classification of claims and equity interests.
Pursuant to Section 1123(a)(1) of the Bankruptcy Code,
Administrative Expense Claims and Priority Tax Claims are not
classified and the holders of these Claims are deemed to vote in
favor of the Plan because their claims will be paid in full.
Classes 1, 2, 3, 4, 5 are unimpaired while Class 6 is impaired.
Classes of interest and subordinated claims in Classes 7 and 8
are, likewise, impaired.
Only Class 6 claimholders are entitled to vote to accept or
reject the Plan. Classes 1, 2, 3, 4 and 5 Claimholders are
deemed to have accepted the Plan and, therefore, are not entitled
to vote. By operation of law, Classes 7 and 8 are deemed to have
rejected the Plan, and are, therefore, not entitled to vote.
Class Description Treatment
----- ----------- ---------
N/A Administrative Claims The Administrative Claim will
be paid by the Debtors, at
their election:
-- in full, in Cash, in the
amounts, as are incurred in
the ordinary course of
business by the Debtors, or
in the amounts as the
Administrative Claim is
allowed by the Court
on the later of the
Distribution Date or the
date on which there is a
Final Order allowing the
Administrative Claim;
-- on other terms as may exist
in the ordinary course of
the Debtors' businesses; or
-- on other terms as may be
agreed between the
Administrative Claimholders
and the Debtors.
N/A Priority Tax Claims The legal and equitable
rights of the Priority Tax
Claimholders are unaltered by
the Plan. As soon as
reasonably practicable after
the Distribution Date, if
the Priority Tax Claim is
an Allowed Priority Tax
Claim as of the Effective
Date, or the date on which the
Priority Tax Claim becomes
an Allowed Priority Tax
Claim, each Allowed
Priority Tax Claimholder
will receive in full
satisfaction, settlement
and release of, and in
exchange for the Allowed
Priority Tax Claim, at the
Debtors' election:
(w) to the extent due and
owing on the Effective
Date, Cash equal to the
amount of the Allowed
Priority Tax Claim;
(x) to the extent not due
and owing on the
Effective Date, Cash,
when and as the Claim
becomes due and owing
in the ordinary course
of business in
accordance with its
terms;
(y) other treatment as to
which the Debtors or
the Reorganized Debtors
and the Claimholder
will have agreed in
writing; or
(z) other treatment in any
other manner that the
Claim will not be
impaired under Section
1124 of the Bankruptcy
Code, including payment
in accordance with the
provisions of Section
1129(a)(9)(C) of the
Bankruptcy Code, over a
period of not more than
six years from the date
of assessment of any
Priority Tax Claim.
1 Non-Tax Priority The legal, equitable and
Claims contractual rights of the
of Class 1 Claimholders are
unaltered by the Plan. On,
or as soon as reasonably
practicable after the
Distribution Date, if
the Class 1 Claim is
allowed on the Effective
Date, or the date on which
the Class 1 Claim becomes
allowed, each Allowed Class 1
Claimholder will receive in
full satisfaction,
settlement of, and in
exchange for, the Allowed
Class 1 Claim, at the
Debtors' election:
(w) to the extent due and
owing on the Effective
Date, Cash, equal to
the Allowed Class 1
Claim;
(x) to the extent not due
and owing on the
Effective Date, Cash
when, and as the Claim
becomes due and owing
in the ordinary course
of business in
accordance with its
terms;
(y) other treatment to
which the Claimholder
and the Debtors or
Reorganized Debtors
agree in writing; or
(z) other treatment in any
other manner that the
Claim will not be
impaired under Section
1124.
2 Other Secured Claims The legal, equitable and
contractual rights of the
Class 2 Claimholders are
unaltered by the Plan. On,
or as soon as reasonably
practicable after the
Distribution Date, if the
Class 2 Claim is allowed on
the Effective Date, or the
date on which the Class 2
Claim becomes allowed, each
Claimholder will receive in
full satisfaction, settlement
of, and in exchange for the
Allowed Class 2 Claim, at
the Debtors' election:
(w) to the extent due and
owing on the Effective
Date, Cash, equal to
the Allowed Class 2
Claim;
(x) to the extent not due
and owing on the
Effective Date, Cash,
when and as the Claim
becomes due and owing
in the ordinary course
of business in
accordance with its
terms;
(y) other treatment as to
which the Claimholder
and the Debtors or
Reorganized Debtors
agree in writing; or
(z) other treatment in any
other manner that the
Claim will not be
impaired under Section
1124.
3 Unimpaired Unsecured The legal, equitable and
Claims contractual rights of the
Class 3 Claimholders are
unaltered by the Plan. On,
or as soon as reasonably
practicable after the
Distribution Date, if
the Class 3 Claim is allowed
on the Effective Date, or
the date on which the Class
3 Claim becomes allowed,
each Claimholder will
receive in full satisfaction,
settlement of, and in
exchange for, the Allowed
Class 3 Claim, at the Debtors'
election:
(w) to the extent due and
owing on the Effective
Date, Cash, equal to
the Allowed Class 3
Claim;
(x) to the extent not due
and owing on the
Effective Date, Cash,
when, and as the Claim
becomes due and owing
in the ordinary course
of business in
accordance with its
terms;
(y) other treatment as to
which the Claimholder
and the Debtors or
Reorganized Debtors
agree in writing; or
(z) other treatment in any
other manner that the
Claim will not be
impaired under Section
1124 of the Bankruptcy
Code.
4 Prepetition Lender The legal, equitable and
Claims contractual rights of Class 4
Claimholder are unimpaired by
the Plan. On the Effective
Date, each Class 4 Claimholder
will receive in full
satisfaction, settlement of,
and in exchange for, the
Allowed Class 4 Claim, Cash in
the Allowed amount of the
Claimholder's Allowed Class 4
Claim, and all letters of
credit issued under the
Prepetition Credit Agreement
will be cancelled and returned
to the Agent.
5 Prepetition Senior The legal, equitable and
Unsecured Note contractual rights of the
Claims Class 5 Claimholders are
unimpaired by the Plan. On
the Distribution Date, each
Claimholder of an Allowed
Class 5 Claim will receive in
full satisfaction, settlement
of, and in exchange for the
Allowed Class 5 Claim, Cash in
the Allowed amount of the
Allowed Class 5 Claim.
6 Sub Debt Claims On the Distribution Date, each
Allowed Class 6 Claimholder
will receive, in full
satisfaction, settlement of
and in exchange for its
Allowed Class 6 Claim, either:
-- the Sub Debt Equity
Consideration, subject to,
among other things, the
terms of the Indemnity
Agreement if the
Claimholder makes an Equity
Election on its Ballot; or
-- the Sub Debt Cash
Consideration if the
Claimholder makes a Cash
Election on its Ballot,
provided, however, that any
Allowed Class 6 Claimholder
that fails to submit a
Ballot making a timely and
valid Equity Election, as
provided for in the Merger
Agreement, will receive the
Sub Debt Cash
Consideration.
7 Subordinated Claims Subordinated Claimholders will
not receive or retain any
distribution on account of the
Subordinated Claims.
8 Old Equity Interests On the Effective Date, the
Old Equity Interests will be
cancelled and the holders of
Old Equity Interests will not
receive any distribution or
retain any Interests on
account of the Old Equity
Interests.
Nothing will affect the Debtors' or the Reorganized Debtors'
rights and defenses, both legal and equitable, regarding any
Claims, including, but not limited to, all rights with respect to
legal and equitable defenses, to set-offs or recoupments against
Claims.
Equity Election Shortfall
In the event of an Equity Election Shortfall, each Sub Debt
Claimholder, who has validly made or is deemed to have made
a Cash Election will be deemed to have made:
* an Equity Election with respect to an amount of the Holder's
Sub Debt Claims equal to the product of:
(a) the amount of the Equity Election Shortfall; and
(b) the quotient of:
(i) the aggregate amount of Sub Debt Claims held of
record as of the Record Date by the Holder, either
directly or through its Holder Representative; over
(ii) the amount of Sub Debt Claims held of record as of
the Record Date by all Sub Debt Claimholders,
either directly or through their Holder
Representatives who validly made or have been
deemed to have made Cash Elections; and
* a Cash Election with respect to an amount of Sub Debt Claims
equal to the amount of the Sub Debt Claims held of record as
of the Record Date by the Holder, either directly or through
its Holder Representative, less the amount in the previous
provision, as set forth in the Merger Agreement.
Distributions on the Effective Date
Except as otherwise provided in the Plan or as ordered by the
Court, distributions to be made on account of Allowed Claims as
of the Effective Date will be made on the Distribution Date. Any
payment or distribution required to be made under the Plan on a
day other than a Business Day will be made on the next succeeding
Business Day. Notwithstanding the date on which any distribution
of securities is made to a Holder of an Allowed Claim on the
Effective Date, as of the date of the distribution, the Holder
will be deemed to have the rights of a Holder of the securities
distributed as of the Effective Date.
Class 6 Claim Distribution Provisions
Notwithstanding any contrary provision contained in the Plan, all
distributions under the Plan of New Securities to be made in
respect of Allowed Class 6 Claims will be conditioned on the
terms and provisions in the Merger Agreement, including the terms
and provisions of the Plan. These requirements will apply:
-- An Equity Election will be properly made only if the Voting
Agent will have received at its designated office, by 5:00
p.m. New York City time on ________, 2004, a properly
completed and signed Election Form and Trust Accession
Instrument. A Holder Representative may submit a separate
Election Form for each Holder of an Allowed Class 6 Claim
for whom the Holder Representative acts as a nominee,
trustee or in another representative capacity. Once made,
an Equity Election will be binding on the Holder and all
successors, transferees and assigns thereof, and may not be
revoked, rescinded, amended or superceded by any Person.
-- The determination of the Debtors, in their sole discretion,
which they may delegate in whole or in part to the Voting
Agent, will be conclusive and binding as to whether or not
Equity Elections have been timely and properly made
pursuant to the Plan and the Merger Agreement. The Debtors
may, in their sole discretion -- which they may delegate,
in whole or in part to Bankruptcy Services Inc., their
Voting Agent -- disregard immaterial defects in any
Election Form. The decision of the Debtors or BSI in these
matters will be conclusive and binding so long as they have
acted in good faith. Neither the Debtors nor BSI will be
under any obligation to notify any person of any defect in
any Election Form submitted.
Interest on Claims
Unless otherwise specifically provided for in the Plan or the
Confirmation Order, or required by applicable bankruptcy law,
postpetition interest will not accrue or be paid on any Claims,
other than any Holder of a Class 4 Claim, and no Holder of a
Claim -- other than Class 4 Claimholders, or any claim with
respect to, or under, the DIP Facility -- will be entitled to
interest accruing on or after the Petition Date on any Claim.
Indenture Trustee Claims
The Indenture Trustee will be granted an Allowed Administrative
Claim for its reasonable fees, costs and expenses in performing
its duties as Indenture Trustee including, but not limited to,
reasonable fees, costs and expenses of its professionals, from
the Petition Date -- including accrued and unpaid trustees fees
as of the Petition Date -- through the Effective Date to the
extent that the fees and expenses are either not in dispute by
the Debtors or, in the event of any dispute, determined by a
Final Court Order. The Reorganized Debtors will pay the
reasonable fees, costs and expenses of the Indenture Trustee
incurred after the Effective Date in connection with the making
of any distribution under the Plan.
Aurora Foods Inc. -- http://www.aurorafoods.com/-- based in St.
Louis, Missouri, produces and markets leading food brands,
including Duncan Hines(R) baking mixes; Log Cabin(R), Mrs.
Butterworth's(R) and Country Kitchen(R) syrups; Lender's(R)
bagels; Van de Kamp's(R) and Mrs. Paul's(R) frozen seafood; Aunt
Jemima(R) frozen breakfast products; Celeste(R) frozen pizza; and
Chef's Choice(R) skillet meals. With $1.2 billion in reported
assets, Aurora Foods, Inc., and Sea Coast Foods, Inc., filed for
chapter 11 protection on December 8, 2003 (Bankr. D. Del. Case No.
03-13744), to complete a pre-negotiated sale of the company to
J.P. Morgan Partners LLC, J.W. Childs Equity Partners III, L.P.,
and C. Dean Metropoulos and Co. Sally McDonald Henry, Esq., and
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP provide Aurora with legal counsel, and David Y. Ying at Miller
Buckfire Lewis Ying & Co., LLP provides financial advisory
services. (Aurora Foods Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
AUSAM BIOTECH.: Taps Jefferies to Explore Strategic Alternatives
----------------------------------------------------------------
AusAm Biotechnologies, Inc., a biopharmaceutical company
developing new methods to identify and treat major diseases,
signed an investment banking agreement with Jefferies & Company,
Inc., the principal operating subsidiary of Jefferies Group, Inc.
(NYSE: JEF).
Jefferies & Company will serve as financial advisor to AusAm in
connection with various strategic initiatives.
AusAm Biotechnologies, Inc. is a biopharmaceutical company in the
business of developing both therapeutic and diagnostic products.
AusAm is headquartered in Santa Monica, California, with research
facilities in the United States and Australia.
AVONDALE MILLS: S&P Lowers Credit and Sub. Debt Ratings to B/CCC
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on textile manufacturer and marketer Avondale Mills Inc. to
'B' from 'BB'. At the same time, the subordinated debt rating was
also lowered to 'CCC+' from 'B+'.
The ratings are removed from CreditWatch, where they were placed
on Oct. 22, 2003. The outlook is negative.
Monroe, Ga.-based Avondale Mills had about $168 million of total
debt outstanding at Nov. 28, 2003.
"The rating downgrade reflects Standard & Poor's heightened
concerns regarding the challenging industry conditions as well as
Avondale Mills' ability to continue to adjust its operating model
in response to the current environment," said credit analyst Susan
H. Ding. "The company's decline in sales and profitability, which
continued in the latest quarter ended Nov. 28, 2003, reflects the
overall weak demand for textile and apparel products as well as
the shift in demand for lower priced goods manufactured overseas."
Although the company has completed cost-saving initiatives to
improve its low-cost domestic manufacturing operations, the very
difficult operating environment, characterized by intense
competition, a contracting domestic customer base, and higher
costs (including cotton, insurance and medical expenses), will
remain very challenging in the near term.
Avondale Mills' revenues and margins have declined steadily for
the past several years. Sales have contracted by more than 44%
from more than $1.056 billion in fiscal 1998 to $590 million for
the fiscal year ended August 2003. The contraction was driven by
unit volume declines as well as price deflation, and Standard &
Poor's expects the trend to continue in the intermediate term. It
is expected to be further exacerbated by the imminent removal of
trade tariffs and quotas under the World Trade Organization's
(WTO) January 2005 deadline.
The ratings on Avondale Mills Inc. reflect very competitive and
cyclical global industry conditions, the company's significant
debt burden, and customer concentration risk. Furthermore, there
is some fashion risk in the apparel fabric segment. These factors
are partially offset by the company's fairly diverse product line.
Monroe, Ga.-based Avondale Mills produces denim and piece-dyed
sportswear and workwear fabrics, which accounted for about 85% of
fiscal 2003 revenues. The company also manufactures and
distributes greige and specialty products, as well as yarns. There
is some customer concentration risk, as one customer, VF Corp.,
accounted for about 16% of fiscal 2003 sales.
BAYOU STEEL: Fiscal 2003 Operating Loss Balloons to $30 Million
---------------------------------------------------------------
On January 22, 2003, Bayou Steel Corporation and its subsidiaries
Bayou Steel Corporation (Tennessee), and River Road Realty
Corporation filed a voluntary petition for reorganization under
Chapter 11 of the United States Bankruptcy Code. The petition
requesting an order for relief was filed in United States
Bankruptcy Court, Northern District of Texas, where the case is
now pending before the Honorable Barbara J. Houser, Case No. 03-
30816 BJH.
The Company intends to continue normal operations and does not
currently foresee any interruption in the shipment of product to
customers in the near term. The Company is managing its business
subsequent to the Petition Date as debtor-in-possession subject to
Bankruptcy Court approval and oversight. The attention of the
Company's financial and accounting group to the various filings,
including the filing of and the Court hearing on the Disclosure
Statement and the Plan of Reorganization, required in the
bankruptcy proceedings and to related liquidity issues, including
the need to obtain exit financing, precluded the timely completion
of the Company's financial statement filing with the SEC.
The Company reported a loss from operations of $30.4 million in
fiscal 2003 compared to $21.5 million in the prior year. Four
major factors account for the $8.9 million unfavorable change.
First, in fiscal 2003, the cost to convert scrap metal, the raw
material, into a finished product increased $2.8 million,
primarily due to fuel prices.
Second, reorganization expenses related to the bankruptcy in the
amount of $5.2 million were incurred in fiscal 2003. No such
expenses were incurred in fiscal 2002.
Third, the Company recorded a non-cash asset impairment charge of
$8.0 million in fiscal 2003, reducing the carrying value of its
Tennessee Facility, compared to a similar charge of $6.6 million
in fiscal 2002.
Fourth, in fiscal 2003 the Company wrote down its stores inventory
by $2.2 million. Partially offsetting these four factors was an
$5.5 million improvement in metal margin (the difference between
the cost of yielded raw material steel scrap and the selling price
of the finished product) and a special tax credit of $3.2 million
recorded in fiscal 2002.
BENZ ENERGY: Ch. 7 Trustee Prepares to Sell 8.5 Mill. HEC Shares
----------------------------------------------------------------
Bob Anderson, the Chapter 7 Trustee overseeing the liquidation of
Benz Energy Inc., sought and obtained bankruptcy court authority
to sell 8,566,652 shares in Harken Energy Corp. (AMEX:HEC). The
timing of the sales and whether those sales occur in the open
market or in private is up to the Trustee.
Judge Bill Parker approved a motion to convert brought by U.S.
Trustee Timothy O'Neill in U.S. Bankruptcy Court in Tyler, Texas,
in early 2001. Houston-based Benz, an oil and gas exploration
company, had defaulted on its senior credit facility provided by
Encap Energy Investment after two-thirds of its reserves dried up.
Benz Energy filed for chapter 11 protection on Nov. 8, 2000
(Bankr. E.D. Tex. Case No. 00-62172) together with its wholly
owned operating subsidiary, Texstar Petroleum Inc., after Benz
defaulted on a $25.7 million credit facility and a related hedge
liquidation with Aquila Energy Capital.
At today's market prices, Benz' 8.5 million shares would bring $9
million into the estate. The Trustee has hired Wachovia
Securities, LLC, to broker any transactions and the Court's
approved a $0.01 per share commission.
BUILDERS PLUMBING: Hires Piper Rudnick as Bankruptcy Counsel
------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
gave its stamp of approval to Builders Plumbing & Heating Supply
Co., and its debtor-affiliates' application to retain and employ
Piper Rudnick LLP as Attorneys for the Debtors.
Piper Rudnick has represented the Debtors and non-debtor
affiliates for several years providing counsel on general
corporate matters. In this retention, the Debtors require Piper
Rudnick to:
a) advise the Debtors with respect to their powers and
duties as debtors and debtors-in-possession in the
continued management and operation of their business and
properties;
b) attend meetings and negotiate with representatives of
creditors and other parties in interest, and advise and
consult on the conduct of the cases, including all of
the legal and administrative requirements of operating
in Chapter 11;
c) advise the Debtors in connection with any contemplated
sales of assets or business combinations, including
negotiating any asset, stock purchase, merger or joint
venture agreements, formulating and implementing any
bidding procedures, evaluating competing offers,
drafting appropriate corporate documents with respect to
the proposed sales, and counseling the Debtors in
connection with the closing of any such sales;
d) advise the Debtors in connection with post-petition
financing and cash collateral arrangements, negotiate
and draft documents relating thereto, provide advice and
counsel with respect to the Debtors' pre-petition
financing arrangements, provide advice to the Debtors in
connection with issues relating to financing and capital
structure under any plan or reorganization, and
negotiate and draft documents relating thereto;
e) advise the Debtors on matters relating to the evaluation
of the assumption or rejection of unexpired leases and
executory contracts;
f) advise the Debtors with respect to legal issues arising
in or relating to the Debtors' ordinary course of
business, including attendance at senior management
meetings, meetings with the Debtors' financial and
turnaround advisors, and meetings of the board of
directors, advise the Debtors on employee, workers'
compensation, employee benefits, labor, tax,
environmental, banking, insurance, securities,
corporate, business operation, contracts, joint
ventures, real property, press/public affairs and
regulatory matters, and advise the Debtors with respect
to continuing disclosure and reporting obligations, if
any, under securities laws;
g) take all necessary action to protect and preserve the
Debtors' estates, including the prosecution of actions
on their behalf, the defense of any actions commenced
against these estates, any negotiation concerning
litigation in which the Debtors may be involved, and the
prosecution of objections to claims filed against the
estates;
h) prepare on behalf of the Debtors all motions,
applications, answers, orders, reports and papers
necessary to the administration of the estates;
i) negotiate and prepare on the Debtors' behalf any plan(s)
of reorganization, disclosure statement(s) and related
agreements and/or documents, and take any necessary
action on behalf of the Debtors to obtain confirmation
of such plan(s);
j) attend meetings with third parties and participate in
negotiations with respect to the above matters;
k) appear before this Court and any appellate courts, and
protect the interests of the Debtors' estates before
such courts; and
l) perform all other necessary legal services and provide
all other necessary legal advice to the Debtors in
connection with these Chapter 11 cases, Piper Rudnick
has indicated a willingness to act on behalf of the
Debtors on such matters.
David N. Missner, Esq., reports that Piper Rudnick's hourly rates
are:
Partners and of Counsel $300 to $615 per hour
Associates $180 to $135 per hour
Legal Assistants $115 to $175 per hour
A plumbing product distributor headquartered in Addison, Illinois,
Builders Plumbing & Heating Supply Co., filed for chapter 11
protection on December 5, 2003 (Bankr. N.D. Ill. Case No. 03-
49243). Brian A. Audette, Esq., David N Missner, Esq., and Marc I.
Fenton, Esq., at Piper Rudnick, represent the Debtors in their
restructuring efforts. When the Company filed for protection from
their creditors, they listed debs and assets of:
Total Assets Total Debts
------------ -----------
Builders Plumbing & Heating $62,834,841 $57,559,894
Supply Co.
Glendale Plumbing Supply Company $13,302,215 $8,068,738
Inc.
Southwest & Pipe & Supply Company, $8,743,763 $11,207,567
Inc.
Spesco Inc. $6,626,890 $7,742,802
CENTENNIAL COMMS: Secures Commitment on New $750M Credit Facility
-----------------------------------------------------------------
Centennial Communications Corp. (NASDAQ: CYCL) received a
commitment for a new $750 million senior secured credit facility,
consisting of a $600 million, seven-year term loan maturing in
2011 and a $150 million, six-year revolving credit facility
maturing in 2010.
In addition, Centennial intends to sell, subject to market
conditions, approximately $250 million in aggregate principal
amount of senior notes due 2014 in a private placement pursuant to
Rule 144A and Regulation S of the Securities Act of 1933.
Term loan borrowings under the new senior secured credit facility,
together with proceeds of the proposed senior notes offering, will
be used to:
-- refinance and replace the Company's existing secured credit
facilities, which have an outstanding principal balance of
approximately $628 million as of November 30, 2003;
-- fund the repurchase of all of the Company's outstanding
unsecured subordinated notes due 2009, which are currently
accruing paid-in-kind interest at a rate of 13.0%. At
November 30, 2003, the outstanding principal amount, including
unaccreted value of the equity portion of the Mezzanine Debt,
was approximately $194 million; and
-- pay related fees and expenses.
Completion of each of the new senior secured credit facility and
the senior notes offering is conditioned on the closing of the
other transaction and is expected in early February. Each
transaction is subject to customary closing conditions. There can
be no assurance that either the new senior secured credit facility
or the senior notes offering will be consummated as planned, or at
all.
The senior notes anticipated to be offered and sold will not be
registered under the Securities Act of 1933 or any state
securities laws and may not be offered or sold in the United
States absent registration under, or an applicable exemption from,
the registration requirements of the Securities Act of 1933 and
applicable state securities laws.
Centennial (S&P, B- Corporate Credit Rating, Negative) is one of
the largest independent wireless telecommunications service
providers in the United States and the Caribbean with
approximately 17.1 million Net Pops and approximately 929,700
wireless subscribers. Centennial's U.S. operations have
approximately 6.0 million Net Pops in small cities and rural
areas. Centennial's Caribbean integrated communications operation
owns and operates wireless licenses for approximately 11.1 million
Net Pops in Puerto Rico, the Dominican Republic and the U.S.
Virgin Islands, and provides voice, data, video and Internet
services on broadband networks in the region. Welsh, Carson
Anderson & Stowe and an affiliate of the Blackstone Group are
controlling shareholders of Centennial. For more information
regarding Centennial, visit its Web sites at
http://www.centennialcom.com/and http://www.centennialpr.com/
CENTENNIAL COMMS: S&P Rates $250M Senior Unsecured Notes at CCC
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC' rating to
the $250 million senior unsecured notes due 2014 to be issued
under Rule 144A with registration rights by Centennial
Communications Corp., and its wholly owned subsidiaries,
Centennial Cellular Operating Co. LLC and Centennial Puerto Rico
Operations Corp.
Proceeds from the new note issue and a new $750 million bank
facility will be used to refinance the $628 million of debt
outstanding under the existing bank facility, as well as repay
about $197 million in 13% payment-in-kind mezzanine debt due in
2009.
The 'B-' corporate credit rating on Wall, N.J.-based wireless
operator Centennial has been affirmed. The outlook is stable.
The rating on the senior unsecured notes reflects the fact that
there are substantial obligations that have a priority claim on
the company's consolidated assets. The concentration of such
obligations (which include borrowings under the new bank facility)
relative to total assets exceeds Standard & Poor's threshold for
notching the notes two below the corporate credit rating.
"The corporate credit rating reflects the high business risk
facing Centennial as a regional wireless carrier," said Standard &
Poor's credit analyst Catherine Cosentino. "The regional wireless
carriers have faced ongoing competition from the larger national
players, such as Verizon Wireless and AT&T Wireless. Carriers such
as Centennial are disadvantaged relative to the national players
in terms of their ability to offer competitively priced national
plans. Moreover, the national players are expected to continue to
be aggressive in taking share from the regional carriers, given
the fact that overall wireless subscriber growth will continue to
slow because of increased overall wireless penetration."
As a result of these competitive forces and the November 2003
introduction of number portability, Centennial's domestic churn is
not expected to exhibit material improvement from the 2.0% level
experienced for the fiscal year ended May 31, 2003. The company's
Caribbean wireless operations in Puerto Rico, the Dominican
Republic, and the U.S. Virgin Islands likewise face increased
competition, although the much lower level of overall penetration
in these markets indicates that growth potential remains somewhat
greater than in the U.S.
CHESAPEAKE: Closes Common Stock Offering & Debt Exchange Offer
--------------------------------------------------------------
Chesapeake Energy Corporation (NYSE: CHK) closed its previously
announced public offering of 23 million shares of its common
stock, including 3 million shares issued pursuant to a fully
exercised underwriters' over-allotment option, at a public
offering price of $13.51 per share.
The Company also completed its previously announced exchange offer
for its 8.125% Senior Notes due April 1, 2011.
The Company received net proceeds in its common stock offering of
approximately $298 million, after underwriting discounts and
estimated expenses. The Company intends to use the net proceeds
of the offering to pay a portion of the aggregate $510 million
purchase price for three recently announced acquisitions. The
largest of these, a pending acquisition for $420 million of Concho
Resources Inc., is expected to close by January 31, 2004.
Pursuant to the senior notes exchange offer, the Company issued
approximately $72.8 million aggregate principal amount of its
7.75% Senior Notes due 2015 and approximately $433.5 million
aggregate principal amount of its 6.875% Senior Notes due 2016 in
exchange for approximately $458.5 million aggregate principal
amount of 2011 Notes. In addition, the Company paid an aggregate
of approximately $4.6 million to the holders who tendered their
2011 Notes by the early participation date.
Following the settlement of the exchange offer, the Company has
outstanding approximately $269.7 million aggregate principal
amount of its 8.125% Senior Notes due 2011, $309.5 million
aggregate principal amount of its 7.75% Senior Notes due 2015 and
$633.5 million aggregate principal amount of its 6.875% Senior
Notes due 2016.
In connection with the exchange offer, the Company expects to
report in the first quarter of 2004 a pre-tax change of
approximately $6.0 million ($3.7 million net of income taxes).
Chesapeake Energy Corporation (Fitch, BB- Senior Note and B
Preferred Share Ratings, Positive) is one of the six largest
independent natural gas producers in the U.S. Headquartered in
Oklahoma City, the company's operations are focused on exploratory
and developmental drilling and producing property acquisitions in
the Mid-Continent region of the United States.
CONSECO/GREEN TREE: Fitch Takes Actions on 57 MH Transactions
-------------------------------------------------------------
Fitch Ratings takes rating actions on 57 Conseco Finance/Green
Tree Finance manufactured housing transactions. Fitch Ratings
affirms 117 classes ($3.8 billion) and downgrades 164 classes
($10.6 billion). The total dollar amount of all rated classes is
$14.6 billion. The rating actions reflect the poor performance of
the MH pools.
Fitch has taken numerous rating actions on the company's MH bonds
since September 2002. These actions reflected the continued
deteriorating financial condition of Conseco Finance Corp., as
well as the poor performance of the MH pools. Since CFC's December
2002 Chapter 11 bankruptcy filing, the company has continued to
service its multi-billion dollar MH portfolio.
The financial stress of CFC in the time period prior to and during
the bankruptcy has affected the servicing operation by limiting
capital and creating an environment for high-turnover of the
employees. Additionally, the difficult environment in MH continues
to be an obstacle to improved bond performance. As CFC has
struggled to achieve the most appropriate method of servicing in a
difficult environment, servicing practices have changed numerous
times.
Since CFC has entered into, operated under, and emerged from
bankruptcy, its practices regarding loan extensions/assumptions,
collections, repossession and liquidations have changed. These
changes have led to considerable volatility in performance. In
June 2003, CFC's MH platform was sold to CFN Investment Holdings,
LLC. The servicing platform was renamed Green Tree Servicing, LLC.
Part of the bankruptcy court agreement provided for $150 million
to be made available for repo-refinancing, a $35 million reserve
account was established to cover claims against GTS and a minimum
of $100 million could be made available for the servicer to
perform its duties. Although the sale has provided new capital,
the degree of servicing stabilization remains to be seen.
In September 2003, Fitch conducted an on-site review of CFC's
servicing operations. A number of servicing process/procedure
changes have only recently been implemented. These
processes/procedures need to be demonstrated for an extended
period of time in order to determine their impact on performance.
In the months prior to the bankruptcy filing, liquidation rates
slowed, causing the repossession inventory to build. (Since
default is defined at the point of liquidation for MH securities,
the terms default and liquidation are used interchangeably). After
the bankruptcy filing, the combination of the backlog of
repossessed inventory and the exclusive reliance on the wholesale
channel to rapidly liquidate the inventory resulted in a
significant increase in liquidation rates and loss severities.
Additionally, certain loss mitigation practices used by GTS create
uncertainty with regard to determining future behavior of
liquidation rates. GTS primarily used extensions prior to the
bankruptcy and has primarily used deferrals since. An extension
occurs when a loan's maturity date is extended by the number of
months delinquent and a deferral occurs when past due payments are
deferred to the end of the loan term. In both instances the
delinquent account is then reported current. Currently,
approximately 1% of the entire portfolio is deferred or extended
each month; a rate which has remained relatively constant over the
past eighteen months.
For some vintages, it appears that the rate of modifications has
declined recently. Since GTS has stated that there has been no
change to modification policies, the decline could indicate that
fewer loans qualify for modifications due to GTS guidelines which
limit the number of times an account can be modified within one
year and over its lifetime. If fewer loans are eligible for
modification, higher liquidation rates will result. Or the lower
rate of modifications could mean the market could be stabilizing.
At this point it is difficult to determine which of these is true.
While Fitch believes modifications can provide the benefit of
maintaining cash flow on a low-recovery asset, Fitch also expects
the use of modifications to increase the percentage of sub-
performing assets that remain in the pool over time. This would
result in a greater percentage of losses occurring later in the
pool's life than would have otherwise occurred. Additionally, a
reliance on modifications makes the pool's performance vulnerable
to a change in policy or practice.
Further, loss severity has been high since the bankruptcy due to
the use of wholesale disposition. To date, the repo refinancing
facility made available in June of last year has not had a
material impact on recoveries. This is due to the limited use of
the facility. Additionally, despite a notable reduction in
repossession inventory throughout the industry, inventory levels
remain relatively high by historical standards. Finally, given the
depreciating nature of the assets, recoveries have generally
declined as pools have seasoned. For these reasons, Fitch expects
recovery rates to remain at low levels for some time.
Also putting pressure on the performance of the bonds is a
reduction in the amount of excess spread available to cover
losses. Excess spread has been reduced since the bankruptcy
primarily due to the increase in the amount and priority of the
servicing fee. While the servicing fee is scheduled to be reduced
in 2004 to 115 bps from 125 bps, most transactions will continue
to have limited excess spread available to cover losses. Since the
transactions involve fixed-rate assets and fixed-rate bonds,
excess spread should only be affected in the future by the
changing composition of the asset pool and the bonds. Interest
rate basis risk would not be a factor.
To date, the transactions have generally suffered deterioration in
the weighted average coupon of the underlying loans, as the
highest coupon borrowers have defaulted and prepaid at a faster
rate than lower coupon borrowers. Additionally, the weighted
average bond coupon has generally increased as the low coupon
senior classes have paid off at a faster rate than the high coupon
subordinate bonds have been written off. As both of these trends
reduce the amount of excess spread, Fitch expects excess spread to
continue to decline. An additional consideration when valuing
excess spread is that GTS does not advance on delinquent loans.
When forecasting excess spread, Fitch reduces available funds by
the percentage of the pool assumed to be non-performing.
When forecasting transaction performance and assessing credit risk
to bonds, Fitch begins by determining an expected loss percentage
for the remaining current pool balance. This figure is a product
of default frequency and loss severity assumptions which Fitch
feels are the most likely to occur. Fitch then uses stressed
variations of these 'expected case' assumptions to determine loss
expectations at the various rating categories. Finally, Fitch
values the excess spread available to cover losses at each rating
category to determine how much subordination is required for any
bond to be assigned a given rating. A change in the expected case
loss assumption affects loss assumptions at each rating category
and consequently the amount of credit enhancement required at each
rating category. Fitch's expected loss scenarios have changed
significantly since the initial issuance of the relevant
transactions.
Depending on the vintage and the transaction, Fitch's expected
loss was originally between 7% and 11%. In most transactions,
cumulative losses have already exceeded their initial loss
expectations. Depending on the vintage and transaction, Fitch
currently expects losses between 14% and 25% on the remaining
balance of the pool. As the expected case loss number has
increased, the credit enhancement required for any rating category
has also increased - resulting in downgrades of outstanding bonds.
While Fitch's rating actions reflect the poor performance of the
pools as well as the limitation of capital due to the company's
bankruptcy, changes in servicing practices have led to
inconsistent performance results. This has made it difficult to
determine whether CFC has made any meaningful strides toward
improved performance. Additionally, only a short period of time
has passed since a change in ownership. As a result, it will take
some time to determine the level of stabilization of the servicing
platform. Fitch will continue to closely monitor the status of the
servicing as well as the performance of the pools and take
appropriate rating actions.
Fitch has taken the following rating actions:
Series 1992-1:
--Class B is affirmed at 'BBB'.
Series 1992-2:
--Class B is downgraded to 'CCC' from 'BB-'.
Series 1993-1:
--Class A-3 is affirmed at 'AAA';
--Class B is downgraded to 'CCC' from 'BB-'.
Series 1993-2:
--Class A-4 is affirmed at 'AAA';
--Class B is downgraded to 'B-' from 'BB-'.
Series 1993-4:
--Class B-2 is downgraded to 'B-' from 'B'.
Series 1994-1:
--Class A-5 is affirmed at 'AA';
--Class B-2 is affirmed at 'C'.
Series 1994-2:
--Class A-5 is affirmed at 'AA';
--Class B-2 is affirmed at 'C'.
Series 1994-3:
--Class A-5 is affirmed at 'AA';
--Class B-2 is affirmed at 'C'.
Series 1994-5:
--Class A-5 is affirmed at 'AA';
--Class B-2 is affirmed at 'C'.
Series 1994-6:
--Class A-6 is affirmed at 'AAA';
--Class M-1 is affirmed at 'AA';
--Class B-1 is affirmed at 'A-';
--Class B-2 is affirmed at 'C'.
Series 1994-7:
--Class A-6 is affirmed at 'AAA';
--Class M-1 is affirmed at 'AA';
--Class B-1 is affirmed at 'BBB+';
--Class B-2 is affirmed at 'C'.
Series 1994-8:
--Class A-6 is affirmed at 'AAA';
--Class M-1 is affirmed at 'AA';
--Class B-1 is affirmed at 'BBB+';
--Class B-2 is affirmed at 'C'.
Series 1995-1:
--Class A-6 is affirmed at 'AAA';
--Class M-1 is affirmed at 'AA';
--Class B-1 is affirmed at 'BBB+';
--Class B-2 is affirmed at 'C'.
Series 1995-2:
--Class A-6 is affirmed at 'AAA';
--Class M-1 is affirmed at 'AA-';
--Class B-1 is affirmed at 'BBB';
--Class B-2 is affirmed at 'C'.
Series 1995-3:
--Class A-6 is affirmed at 'AAA';
--Class M-1 is affirmed at 'AA-';
--Class B-1 is downgraded to 'BBB' from 'BBB+';
--Class B-2 is affirmed at 'C'.
Series 1995-4:
--Classes A-5 - A-6 are affirmed at 'AAA';
--Class M-1 is affirmed at 'AA-';
--Class B-1 is downgraded to 'BBB-' from 'BBB+';
--Class B-2 is affirmed at 'C'.
Series 1995-5:
--Class A-6 is affirmed at 'AAA';
--Class M-1 is downgraded to 'A' from 'AA-';
--Class B-1 is downgraded to 'BB+' from 'BBB+';
--Class B-2 is affirmed at 'C'.
Series 1995-6:
--Classes A-5 - A-6 are affirmed at 'AAA';
--Class M-1 is downgraded to 'A-' from 'AA';
--Class B-1 is downgraded to 'BB+' from 'BBB+';
--Class B-2 is affirmed at 'C'.
Series 1995-7:
--Classes A-5 - A-6 are affirmed at 'AAA';
--Class M-1 is downgraded to 'A-' from 'AA';
--Class B-1 is downgraded to 'BB+' from 'BBB+';
--Class B-2 is affirmed at 'C'.
Series 1995-8:
--Class A-6 is affirmed at 'AAA';
--Class M-1 is downgraded to 'A+' from 'AA';
--Class B-1 is downgraded to 'BB+' from 'BBB+';
--Class B-2 is affirmed at 'C'.
Series 1995-9:
--Class A-6 is affirmed at 'AAA';
--Class M-1 is downgraded to 'A-' from 'AA-';
--Class B-1 is downgraded to 'BB+' from 'BBB+';
--Class B-2 is affirmed at 'C'.
Series 1995-10:
--Class A-6 is affirmed at 'AAA';
--Class M-1 is downgraded to 'A' from 'AA-';
--Class B-1 is downgraded to 'BB+' from 'BBB+';
--Class B-2 is affirmed at 'C'.
Series 1996-1:
--Classes A-4 - A-5 are affirmed at 'AAA';
--Class M-1 is downgraded to 'BBB+' from 'A+';
--Class B-1 is downgraded to 'B+' from 'BB+';
--Class B-2 is affirmed at 'C'.
Series 1996-2:
--Classes A-4 - A-5 are affirmed at 'AAA';
--Class M-1 is downgraded to 'BBB' from 'A+';
--Class B-1 is downgraded to 'B-' from 'BB';
--Class B-2 is affirmed at 'C'.
Series 1996-3:
--Classes A-5 - A-6 are affirmed at 'AAA';
--Class M-1 is downgraded to 'BBB-' from 'A';
--Class B-1 is downgraded to 'B-' from 'BB';
--Class B-2 is affirmed at 'C'.
Series 1996-4:
--Classes A-6 - A-7 are affirmed at 'AAA';
--Class M-1 is downgraded to 'BBB-' from 'A';
--Class B-1 is downgraded to 'B-' from 'BB';
--Class B-2 is affirmed at 'C'.
Series 1996-5:
--Classes A-6 - A-7 are affirmed at 'AAA';
--Class M-1 is downgraded to 'BBB-' from 'A';
--Class B-1 is downgraded to 'B-' from 'BB';
--Class B-2 is affirmed at 'C'.
Series 1996-6:
--Class A-6 is affirmed at 'AAA';
--Class M-1 is downgraded to 'BBB-' from 'A';
--Class B-1 is downgraded to 'B-' from 'BB';
--Class B-2 is affirmed at 'C'.
Series 1996-7:
--Class A-6 is affirmed at 'AAA';
--Class M-1 is downgraded to 'BBB' from 'A';
--Class B-1 is downgraded to 'B-' from 'BB';
--Class B-2 is affirmed at 'C'.
Series 1996-8:
--Classes A-6 - A-7 are affirmed at 'AAA';
--Class M-1 is downgraded to 'BBB-' from 'A';
--Class B-1 is downgraded to 'B-' from 'BB';
--Class B-2 is affirmed at 'C'.
Series 1996-9:
--Classes A-5 - A-6 are affirmed at 'AAA';
--Class M-1 is downgraded to BBB-' from 'A';
--Class B-1 is downgraded to 'B-' from 'BB';
--Class B-2 is affirmed at 'C'.
Series 1996-10:
--Classes A-5 - A-6 are affirmed at 'AAA';
--Class M-1 is downgraded to 'BBB' from 'A';
--Class B-1 is downgraded to 'B-' from 'BB';
--Class B-2 is affirmed at 'C'.
Series 1997-1:
--Classes A-5 - A-6 are affirmed at 'AAA';
--Class M-1 is downgraded to 'BBB' from 'A';
--Class B-1 is downgraded to 'B' from 'BB';
--Class B-2 is affirmed at 'C'.
Series 1997-2:
--Classes A-6 - A-7 are affirmed at 'AA+';
--Class M-1 is downgraded to 'BBB-' from 'A-';
--Class B-1 is downgraded to 'CC' from 'BB';
--Class B-2 is affirmed at 'C'.
Series 1997-3:
--Classes A-5 - A-7 are downgraded to 'AA' from 'AA+';
--Class M-1 is downgraded to 'BBB-' from 'A-';
--Class B-1 is downgraded to 'CC' from 'BB';
--Class B-2 is affirmed at 'C'.
Series 1997-4:
--Classes A-5 - A-7 are affirmed at 'AA+';
--Class M-1 is downgraded to 'BBB-' from 'A-';
--Class B-1 is downgraded to 'B-' from 'BB';
--Class B-2 is affirmed at 'C'.
Series 1997-5:
--Classes A-5 - A-7 are affirmed at 'AA+';
--Class M-1 is downgraded to 'BBB-' from 'A-';
--Class B-1 is downgraded to 'B-' from 'BB';
--Class B-2 is affirmed at 'C'.
Series 1997-6:
--Classes A-6 - A-10 are downgraded to 'AA' from 'AA+';
--Class M-1 is downgraded to 'BBB-' from 'A-';
--Class B-1 is downgraded to 'CCC' from 'BB';
--Class B-2 is affirmed at 'C'.
Series 1997-8:
--Class A-1 is downgraded to 'AA-' from 'AA+';
--Class M-1 is downgraded to 'BBB-' from 'A-';
--Class B-1 is downgraded to 'CCC' from 'BB';
--Class B-2 is affirmed at 'C'.
Series 1998-1:
--Classes A-4 - A-6 are downgraded to 'A+' from 'AA+';
--Class M-1 is downgraded to 'BB+' from 'A-';
--Class B-1 is downgraded to 'CCC' from 'BB';
--Class B-2 is affirmed at 'C'.
Series 1998-3:
--Classes A-5 - A-6 are downgraded to 'A' from 'AA';
--Class M-1 is downgraded to 'BB-' from 'BBB-';
--Class B-1 is downgraded to 'CC' from 'B';
--Class B-2 is affirmed at 'C'.
Series 1998-4:
--Classes A-5 - A-7 are downgraded to 'A' from 'AA';
--Class M-1 is downgraded to 'BB-' from 'BBB-';
--Class B-1 is downgraded to 'CC' from 'B';
--Class B-2 is affirmed at 'C'.
Series 1998-6:
--Class A-5 is affirmed at 'AAA';
--Class A-6 is downgraded to 'AA' from 'AA+';
--Classes A-7 - A-8 are downgraded to 'A' from 'AA';
--Class M-1 is downgraded to 'BB-' from 'BBB-';
--Class M-2 is downgraded to 'B-' from 'BB';
--Class B-1 is downgraded to 'CC' from 'B';
--Class B-2 is affirmed at 'C'.
Series 1998-7:
--Class A-1 is downgraded to 'A-' from 'AA';
--Class M-1 is downgraded to 'BB-' from 'BBB-';
--Class M-2 is downgraded to 'B-' from 'BB';
--Class B-1 is downgraded to 'CC' from 'B';
--Class B-2 is affirmed at 'C'.
Series 1999-1:
--Class A-4 is downgraded to 'AA' from 'AA+';
--Class A-5 is downgraded to 'A-' from 'AA';
--Classes A-6 - A-7 are downgraded to 'BBB' from 'AA';
--Class M-1 is downgraded to 'B+' from 'BBB-';
--Class M-2 is downgraded to 'B-' from 'BB';
--Class B-1 is downgraded to 'CC' from 'B';
--Class B-2 is affirmed at 'C'.
Series 1999-2:
--Class A-3 is downgraded to 'A+' from 'AA+';
--Class A-4 is downgraded to 'A-' from 'AA';
--Classes A-5 - A-7 are downgraded to 'BBB' from 'AA';
--Class M-1 is downgraded to 'B+' from 'BBB-';
--Class M-2 is downgraded to 'B-' from 'BB';
--Class B-1 is downgraded to 'CC' from 'B-';
--Class B-2 is affirmed at 'C'.
Series 1999-3:
--Class A-5 is downgraded to 'BBB+' from 'AA';
--Class A-6 is downgraded to 'BBB' from 'AA';
--Classes A-7 - A-9 are downgraded to 'BBB-' from 'AA';
--Class M-1 is downgraded to 'B' from 'BBB-';
--Class M-2 is downgraded to 'CCC' from 'BB';
--Class B-1 is downgraded to 'CC' from 'B-';
--Class B-2 is affirmed at 'C'.
Series 1999-4:
--Class A-5 is downgraded to 'BBB+' from 'A';
--Class A-6 is downgraded to 'BBB' from 'A';
--Classes A-7 - A-9 are downgraded to 'BB+' from 'A';
--Class M-1 is downgraded to 'B' from 'BBB-';
--Class M-2 is downgraded to 'CCC' from 'BB';
--Class B-1 is downgraded to 'CC' from 'B-';
--Class B-2 is affirmed at 'C'.
Series 1999-5:
--Class A-3 is affirmed at 'AAA';
--Class A-4 is downgraded to 'BBB+' from 'A';
--Classes A-5 - A-6 are downgraded to 'BB+' from 'A';
--Class M-1 is downgraded to 'B' from 'BBB-';
--Class M-2 is downgraded to 'CCC' from 'BB';
--Class B-1 is downgraded to 'CC' from 'B-';
--Class B-2 is affirmed at 'C'.
Series 2000-1:
--Class A-4 is downgraded to 'A' from 'AA-';
--Class A-5 is downgraded to 'BB-' from 'A-';
--Class M-1 is downgraded to 'B-' from 'BBB-';
--Class M-2 is downgraded to 'CC' from 'BB';
--Class B-1 is downgraded to 'CC' from 'B-';
--Class B-2 is affirmed at 'C'.
Series 2000-2:
--Class A-3 is affirmed at 'AAA';
--Class A-4 is downgraded to 'BBB-' from 'AA-';
--Classes A-5 - A-6 are downgraded to 'BB-' from 'A-';
--Class M-1 is downgraded to 'B-' from 'BBB-';
--Class M-2 is downgraded to 'CC' from 'BB';
--Class B-1 is downgraded to 'CC' from 'B-'.
Series 2000-4:
--Classes A-3 is affirmed at 'AAA';
--Class A-4 is downgraded to 'BBB-' from 'AA-';
--Classes A-5 - A-6 are downgraded to 'BB-' from 'A-';
--Class M-1 is downgraded to 'B-' from 'BBB-';
--Class M-2 is downgraded to 'CC' from 'BB';
--Class B-1 is downgraded to 'CC' from 'B-'.
Series 2000-5:
--Class A-3 is affirmed at 'AAA';
--Class A-4 is downgraded to 'BBB' from 'AA-';
--Class A-5 is downgraded to 'BBB-' from 'A-';
--Class A-6 is downgraded to 'BB' from 'A-';
--Class A-7 is downgraded to 'BB-' from 'A-';
--Class M-1 is downgraded to 'B-' from 'BBB-';
--Class M-2 is downgraded to 'CC' from 'BB';
--Class B-1 is downgraded to 'CC' from 'B-'.
Series 2000-6:
--Class A-3 is affirmed at 'AAA';
--Class A-4 is downgraded to 'A-' from 'AA-';
--Class A-5 is downgraded to 'BBB-' from 'A-';
--Class M-1 is downgraded to 'B' from 'BBB-';
--Class M-2 is downgraded to 'CCC' from 'BB';
--Class B-1 is downgraded to 'CC' from 'B-'.
Series 2001-1:
--Classes A-3 & A-IO are affirmed at 'AAA';
--Class A-4 is downgraded to 'A' from 'AA-';
--Class A-5 is downgraded to 'BBB-' from 'A-';
--Class M-1 is downgraded to 'B+' from 'BBB-';
--Class M-2 is downgraded to 'CCC' from 'BB';
--Class B-1 is downgraded to 'CC' from 'B-'.
Series 2001-2:
--Classes A-1 & A-IO are affirmed at 'AAA';
--Class M-1 is downgraded to 'BB-' from 'A-';
--Class M-2 is downgraded to 'B-' from 'BBB-';
--Class B-1 is downgraded to 'CC' from 'BB-';
Series 2001-4:
--Class A-IO is affirmed at 'AAA';
--Class A-2 affirmed at 'AA';
--Class A-3 is downgraded to 'A+' from 'AA';
--Class A-4 is downgraded to 'A-' from 'AA-';
--Class M-1 is downgraded to 'BB+' from 'A-';
--Class M-2 is downgraded to 'B' from 'BBB-';
--Class B-1 is downgraded to 'CCC' from 'BB-'.
CPT HOLDINGS: Secures Court Approval to Hire Greenberg Taurig
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Connecticut gave its
nod of approval to CPT Holdings, Inc.'s application to retain and
employ Greenberg Taurig, LLP, as Counsel.
In preparing the Debtor for its Chapter 11 filing, Greenberg
Traurig has become familiar with its business affairs and the
potential legal issues which may arise in the Chapter 11 case.
For the duration of this case, Greenberg Taurig will:
a) advise the Debtor of its powers and duties as debtor-in-
possession;
b) represent the Debtor with respect to all applications,
motions, complaints, or other requests and at all
hearings on matters pertaining to its affairs as debtor-
in-possession and coordinating the efforts of other
professionals that may be involved in the various
matters, proceedings and hearings;
c) counsel and represent the Debtor concerning the
administration of claims and numerous other bankruptcy-
related matters arising in the cases;
d) assist in the preparation of necessary reports involving
financial statements, the schedules of assets and
liabilities, the statements of financial affairs, and
other reports and documentation required by the
Bankruptcy Code, the Bankruptcy Rules and the United
States Trustee;
e) advise and represent the Debtor with respect to the J&L
Litigation;
f) perform such other legal services that are desirable and
necessary for the Debtor and coordinating the efforts of
others engaged in efficiently prosecuting the
administration of the Chapter 11 case.
Richard S. Miller, Esq., a shareholder of Greenberg Taurig will
lead the team in this engagement. Mr. Miller's hourly rate is $650
per hour. Other Greenberg Taurig professional hourly rates are:
Shareholders and Counsel $215 to $750 per hour
Associates $150 to $435 per hour
Legal Assistants and Clerks $25 to $250 per hour
Headquartered in Greenwich, Connecticut, CPT Holdings, Inc., filed
for chapter 11 protection on December 11, 2003 (Bankr. Conn. Case
No. 03-51629). Melissa Zelen Neier, Esq., at Ivey, Barnum, and
O'Mara, represents the Debtor in its restructuring efforts. When
the Company filed for protection from its creditors, it listed
$24,897 in total assets and $24,007,122 in total debts.
DELTA AIR LINES: Dec. 31 Balance Sheet Upside-Down by $862 Mill.
----------------------------------------------------------------
Delta Air Lines (NYSE: DAL) reported results for the quarter and
full year ending Dec. 31, 2003, and other significant news.
The key points are, Delta:
* Reports a fourth quarter net loss of $327 million, or $2.69
loss per common share. Full year 2003 net loss is $773
million, or $6.40 loss per share.
* Excluding the unusual items, reports a fourth quarter
net loss of $207 million, or $1.71 loss per common share.
Excluding unusual items, full year 2003 net loss is $1.0
billion, or $8.58 loss per share.
* Ends quarter with $2.9 billion in cash, of which $2.7
billion is unrestricted cash.
* As challenges continue into 2004, reaffirms its focus on
cost containment and improving customer service.
Delta Air Lines reported a net loss of $327 million and a loss per
share of $2.69 for the December 2003 quarter. In the December 2002
quarter, Delta reported a net loss of $363 million and a loss per
share of $2.98. For the full year 2003, Delta reported a net loss
of $773 million and a loss per share of $6.40. This is compared
to a net loss of $1.3 billion and $10.44 loss per share for the
full year 2002.
Excluding the unusual items, the December 2003 quarter net loss
and loss per share were $207 million and $1.71, respectively,
compared to a net loss of $230 million and loss per share of $1.90
in the December 2002 quarter. The First Call mean estimate for the
December 2003 quarter was a loss per share of $1.66, excluding
unusual items, with estimates ranging between a loss per share of
$1.58 and $1.85. Excluding the unusual items, the full year 2003
net loss was $1.0 billion and loss per share was $8.58 compared to
a net loss of $958 million and loss per share of $7.89 for
calendar year 2002.
"While in line with our expectations, [Wednes]day's financial
results are disappointing, especially given the expected
performance of the other air carriers," said Gerald Grinstein,
Delta's chief executive officer. "2003 was a year full of
significant financial challenges for Delta. While we have made
progress in addressing these challenges, Delta still faces many
hurdles in 2004. Accordingly, we have begun a complete strategic
reassessment of our business to ensure we are competitive in the
rapidly changing industry environment. Delta must continue toward
its goal of maximizing the use of its resources and creating
business efficiencies across the company. We will continue to
focus on our priorities to reduce costs, improve customer service
and work with Delta people to find solutions to our challenges."
Earnings Performance
Fourth quarter operating revenues increased 2.7 percent and
passenger unit revenues increased 4.6 percent, compared to the
December 2002 quarter. The load factor for the December 2003
quarter was 72.7 percent, a 1.5 point increase as compared to the
December 2002 quarter. System capacity was down 1.8 percent and
mainline capacity was down 4.8 percent from the prior year.
Operating expenses for the December 2003 quarter increased 2.6
percent and unit costs increased 4.5 percent from the December
2002 quarter. Excluding unusual items, unit costs increased 2.3
percent and fuel price neutralized unit costs increased 0.8
percent.
Delta's profit improvement initiatives achieved approximately $1.2
billion in gross cost savings and revenue benefits for the full
year 2003. Netted against related cost pressures, the amount
achieved is approximately $700 million. Much of the cost savings
is attributable to productivity gains resulting from the
additional use of technology and the hard work of Delta's
employees.
"Delta had significant cost pressures in 2003, but thanks to our
profit improvement initiatives and the efforts of Delta people, we
were able to mitigate the pressures," said M. Michele Burns,
Delta's executive vice president and chief financial officer. "We
know that there is much more work to be done and we are committed
to continuing our progress."
In the December 2003 quarter, Delta's fuel hedging program reduced
costs by $21 million, pretax. Delta hedged 46 percent of its jet
fuel requirements in the quarter at an average price of $0.76 per
gallon, excluding fuel taxes. Delta's total fuel price for the
December 2003 quarter was $0.85 per gallon.
Liquidity and Financing Transactions
At Dec. 31, 2003, Delta had $2.9 billion in cash, of which $2.7
billion was unrestricted. For the December 2003 quarter, Delta
had positive cash flow from operations of $82 million and non-
fleet capital expenditures of $125 million, resulting in a cash
burn for the quarter.
During the December 2003 quarter, Delta received cash proceeds of
approximately $45 million from the sale of certain equity
investments in Orbitz and Hotwire. These transactions resulted in
a net gain of $21 million, net of tax, in Delta's Consolidated
Statements of Operations. Subsequent to the sale, Delta has a 13
percent equity stake in Orbitz.
At December 31, 2003, Delta's balance sheet shows a total
shareholders' equity deficit of about $862 million.
As announced in November, Delta recorded a non-cash charge to
equity related to its pension plans during the December 2003
quarter. This charge of $1.1 billion, net of tax, impacted
Delta's balance sheet, but did not affect the results of
operations for the December 2003 quarter. The actual amount was
greater than previously estimated due to the impact of changes to
actuarial assumptions caused by updated demographic data. The
charge does not impact Delta's current cash funding obligations to
its pension plans. Delta's pension plans meet all funding
requirements and Delta intends to continue to fund its pension
plans as required by law.
As previously announced in October 2003, Delta entered into a
definitive agreement to sell to a third party 11 Boeing 737-800
aircraft immediately after those aircraft are delivered to Delta
by the manufacturer in 2005. This transaction is expected to
reduce Delta's capital expenditures by approximately $500 million
through 2005. As a result of this transaction, Delta recognized a
$26 million charge, net of tax, in the December 2003 quarter.
Also as previously announced, Delta intends to defer until 2008
the delivery of eight additional B737-800 aircraft, which were
also scheduled for delivery in 2005. The deferrals are expected
to further reduce Delta's capital expenditures through 2005 by
approximately $360 million.
Explanation of Unusual Items
December 2003 Quarter
In the December 2003 quarter, Delta recorded, net of tax, (1) a
$134 million settlement charge related to the pilots' defined
benefit pension plan; (2) a $26 million charge associated with the
planned sale of 11 B737-800 aircraft; (3) a $21 million net gain
related to the sale of certain equity investments in Orbitz and
Hotwire; (4) a $14 million reduction to operating expenses
resulting from revised estimates of remaining costs associated
with Delta's 2002 workforce reduction programs; and (5) a $5
million gain related to derivative and hedging activities
accounted for under Statement of Financial Accounting Standard
(SFAS) No. 133.
December 2002 Quarter
In the December 2002 quarter, Delta recorded charges related to
(1) the severance and related costs associated with Delta's 2002
workforce reduction programs; (2) the repurchase of a portion of
outstanding ESOP Notes; (3) the impairment of Embraer 120 aircraft
and related spare parts; (4) the cost to defer the delivery of
certain Boeing aircraft; (5) the closure of certain leased
facilities; (6) the temporary carrying costs of surplus pilots and
grounded aircraft; and (7) derivative and hedging activities
accounted for under SFAS No. 133. Additionally, during the same
period, Delta recorded reductions to operating expenses resulting
from (1) Delta's decision to return to service nine B-737 leased
aircraft previously removed from service; and (2) revised
estimates of remaining costs associated with prior year
restructuring activities. These items totaled a net charge of $133
million, net of tax. In addition to the net loss as reported under
GAAP, Delta also discloses net loss excluding these items because
it believes this information is helpful to investors to evaluate
recurring operational performance.
Delta Air Lines, the world's second largest airline in terms of
passengers carried and the leading U.S. carrier across the
Atlantic, offers 7,318 flights each day to 487 destinations in 82
countries on Delta, Song, Delta Shuttle, Delta Connection and
Delta's worldwide partners. Delta is a founding member of SkyTeam,
a global airline alliance that provides customers with extensive
worldwide destinations, flights and services. For more
information, please visit http://www.delta.com/
2004 Guidance
Delta estimates its funding obligation for its defined benefit
pension plans in 2004 will be approximately $450 million.
Delta expects to have capital expenditures of approximately $1.2
billion in 2004. This includes approximately $600 million for
aircraft, $300 million for aircraft modifications and inventory,
and $300 million for non-fleet related expenditures.
DII INDUSTRIES: Brings-In KPMG to Render Tax Accounting Services
----------------------------------------------------------------
The DII Industries, LLC, and Kellogg, Brown & Root Debtors require
the services of qualified professionals to provide accounting, tax
advisory and consulting services necessary in their bankruptcy
cases. The Debtors sought and obtained the Court's authority to
employ KPMG LLP as their Restructuring and Tax Accountants.
KPMG will provide these services to the Debtors:
(a) Financial Advisory
* Advice and assistance in the preparation of reports or
filings as required by the Bankruptcy Court or the
Office of the United States Trustee, including, but not
limited to, schedules of assets and liabilities,
statement of financial affairs, mailing matrix and
monthly operating reports;
* Advice and assistance regarding financial information
for distribution to creditors and other parties-in-
interest, including, but not limited to, analyses of
cash receipts and disbursements, financial statement
items and proposed transactions for which Bankruptcy
Court approval is sought;
* Assistance with the implementation of bankruptcy
accounting procedures as required by the Bankruptcy Code
and generally accepted accounting principles, including,
but not limited to, Statement of Position 90-7;
* Assistance in preparing documents necessary for
confirmation, including, but not limited to, financial
and other information;
* Assistance with claims resolution procedures, including,
but not limited to, analyses of creditors' claims by
type and entity; and
* Other functions as requested by the Debtors or their
counsel to assist them in their businesses and
reorganization; and
(b) Tax Advisory Services
* Review of and assistance in the preparation and filing
of individual tax returns and other tax matters for the
Debtors' international employees, as authorized by the
Debtors; and
* Other consulting, advice, research, planning or analysis
regarding tax issues as may be requested from time to
time.
Thomas D. Bibby, a partner at KPMG, ascertains that the firm is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code. KPMG does not hold or represent an
interest adverse to the Estates.
KPMG is a firm of independent public accountants as defined under
the Code of Professional Conduct of the American Institute of
Certified Public Accountants. KPMG has been employed by the
Debtors as restructuring accountants since September 19, 2002.
KPMG has also been employed as tax accountants for Halliburton
Company since 1999 and as auditors since May 1, 2002. From time
to time, KPMG also has been and expects to be engaged to provide
other services by or on behalf of Halliburton and its
subsidiaries. KPMG will examine and report on the consolidated
financial statements of Halliburton as of December 31, 2003 and
for the year then ended. These financial statements will include
the Debtors' accounts.
The Debtors selected KPMG as their restructuring accountants and
tax accountants because of the firm's diverse experience and
extensive knowledge in the fields of accounting, taxation and
bankruptcy. In addition, by virtue of its prior engagement with
the Debtors, KPMG is familiar with the Debtors' books, records,
financial information and other data maintained. Moreover, the
Debtors need assistance in collecting, analyzing and presenting
accounting, financial and other information in relation to their
reorganization cases. KPMG has considerable experience with
rendering these services to debtors and other parties in numerous
Chapter 11 cases.
KPMG will be compensated for its professional services based on
its normal and customary hourly rates. The customary hourly
rates for financial advisory and tax advisory services to be
rendered by KPMG are:
(1) Financial Advisory
Partner $590 - 650
Director 480 - 570
Manager 390 - 450
Senior Associate 300 - 360
Associate 190 - 270
Paraprofessional 140
(2) Tax Advisory
Partner $600
Director 470
Manager 350
Senior Associate 215
Associate 190
With respect to the engagement, KPMG has agreed:
(a) to apply a 10% discount to its financial advisory fees as
determined under the rate structure; and
(b) that the fee schedule for the tax services to be provided
to the Expatriate Employees will not exceed:
Description Amount
----------- ------
Individual pre-departure/
post arrival consultation $300
Federal return
(including extensions), full year
0-500 Returns 1,095
501-1000 Returns 910
1,001-1500 Returns 860
Federal return (including extensions),
transfer year additional 150
State return (if applicable) 300
Estimated tax calculation and 200 - 300
payment vouchers (personal income)
Application for individual taxpayer
identification number-initial application
(additional family members $50 each) 400
Amended tax returns (FTC carryback) 500
Assistance with tax payment calculations Hourly Rates
and other U.S. payroll issues less 25%
IRS Notice/Examinations Hourly Rates
less 25%
Tax protection calculation-full
year assignee 250
Tax protection calculation-transfer
year assignee 300
State calculations 100
Prior year calculations 250
KPMG will be reimbursed for its necessary out-of-pocket expenses.
The Debtors disclose that KPMG received a $250,000 advance
retainer. Of the retainer, nothing has been applied to the fees
and expenses incurred before the Petition Date. Any amounts from
the retainer in excess of fees and expenses incurred before the
Petition Date will be held by KPMG and applied against
postpetition fees and expenses, to the extent allowed by the
Court. KPMG also received payments totaling $1,238,260 in the 90
days before the Petition Date. KPMG is not a prepetition
creditor of the Estates.
Headquartered in Houston, Texas, Kellogg, Brown & Root is engaged
in the engineering and construction business, providing a wide
range of services to energy and industrial customers and
government entities in over 100 countries. DII has no business
operations. The Company filed for chapter 11 protection on
December 16, 2003 (Bankr. W.D. Pa. Case No. 02-12152). Jeffrey N.
Rich, Esq., Michael G. Zanic, Esq., and Eric T. Moser, Esq., at
Kirkpatrick & Lockhart LLP represent the Debtors in their
restructuring efforts. (DII & KBR Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
DIRECTV LATIN: Court Okays Latham & Watkins as Special Counsel
--------------------------------------------------------------
On March 13, 2003, pursuant to an engagement letter, DirecTV Latin
America, LLC employed Latham & Watkins LLP to perform legal
services in connection with the negotiation or renegotiation of
contracts with third party programmers regarding licenses for
programming provided by the Debtor to its customers.
Programming costs represent the Debtor's single largest expense,
amounting to hundreds of millions of dollars per year.
Uneconomic agreements with its Programmers were one of the
factors leading to the Debtor's filing for bankruptcy. The
renegotiation of unfavorable Programming Agreements is an
essential facet of the Chapter 11 case, and Latham has been
working toward this objective.
In the context of its restructuring, the Debtor sought and
obtained permission from the Court to employ ordinary course
professionals on April 14, 2003. Pursuant to the OCP Order,
Latham was employed as an ordinary course professional.
The OCP Order authorized the Debtor to pay Latham for its
services up to $25,000 per month and up to $150,000 during the
pendency of the Chapter 11 case. Pursuant to the OCP Order, the
Court must authorize the payment of fees and reimbursement of
expenses to the extent that the fees and expenses exceed the
Caps.
Moreover, the OCP Order provides that, if the average monthly
fees over any three-month period for any Ordinary Course
Professional exceed $25,000, then the Debtor will file separate
pleadings for future services to be provided by the Ordinary
Course Professional. While engaged in necessary postpetition
legal activities, Latham exceeded the Monthly Cap in June, July,
August and November 2003.
Pursuant to Section 327(e) of the Bankruptcy Code, the Debtor
sought and obtained the Court's authority to employ Latham as its
special counsel, nunc pro tunc to September 1, 2003.
As special counsel, Latham will continue:
(a) representing the Debtor in negotiations with various
Programmers, including HBO, Disney and Kirch Media, for
the acquisition of licenses to broadcast Programming to
the Latin American market including representing the
Debtor in the renegotiation of its exclusive license with
FIFA to broadcast the World Cup 2006 and certain other
FIFA events; and
(b) negotiating the sublicensing of 2003 soccer content in the
Latin American market.
The Court also permits the Debtor to pay Latham $200,462, which
constitutes the amounts billed in excess of the Monthly Cap by
Latham to date. Future requests for payment of fees and
reimbursements of expenses will be submitted in accordance with
applicable bankruptcy law by the submission of fee applications
to the Court for approval.
The Debtor employed Latham because it has the requisite
expertise, knowledge and experience and because the firm has an
excellent reputation for providing high quality legal services.
The primary professional at Latham who will be responsible for
the engagement is Richard Wirthlin. Mr. Wirthlin attests that
neither he nor any other person employed by Latham holds any
interest adverse to the Debtor or to the Debtor's estate.
Latham has conducted, and continues to conduct, extensive
research into its relations with the Debtor, its creditors,
employees of the Office of the United States Trustee, its
attorneys and accountants, and other parties interested in these
cases. As part of this inquiry, Latham obtained from the
Debtor's senior management over 80 names of individuals or
entities who may be parties-in-interest in this Chapter 11 case.
Latham currently represents several third parties in certain non-
related matters against the Debtor's parent companies, General
Motors Corporation, Hughes Electronics Corporation, and DirecTV
Latin America Holdings, Inc. Latham has determined that the
representation concerns matters that are not adverse to the
Debtor.
Latham also currently represents the Debtor's wholly owned non-
debtor subsidiary, DTVLA-WC LLC, in matters that Latham has
determined to be unrelated or not adverse to the Debtor.
While Latham has undertaken, and continues to undertake,
extensive efforts to identify connections with the Debtor and
other parties-in-interest, it is possible that connections with
some parties-in-interest have not yet been identified. Should
Latham, through its continuing efforts, learn of any new
connections, Latham will so advise the Court.
The Debtor has agreed that Latham will not represent the Debtor
in connection with:
(a) objections to the claims against the Debtor asserted by
any party, which is represented by Latham in matters
unrelated to the Debtor;
(b) any litigation commenced on behalf of the Debtor seeking
to recover damages from any party, which is represented by
Latham in matters unrelated to the Debtor; or
(c) any litigation commenced by any party, which is a current
client of Latham.
In the event the Debtor requires legal representation in
connection with any such matters, the Debtor will obtain other
counsel for such purposes.
The Debtor will compensate Latham for professional services
rendered at its normal and customary hourly rates. The Debtor
will also reimburse Latham for actual, necessary expenses and
other charges incurred. The current standard hourly rates for
the Latham professionals who will be assisting the Debtor during
the Chapter 11 case are:
Counsel Fee
------- ---
Richard Wirthlin $520
Robert Crockett 520
David Blood 330
Robert Lu 330
Steven Sorell 290
Paralegal Fee
--------- ---
James Padilla $155
The hourly rates are subject to periodic adjustments to reflect
economic and other conditions. (DirecTV Latin America Bankruptcy
News, Issue No. 18; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
DIVERSIFIED CORPORATE: Obtains Favorable Ruling in Ditto Lawsuit
----------------------------------------------------------------
Diversified Corporate Resources, Inc. (Amex: HIR) announces that a
Directed Verdict on all counts against the Company was recently
rendered in the Company's favor in the United States Bankruptcy
Court for the Northern District of Texas in connection with in the
Ditto Properties litigation.
The lawsuit, which had been pending against the Company for over
eight years, alleged damages in excess of $32,000,000. J. Michael
Moore, Chairman and Chief Executive Officer of Diversified
commented that "we are delighted with the Court's ruling in this
matter. This lawsuit has represented a strain on the Company in
terms of time, energy and financial resources, however, it all
comes down to the character of an organization -- sometimes you
have to resolve to fight for what you believe in."
In unrelated news, it is with equal parts pride and sadness that
the Company announces the departure, effective on January 15,
2004, of its Chief Financial Officer Kenneth E. Dopher. Mr. Dopher
has accepted a position as Vice President of Finance and
Accounting at Sony Online Entertainment, a San Diego-based unit of
Sony Corporation. Mr. Moore stated that "It reflects well on our
organization and the quality of our personnel that Mr. Dopher has
been given the opportunity to work for one of the world's premier
companies." Michael C. Lee, currently Director of Accounting and
Finance, will replace Mr. Dopher as interim Chief Financial
Officer. Mr. Lee holds a Masters Degree in Accounting from the
University of Texas, and has been instrumental in revising the
Company's cash management procedures. Mr. Moore adds "we look to
Mike Lee to step up in his new responsibilities with the same
enthusiasm, skill and dedication which he brought to the past
challenges the Company entrusted to him."
Diversified Corporate Resources, Inc., is a national employment
services and consulting firm servicing Fortune 500 and larger
regional companies with permanent recruiting and staff
augmentation in the fields of Engineering, Information Technology,
Healthcare, BioPharm and Finance and Accounting. The Company
currently operates a nationwide network of nine regional offices.
* * *
As reported in the Troubled Company Reporter's September 4, 2003
edition, Diversified Corporate Resources, Inc. dismissed Weaver
and Tidwell, L.L.P. as its independent accountants, effective
August 19, 2003, and appointed BDO Seidman, LLP as its independent
accountants.
The Weaver and Tidwell, L.L.P. reports on the Company's 2000, 2001
and 2002 consolidated financial statements were qualified as to
uncertainty regarding Diversified Corporate Resources' ability to
continue as a going concern.
EAGLE FOOD CENTERS: Overview & Summary of Proposed Chapter 11 Plan
------------------------------------------------------------------
Eagle Food Centers Inc. has prepared a Disclosure Statement
containing, among other things, descriptions and summaries of
provisions of the Plan being proposed by Eagle Food Centers, Inc.,
and four (4) of its affiliates, debtors and debtors-in-possession
as filed on December 24, 2003, with the United States Bankruptcy
Court for the Northern District of Illinois, Eastern Division.
Certain provisions of the Plan, and thus the descriptions and
summaries contained here, are or may become, the subject of
continuing negotiations among the Debtors and various parties and,
therefore, remain subject to modification. The Debtors do not
anticipate that such modifications will have a material effect on
the distributions contemplated by the Plan and any such
modifications will be disclosed at the Confirmation Hearing.
For more than one hundred years, the Debtors operated a leading
regional supermarket chain offering a full selection of groceries,
meats, fresh produce, dairy products, delicatessen and bakery
products, health and beauty aids and other general merchandise
and, in certain stores, service seafood, prescription medicine,
video rental, floral service, in-store banks, dry cleaners and
coffee shops. At the commencement of these cases, the Debtors
achieved over $600 million in annual sales and operated over 60
stores throughout Illinois and Iowa.
A little more than 3 years ago, Eagle Foods filed a chapter 11
proceeding in order to facilitate a largely prenegotiated
financial restructuring. Eagle Foods emerged from that chapter 11
proceeding in August 2000. Since its initial restructuring
efforts, Eagle Foods faced new threats from increased competition,
rising costs in connection with its unionized labor, significant
cash outlays to cover interest expense from its outstanding
Prepetition Notes, and a recessionary economy. As a result, Eagle
Foods' overall cost of doing business increased and the Company
once again faced a liquidity crisis. Accordingly, the Debtors
commenced a strategic review of their operations and considered a
number of options to maximize value through strategic business
initiatives, capital restructurings and/or asset dispositions
involving all or a part of the business. With limited liquidity
and an interest payment on its Prepetition Notes looming, the
Debtors ultimately decided to continue this review process under
the protections of the Bankruptcy Code and filed for relief under
chapter 11 on April 7, 2003.
In chapter 11, the Debtors continued to review various
restructuring and sale alternatives. In this regard, the Debtors
frequently conferred with the Official Committee of Unsecured
Creditors and representatives of the United Food and Commercial
Workers and the International Brotherhood of Teamsters, unions
4which together represented approximately 3,300 of the Debtors'
employees as of the Petition Date. The Debtors believed that any
of the standalone alternatives had substantial inherent risks that
threatened their long-term viability. Accordingly, the Debtors
further pursued the growing interest generated among prospective
bidders in a sale process, and decided to sell as many stores as
they could as a going concern and, ultimately, to liquidate their
remaining assets.
The Plan, which has been negotiated with the Creditors' Committee,
provides for the liquidation of the Debtors and for the
distribution of the net proceeds of the Debtors' assets to
creditors in order of their relative priority of distribution
under the Bankruptcy Code. The Plan contemplates and is
predicated upon the substantive consolidation of the Debtors. The
Plan further contemplates that, upon consummation, the Affiliate
Debtors will be merged with and into Eagle Foods, which will
remain in existence for the limited purpose of implementing the
Plan and making distributions to creditors as provided in the
Plan. Three shares of common stock shall be issued by Reorganized
Eagle Foods and each of the three members of the Board of
Directors of Reorganized Eagle Foods (to be appointed pursuant to
Section 7.4 of the Plan) will hold title to a share of common
stock. In addition, the Chief Wind Down Officer (to be
designated, as set forth in Section 7.5 of the Plan) shall serve
as the sole officer of Reorganized Eagle Foods. The Chief Wind
Down Officer, on behalf of Reorganized Eagle Foods, will be
responsible for implementing and administering the Plan in
accordance with the Plan and applicable law.
The Plan constitutes a single plan for all of the Debtors. The
Plan provides for the emergence of Eagle Foods as Reorganized
Eagle Foods to administer the liquidation of the Debtors and their
estate and the distribution of the proceeds thereof in resolution
of the outstanding claims against and interests in the Debtors.
Under the Plan, Claims against and Interests in the Debtors are
divided into five Classes. As contemplated by the Bankruptcy
Code, Administrative Claims and Priority Tax Claims are not
classified and will be paid in full under the Plan.
As of December 19, 2003, the Debtors had approximately $31 million
in Cash. The Debtors also possess a de minimis amount of non-Cash
assets which the Debtors are continuing to liquidate as a result
of their wind down efforts. Of the Cash amount, the Debtors
estimate that approximately $17 million will be required to fund
the Cash Reserves for the payment of Administrative Claims,
Priority Tax Claims, Secured Claims, Non-Tax Priority Claims, Cure
Claims and other payments required under the Plan, as well as to
pay for anticipated post-confirmation operating expenses in
connection with the remaining wind down of the Debtors' affairs
such as, among other things, resolving Avoidance Actions to be
brought and reconciling their Disputed Claims. Thus, as of the
Effective Date, the Debtors estimate that, as a result of their
continuing wind down efforts, there will be approximately $15
million of Net Available Cash for distribution to Holders of
Allowed Unsecured Claims as provided under the Plan on the Initial
Distribution Date. In addition, the Net Proceeds realized from the
disposition of the Debtors' remaining non-Cash assets described
above will also be distributed to Holders of Allowed Unsecured
Claims as provided under the Plan. The actual recoveries under
the Plan by the Debtors' creditors will be dependent upon whether,
and in what amount, the Debtors are able to dispose of these
assets and resolve and collect on the Avoidance Actions, as well
as on the results of any government audits and the ultimate amount
of Allowed Claims.
The Debtors have engaged in an extensive review of all Scheduled
and filed Claims to estimate the total Claims outstanding. As of
December 19, 2003, there were approximately $494 million in Claims
filed or Scheduled against the Debtors. To date, this amount has
been reduced by approximately $136 million as a result of the
claims review and objection process. The Debtors anticipate that
the total claims base will be reduced by an additional $185 to
$206 million as the claims resolution process continues and
certain secured, priority and general unsecured claims, which have
been previously satisfied or improperly filed are withdrawn or are
modified or disallowed pursuant to an objection. In that regard,
the Debtors are reviewing each proof of claim filed in these cases
and each scheduled claim and reconciling them against their books
and records. Following such review the Debtors are also reviewing
other legal grounds, which may reduce or disallow claims filed and
scheduled against the Debtors and their estates. After the
Debtors have a batch of claims against which they are prepared to
object, the Debtors file an omnibus objection to such claims. In
addition, the Debtors intend to file objections on a "one-off"
basis to those claims that require a more substantive pleading.
As a result of this process, the Debtors estimate that the total
amount of ultimately Allowed Secured Claims will be approximately
$1 to $1.5 million, Allowed Non-Tax Priority Claims will be
approximately $168,000 to $330,000 and Allowed Unsecured Claims
will aggregate approximately $150 to $170 million plus
unliquidated amounts. This Allowed Unsecured Claims amount is
comprised of approximately $64 million in principal of Prepetition
Notes Claims plus $3 million in interest accrued prepetition,
approximately $80 to $100 million of General Unsecured Claims, and
approximately $1.4 million of General Unsecured Convenience Claims
plus unliquidated amounts. While the foregoing is a good-faith
estimate of the ultimate amount and breakdown of Claims against
the Debtors, no assurances can or are being given that this will
be the actual amount and breakdown, and the actual amount and
breakdown may be materially different from the Debtors' estimates.
EL PASO: Finalizes $246-Mill. Coastal Eagle Point Refinery Sale
---------------------------------------------------------------
El Paso Corporation (NYSE: EP) and its subsidiary, Coastal Eagle
Point Oil Company, closed the sale of the Eagle Point refinery and
related working inventories to Sunoco, Inc. (NYSE: SUN) for
approximately $246 million.
As previously indicated, this amount consists of $111 million for
the refinery and approximately $135 million subject to adjustment
representing the fair market value for the related working
inventories. The refinery, located in Westville, New Jersey
across the Delaware River from Philadelphia, has a rated capacity
of 150,000 barrels per day.
This sale supports El Paso's recently announced long-range plan to
reduce the company's total debt to approximately $15 billion by
year-end 2005.
El Paso Corporation's (S&P, B Corporate Credit Rating, Negative
Outlook) purpose is to provide natural gas and related energy
products in a safe, efficient, dependable manner. The company
owns North America's largest natural gas pipeline system and one
of North America's largest independent natural gas producers. For
more information, visit http://www.elpaso.com/
EMMIS COMMS: Vanessa Oubre Promoted to VP & GM at Two TV Stations
-----------------------------------------------------------------
Emmis Communications Corporation (Nasdaq: EMMS) announced that
Vanessa Oubre, Vice President of Research for Emmis Television,
has been named Vice President/General Manager of WALA-TV in
Mobile, Alabama, and WBPG-TV in Pensacola, Florida.
"In the last several months, Vanessa has been deeply involved in
the management of the Mobile properties and has shown her capacity
to oversee this operation," said Joe Cook, Regional Vice President
for Emmis Television. "We have been thrilled with her work in the
research area, and I know she will bring that same energy and
commitment to her new position."
After joining Emmis in July of 1999 as Director of Research for
New Orleans' WVUE-TV, Oubre was promoted to Vice President of
Research for Emmis Television in June of 2000. Prior to joining
Emmis, Oubre served as Marketing and Research Director at
Houston's KHOU-TV (1999); Research Director at WOIO/WUAB-TV in
Cleveland (1996-99); Research Director at WKYC-TV in Cleveland
(1993-96); Research Director at Network Ventures in New York
(1988-93); and Marketing Coordinator for WDSU-TV in New Orleans
(1979-88).
Oubre is a cum laude graduate of Xavier University in New Orleans
with a degree in Communications. She assumes her new
responsibilities immediately.
Emmis Communications (S&P, B- Corporate Credit Rating, Stable) is
an Indianapolis based diversified media firm with radio
broadcasting, television broadcasting and magazine publishing
operations. Emmis' 23 FM and 4 AM domestic radio stations serve
the nation's largest markets of New York, Los Angeles and Chicago
as well as Phoenix, St. Louis, Austin, Indianapolis and Terre
Haute, IN. In addition, Emmis owns two radio networks, three
international radio stations, 16 television stations, regional and
specialty magazines, and ancillary businesses in broadcast sales
and book publishing.
ENRON: East Coast Power Asset Sale to Special Situations Okayed
---------------------------------------------------------------
After conducting the Auction on December 16, 2003, Enron North
America Corporation declared Special Situations Investing Group,
Inc. as the Winning Bidder.
Accordingly, the Court approves the sale of the Senior
Participation Interest in the subordinated debt of East Coast
Power LLC and certain related assets to Special Situations for
$28,763,000 in accordance with the terms of the Purchase
Agreement. (Enron Bankruptcy News, Issue No. 93; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
ENRON CORP: Court Clears Sale of Metromedia Claims to Liquidity
---------------------------------------------------------------
Pursuant to modified terms and conditions of the Assignment, the
U.S. Bankruptcy Court permits Enron Broadband Services, Inc. to
sell its $3,749,983 Claim against Metromedia Fiber Network, Inc.
to Liquidity Solutions, Inc.
The Assignment modifications are:
(a) The Purchase Price will be an amount equal to 13% of the
net amount of the Metromedia Claim as determined in the
Metromedia Chapter 11 cases pursuant to a final order of
the Metromedia Bankruptcy Court regarding Metromedia's
pending objection to the Enron Broadband Claim or
withdrawal of the Metromedia Objection;
(b) In the event the Claim Amount is not fully determined,
then the Assignment will, subject to the rights of
Liquidity to extend the 180-day period, terminate and be
of no further force or effect and Enron Broadband and
Liquidity will have no further rights, interests, claims
or liability under Assignment as to the other;
(c) Upon the determination of the Metromedia Claim Amount by
final order of the Metromedia Bankruptcy Court or
withdrawal of Metromedia's objection on the Claim,
Liquidity will deliver the Purchase Price to Enron
Broadband in immediately available funds; and
(d) The transfer and assignment of the Metromedia Claim will
be deemed effective only upon the payment of the Purchase
Price by Liquidity to Enron Broadband.
* * *
Backgrounder
Metromedia filed for Chapter 11 protection on May 20, 2002.
Pursuant to a court order, October 18, 2002 was fixed as the last
day for filing claims against Metromedia.
EBS timely filed its Claim on October 16, 2002. The EBS Claim
asserts a prepetition obligation due and owing by Metromedia to
EBS under certain lease, IRU and collection agreements between
Metromedia and EBS relating to fiber-optic networks maintained by
both EBS and Metromedia. Metromedia has not contested the EBS
Claim.
By an August 21, 2003 Court Order in the Metromedia cases, their
Second Amended Plan of Reorganization was confirmed pursuant to
Section 1129 of the Bankruptcy Code. Under the Metromedia Plan,
Mr. Berger tells the Court that the EBS Claim was designated as a
Class 7 Subsidiary Unsecured Claim. Holders of Class 7
Subsidiary Unsecured Claims will receive a pro rata distribution
of a portion of the new common stock of the reorganized
Metromedia. The Metromedia Disclosure Statement projects that
the treatment of Class 7 Claims is estimated to result in a
recovery of about 7.4% as of the projected stock distribution
date. (Enron Bankruptcy News, Issue No. 93; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
FACTORY 2-U STORES: Receives Court Approval of First-Day Motions
----------------------------------------------------------------
Factory 2-U Stores, Inc. (Nasdaq:FTUSQ) announced that Judge Peter
J. Walsh of the United States Bankruptcy Court in Wilmington,
Delaware has approved the critical "first-day motions" that
Factory 2-U made as part of its Chapter 11 filing on January 13,
2004.
The first-day motions were filed as a proactive step to ensure
that Factory 2-U is able to conduct normal business operations
during the Chapter 11 process.
The Judge's orders include interim approval of the $45 million
debtor-in-possession (DIP) financing facility that was committed
by The CIT Group/Business Credit, Inc. and GB Retail Funding, LLC.
Factory 2-U now has authorization to borrow up to $3 million if
needed prior to the February 2, 2004 hearing at which the Court
will be asked to give final approval for the full DIP facility.
The Company intends to utilize this capital, in addition to cash
flow from operations, to fulfill its business obligations during
the Chapter 11 process and ensure that its stores are well stocked
with quality merchandise that appeals to its customers.
Factory 2-U has received court authorization to pay suppliers and
vendors in full and under normal conditions for all goods and
services provided on or after the January 13, 2004 filing date.
The Judge also approved Factory 2-U's request to continue to pay
employees as usual, honor gift cards and layaway, and continue its
refund policy.
Norman G. Plotkin, Chief Executive Officer of Factory 2-U, said:
"Our reorganization proceeding is off to a very productive start.
We are gratified that Judge Walsh has approved our critical first-
day motions, which will enable us to maintain normal operations
throughout the Chapter 11 process, including meeting important
financial obligations to employees, vendors and suppliers. We will
now turn our attention to implementing our plans to improve our
financial and operational performance."
Factory 2-U Stores, Inc. operates 243 "Factory 2-U" off-price
retail stores which sell branded casual apparel for the family, as
well as selected domestics and household merchandise at prices
which generally are significantly lower than the prices offered by
its discount competitors. The Company operates 32 stores in
Arizona, 2 stores in Arkansas, 65 stores in southern California,
63 stores in northern California, 1 store in Idaho, 8 stores in
Nevada, 9 stores in New Mexico, 1 store in Oklahoma, 14 stores in
Oregon, 34 stores in Texas, and 14 stores in Washington.
FIRST CHICAGO: Fitch Affirms 1997-CHL1 Ratings at B/Junk Levels
---------------------------------------------------------------
First Chicago/Lennar Trust I, series 1997-CHL1, commercial
mortgage certificates are affirmed as follows:
-- $13.8 million class F at 'B-' and removed from Rating
Watch Negative;
-- $57.8 million class B 'A-';
-- $36.7 million class C 'BBB';
-- $78 million class D 'BB';
-- $119.4 million class E 'B';
-- $18.4 million class G 'CCC'.
The class H certificates are not rated by Fitch. Classes A and IO
have paid in full.
The ratings affirmations are due to consistent overall pool
performance since the Fitch 2002 surveillance review. The removal
of rating watch negative is due to the interest shortfalls
incurred by class F being recovered in full.
While 22.5% of the pledged certificates in the transaction by
balance have credit assessments of 'CCC' or worse compared to 9.6%
at issuance, 21.9% have assessments of 'BBB-' or better compared
to 0% at issuance. After taking into account the ratings
migrations, the transaction's paydown, the realized losses, and
expected losses, the credit enhancement to the Fitch rated classes
warrant the affirmations.
The certificates are secured by 41 subordinate commercial mortgage
pass-through certificates (pledged certificates) from 21 separate
commercial mortgage securitizations (underlying transactions). The
underlying transactions, backed by a variety of property types,
were securitized from 1993 to 1997 by various issuers and, as of
the January 2004 distribution date, have a current aggregate
certificate balance of approximately $2.7 billion, down from $8.8
billion at closing. The transaction's certificate balance has
decreased by 26.1% to $339.4 million, from $459.1 million at
closing. The decrease in certificate balance is due to paydowns of
$96.1 million on 11 of the pledged certificate classes and
realized losses of $21.6 million on nine of the pledged
certificate classes.
Fitch rates and monitors 20 of the 21 underlying transactions,
approximately 99% of the re-remic by balance. The remaining
transaction is assessed and monitored internally. Fitch's current
ratings or credit assessments on the pledged certificates compared
to origination are as follows:
-- At or above 'BBB-' - 21.9% compared to 0%;
-- 'BB' - 30.9% compared to 47.3%;
-- 'B' - 23.7% compared to 43.1%; and,
-- At or below 'CCC' or not rated - 22.9% compared to 9.6%.
Since last review, Fitch has upgraded seven of the pledged
certificates (13.8% of the re-remic transaction) and downgraded
three (6.4%). The upgraded certificates are part of the following
underlying transactions: CSFB 1995-MF1 (0.43%), MLMI 1994-C1
(0.1%), Pru 1995-C1 (0.9%), SASCO 1995-C4 (0.9%), and SASCO 1996-
CFL (9.1%). The downgraded certificates are part of the following
transactions: Pru 1995-C1 (0.8%) and Pru 1995-MCF2 (5.6%).
As of the January 2004 distribution date, total delinquencies have
increased to 3.8% of the outstanding balance of the underlying
transactions from 2.01% at origination and 3.6% last year.
FLEMING COS.: Asks Court to Clear Settlement with RLI Insurance
---------------------------------------------------------------
The Fleming Companies Debtors ask Judge Walrath to approve a
settlement with RLI Insurance Company, reached shortly after they
filed a lawsuit against RLI.
Before the Petition Date, RLI had issued six surety bonds on
behalf of Core-Mark -- for which Fleming is liable as an
indemnitor -- in favor of the Department of Revenue in several
states. RLI's actual liability under the bonds is much lower
than the bond amounts:
Bond Estimated
State Amount Liability
----- ------ ---------
Arizona $5,000,000 $1,047,246
Arkansas 750,000 0
Kansas 1,000 0
Utah 3,700,000 2,241,792
Washington 4,100,000 2,554,200
Washington 1,400,000 808,830
RLI holds a letter of credit as collateral from losses related to
the Bonds. The letter of credit was issued on January 31, 2003
for $5,000,000. The letter of credit was increased on
February 18, 2003 to $7,500,000, and again on March 14, 2003 to
$15,000,000.
On July 17, 2003, RLI made a draw on the LOC for $3,405,600 to
satisfy its liability under the Bonds to the State of Washington
Department of Revenue. As a result of this draw, the LOC was
reduced to $11,593,400. The parties estimate that RLI's actual
remaining liability under the Bonds has been reduced to
$3,289,000.
On December 17, 2003, Fleming commenced an adversary proceeding
against RLI to recover preferential transfers. Fleming asserted
that the entire $15,000,000 LOC given to RLI was a preferential
transfer. Fleming asked the Court to cancel the entire LOC, and
to the extent of any draws against it, for a money judgment
against RLI for that amount, plus interest. RLI denied the
allegations and asserted defenses.
The parties were able to settle their dispute. They agree that:
(1) RLI will release $11,594,400 of the security it holds
for the Bonds by authorizing the Debtors to cancel
the balance of the LOC;
(2) RLI will pay $1,900,000 in cash to the Debtors;
(3) RLI may cancel the Bonds;
(4) RLI waives any right to a postpetition claim against
any of the Debtors arising under the Bonds and
related documents;
(5) Fleming will dismiss the adversary proceeding with
prejudice, with each party bearing its own costs and
fees;
(6) Fleming will pay, and indemnify RLI against,
liability for all postpetition obligations arising
under the Bonds;
(7) RLI may apply any collateral held by it to sums owed
to it by Fleming; and
(8) RLI has an allowed, general unsecured claim in the
amount, if any, that the prepetition claims it
actually paid exceed any collateral held by or for its
benefit as security for those prepetition claims.
Headquartered in Lewisville, Texas, Fleming Companies, Inc. --
http://www.fleming.com/-- is the largest multi-tier distributor
of consumer package goods in the United States. The Company filed
for chapter 11 protection on April 1, 2003 (Bankr. Del. Case No.
03-10945). Richard L. Wynne, Esq., Bennett L. Spiegel, Esq.,
Shirley Cho, Esq., and Marjon Ghasemi, Esq., at Kirkland & Ellis
represent the Debtors in their restructuring efforts. When the
Debtors filed for protection from its creditors, they listed
$4,220,500,000 in assets and $3,547,900,000 in liabilities.
(Fleming Bankruptcy News, Issue No. 21; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
FUELNATION: Enters into Fuel Supply Agreement with Alkhalifa
------------------------------------------------------------
In December 2003 FuelNation entered into a Fuel Supply Agreement
with ALKHALIFA PETROLEUM CORP., a Florida for Profit Corporation,
100% owned and controlled by FuelNation's director Sheikh Isa
Mohammed Isa Al-Khalifa. The Company has entered into this
relationship with ALKHALIFA PETROLEUM CORP., to allow Sheikh Isa
Mohammed Isa Al-Khalifa to use his Petroleum relationships and
Contacts to negotiate the most favorable terms on fuel supply and
provide the Company the necessary credit in order to receive the
supplies of fuel to implement its business plan and maintain a
competitive pricing on fuel.
In addition to the Fuel Supply Contract, Al-Khalifa Petroleum
Corp., owned and controlled by the Company's director, Sheikh Isa
Mohammed Isa Al-Khalifa has purchased 8,000 Series A preferred
shares of stock for $8,000,000 and applied the funds as a security
deposit to purchase fuel.
In December 2003, The Company modified and restated its Articles
of Incorporation with the State of Florida, pursuant to the
authority contained in the Company's Articles of Incorporation,
and in accordance with the provisions of Section 607.0602(4) of
the Florida Business Corporation Act. The modification and
restatement had the unanimous written consent of the Board of
Directors of the Company, dated November 5, 2003 pursuant to
Section 607.0821 of the Act, adopting the resolutions providing
for the creation of a series of preferred stock to be designated
as "Series A Convertible Preferred Stock," which resolutions are
effective without the approval of the Company's shareholders,
under Section 607.0602(4) of the Act. The Articles of
Incorporation were further restated pursuant to Section 607.1007,
and the Company's Articles of Incorporation have been amended to
create such preferred stock having the preferences, limitations
and relative rights.
FuelNation granted an exclusive marketing and advertising right to
Supplier (exclusive to petroleum and related advertising products
or vendors). The exclusive marketing and advertising right will be
granted at each location that Supplier supplies petroleum products
and that Marketing and Advertising rights are available, (i.e.
Billboards, canopies, banners, road signs, roof tops, buildings,
walls, pumps, marquee boards, trucks, cars, radio, television,
etc.) Supplier agrees to issue a marketing and advertising
allowance credit to Seller in the amount of one and one-half cents
per gallon on all purchases of petroleum products monthly. This
exclusive marketing and advertising rights allowance will be paid
monthly to Seller, or may be applied against outstanding invoices,
at Suppliers sole discretion.
The Company granted the exclusive marketing and advertising rights
on the entire Travel Center site to be built in Davie, Florida. In
addition to the marketing and advertising allowance credit to
Seller in the amount of one and one-half cents per gallon on all
purchases of petroleum products monthly Supplier agrees to pay
Seller an additional fixed payment of $200,000 per month for a
total of $2,400,000 annually for a period of 10 years. The total
advertising budget for 10 years will be $24,000,000. The
advertising dollars will be used to market and advertise brand
awareness and related products. The Travel Center rights will not
be restricted to petroleum and vendor advertising only; these
rights will be granted to allow Supplier to sub-lease space to
third party advertisers that do not compete with Seller or the
location. This lease will commence January 2004 through January
2014.
FuelNation Inc. is a Florida-based development stage corporation
which was incorporated in Florida in 1993. The company is planning
to build and develop a portfolio of real estate assets with our
concept of the "Super Store" of Travel Centers across The United
States. It has also been engaged in the development of providing
real-time e-commerce communications in petroleum marketing and
energy services.
At September 30, 2003, FuelNation's balance sheet shows a working
capital deficit of close to $3 million, and a total shareholders'
equity deficit of about $6 million.
GENERAL MEDIA: Hires Seneca Financial as Restructuring Advisor
--------------------------------------------------------------
Seneca Financial Group, Inc., has been officially retained as the
restructuring advisor to General Media, Inc., the publisher of
Penthouse and other magazines as well as eight of its direct and
indirect subsidiaries. As approved last week by the Honorable
Stuart M. Bernstein, Chief United States Bankruptcy Judge for the
Southern District of New York, Seneca Financial Group will manage
the Company's day-to-day financial operations until it
successfully emerges from bankruptcy. James Sullivan, managing
director of Seneca Financial Group, will serve as chief
restructuring officer to General Media.
General Media filed for voluntary bankruptcy protection with the
U.S. Bankruptcy Court in August 2003 (Bankr. S.D.N.Y. Case. No.
03-15078), and submitted a proposed Plan of Reorganization in late
December 2003. Seneca Financial Group has replaced the former
interim management team and continues to rationalize General
Media's business, address its ongoing liquidity needs, and
identify and implement initiatives that will lead to long-term
appreciation for all Company stakeholders.
"We are pleased to be working with General Media and the team
behind the reorganization plan, including Marc Bell Capital
Partners LLC, to ensure a speedy and successful reorganization,"
said James Harris, president of Seneca Financial Group.
"Penthouse magazine is a renowned brand worldwide, and we look
forward to spearheading a restructuring effort that will assist
General Media to reestablish its rightful position as a highly
regarded and financially sound powerhouse in its market."
The U.S. Bankruptcy Court has scheduled a hearing for January 21,
2004 to consider approval of the proposed Disclosure Statement,
filed along with the Plan of Reorganization, with a confirmation
hearing set for February 26, 2004. The Company estimates that it
will complete its restructuring and emerge from Chapter 11 by
early March 2004.
If confirmed, the Plan would deleverage the Company's balance
sheet, restore liquidity, and enhance the Company's competitive
position in the marketplace. In addition to Penthouse magazine,
the Company publishes other magazines and is engaged in other
media and entertainment businesses. The Plan results from
discussions with the holders of approximately 89% of the Company's
15% Senior Notes due 2004 and its Official Committee of Unsecured
Creditors. Under the Plan, holders of the Company's Senior Notes
would exchange them for 1 million shares of common stock of the
reorganized Company, representing 100% of the new common equity,
plus new Term Loan Notes of up to $27 million. The new Term Loan
Notes will bear interest at 13% per annum, payable in kind for the
first three years of their seven-year term, and be secured by a
first priority lien on all the reorganized company's assets,
subordinate only to a lien granted to a lender under an exit
financing facility of up to $15 million. General unsecured
creditors, whose claims aggregate approximately $10 million, will
share pro rata in $2 million in cash and $3 million principal
amount of new Term Loan Notes.
Seneca Financial Group is an investment bank focusing on working
with companies and creditors to companies in financial distress.
Seneca is based in Greenwich, Connecticut. More information can
be obtained about Seneca at http://www.senecafinancial.com/
GRAFTECH INT'L: Prices $180MM of 1.625% Conv. Senior Debentures
---------------------------------------------------------------
GrafTech International Ltd. (NYSE:GTI) announced the pricing of
its Rule 144A private offering of $180 million aggregate principal
amount of 1.625 percent convertible senior debentures.
The debentures will mature in 2024, unless previously converted,
redeemed or repurchased. The size of the offering was increased
from the $125 million aggregate principal amount previously
announced. The closing of the offering is expected to take place
on January 22, 2004. The issue price of the debentures is 100
percent of principal amount, plus accrued interest from January
22, 2004, if any. In addition, the initial purchasers will have
the option to purchase up to an additional $45 million aggregate
principal amount of debentures.
GrafTech intends to use the net proceeds from the offering to
repay approximately $21 million of term loans outstanding under
its principal senior secured credit facilities, to pay
approximately $49 million toward the antitrust fine assessed by
the European Union in July 2001, and the balance for general
corporate purposes, including strategic acquisitions that are
complementary to its businesses and approximately $46 million to
reduce accounts receivable factoring.
The debentures are convertible into GrafTech common stock at an
initial conversion rate of 60.3136 shares per $1,000 principal
amount (equal to an initial conversion price of approximately
$16.58 per share) if the price of GrafTech's common stock exceeds
125% of the conversion price (or $20.73 per share) for specified
periods or the debentures are called for redemption by GrafTech
and upon other customary events. The conversion rate is subject to
customary anti-dilution adjustments.
Prior to January 2011, GrafTech may redeem the debentures for
cash, if the price of GrafTech's common stock exceeds 125% of the
conversion price for specified periods. Beginning in January 2011,
GrafTech may redeem the debentures at any time for cash.
Holders of the debentures may require GrafTech to repurchase their
debentures in January of 2011, 2014 or 2019 or if GrafTech
experiences a change in control or other customary events.
The debentures and the shares of common stock issuable upon
conversion, redemption or repurchase thereof have not been and may
not be offered or sold in the United States absent registration
under the Securities Act of 1933 or an applicable exemption from
the registration requirements of the Securities Act of 1933.
This press release is not an offer to sell or the solicitation of
an offer to buy, nor shall there be any sale of, these securities
in any state or jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification
under the securities laws of any such state or jurisdiction.
GrafTech International Ltd. -- whose September 30, 2003 balance
sheet shows a total shareholders' equity deficit of about $306
million -- is one of the world's largest manufacturers and
providers of high quality synthetic and natural graphite and
carbon based products and technical and research and development
services, with customers in more than 70 countries engaged in the
manufacture of steel, aluminum, silicon metal, automotive products
and electronics.
HAYES LEMMERZ: Buys Certain Assets from Hayes Wheels de Mexico
--------------------------------------------------------------
Hayes Lemmerz International, Inc. (Nasdaq: HAYZ) purchased certain
assets from Hayes Wheels de Mexico, S.A. de C.V. and sold its
equity interest in Hayes Wheels de Mexico, S.A. de C.V., to DESC,
S.A. de C.V. (NYSE: DES).
Under terms of the agreement, Hayes Lemmerz purchased certain
assets from Hayes Wheels Aluminio, S.A. de C.V., which operated a
cast aluminum wheel plant in Chihuahua, Mexico. The Chihuahua
aluminum wheel plant has been renamed "Hayes Lemmerz Aluminio, S.
de R.L. de C.V." and will be part of Hayes Lemmerz' International
Wheel Group. Hayes Lemmerz also sold its 40% equity interest in
Hayes Wheels de Mexico to DESC, which owned a majority interest in
the joint venture.
"We view this transaction as a key step in our strategy to focus
on the growth market for aluminum wheels. We will continue to
work closely with our customers to enhance our relationships and
continue to strengthen our operations for continued high quality
production," said Fred Bentley, President of Hayes Lemmerz'
International Wheel Group.
Hayes Lemmerz International, Inc. is a world leading global
supplier of automotive and commercial highway wheels, brakes,
powertrain, suspension, structural and other lightweight
components. The Company has 44 plants and approximately 11,000
employees worldwide. For more information about Hayes Lemmerz
International, visit the Company's Web site at
http://www.hayes-lemmerz.com/
HAYES LEMMERZ: HLI Trust Wants Skadden Arps to Turn Over Docs.
--------------------------------------------------------------
In accordance with the Hayes Lemmerz Debtors' confirmed Plan and
the Trust Agreement, the HLI Creditor Trust was created to
litigate the Trust Claims on behalf of, and for the benefit of,
the Trust's beneficiaries.
As part of its duties, the Trust determined that to enable it to
zealously prosecute certain of the Trust Claims, it needs to
review documents prepared by the Debtors' former counsel --
Skadden, Arps, Slate, Meagher & Flom LLP. These documents were
prepared in the course of Skadden Arps' investigation of the Trust
Claims, prior to the vesting of the claims in the Trust under the
provisions of the Plan and Confirmation Order.
William F. Taylor, Esq., at McCarter & English, LLP, in
Wilmington, Delaware, asserts that under the Plan and the
Confirmation Order, the documents are property of the Trust.
However, Skadden Arps refuses to turn over the documents. Since
Skadden Arps' refusal interferes with the Plan's implementation,
the Trust asks the Court to compel Skadden Arps to immediately
turn over the documents.
The Court should compel Skadden to hand over the documents, Mr.
Taylor says, to enable the Trust to prosecute the Trust Claims in
accordance with Section 1142(b) of the Bankruptcy Code. The
Trust, as legal successor to the Debtors as to the Trust Claims,
is entitled to all of the documents generated during Skadden
Arps' representation of the Debtors. The duties that Skadden
Arps owes under state law to the Debtors are now owed to the
Trust. And one of the duties is to deliver to the Trust all
documents generated during the course of the former
representation.
The jurisprudence in Sage Realty Corp v. Proskauer Goetz &
Mendelsohn LLP states that when the representation ends, a former
client has the right to review and copy the file prepared by
counsel during the representation, unless counsel shows
substantial grounds for denial.
Reorganized Debtors and Skadden Object
J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP,
in Chicago, Illinois, informs Judge Walrath that what the Trust
really seeks is Skadden Arps' attorney work product, generated in
connection with the Audit Committee's Restatement investigation.
These are highly sensitive and confidential work product
documents, Mr. Ivester asserts.
The dispute first arose when the Trust demanded Skadden Arps'
attorney work product from the Audit Committee Restatement
investigation -- specifically the notes and memoranda prepared by
Skadden Arps lawyers who interviewed Hayes personnel. Skadden
Arps consistently declined to provide these documents to others
that have requested them, including the Securities and Exchange
Commission staff and the Creditors Committee advisors
investigating the Restatement issues, as well as the plaintiffs
in the federal securities class action lawsuits concerning the
Restatement. No one outside Skadden Arps, not even the
Reorganized Debtors, has ever seen them.
According to Mr. Ivester, there is no truth as to the allegation
that the Reorganized Debtors and Skadden Arps failed to cooperate
with the Trust, thus, interfering in its duties under the Plan,
because the Reorganized Debtors' representatives have:
* met with the Trustee and his counsel on several occasions;
* exchanged countless telephone calls, e-mails, letters and
other correspondence with the Trustee and his counsel;
* produced numerous confidential documents -- more than
120,000 documents on the Restatement issues alone -- to the
Trustee and his counsel, and prepared and provided indexes
for many of the documents; and
* responded to each of the Trustee's many information
requests, often made on an expedited basis, promptly and
fully in compliance with the Plan.
Mr. Ivester argues that the Trust's non-cooperation claim makes
no economic sense because the Reorganized Debtors are priority
beneficiaries of the Trust on account of amounts advanced to the
HLI Creditor Trust. The Reorganized Debtors are entitled to
receive the first $2,000,000 recovered by the Trust to repay the
Trust Advance and another $625,000 after repayment of the Trust
Advance and Trust Expenses to repay other amounts expended by the
Reorganized Debtors pursuant to the Plan. Thus, the Reorganized
Debtors have every incentive in reasonably assisting the Trust in
pursuing the Trust Claims and have done so.
Unfortunately, the Trust has not reciprocated the Reorganized
Debtors' cooperation, Mr. Ivester says. For example, in a
May 20, 2003 Confidentiality and Joint Interest Agreement between
the Trust, the Debtors and the Creditors' Committee, the Trust
agreed to "provid[e] . . . the Reorganized Debtors with
reasonably detailed prior notice" before disclosing any
confidential information provided by Hayes. Yet, the Trust filed
dozens, perhaps hundreds, of lawsuits based on the Debtors'
confidential information without ever once providing a draft
pleading, or any other "detailed" information, to the Reorganized
Debtors for review. In one of those lawsuits -- the Trust's
Restatement complaint -- discloses the Debtors' confidential
information without prior notice to, or consent from, the
Reorganized Debtors.
Mr. Ivester further argues that:
A. The Trust has no right to Skadden's work under the Plan and
Confirmation Order.
The Trust bases its alleged entitlement to Skadden Arps'
confidential files on two legal contentions -- that the files
"are property of the Trust" and that Skadden, as "former
counsel to the Debtors," is ethically obligated to give the
files to the Trustee as successor to Skadden's "former"
clients.
Mr. Ivester asserts that the Plan and the Confirmation Order
never even mentioned the Skadden files, much less purport to
transfer ownership of the files to the Creditor Trust. While
the Reorganized Debtors were "formerly" debtors-in-possession
and Skadden was then their counsel, Skadden remains their
counsel, and they remain Skadden Arps' clients, including
"with respect to" what are now "the Trust Claims." Thus, the
rules for when counsel and client have parted ways and
disagree over entitlement to counsel's files have no
relevance, since Skadden Arps and the Reorganized Debtors
remain counsel and client and agree that the Trust has no
right to Skadden Arps' files, Mr. Ivester explains.
Nowhere does the Plan specifically direct Skadden Arps to give
its privileged and work product files to the Trustee. Nor
does it even suggest that Skadden Arps' documents are intended
to be transferred to the Trust. The "Trust Assets" and "Trust
Claims" -- the only things the Trust received under he Plan --
do not include the Skadden Arps files. Nor does the Plan give
the Trust any right of access to the Skadden files. The Plan
only requires the Reorganized Debtors to give the Trust
"reasonable access during normal business hours, upon
reasonable notice, to personnel and books and records of the
Reorganized Debtors," not those of outside counsel.
Moreover, the Trust mischaracterizes and twists the meaning
of the Confirmation Order language, Mr. Ivester remarks. The
Confirmation Order makes it clear that the Reorganized Debtors
and the Trust constitute successors, but only for purposes of
protecting any privileged communications that they may share
with each other. No provision in the Confirmation Order or
Plan requires the Reorganized Debtors to share privileged
information with the Trust.
B. The Trust has no right to Skadden's Work under state law.
The Trust's "State Law" argument is based on the false
premise that the Reorganized Debtors are "former" clients of
Skadden Arps to which the Creditor Trust is a successor. The
Trust's legal authorities are inapposite. Skadden Arps has
never been terminated as counsel to the Reorganized Debtors,
and both counsel and client agree that the Trust should not
receive the Skadden files.
C. The Risk of Prejudice
By claiming to "own" the Skadden Arps files either under the
Plan or as a purported successor-in-interest to "former"
Skadden Arps clients, the Trust assiduously avoids any
discussion of the standards that apply to efforts to compel
production of attorney work product. Mr. Ivester asserts that
a party may discover protected attorney work product only upon
showing substantial need and that the material sought or its
equivalent cannot be obtained without incurring a substantial
hardship.
The Trust cannot make the required showing. The Trust has no
substantial need for the materials because it can obtain
their equivalent without any hardship. To note, the Trust:
(a) already has the Audit Committee and Creditors Committee's
confidential reports detailing the analysis and
conclusions from their investigations of the Restatement
investigations;
(b) can interview the Hayes personnel with knowledge of the
Restatement issues;
(c) can interview the Skadden lawyers who worked on the Audit
Committee investigation; and
(d) can even interview the advisors to the Creditors
Committee who worked on its investigation.
Thus, the Trust will suffer no prejudice without Skadden Arps'
attorney work product. By contrast, if the Skadden Arps files
are to be released to the Trust, the Reorganized Debtors and the
other beneficiaries of the Trust could suffer significant
prejudice.
For these reasons, the Reorganized Debtors and Skadden Arps ask
the Court to deny the Trust's request for the transfer of the
documents. (Hayes Lemmerz Bankruptcy News, Issue No. 43;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
IMC GLOBAL: Wants to Buy Phosphate Resource's Publicly Held Units
-----------------------------------------------------------------
The Board of Directors of IMC Global Inc. (NYSE: IGL) has
authorized management of the Company to communicate a proposal to
Phosphate Resource Partners Limited Partnership (NYSE: PLP) to
acquire all of the publicly held units of PLP. Under the proposal,
each publicly held PLP unit would be converted into 0.2 shares of
IMC common stock.
IMC and PLP have previously announced an arrangement pursuant to
which Alpine Capital, L.P., Keystone, Inc. and The Anne T. and
Robert M. Bass Foundation, collectively the largest holders of PLP
units other than IMC, have agreed to support a transaction in
which all PLP publicly held units would be converted into 0.2
shares of IMC common stock.
Any transaction will be subject to, among other things, the
negotiation of a definitive merger agreement, necessary regulatory
approvals, action by the unitholders of PLP and other conditions
which are customary for transactions of this nature involving
publicly traded companies.
With 2002 revenues of $2.1 billion, IMC Global (S&P, B+ Corporate
Credit Rating, Stable) is the world's largest producer and
marketer of concentrated phosphates and potash crop nutrients for
the agricultural industry and a leading global provider of feed
ingredients for the animal nutrition industry. For more
information, visit IMC Global's Web site at
http://www.imcglobal.com/
PLP is engaged in the production and sale of phosphate crop
nutrients and animal feed ingredients. For more information,
visit the PLP Web site at http://www.phosplp.com/
INFOUSA: Fourth-Quarter and Year-End Results Show Slight Decline
----------------------------------------------------------------
The following table presents InfoUSA(R)'s (Nasdaq:IUSA) financial
results, key financial highlights of the company's operations and
selected balance sheet items for the fourth quarter and full year
of 2003:
Fiscal Fiscal
4th Qtr 4th Qtr Year Year
2002 2003 2002 2003
---- ---- ---- ----
(amounts in thousands, except per share amounts)
Net sales $74,580 $79,055 $302,516 $311,345
EBITDA 18,713 16,060 82,692 76,618
Operating income 11,671 9,351 54,557 48,550
Depreciation and amortization of
operating assets 3,701 3,319 14,773 14,573
Intangible asset amortization 3,324 3,316 13,310 13,276
Non-cash stock compensation 17 74 52 219
infoUSA bond repurchase charges 173 0 347 4,820
Net income 4,940 4,483 20,436 19,695
Total debt 190,428 139,765 190,428 139,765
Interest expense 3,497 2,047 16,059 11,547
Capital expenditures 945 1,226 4,880 6,625
RESULTS OF OPERATIONS
Vin Gupta, Chairman and CEO, infoUSA, said, "During 2003 we
achieved record revenues of $311.3 million, as well as solid
profitability. We generated this revenue growth while at the same
time maintaining healthy EBITDA margins of 25%. These margins are
lower than historical levels due to the previously announced
investments in advertising and marketing, which included hiring
more salespeople and increasing our advertising expense in order
to grow internally going forward. We are already beginning to see
the results from this effort. We had 6% revenue growth in 2003 in
our Donnelley Group. In Small Business Group, excluding Polk, we
had 7% revenue growth. We have built a strong pipeline of new
business for fiscal 2004, as evidenced by our $6 million increase
in deferred revenue during 2003."
"Our Sales Genie(R) rollout is proceeding on plan, and is gaining
acceptance among small businesses in our introductory markets of
Omaha, Nebraska and Tampa, Florida. Our consumer and SOHO product,
SalesLeadsUSA(R) is being introduced in retail stores nationwide.
We are also planning on advertising this product on TV. We are
increasing our presence at trade shows in order to promote our
sales lead and mailing list products on DVD to attendees and
exhibitors. In addition, we are transforming our company from
strictly a database company to a major provider of sales growth
products and services to small businesses on a subscription basis.
An example of this would be our New Homeowners, New Businesses,
New Movers, and Bankruptcy Filing databases, which are available
on DVD every month."
"The growth of our organization depends on quality management. In
recent months, we have recruited many high caliber executives and
upgraded our management ranks. Under Ray Butkus, the newly
appointed President of our Donnelley Group, this segment generated
record bookings and new customer wins in 2003. Rob Jelinek, a
long-time Procter & Gamble veteran, is spearheading the effort to
return our Polk City Directories business to revenue growth.
Shirlee Jacobson, a retail industry veteran, is focusing on our
retail consumer product. David Schajatovich recently joined us to
monetize our directory assistance product on the Internet. Raj
Das, our newly appointed Chief Financial Officer, is focused on
driving internal revenue growth for the company while maintaining
attractive EBITDA margins. We believe that these key executives
will help us in our growth and profitability in 2004 and beyond."
"We continued to strengthen our balance sheet throughout the year
by: first, refinancing our senior credit facilities; second,
redeeming approximately $67 million of our outstanding bonds; and
finally, using our cash flow to aggressively pay down a total of
approximately $50 million in debt. Total debt declined from $190
million at the end of 2002 to $140 million at year-end 2003. This
resulted in annual interest cost savings of over $4 million for
fiscal 2003. We used a portion of our internal cash to
successfully acquire and integrate the Yesmail business into our
core operations."
Gupta concluded, "Going forward, we are focused on internal
revenue growth, with the ultimate goal of 10% long-term revenue
growth. We have a potential market of over $10 billion and we
intend to gain market share gradually by leveraging our consumer
and business databases into many distribution channels."
Highlights of Fourth Quarter:
Net sales for the fourth quarter were $79.1 million compared to
$74.6 million for the fourth quarter of 2002. EBITDA for the
fourth quarter was $16.1 million, or 20% of net sales, compared to
$18.7 million, or 25% of net sales, for Q4 last year. Fourth
quarter GAAP earnings per share was $0.09 versus earnings per
share of $0.10 for the previous year.
Highlights of Fiscal Year 2003:
Net sales for the fiscal year 2003 were $311.3 million compared to
$302.5 million for 2002. EBITDA for 2003 was $76.6 million, or 25%
of net sales, versus $82.7 million, or 27% of net sales, the
previous year. The reduction in 2002 EBITDA is primarily the
result of an increase in selling and marketing expenditures in the
second half of fiscal year. Fiscal year 2003 operating income was
$48.6 million, or 16% of net sales, compared to $54.6 million, or
18% of net sales. Fiscal 2003 earnings per share were $0.38
compared to $0.40 for the previous year. The reduction in EPS
resulted from a combination of lower EBITDA margins due to
increased advertising and marketing expense and special charges of
approximately $8 million from a litigation settlement charge, bond
redemption, and debt refinancing costs.
OPERATING HIGHLIGHTS
The Donnelley Group (Large Business Group)
The Donnelley Group, previously known as the Large Business Group,
reported fourth quarter 2003 revenues of $41.4 million versus
$36.2 million for the comparable quarter of the prior year, and
full year revenues of $156.0 million versus $146.8 million. The
group has a strong pipeline of new business going into 2004, as
evidenced by $6 million increase in deferred revenue during 2003.
The group has been able to grow its revenue base from the addition
of new products and services, particularly in the e-mail marketing
space. Under Ray Butkus, the new President of The Donnelley Group,
the group has reorganized the sales force, positioned the business
to sell a higher percentage of our high margin, proprietary data,
and implemented a team marketing approach that will encourage
revenue growth and increased market share. Fiscal 2003 was a
strong year for The Donnelley Group in terms of acquiring new
customers. Going forward, the group will continue to focus on
profitable revenue growth and new client acquisition.
The infoUSA Group (Small Business Group)
The infoUSA Group reported 2003 fourth quarter revenues of $37.6
million, versus $38.3 million last year. For fiscal year 2003,
this group had revenue of $155.4 million, versus $155.7 million
last year. The primary reason for the slight decline in revenues
was the weakness in the Polk City Directories business. Excluding
Polk, the group experienced a 7% revenue growth in fiscal year
2003 versus 2002. As previously announced, Rob Jelinek has been
appointed as the new general manager for Polk. He is successfully
implementing his plan to grow revenue by bundling the company's
printed directories with DVD and Internet access for the Polk City
Directories, at an affordable monthly subscription price. The
subscription price will include many new features including
frequent updates, greater selection features and downloadable
information. As such, Polk City Directories have been re-
engineered from strictly a reference tool for small businesses to
a total sales and marketing solution.
The infoUSA Group consists of approximately 20 small business
units that offer directory products, vertical industry databases,
online mailing lists and marketing leads, and retail consumer
products. We have competent managers running their own small
businesses who are motivated and incentivized to produce 10% plus
revenue growth.
OUTLOOK FOR FISCAL 2004
infoUSA management feels optimistic about continuing to execute on
its current product and marketing strategies to drive organic
revenue growth while producing healthy EBITDA margins and earnings
per share. In fiscal 2004, the company expects to generate
revenues of $325 million and earnings per share of $0.60.
infoUSA -- http://www.infoUSA.com/-- (S&P, BB Corporate Credit
Rating, Stable), founded in 1972, is the leading provider of
business and consumer information products, database marketing
services, data processing services and sales and marketing
solutions. Content is the essential ingredient in every marketing
program, and infoUSA has the most comprehensive data in the
industry, and is the only company to own a proprietary database of
250 million consumers and 14 million businesses under one roof.
The infoUSA database powers the directory services of the top
Internet traffic-generating sites, including Yahoo! (Nasdaq:YHOO)
and America Online (NYSE:AOL). Nearly 3 million customers use
infoUSA's products and services to find new customers, grow their
sales, and for other direct marketing, telemarketing, customer
analysis and credit reference purposes. infoUSA headquarters are
located at 5711 S. 86th Circle, Omaha, NE 68127 and can be
contacted at (402) 593-4500.
INSCI CORP: Annual Shareholders' Meeting to Convene on Jan. 29
--------------------------------------------------------------
The Annual Meeting of Stockholders of INSCI Corp. will be held at
the Company's new headquarters at One Research Drive, Westborough,
MA 01581, on January 29, 2004, at 10 a.m., for the following
purposes:
(1) To elect ten (10) Directors to serve for the ensuing year or
until their successors are elected and have been qualified.
(2) To ratify the appointment of Goldstein and Morris Certified
Public Accountants as the independent public accountants for
the Company's fiscal year ended March 31, 2003.
(3) To ratify and approve the Board of Directors' resolution to
increase the authorized number of stock options under the
Company's 1997 Equity Incentive Plan to 3,000,000 shares on a
post split basis.
(4) Such other business as may be properly brought before the
meeting or any adjournments thereof.
Only those shareholders who were shareholders of record at the
close of business on December 23, 2003 will be entitled to notice
of, and to vote at, the Meeting or any adjournment thereof.
INSCI Corp. (OTC Bulletin Board: INCCV) is a leading provider of
solutions for the enterprise content management (ECM) market.
INSCI's technology provides a strong foundation enabling companies
to manage the full spectrum of enterprise content, from documents
to e-mail, graphics and video. INSCI's ESP+ Solutions Suite
enables financial services companies, call centers, health
insurance organizations, utilities and government to provide
Internet-based access for virtually unlimited users to their
banking and financial statements, customer bills and similar
content.
INSCI's WebWare Digital Asset Management (DAM) products provide a
powerful media services platform for integrating rich media into
enterprise content management systems, marketing and communication
portals, web publishing systems, and e-commerce portals. WebWare
was named by eContent Magazine in its 2002 eContent 100 list of
leading digital content industry companies, and recently was named
the 2003 Product of the Year for excellence in information and
communication technology by industry analysts Frost & Sullivan.
The award will be formally presented in 2004.
For more information about INSCI, visit http://www.insci.com/
At June 30, 2003, INSCI Corp.'s balance sheet shows a working
capital deficit of about $2 million, and a total shareholders'
equity deficit of about $3 million.
IRON MOUNTAIN: Prices 7.25% Senior Subordinated Note Offering
-------------------------------------------------------------
Iron Mountain Incorporated (NYSE: IRM), the leader in records and
information management services, priced a private placement of GBP
150 million in aggregate principal amount of its 7.25% Senior
Subordinated Notes due 2014.
The notes will be sold at 100.0% of par. The net proceeds to the
Company are expected to be GBP 146.9 million, after paying the
initial purchasers' discounts and commissions and estimated
expenses, and will be used to fund the previously announced
acquisition of Mentmore plc's 49.9% equity interest in Iron
Mountain Europe Limited for total consideration of GBP 82.5
million, which includes the related repayment of trade and working
capital funding owed to Mentmore by Iron Mountain Europe, and for
general corporate purposes, including the possible repayment of
outstanding borrowings under its revolving credit facility, the
possible repayment of other indebtedness and possible future
acquisitions and investments. The closing of the offering is
expected to occur on January 22, 2004 and is subject to customary
closing conditions.
The notes are being sold only to qualified institutional buyers
under Rule 144A and to persons outside the United States under
Regulation S. The notes have not been registered under the
Securities Act of 1933 or under the securities laws of any other
jurisdiction, and, unless so registered under the Securities Act
of 1933, may not be offered or sold in the United States except
pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act and applicable
state securities laws.
Iron Mountain Incorporated (S&P, BB- Corporate Credit Rating,
Stable) is the world's trusted partner for outsourced records and
information management services. Founded in 1951, the Company has
grown to service more than 150,000 customer accounts throughout
the United States, Canada, Europe and Latin America. Iron Mountain
offers records management services for both physical and digital
media, disaster recovery support services and consulting services
-- services that help businesses save money and manage risks
associated with legal and regulatory compliance, protection of
vital information, and business continuity challenges. For more
information, visit http://www.ironmountain.com/
ISLE OF CAPRI: Elects John Brackenbury to Board of Directors
------------------------------------------------------------
Isle of Capri Casinos, Inc. (Nasdaq: ISLE) elected John
Brackenbury, C.B.E., of London, England, to its board of
directors.
Brackenbury joins the company's board as it continues its
expansion into the United Kingdom as the first U.S. company to
have received approval to own a casino in that country.
As a result of his election, the majority of the company's board
of directors will now consist of independent directors.
Brackenbury, who has worked in the United Kingdom hospitality and
leisure industry since 1955, currently holds several board
positions with U.K. companies. He previously was chairman and
major owner of Pubmaster, Britain's third largest tenanted pub
company, for more than a decade.
He is also chairman of Business in Sport and Leisure, which is
currently compiling responses for the U.K. Gaming reform, chairman
of the Hospitality Training Foundation, senior non-executive
director of SFI Group PLC, chairman of Avanti Communications and
director for Holsten PLC. He also serves as chairman elect of
People First, the sector skills council for the hospitality,
leisure, travel and tourism industries.
Brackenbury is owner of Brackenbury Leisure Ltd., a leisure
industry consulting firm. During Brackenbury's career, he spent
many years with International Distillers and Vintners and served
as a founding director and shareholder of the Happy Eater for 16
years. He also held the position of chief executive of Marriott
Watney International, a company formed to bring the Marriott
Corporation into Europe.
In 2000, Brackenbury was honored with the Commander of the British
Empire award for his services to tourism, education and
employment. A native of London, England, Brackenbury is a member
of the Duke of Edinburgh Award Charter, Lord's Taverners and the
British Institute of Innkeeping.
"Changing the board composition to a majority of independent
directors is an important step and is reflective of our growth as
a company. We are excited that John has chosen to join our Board.
He brings a wealth of experience in the leisure and entertainment
industry and will bring invaluable advice and experience to our
expansion in the United Kingdom," said Bernard Goldstein, chairman
and chief executive officer of the company.
Brackenbury said, "Having been instrumental in bringing the
Marriott Corporation into Europe, I look forward to advising the
Isle of Capri on their strategy and development within Europe."
Isle of Capri Casinos, Inc. (S&P, B+ Corporate Credit Rating,
Stable) owns and operates 15 riverboat, dockside and land-based
casinos at 14 locations, including Biloxi, Vicksburg, Lula and
Natchez, Mississippi; Bossier City and Lake Charles (two
riverboats), Louisiana; Black Hawk (two land-based casinos) and
Cripple Creek, Colorado; Bettendorf, Davenport and Marquette,
Iowa; and Kansas City and Boonville, Missouri. The company also
operates Pompano Park Harness Racing Track in Pompano Beach,
Florida.
ISTAR FINANCIAL: Agrees to Sell $350 Million of 4.875% Sr. Notes
----------------------------------------------------------------
iStar Financial Inc. (NYSE: SFI) agreed to sell $350 million of
4.875% Senior Notes due 2009 to qualified institutional investors
in a transaction complying with Securities and Exchange Commission
Rule 144A. The Notes are being sold at 99.892% of their principal
amount to yield 4.90% per annum. The transaction is expected to
close on January 23, 2004.
iStar Financial expects to use the proceeds from the sale of the
Notes to repay secured indebtedness.
iStar Financial (Fitch, BB Preferred Share Rating, Stable Outlook)
is the leading publicly traded finance company focused on the
commercial real estate industry. The Company provides custom-
tailored financing to high-end private and corporate owners of
real estate nationwide, including senior and junior mortgage debt,
senior, mezzanine and subordinated corporate capital, and
corporate net lease financing. The Company, which is
taxed as a real estate investment trust, seeks to deliver a strong
dividend and superior risk-adjusted returns on equity to
shareholders by providing innovative and value-added financing
solutions to its customers. Additional information on iStar
Financial is available on the Company's Web site at
http://www.istarfinancial.com/
IT GROUP: Court Sets Exclusivity Extension Hearing for Feb. 23
--------------------------------------------------------------
Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in Wilmington, Delaware, recounts that the IT Group Debtors
and the Official Committee of Unsecured Creditors filed their
Joint Plan of Reorganization and Disclosure Statement on
December 17, 2003.
A hearing to consider the approval of the Disclosure Statement is
scheduled for January 20, 2004.
To this end, Mr. Galardi asserts that the Debtors need additional
time to obtain approval of the Disclosure Statement and solicit
votes on the Plan, without the distraction and expense of
competing plans filed by other parties-in-interest. Hence, the
Debtors ask the Court to further extend their Exclusive Plan
Proposal Period to March 8, 2004, and their Solicitation Period
to April 5, 2004.
Moreover, the Debtors face unresolved complex issues, which
include the resolution of certain environmental and insurance
matters in connection with their business operations at the
Northern California Sites, as well as environmental and tax
issues relating to property owned by Debtor Woodbury Creek, Inc.
Thus, Mr. Galardi tells the Court, a 60-day extension is
reasonable.
Judge Walrath will convene a hearing on February 23, 2004 at 9:30
a.m. to consider the Debtors' request. By application of
Delaware Local Rule 9006-2, the Debtors' Exclusive Periods are
automatically extended until the conclusion of that hearing.
Headquartered in Monroeville, Pennsylvania, The IT Group, Inc. --
http://www.theitgroup.com/-- together with its 92 direct and
indirect subsidiaries, is a leading provider of diversified,
value-added services in the areas of consulting, engineering and
construction, remediation, and facilities management. The Company
filed for chapter 11 protection on January 16, 2002 (Bankr. Del.
Case No. 02-10118). David S. Kurtz, Esq., at Skadden Arps Slate
Meagher & Flom, represents the Debtors in their restructuring
efforts. On September 30, 2001, the Debtors listed $1,344,800,000
in assets and 1,086,500,000 in debts. (IT Group Bankruptcy News,
Issue No. 39; Bankruptcy Creditors' Service, Inc., 215/945-7000)
JACKSON PRODUCTS: Case Summary & 105 Largest Unsecured Creditors
----------------------------------------------------------------
Lead Debtor: Jackson Products, Inc.
801 Corporate Centre Dr.
St. Charles, Missouri 63304
Bankruptcy Case No.: 04-40448
Debtors affiliate filing separate chapter 11 petitions:
Entity Case No.
------ --------
American Allsafe Company 04-40451
Flex-O-Lite, Inc. 04-40452
Silencio-Safety Direct, Inc. 04-40453
TMT-Pathway, L.L.C. 04-40454
Type of Business: The Debtor designs, manufactures and
distributes safety products of personal
protective wear including hard hats, safety
glasses, hearing protectors and welding masks.
Parent holding company with high tech
operating units involved in liquid-crystal
displays and industrial reflective glass beads.
See http://www.jacksonproducts.com/
Chapter 11 Petition Date: January 12, 2004
Court: Eastern District of Missouri (St. Louis)
Judge: Barry S. Schermer
Debtors' Counsels: Holly J. Warrington, Esq.
William L. Wallander, Esq.
Vinson and Elkins LLP
3700 Trammell Crow Center
2001 Ross Avenue
Dallas, TX 75201-2975
- and -
Peter D. Kerth, Esq.
Gallop, Johnson & Neuman, L.C.
101 South Hanley, Suite 1600
Saint Louis, MO 63105
Tel: 314-615-6000
Estimated Assets Estimated Debts
---------------- ---------------
Jackson Products Inc. More than $100 M More than $100 M
American Allsafe Company $10 M to $50 M $1 M to $10 M
Flex-O-Lite, Inc. $10 M to $50 M $1 M to $10 M
Silencio-Safety Direct, Inc. $1 M to $10 M $500,000 to $1 M
TMT-Pathway, L.L.C. $10 M to $50 M $10 M to $50 M
A. Jackson Products Inc.'s 25 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
The Bank of New York Subordinated Note $38,166,000
One Wall Street Custodian
New York, NY 10286
ABN AMRO Incorporated Subordinated Note $24,480,000
Park Avenue Custodian
55 East 42nd Streetx
New York, NY 10055
JPMorgan Chase Bank Subordinated Note $20,545,000
Proxy/Class Actions/ Custodian
Bankruptcy
14201 Dallas Pkwy
Dallas, TX 75254
Citibank NA Subordinated Note $20,475,500
3800 Citibank Center, B3-15 Custodian
Tampa, FL 33610
Bear Stearns Securities Subordinated Note $7,170,000
One Metrotech Center North Custodian
4th Floor
Brooklyn, NY 11201-3862
Goldman, Sachs & Co. Subordinated Note $3,000,000
180 Maiden Lane Custodian
New York, NY 10038
Morgan Stanley & Co. Inc. Subordinated Note $1,000,000
One Pierreport Plaza Custodian
Brooklyn, NY 11201
Total Plastics Trade $370,811
1652 Gezon Park
Grand Rapids, MI 49509
Safari Technologies, Inc. Trade $173,324
Jefferies & Company, Inc. Subordinated Note $163,000
Custodian
UnaxiS Trade $151,502
GE Polymerland Trade $147,617
Plainfield Township Trade $96,367
Brass Aluminum Forging Trade $63,140
Bonvuele Display Ltd. Trade $50,303
Dienetics Trade $41,994
Ponderosa International Trade $39,994
Precision Ploymer Trade $39,000
Rangers Die Casting Co. Trade $34,809
Repco Trade $34,608
Delcon Industries, Inc. Trade $30,571
Paulson Manufacturing Trade $29,652
Computer Associates Trade $28,602
International, Inc.
Mack Products Trade $27,292
Pummill Business Form Inc. Trade $25,891
B. American Allsafe Company's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Gazell Corp, 4F 68 Trade $90,895
Moldex-Metric, Inc. Trade $88,553
Green Mountain Knitting Trade $34,662
Semco Trade $29,171
Lawrence Schiff Silk Mill Trade $24,674
Safe Cross First Aid Ltd. Trade $23,928
Quiller & Blake Trade $21,250
Hellberg Stakebergsvagen Trade $17,390
Packaging Services of Trade $17,089
Maryland
ASWAN Trade $15,735
Degil Safety Products Trade $13,888
Spontex, Inc. Trade $13,488
Caribbean Safety Products Trade $12,846
Mod-Pac Corporation Trade $10,673
Repco Trade $9,828
Mr. Chain Trade $9,800
Automated Packaging Sys. Trade $8,486
Safety Products Trade $8,000
Teknor Color Company Trade $7,998
Safety Equipment Institute Trade $7,362
C. Flex-O-Lite, Inc.'s 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Custom Tailored Mfg Trade $309,691
530 Wood Street Suite B
Bristol, RI 02809-2310
Strategic Materials Trade $230,211
Engineering America Trade $213,558
CPM Industries Trade $166,773
Dlubak Glass Trade $126,440
New Reflection Tech Trade $71,701
Reflexite Corp. Trade $58,514
Semco Plastics Trade $52,825
Chemical Products Trade $51,857
3M SAJ Trade $45,602
Eastman Chemical Co. Trade $44,460
Air Liquide Canada Trade $43,146
Three D Traffic Work Trade $37,400
Bommarito Ind Sales Trade $34,233
Avery Dennison Trade $26,965
Orion Safety Products Trade $24,104
Conwed Plastics Trade $23,657
ExoPack, LLC Trade $21,716
GNR Technologies Trade $21,164
Tenax Corp. Trade $2,028
D. Silencio-Safety Direct, Inc's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
ASWAN Trade $57,730
Advanced Plastic Mold. Trade $38,681
Stephen Gould Corp. Trade $32,468
Reno Forklift Storage Sys. Trade $15,320
Card Pak Inc. Trade $7,764
Western Metal Finishing Trade $7,102
Macfarlane Western Foam Trade $6,900
Cutting Edge Machining Trade $4,696
Perfectseal/Bemis Trade $4,592
Hellberg Trade $3,950
Merrills Packaging Inc. Trade $3,869
Packaging Concepts, Inc. Trade $3,654
Publisher's Dev. Corp. Trade $3,316
Nev-Cal Transportation Trade $2,813
Polyone Engineered Films Trade $2,811
Display Pack, Inc. Trade $2,704
Glasforms, Inc. Trade $2,689
V.B. Ross Corp. Trade $2,540
Able Industrial Prod. Trade $2,520
Grandview Media Group Trade $2,500
E. TMT-Pathway, L.L.C.'s 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Rohm and Haas Company-LA Trade $153,786
OMYA (California) Inc Trade $65,226
Norton Packaging Inc-LA Trade $54,413
Ingersoll-Rand Fluid Trade $33,901
Products
Brenntag West Inc. Trade $22,123
Univar USA Inc Trade $20,958
Air Products And Chemicals Trade $17,608
Inc.
Fluid Connector Trade $13,794
Products-Equip
Clariant Corporation Trade $13,543
Potters Industries Inc-LA Trade $10,212
Rohm America LLC (degussa) Trade $8,010
Shield Pack Inc. Trade $6,881
Skip-Line Inc. Trade $6,550
Pacific Power Tech LLC Trade $4,329
Napa Auto Parts - Salem Trade $4,210
Graco Inc. Trade $3,883
US Bearings & Drive Trade $3,692
Martin Metal Fabricators Inc Trade $3,560
Industrial Container Service Trade $3,176
Mayzo Trade $2,810
JACKSON PRODUCTS: Court to Consider Prepack. Plan on January 28
---------------------------------------------------------------
Jackson Products, Inc., received interim court approval of a $10
million debtor-in- possession credit facility. Jackson Products
has also received approval of its "first day motions" from the
U.S. Bankruptcy Court for the Eastern District of Missouri,
including authorization to continue paying pre-petition and post-
petition suppliers and vendors without interruption.
The company's prepackaged plan of reorganization has been set for
confirmation hearing on January 28, 2004. The prepackaged plan of
reorganization has been overwhelmingly accepted by creditors
representing 90% of its 9.5% senior subordinated notes due 2005,
and 100% of the holders submitting votes, representing 94% of its
15% secured senior subordinated notes due 2004.
"We are pleased with the prompt approval by the court of our key
'first day motions,' which will allow us to continue to operate
without interruption and meet our normal business obligations,"
said David Gilchrist, Jackson Products' President and Chief
Executive Officer.
Gilchrist added, "We are maintaining our commitment to provide
quality goods and services to our customers, and are pleased that
the date set for the hearing to approve our prepackaged plan is
consistent with our goal to complete the process in mid-February
2004."
Jackson Products designs, manufactures and distributes safety
products and serves a variety of niche applications within the
personal and highway safety markets, principally throughout North
America and in Europe. Jackson Products markets its products under
established, well-known brand names to an extensive network of
distributors, wholesalers, contractors and government agencies.
Jackson Products currently has two reportable business segments:
Personal Safety Products and Highway Safety Products.
KAISER ALUMINUM: Wants Go-Signal to Modify Retiree Benefits Plan
----------------------------------------------------------------
The Kaiser Aluminum Debtors seek the Court's authority under
Section 1114 of the Bankruptcy Code to modify existing plans,
funds and programs maintained or established by Kaiser Aluminum
and Chemical Corporation and Kaiser Bellwood Corporation before
the Petition Date for retirees represented by the United
Steelworkers of America, the International Association of
Machinists and Aerospace Workers and the Official Committee of
Salaried Retirees.
These plans, funds and programs provide medical, surgical,
hospital care benefits, or benefits in the event of sickness,
accident, death, or disability benefits -- including Medicare
Part B and prescription drug benefits -- for current retirees and
current employees upon retirement. The Debtors want to modify
them consistent with the recent proposals they presented to the
USWA, the IAM and the Salaried Retirees' Committee.
Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, P.A.,
in Wilmington, Delaware, explains that Section 1114 permits a
debtor to modify or terminate its retiree benefits either by
agreement with the authorized representative of the retirees of,
if the debtor and the authorized representative do not reach an
agreement, with court authorization. Section 1114 establishes
the requirements for terminating or modifying retiree benefits.
Because Section 1114 was modeled on Section 1113, the procedural
requirements for terminating or modifying retiree benefits are
essentially the same as those for rejecting a collective
bargaining agreement under Section 1113.
According to Mr. DeFranceschi, the modifications proposed by the
Debtors are "necessary" and "essential" where status quo could
not be maintained through capital investments, and faced with
reduction or liquidation. Moreover, Mr. DeFranceschi tells the
Court that if the Debtors cannot modify, or terminate, the
Retiree Benefit Plans, the Debtors will be unable to reorganize
and emerge from their Chapter 11 cases as viable entities.
Despite the Debtors' exhaustive efforts to preserve and enhance
liquidity and improve their operations -- obtaining additional
financing, including obtaining additional availability under
existing financing, selling non-strategic assets, implementing
over $130,000,000 in cost-cutting measures -- the Debtors'
businesses remain significantly cash flow negative.
Mr. DeFranceschi states that the Debtors' current cash
disbursements exceed cash receipts by $10,000,000 per month.
The Debtors are currently paying $60,000,000 per year in Retiree
Benefits for Salaried Retirees and Hourly Retirees. They project
that this obligation will increase substantially in future years
due to a variety of factors, including double-digit percentage
increases in medical and prescription costs and increasing life
expectancies of covered individuals. As of January 1, 2003, the
Debtors' Accumulated Postretirement Benefit Obligation
approximated $790,000,000 for Salaried Retirees and Hourly
Retirees. Of this amount, $675,000,000 relate to the Hourly
Retirees.
As of January 1, 2003, the Debtors' total unfounded liability for
the Hourly Plans was $97,865,000. The Debtors have not made and
will not make minimum contributions to the Hourly Plans totaling
$47,845,233 that were and will become due in respect to the 2003
plan year.
The Debtors propose the termination of the existing Retiree
Benefit plans and the establishment of one or more Voluntary
Employee Benefit Associations to provide medical and life
insurance benefits for the various retiree constituencies. The
Debtors estimate that the costs to their estates of terminating
the Hourly Plans and implementing the replacement plan will
approximate $20,000,000 over the five-year period from 2004
through 2009.
The funding mechanism for VEBA provides that the retiree benefit
fund to be created in lieu of the existing Retiree Benefit Plans
will receive contributions from the Debtors. Under the Debtors'
proposal to the USWA, the VEBA will be funded by:
(a) an initial lump sum payment determined by taking the
average monthly costs of providing retiree benefits to the
relevant constituent group and multiplying that cost by
the number of full months before May 31, 2004 that the
retiree benefit plans are terminated before May 31, 2004;
(b) a variable contribution of a percentage of the Debtors'
Adjusted After-Tax Cash Flow, made up of a contribution of
7.5% of AATCF between $10,000,000 and $20,000,000 plus
15% of all AATCF in excess of $20,000,000; and
(c) a contribution on the effective date of a reorganization
plan based on the residual value of the Debtors.
The Debtors' Proposals to the Salaried Retirees Committee and the
IAM are comparable, though different in some respects -- such as
the variable contribution and percentage of residual value -- due
in part to the relative progress of the negotiations with those
groups.
Mr. DeFranceschi states that the Proposals are designed to ensure
that the Hourly and Salaried Retirees receive, on a pro rata
basis, the substantial majority of the remaining value of the
Debtors after satisfaction of administrative, priority, and
secured claims and amounts necessary to establish trusts for the
potential Debtors' tort liability claims. Absent the
modification of the Retiree Benefits and in the event the Debtors
liquidate, retirees stand to receive substantially lower recovery
than they would receive based on the Proposal.
Headquartered in Houston, Texas, Kaiser Aluminum Corporation
operates in all principal aspects of the aluminum industry,
including mining bauxite; refining bauxite into alumina;
production of primary aluminum from alumina; and manufacturing
fabricated and semi-fabricated aluminum products. The Company
filed for chapter 11 protection on February 12, 2002 (Bankr. Del.
Case No. 02-10429). Corinne Ball, Esq., at Jones, Day, Reavis &
Pogue, represents the Debtors in their restructuring efforts. On
September 30, 2001, the Company listed $3,364,300,000 in assets
and $3,129,400,000 in debts. (Kaiser Bankruptcy News, Issue No.
37; Bankruptcy Creditors' Service, Inc., 215/945-7000)
KB HOME: Fitch Assigns 'BB+' Rating to $250 Million Debt Issue
--------------------------------------------------------------
Fitch Ratings assigned a 'BB+' rating to KB Home's (NYSE: KBH)
$250 million, 5.75% senior subordinated notes due February 1,
2014. The Rating Outlook is Positive.
Proceeds from the new debt issue will be largely used to pay down
bank debt in the short term and for other corporate purposes. $175
million of 7-3/4% senior notes will mature later in the year.
The current ratings and Outlook reflect KB Home's solid,
consistent profit performance in recent years and the expectation
that the company's credit profile will continue to improve as it
executes its business model and embarks on a new period of growth.
The ratings also take into account the company's primary focus on
entry-level and first-step trade-up housing (the deepest segments
of the market), its conservative building practices, and effective
utilization of return on invested capital criteria as a key
element of its operating model. Over recent years the company has
improved its capital structure and increased its geographic
diversity and has better positioned itself to withstand a
meaningful housing downturn. Fitch also has taken note of KB
Home's role as an active consolidator within the industry. Risk
factors also include the cyclical nature of the homebuilding
industry. Fitch expects leverage (excluding financial services) to
remain comfortably within KB Home's stated debt to capital target
of 45%-55%.
The company has expanded EBITDA margins over the past several
years on steady price increases, volume improvements and
reductions in SG&A expenses. Also, KB Home has produced record
levels of home closings, orders and backlog as the housing cycle
extended its upward momentum. KB Home realizes a significant
portion of its revenue from California, a region that has proved
volatile in past cycles. But the company has reduced this exposure
as it has implemented its growth strategy and currently sources
approximately 20% of its deliveries from California, compared with
69% in fiscal 1995. Over recent years KB Home shifted toward a
presale strategy, producing a higher backlog/delivery ratio and
reducing the risk of excess inventory and debt accumulation in the
event of a slowdown in new orders. The strategy has also served to
enhance margins. The company maintains a 4.2 year supply of lots
(based on deliveries management has projected for 2004), 47.4% of
which are owned and the balance controlled through options.
Inventory turnover has been consistently at or above 1.7 times
during the past seven years.
Balance sheet liquidity has continued to improve as a result of
efforts to reduce long-dated inventories, quicken inventory turns
and improve returns on capital. Progress in these areas has
allowed the company to accelerate deliveries without excessively
burdening the balance sheet.
As the housing cycle progresses, creditors should benefit from KB
Home's solid financial flexibility supported by cash and
equivalents of $116.6 million and $892.9 million available under
its $1 billion domestic unsecured credit facility (before
adjusting for $89.7 million of letters of credit) as of November
30, 2003. In addition, liquid, primarily pre-sold work-in-process
inventory totaling an estimated $2.3 billion provides comfortable
coverage for construction debt. As noted earlier, $175 million in
senior notes mature in 2004, but the balance of debt is well
laddered and the new $1 billion revolving credit facility matures
in four years.
Management's share repurchase strategy has been aggressive at
times, but has not impaired the company's financial flexibility.
KB Home repurchased $81.9 million of stock in fiscal 1999, $169.2
million in 2000, $190.8 million in 2002 and $108.3 million (2
million shares) in fiscal 2003. At the end of November, 2 million
shares remain under the board of directors' repurchase
authorization. Notwithstanding these repurchases, book equity has
increased $916.3 million since the end of 1999, while construction
debt grew $250.8 million. The company has had a small dividend. In
early December the board of directors sharply raised the annual
dividend from $0.30 per share to $1.00 per share - a pay out of
11.4%, based on trailing twelve months earnings. However, the cash
expenditures on dividends represent only about $40 million, based
on the current share count.
KBH has lessened its dependence on the state of California, but it
is still the company's largest market in terms of investment.
Operations are dispersed within multiple markets in the north and
in the south. During the 1990s the company entered various major
Western metropolitan markets, including Phoenix, Denver, Dallas,
Austin and San Antonio, and has risen to a top 5 ranking in each
market. In an effort to further broaden and enhance its growth
prospects it has established operations (greenfield and by
acquisition) in the southeastern U.S., including various markets
in Florida, Atlanta, Georgia, North and South Carolina. Recently,
the company entered the Midwest (Chicago) via acquisition. Fitch
recognizes the company as a consolidator in the industry, but
expects future acquisitions will be moderate in size and largely
funded through cash flow.
KMART CORP: Asks Court to Disallow $4.5MM of Unsupported Claims
---------------------------------------------------------------
The Kmart Corporation Debtors ask the U.S. Bankruptcy Court to
expunge and disallow 108 unsupported claims. The Unsupported
Claims either contain no supporting documentation or provide no
evidence of the Debtors' liability for the claim.
The amount classified as administrative is $4,219,248 while
$292,685 is classified as unsecured, for a total of $4,511,933.
(Kmart Bankruptcy News, Issue No. 67; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
KNIGHTHAWK INC: Subsidiaries File Proposal Under BIA in Canada
--------------------------------------------------------------
KnightHawk Inc.'s subsidiaries 2734141 Canada Inc. dba KnightHawk
Air Express and Kelowna Pacific Railway Ltd., have each filed a
Proposal under Part III Division I of the Bankruptcy and
Insolvency Act with the Superior Court of Ontario.
The Proposal describing the circumstances of the Companies'
financial situation was sent to the Companies' Creditors in
accordance with the applicable provisions of the BIA. As of the
date of filing of the Proposal, the Creditors have been stayed
from taking action against the Companies and the Companies have
not been placed into receivership or bankruptcy.
Creditors are expected to vote on the Proposal on Wednesday,
January 28, 2004 at the hour of 10:00 a.m.
KnightHawk is hopeful that the affairs of both air and rail
operations will be restructured such that they will both operate
on a profitable basis once the reorganization is complete.
KnightHawk provides contract rail and air cargo services,
delivering freight both domestically and transborder between
Canada and the United States, on behalf of its customers in the
North American railway and courier industries. KnightHawk's air
division operates a fleet of five aircraft, and during the past
ten years and over 40,000 flying hours has maintained an on- time
performance record of over 99%, a crucial reliability factor for
its customers.
LAIDLAW INC: Provides Info About Ongoing Litigation & Disputes
--------------------------------------------------------------
Laidlaw International Inc. Senior Vice-President and Chief
Financial Officer, Douglas A. Carty, relates that Laidlaw has no
material new cases to report. No material changes in the
previously reported proceedings have likewise occurred, except
with respect to the American Medical Response, Inc.
investigation, and the Greyhound Lines environmental liability.
AMR Dispute
During the first quarter of fiscal 2004, AMR was advised by the
United States Department of Justice that it continues to
investigate certain of AMR's business practices. These business
practices were primarily the focus of a January 4, 2002 subpoena
served on AMR by the Office of the Inspector General of the
United States Department of Health and Human Services.
Specifically, the DOJ is investigating whether:
(a) ambulance transports involving Medicare eligible patients
complied with the "medically necessary" requirement
imposed by Medicare regulations;
(b) patient signatures, when required, were properly obtained
from Medicare eligible patients; and
(c) discounts in violation of the Federal Anti-Kickback Act
were provided by AMR, in exchange for referrals involving
Medicare eligible patients.
At this juncture, Mr. Carty says, it is not possible to predict
the ultimate conclusion of the investigation, nor is it possible
to calculate any possible financial exposure to Laidlaw.
Greyhound's Environmental Issues
Laidlaw is subject to certain environmental liabilities.
Specifically, Greyhound Lines may be liable for certain
environmental liabilities and clean-up costs at the various
facilities, presently or formerly owned or leased by Greyhound
Lines.
Based on surveys conducted solely by Greyhound Lines' personnel
or experts, 36 active and seven inactive locations were
identified as sites requiring potential clean-up or remediation
as of November 30, 2003. Additionally, Greyhound Lines is
potentially liable with respect to six active and seven inactive
locations, which the EPA has designated as Superfund sites.
Greyhound Lines, as well as other parties designated by the EPA
as potentially responsible parties, face exposure for costs
related to the clean-up of those sites. Based on the EPA's
enforcement activities to date, Mr. Carty believes that Greyhound
Lines' liability at these sites will not be material because its
involvement was as a de minimis generator of wastes, disposed of
at the sites. In light of its minimal involvement, Greyhound
Lines has been negotiating to be released from liability in
return for the payment of nominal settlement amounts.
Greyhound Lines has recorded a total environmental liability of
$5,600,000 at November 30, 2003, of which $1,000,000 is
indemnifiable by the predecessor owner of Greyhound Lines'
domestic bus operations, Viad Corp. The environmental liability
relates to sites identified for potential clean-up or remediation
and the majority of this environmental liability is expected to
be paid over the next five to 10 years.
As of January 13, 2004, Laidlaw is not aware of any additional
sites to be identified, and Mr. Carty believes that adequate
accruals have been made related to all known environmental
matters. (Laidlaw Bankruptcy News, Issue No. 44; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
LEGACY HOTELS: Appoints Robert Putman as Vice President and CFO
---------------------------------------------------------------
Legacy Hotels Real Estate Investment Trust (TSX: LGY.UN) announced
the appointment of Robert M. Putman as Vice President and Chief
Financial Officer effective immediately.
"Following an extensive executive search, I am very pleased to
have Robert joining our team," said Neil Labatte, Legacy's
President and Chief Executive Officer. "Robert brings over 15
years of senior financial experience to this position. His
expertise in real estate finance will be a tremendous asset to
Legacy."
Mr. Putman most recently served as Vice President, Corporate
Finance & Treasurer for Borealis Capital Corporation. Previously,
he spent 11 years at Oxford Properties Group in several
progressive positions, including Vice President, Finance. Mr.
Putman received a Bachelor of Commerce degree from the University
of Toronto and is a Chartered Accountant.
Legacy is Canada's premier hotel real estate investment trust with
24 luxury and first-class hotels and resorts with over 10,000
guestrooms located in Canada and the United States. The portfolio
includes landmark properties such as Fairmont Le Chƒteau
Frontenac, The Fairmont Royal York, The Fairmont Empress and The
Fairmont Olympic Hotel, Seattle.
* * *
As previously reported, Standard & Poor's Ratings Services
downgraded its ratings on Legacy Hotels Real Estate Investment
Trust (Legacy REIT or the trust) to 'BB-'. At the same time, the
senior unsecured debt rating was lowered to 'B+' from 'BB+'. The
outlook is negative.
The 'BB-' long-term corporate credit rating on Legacy REIT
reflects the deterioration of its business risk profile and
financial risk profile. Legacy REIT's credit strengths include a
portfolio of good quality real estate assets and its prominent
market position. Legacy REIT's credit weaknesses include the
aggressive business and financial policies of management, weak and
deteriorating credit measures, liquidity concerns, and uncertainty
in the lodging sector in general. Standard & Poor's is concerned
with Legacy REIT's business and financial strategies given a
challenging lodging environment when it is experiencing weakening
credit measures.
LES BOUTIQUES: Canadian Court Gives Restructuring Plan Green-Light
------------------------------------------------------------------
Les Boutiques San Francisoco Incorporees announces that the
Superior Court of the Province of Quebec has granted it a court
order that will allow it to proceed with its restructuring plan.
This plan will result in the elimination of 585 jobs, 66 of which
are at head office and 36 at the Company's distribution center.
The other 483 job reductions are planned for the network of four
Les Ailes de la Mode stores, mainly at the downtown Montreal
branch. Company currently employs a total of 2,816 people.
"It is with regret that we announce these job cuts," said Gaetan
Frigon, Chief Restructuring Officer. "However, a rationalization
of staff levels was necessary to reduce administrative and sales
costs."
The business foresees a recurring reduction in its administrative
costs of $8.5 million a year as a result of the reorganization of
its administrative structure, including the decrease in staff at
head office and the distribution center, and the reduction of
advertising expenditures. Under the plan, the head office in
Boucherville will be sold and administrative staff will be housed
in offices adjacent to the Les Ailes de la Mode store in
Brossard.
Sales expenses will drop by $24 million per year. The sale of the
San Francisco and Victoire Delage/Moments Intimes banners will
result in a decrease of $17.5 million in sales costs per year.
The reduction in surface area of the Les Ailes de la Mode store
in downtown Montreal and the repositioning of the overall Les
Ailes de la Mode banner will account for savings of $6.5 million.
At the Superior Court hearing, the lawyer representing the
banking syndicate indicated that his clients supported the
restructuring plan and even alluded to the possibility of new
financing. The Corporation has an initial 60-day period to
implement the first elements of its restructuring plan.
Jean-Claude Gagnon will act as Interim Chief Operating Officer,
while Laurent Meriaux will be the Interim Chief Financial
Officer. They will report directly to Mr. Frigon.
"During the coming weeks, we will implement the initial elements
of our restructuring plan in cooperation with the Court-appointed
monitor and will continue our discussions with the Company's
partners on the elements that still need to be settled. In all
cases, we will act in the best interest of the parties involved,"
Mr. Frigon concluded.
LNR PROPERTY: Declares Quarterly Cash Dividend Payable Feb. 27
--------------------------------------------------------------
LNR Property Corporation (NYSE: LNR) declared a quarterly cash
dividend of $0.0125 per common share and $0.01125 per Class B
common share. Both dividends are payable on February 27, 2004 to
shareholders of record at the close of business on February 17,
2004.
LNR has approximately 29.7 million shares outstanding, 19.9
million of which are common stock and 9.8 million are Class B
common stock.
LNR Property Corporation (S&P, B+ Senior Subordinated Debt and BB
Long-Term Counterparty Credit Ratings, Stable Outlook) is a real
estate investment, finance and management company.
LOEWEN: Alderwoods Directors Increase Personal Stock Holdings
-------------------------------------------------------------
In recent filings with the Securities and Exchange Commission,
Charles M. Elson discloses his acquisition of an additional 184
shares of the common stock of Alderwoods Group Inc. (fka The
Loewen Group, Inc.), bringing his total holdings to 23,216 shares.
Mr. Elson is a director of AGI.
David R. Hilty, another director of AGI, reports acquiring 306
shares. Mr. Hilty now holds a total of 8,840 shares of AGI's
common stock.
Olivia F. Kirtley, another AGI Director, acquires 230 shares of
common stock of AGI, bringing her total holdings to 7,460 shares
of AGI common stock. (Loewen Bankruptcy News, Issue No. 80;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
MCCROF REALTY INC: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: McCrof Realty Inc.
1450 E. Gun Hill Road
Bronx, New York 10469
Bankruptcy Case No.: 04-10051
Type of Business: Real Estate
Chapter 11 Petition Date: January 6, 2004
Court: Southern District of New York (Manhattan)
Judge: Prudence Carter Beatty
Debtor's Counsel: Victor N. Okeke, Esq.
Law Offices of Victor N. Okeke
3550 White Plains Road Suite 7
Bronx, NY 10467
Tel: 718-653-2650
Fax: 718-653-2649
Total Assets: $1,210,000
Total Debts: $958,651
MCGUFFEY'S RESTAURANTS: Case Summary & 19 Largest Unsec. Creditors
------------------------------------------------------------------
Debtor: McGuffey's Restaurants, Inc.
370 Louisana Avenue
Asheville, North Carolina 28806
Bankruptcy Case No.: 04-10027
Type of Business: The Debtor is a Retail Full Service Restaurant.
Chapter 11 Petition Date: January 9, 2004
Court: Western District of North Carolina (Asheville)
Judge: George R. Hodges
Debtor's Counsels: Gregory B. Crampton, Esq.
Stephani W. Humrickhouse, Esq.
Nicholls & Crampton, P.A.
Post Office Box 18237
Raleigh, NC 27619
Tel: 919-781-1311
Total Assets: $2,242,419
Total Debts: $5,647,108
Debtor's 19 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Hillco Ltd. Loan (undersecured, $3,573,259
1435 Hwy 258 N. secured claim)
Kinston, NC 28504
Falls Center, LLc Judgment Pending $213,058
US Foods Trade Debt $195,548
Sysco Foods Trade Debt $105,570
Valley Hills Mall Lease $87,730
Moon River Ent. Lease $76,000
Neil Realty Lease $73,725
CBL Assoc. Anna. Lease $63,562
Gold Crown Foods Trade Debt $54,528
Lake Hickory Plaza, Inc. Lease $42,200
Ingles Markets Lease $31,500
CBL Assoc. TOA Lease $30,005
Dearborn Dev. Lease $27,039
Hull Storey Lease $25,650
Mull, Inc. Lease $25,060
Atlanta Express Trade Debt $14,740
Superior Linen Trade Debt $10,370
Overton Trade Debt $9,923
Philips and Jordon Lease $9,000
MCWATTERS: Intends to Make Proposal Under Canadian Bankruptcy Act
-----------------------------------------------------------------
McWatters filed notices of intention to make a proposal under the
Bankruptcy and Insolvency Act for itself and other members of its
group in order to receive protection from their creditors pending
the filing of a proposal to the creditors.
Investissement Quebec, a secured creditor of McWatters, has asked
the Superior Court of Quebec to issue an order appointing Raymond
Chabot Inc., the trustee under the notice of intention, as interim
receiver of McWatters, and McWatters has consented. Under the
terms of the court order, Raymond Chabot will be granted certain
specific powers, including the power to take steps to preserve and
market the assets in conjunction with management, and the power to
control the receipts and disbursements. Subject to the terms of
the court order, the board of directors and management of
McWatters will otherwise continue to assume their respective
responsibilities in the management of the business and affairs of
McWatters.
McWatters also announced that, as part of the process of marketing
the assets, it has engaged Prime Capital Finance of Australia to
find an investor interested in acquiring either a full or a
partial interest in its Sigma-Lamaque open pit operations.
McWatters will also examine all other possible alternatives which
may allow operations at its Sigma-Lamaque open pit to resume.
McWatters is required to file its proposal within thirty days
unless the delay is extended by the court. After the filing of the
proposal, a meeting of the creditors of McWatters will be
scheduled to occur within twenty-one days, at which time the
creditors of McWatters will vote on whether or not to accept the
proposal.
For further information, visit http://www.mcwatters.com/
MIRANT: Court OKs Heller Ehrman's Engagement as Special Counsel
---------------------------------------------------------------
Mirant Corp. obtained permission from the U.S. Bankruptcy Court
for the Northern District of Texas, to employ Heller Ehrman White
& McAuliffe LLP as their special counsel.
With the Court's approval, Heller will continue to serve as
project counsel to the Cayote Springs 2 project and assist with
non-bankruptcy related aspects of any sale or financing of the
Mint Farm project.
Subject to the provisions of the Bankruptcy Code, the Bankruptcy
Rules, the Local Rules and the Court orders, Heller will seek
compensation based on its customary hourly rates that are in
effect at the time the services are rendered. Heller will also
seek reimbursement of its reasonable out-of-pocket expenses.
(Mirant Bankruptcy News, Issue No. 18; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
MULTICANAL S.A.: Turns to U.S. Court to Block W.R. Huff Litigation
------------------------------------------------------------------
Buenos Aires-based cable company Multicanal S.A. is currently
seeking judicial confirmation in Argentina of an acuerdo
preventivo extrajudicial proceeding under applicable Argentine
Insolvency Law. The APE is a debt restructuring agreement
designed to enable the Debtor to effectively overcome the
financial distress that resulted from the unprecedented economic,
financial and social crisis that affected Argentina in 2001, 2002
and the early months of 2003.
Much like a prepackaged chapter 11 case, Multicanal obtains
consents from affected unsecured creditors prior to initiating the
proceeding on December 16, 2003 before the Juzgado Comercial Nø 4,
Secretaria Nø 8 (the Federal Commercial Trial Court No. 4) in and
for the city of Buenos Aires, Argentina.
On December 19, 2003, Argentinian Recovery Company, L.L.C. (an
affiliate of W.R. Huff Asset Management Co., L.L.C.) filed
lawsuits in the Supreme Court of the State of New York, County of
New York (Index Nos. 603977/03 and 603978/03), demanding monetary
judgments for principal and interest owed on certain bonds issued
by the Debtor that ARC claims to hold. In addition, in the
Lawsuits, ARC seeks to enjoin the Debtor from seeking court
confirmation of the APE, as applied to the Debtor's bond debt
allegedly owned by ARC, even if the APE has been approved by the
Debtor's creditors in the APE Proceeding. Huff has obtained a
preliminary injunction from the New York State Court.
Multicanal, like many large Argentinian companies, borrowed under
dollar-denominated debt instruments. Multicanal collects pesos
from its 95,000 subscribers. Because the peso lost 75% of its
value against the U.S. dollar when the currency floated in early
2002, the company doesn't collect enough pesos to service or repay
its debt.
J. P. Morgan Securities Inc., acting as Multicanal's financial
advisor, initiated restructuring talks with Fleet National Bank,
Citibank, Deutsche Bank, Credit Suisse First Boston, Credit
Lyonnais, Toronto Dominion, TIAA-CREF, Fintech Advisory Ltd., Orix
Capital Markets LLC, Dolphin Fund Management, Huff and other
Argentine banks in late 2002. A negotiating group representing
25% of outstanding Notes worked with J.P. Morgan to craft a plan
offering holders of up to $100 million of debt 30% in cash and
offering noteholders who didn't tender their notes for cash either
100% in new 10-year notes or an option to take 31.5% in the form
of new 7-year notes plus a package of Class C common stock.
Clarin, Multicanal's equity holder, will inject $15 million to
fund the cash payments.
Adrian Meszaros, Multicanal's Chief Financial Officer, says that
Multicanal S.A. believes it has the requisite votes to complete
the APE proceeding. The Company turns to the U.S. Bankruptcy
Court for assistance under Section 304 of the U.S. Bankruptcy Code
to stop Huff's latest attempts to frustrate the restructuring.
MULTICANAL S.A.: Section 304 Petition Summary
---------------------------------------------
Petitioner: Board of Directors of Multicanal S.A.
Debtor: Multicanal S.A.
Avalos 2057
(1431) Buenos Aires
Argentina
Case No.: 04-10280
Type of Business: The Debtor is an Argentinean multiple
cable systems operator with its
principal operations in Argentina and
smaller operations in Uruguay and
Paraguay. Grupo Clarin SA owns Multicanal.
See http://www.multicanal.com.ar/
Section 304 Petition Date: January 16, 2004
Court: Southern District of New York (Manhattan)
Judge: Allan L. Gropper
Petitioner's Counsel: Lindsee Paige Granfield, Esq.
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, NY 10006
Tel: 212-225-2000
Fax: 212-225-3499
Estimated Assets: More than $100 Million
Estimated Debts: More than $100 Million
NOVA Chemicals: Will Publish Fourth-Quarter Results on Jan. 28
--------------------------------------------------------------
NOVA Chemicals (NYSE:NCX)(TSX:NCX) issues this notice:
Earnings Release: Wednesday, January 28, 2004
7:30 a.m. EST (6:30 a.m. CST; 5:30 a.m. MST;
4:30 a.m. PST)
Conference Call: Wednesday, January 28, 2004
1:00 p.m. EST (12:00 p.m. CST; 11:00 a.m. MST;
10:00 a.m. PST)
Dial-In Number: 416.695.5806
Live Web Cast: The web cast can be accessed live at
http://www.vcall.com/(ticker symbol NCX).
Instant Replay: A replay of the conference call will be
available at 416.695.5800 (passcode #1516336)
through Tuesday, February 3, 2004.
Upcoming Earnings Release Dates:
-- 1st Quarter 2004 - April 21, 2004
-- 2nd Quarter 2004 - July 21, 2004
-- 3rd Quarter 2004 - October 20, 2004
Please note that dates are subject to change. Conference calls
and live internet web casts to discuss quarterly earnings are
held at 1:00 p.m. Eastern Time on the day of the earnings
release. Earnings are released at 7:30 a.m. on the day indicated.
The news release will contain the necessary instructions for
accessing the call.
NOVA Chemicals (S&P, BB+ Long-Term Corporate Credit Rating,
Positive) is a focused, commodity chemical company producing
olefins/polyolefins and styrenics at 18 locations in the United
States, Canada, France, the Netherlands and the United Kingdom.
NOVA Chemicals Corporation shares trade on the Toronto and New
York exchanges under the trading symbol NCX. Visit NOVA Chemicals
on the Internet at http://www.novachemicals.com/
OLYMPIC WORLD: Inks Settlement Pact with German Bank Lenders
------------------------------------------------------------
Royal Olympic Cruise Lines Inc. (Nasdaq: ROCLF) and two of its
subsidiary companies, Olympic World Cruises, Inc. and Royal World
Cruises, Inc., owners of the cruise ships OLYMPIA VOYAGER and
OLYMPIA EXPLORER respectively, which latter two companies are
subject to a Chapter 11 reorganization proceeding pending in
Honolulu, Hawaii, have amicably resolved their differences with
German lending institutions by an agreement for the resolution of
the pending proceedings by consent.
While a further announcement on the terms and effect of the
agreement relative to these two ships will be made shortly, Royal
Olympic stated that this agreement represents a major step forward
for resolution of the present impasse facing the company, which
also involves the arrest in Durban, South Africa, of the vessel
OLYMPIA COUNTESS (as to which owners are currently in discussion
with creditors).
OWENS CORNING: Judge Fitzgerald Approves Plan-Voting Procedures
---------------------------------------------------------------
U.S. Bankruptcy Court Judge Fitzgerald approves the Owens Corning
Debtors' proposed forms of the Ballots and the Master Ballots and
the Voting Procedures.
Judge Fitzgerald directs attorneys for individual holders of PI
Trust Claims who are not authorized to vote on behalf of the
holder, within 30 calendar days after the mailing of the
Solicitation Package, to furnish the Voting Agent with the name,
address and social security number of each holder. In addition
to any types of authorization permitted by applicable bankruptcy
or non-bankruptcy law, duly executed powers of attorney, whether
or not notarized, will be constitute sufficient evidence that an
attorney is authorized to vote on behalf of an individual holder
of a PI Trust Claim.
Any attorney representing holders of PI Trust Claims who chooses
to transmit the Solicitation Packages to his or her clients
directly may, within 30 calendar days after the mailing of the
Solicitation Package, make a written request to the Voting Agent
for a specified number of Solicitation Packages and Ballots,
which will be provided to the attorney by the Voting Agent as
soon as practicable after receipt of the written request. Any
attorney transmitting Solicitation Packages to his or her clients
will promptly provide the Voting Agent with a written
certification of the mailing together with a list of the names,
addresses and social security numbers of the clients at issue.
The Debtors will reimburse the reasonable, documented out-of-
pocket postage expenditures of any attorney mailing Solicitation
Packages to his or her clients.
Any attorney representing holders of PI Trust Claims who wishes
to have the Voting Agent transmit Solicitation Packages directly
to his or her clients will, within 30 calendar days of the Voting
Agent's mailing of a Solicitation Package to the attorney,
provide the Voting Agent with a list of the names, addresses and
social security numbers of the clients at issue, along with any
transmittal letter and other material the attorney wishes the
Voting Agent to include within the Solicitation Package sent to
the attorney's clients.
If any claimant seeks to challenge the disallowance of its Claim
for voting purposes or the amount of its Claim for voting
purposes, the claimant is directed to serve on the Debtors and
file with the Court a motion for an order pursuant to Bankruptcy
Rule 3018(a) temporarily allowing the Claim or allowing the claim
in a different amount for purposes of voting to accept or reject
the Plan on or before the 20th day after the later of:
(1) service upon the claimant of the Notice of Confirmation
Hearing; and
(2) service of a notice of an objection, if any, to the
Claim.
As to any creditor filing a motion pursuant to Bankruptcy Rule
3018(a), the creditor's Ballot will not be counted unless
temporarily allowed by the Court for voting purposes after notice
and a hearing.
For the purposes of voting, classification, and treatment under
the Plan, the number and amount of General Unsecured Claims held
by an Entity to which any General Unsecured Claim is transferred
and which transfer is effective pursuant to Bankruptcy Rule
3001(e) no later than the close of business on the Record Date
will be determined based upon the identity of the original holder
of such General Unsecured Claim. (Owens Corning Bankruptcy News,
Issue No. 65; Bankruptcy Creditors' Service, Inc., 215/945-7000)
PACIFIC GAS: Proposes to Reduce Electric Rates by $800MM in 2004
----------------------------------------------------------------
As it continues to implement the approved settlement plan to
resolve its Chapter 11 case, Pacific Gas and Electric Company
announced a rate design agreement with representatives of major
customer groups to allocate approximately $800 million in electric
rate reductions in 2004.
If approved by the California Public Utilities Commission (CPUC),
and if the Commission approves other pending revenue requirement
changes for the utility, the agreement would reduce the utility's
average bundled electric rate from 13.9 cents/kWh to 12.76
cents/kWh, an 8.2% decrease.
"As we emerge from Chapter 11, we will be able to provide
significant rate relief to our electric customers -- from the
residential customer all the way up to our largest commercial
user," said Tom Bottorff, Pacific Gas and Electric Company's vice
president of customer service.
When the three-cent surcharge was adopted by the CPUC in March
2001, it was allocated to residential customers that used more
than 130% of baseline and to business and agricultural customers.
The proposed rate structure would reduce the rates in the classes
that paid the surcharges in proportion to the increase.
The company's nearly 4.3 million residential electric customers
would see their rates drop to about 12.59 cents/kWh from the
current 13.13 cents/kWh, a 4.1% reduction. For the average
residential customer using 521 kWh/month, the average monthly bill
would go from $62.86 per month to $62.56 per month. A residential
customer that uses 750 kWh/month currently pays, on average,
$104.51 per month, and under the proposal the customer would pay,
$101.12, a 3.2% reduction.
Business customers, who paid most of the costs from the emergency
surcharge rates imposed during the energy crisis, would see their
rates reduced between 9% and 15%, depending on their customer
class.
The overall electric rate reduction is about $130 million more
than projected by PG&E in September 2003 under the approved
Chapter 11 settlement agreement between PG&E and the CPUC, and
about $350 million more than the CPUC's staff estimated in June
2003 when the proposed settlement was announced. The
approximately $800 million in electric rate reductions assumes
that the following changes in the utility's total electric revenue
requirement are approved by the CPUC:
-- Reduced revenues resulting from implementation of the
approved Chapter 11 settlement agreement that ended the
rate freeze and the energy crisis surcharges.
-- Settlement of PG&E's 2003 General Rate Case as proposed by
PG&E and other parties (final approval is currently pending
before the CPUC).
-- As provided in the Chapter 11 settlement agreement,
reducing the size of the Regulatory Asset by approximately
$170 million, to reflect pending refunds and claim offsets
from power generators and energy suppliers, including the
settlement with El Paso Corporation.
-- Amortization of approximately $100 million arising from a
reduction in the Department of Water Resources (DWR) 2004
revenue requirement, due to DWR overcharges in 2001-2002.
The following consumer groups and government agencies entered into
the rate design settlement agreement: The Utility Reform Network
(TURN), the CPUC's Office of Ratepayer Advocates, the California
Manufacturers and Technology Association, the California Large
Energy Consumers Association, the Silicon Valley Manufacturing
Group, the California Farm Bureau Federation, the Agricultural
Energy Consumers Association, the California Retailers
Association, the Building Owners and Managers Association of
California, the Energy Users and Producers Coalition, the Federal
Executive Agencies, the Aglet Consumer Alliance, and the
California City-County Street Light Association.
Next week, Pacific Gas and Electric Company and the settling
parties are expected to file the agreement with the CPUC, and if
the Commission approves the rate agreement at its February 22nd
meeting, customers would begin seeing the lower rates on their
March bills. The rate reduction will be made retroactive to
January 1, 2004, as provided by the Chapter 11 settlement
agreement.
The $800 million total electric rate reduction in 2004 is an
estimate, and actual rates will depend on the outcome of various
CPUC proceedings, including the approval of the 2003 General Rate
Case settlement, as well as other factors, such as weather, sales,
DWR power costs, and other wholesale power costs.
Customers could see additional electric rate reductions if federal
regulators approve refunds from power generators and suppliers,
and if PG&E can refinance a portion of its costs after emerging
from Chapter 11 under the settlement plan. Last month, PG&E and
TURN reached an agreement for PG&E to refinance its Regulatory
Asset with a dedicated rate component, if specific conditions are
met. The refinancing could potentially save customers
approximately $1 billion in lower interest rates and tax savings,
and the company continues to work closely with TURN and the CPUC
to seek legislative approval.
PROPOSED ALLOCATION OF THE RATE DECREASE BY CUSTOMER CLASS
(Effective January 1, 2004)
Current Proposed
Average Rates Average Rate Percent
Customer Class (cents/kWh) (cents/kWh) Reduction
-------------- ------------- ------------- ---------
Residential 13.13 12.59 4.1%
Small Business 16.82 14.92 11.3%
Medium Business 15.53 14.17 8.8%
Agriculture 13.26 11.37 14.3%
Streetlights 17.40 14.80 14.9%
E-19 13.97 12.61 9.8%
E-20 11.90 10.49 11.8%
Transmission 10.25 8.69 15.2%
Primary 12.12 10.76 11.2%
Secondary 13.62 12.32 9.5%
Average Bundled Rate 13.90 12.76 8.2%
PARMALAT: Winding-Up Petition against Capital Finance Unit Filed
----------------------------------------------------------------
Food Holdings Limited and Dairy Holding Limited, two Cayman
Island special-purpose vehicles established by Parmalat S.p.A.,
filed a winding up petition against Parmalat Capital Finance
Limited in the Grand Court of the Cayman Islands last week.
A copy of the Winding-Up Petition filed against Parmalat Capital
is available no charge at:
http://bankrupt.com/misc/830.pdf
In order for Food Holdings and Dairy Holding to honor their
obligations to their noteholders, Parmalat Capital must honor its
obligations under Put Agreements. (Parmalat Bankruptcy News, Issue
No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000)
POLYONE: Will Report 3 Non-Core Units as Discontinued Operations
----------------------------------------------------------------
PolyOne Corporation (NYSE: POL), a leading global polymer services
company, announced that three non-core operating units previously
identified for possible divestiture, in line with the Company's
plan to reduce debt by $200 million to $300 million, will be
financially reported as discontinued operations beginning in the
fourth quarter of 2003.
The non-core units -- Elastomers and Performance Additives,
Specialty Resins and Engineered Films -- employ approximately
2,270 people and have annual sales totaling approximately $600
million. A substantial portion of the anticipated proceeds from
the planned sale of these units will be used to strengthen the
Company's balance sheet by reducing debt.
The planned dispositions reflect a strategic decision to tighten
PolyOne's focus on its global Plastics Compounding and Color
businesses and its Distribution business, which have strong market
synergies. In December 2003, PolyOne's Board of Directors
authorized management to sell the non-core units. On December 31,
2003, management finalized these plans with specific actions to
market the units for sale. PolyOne expects to complete all three
dispositions in 2004.
PolyOne's third-quarter 2003 Form 10-Q disclosed that, as a result
of the decision to pursue the divestments, a review of the value
of certain assets would occur in the fourth quarter of 2003.
Based on the current projected net proceeds from the disposition
of the discontinued operations, PolyOne will record an estimated
fourth-quarter 2003 pre-tax, non-cash charge of approximately $130
million. This non-cash charge will be accounted for as an
estimated impairment in the net assets of the discontinued
operations held for sale.
"We are making [Thurs]day's announcement in accord with financial
reporting requirements resulting from our decision to sell three
non-core operating units," said Thomas A. Waltermire, PolyOne
chief executive officer and president. "We are confident that the
proceeds from these divestments will be at the level we
anticipated when we disclosed our plans in October, and will
allow us to meet our stated goal of reducing debt." PolyOne's
December 31, 2003, consolidated balance sheet will separate from
continuing operations the assets and liabilities of the
discontinued operations to be sold. Further, the 2003
consolidated statement of operations will reflect continuing
operations, with discontinued operations aggregated and reported
separately on one line. Continuing operations will include any
estimated retained indirect costs previously allocated to
discontinued operations. PolyOne, however, continues to bring
overhead costs in line with the targets it has set for its core
business operations.
Financial statements, restated for the discontinued operations,
will be provided when PolyOne releases its fourth-quarter earnings
on January 29, 2004.
PolyOne Fourth-Quarter 2003 Conference Call
PolyOne will host a conference call at 9 a.m. Eastern time on
January 30, 2004. The conference dial-in number is 888-489-0038
(domestic) or 706-643-1611 (international), conference topic:
PolyOne Earnings Call. The replay number is 800-642-1687
(domestic) or 706-645-9291 (international). The conference ID for
the replay is 4281892. The call will be broadcast live and
then via replay for two weeks on the Company's Web
site at http://www.polyone.com/
PolyOne Corporation (Fitch, B Senior Unsecured Debt and BB- Senior
Secured Debt Ratings, Negative) with 2002 revenues of $2.5
billion, is an international polymer services company with
operations in thermoplastic compounds, specialty resins, specialty
polymer formulations, engineered films, color and additive
systems, elastomer compounding and thermoplastic resin
distribution. Headquartered in Cleveland, Ohio, PolyOne has
employees at manufacturing sites in North America, Europe, Asia
and Australia, and joint ventures in North America, South America,
Europe and Asia. Information on the Company's products and
services can be found at http://www.polyone.com/
PRESIDENT CASINOS: Nov. 30 Net Capital Deficit Widens to $52MM
--------------------------------------------------------------
President Casinos, Inc. (OTC:PREZ) announced results of operations
for the third quarter ended November 30, 2003.
For the three-month period ended November 30, 2003, the Company
reported a net loss of $2.6 million, or $0.52 per share, compared
to a net loss of $1.6 million, or $0.31 per share, for the three-
month period ended November 30, 2002. Revenues for the three-month
period ended November 30, 2003 were $27.5 million, compared to
revenues of $29.0 million for the three-month period ended
November 30, 2002.
Revenues for the nine-month period ended November 30, 2003 were
$90.8 million, compared to revenues of $94.4 million for the nine-
month period ended November 30, 2002. For the nine-month period
ended November 30, 2003, the Company reported a net loss of $2.2
million, or $0.44 per share, compared to a loss of $6.2 million,
or $1.23 per share, for the nine-month period ended November 30,
2002.
At November 30, 2003, the Company's balance sheet shows a total
shareholders' equity deficit of about $52 million.
President Casinos, Inc. owns and operates dockside gaming
facilities in Biloxi, Mississippi and downtown St. Louis,
Missouri, north of the Gateway Arch.
RCN CORP: Continues Restructuring Talks with Banks & Bondholders
----------------------------------------------------------------
RCN Corporation (Nasdaq: RCNC) is continuing discussions with its
Senior Secured Lenders and an ad hoc committee of holders of its
Senior Notes and others on a consensual financial restructuring of
its balance sheet.
In anticipation of a successful negotiation, RCN has chosen to
defer the decision to make an interest payment scheduled to be
made on January 15, 2004, of approximately $10.3 million with
respect to its 10-1/8% Senior Notes due 2010.
That decision was made as part of the ongoing negotiations with
the Lenders. RCN has not made a final decision whether to make the
interest payment, but notes that it has sufficient liquidity to
make the payment if it chooses to do so.
While these negotiations have not yet reached an agreement, based
upon negotiations with the Noteholders' Committee, RCN anticipates
that such an agreement would result in a conversion of a
substantial portion of the Senior Notes into equity and an
extremely significant dilution of current equity. Although RCN is
actively pursuing these discussions towards a final agreement on a
consensual financial restructuring, there can be no assurance that
such an agreement will ultimately be reached.
If RCN does not make this interest payment on or before
February 13, 2004, an Event of Default would arise with respect to
the 10-1/8% Senior Notes and entitle, but not require, holders of
these Notes to declare the outstanding notes immediately due and
payable. Any acceleration of amounts due of this Note would, due
to cross default provisions in the Company's indentures governing
its other senior notes, entitle, but not require, the holders of
other senior notes to declare the Company's other senior notes
immediately due and payable if they so choose. In addition, the
failure to make the payment on or before February 13, 2004 would,
due to cross default provisions in the Company's senior credit
facilities, entitle, but not require, the Lenders to declare the
Company's credit facilities immediately due and payable.
"As we work to significantly reduce our debt through a financial
restructuring, our operating companies remain healthy," said David
C. McCourt, Chief Executive Officer of RCN. "We do not intend to
adversely impact our customers, vendors and employees as a result
of this financial restructuring. We shall continue to provide the
same type of high quality service and performance that has been
our trademark."
Russ Belinsky of Chanin Capital Partners, financial advisors to
the Noteholders' Committee, confirmed the statement of Mr.
McCourt. "All of our discussions with the Company contemplate the
conversion of a substantial portion of the bonds into equity,"
noted Mr. Belinsky. "Therefore, this restructuring should
positively impact the operating companies and the vendors,
customers, and employees of those companies. We look forward to
completing our negotiations and our continuing long term
relationship with the Company."
RCN Corporation (Nasdaq: RCNC) is the nation's first and largest
facilities-based competitive provider of bundled phone, cable and
high speed internet services delivered over its own fiber-optic
local network to consumers in the most densely populated markets
in the U.S. RCN has more than one million customer connections and
provides service in Boston, New York, Philadelphia/Lehigh Valley,
Chicago, San Francisco, Los Angeles and Washington, D.C.
metropolitan markets.
RENAISSANCE COSMETICS: Converting Cases to Chapter 7 Liquidation
----------------------------------------------------------------
Renaissance Cosmetics, Inc., and its debtor-affiliates tell Judge
Walrath they were hopeful that the resolution of various causes of
action would result in adequate funds to pay administrative
expenses in full and a small dividend to unsecured creditors.
It's now clear that won't happen.
Bonnie Glantz Fatell, Esq., at Blank Rome LLP in Wilmington
reminds Judge Walrath that Renaissance filed for chapter 11
protection on June 2, 1999 (Bankr. D. Del. Case No. 99-02136), and
sold substantially all of its assets to DPC Acquisition Corp., on
July 30, 1999, for $29 million. After terminating all but one of
their employees, the Debtors sought authority to terminate 401(k)
benefit plans, began the process of marshalling their remaining
assets for the benefit of their creditors, and litigating
avoidance actions. The Debtors struck a deal with General
Electric Capital Corp., their secured lender, to pursue avoidance
actions for the benefit of unsecured creditors. The Debtors
thought all of this would culminate in a Liquidating Chapter 11
Plan and a dividend to unsecured creditors.
It won't be possible to propose a confirmable plan, since
administrative claims can't be paid in full, so the Debtors ask
the Court to approve the conversion of their bankruptcy cases to
chapter 7 liquidation proceedings in accordance with 11 U.S.C.
Sec. 1112(a). The Debtors do not indicate the extent of their
administrative insolvency.
RICA FOODS: Makes Full $5.2 Million Debt Repayment to Citibank
--------------------------------------------------------------
Rica Foods, Inc. (Amex: RCF) repaid to Citibank $5.2 million, the
entire amount of the Company's outstanding indebtedness to
Citibank (Costa Rica), S.A.
On January 15, 2004, the Company repaid the aggregate Citibank
Indebtedness with funds the Company received upon the repayment in
full of loans owed to the Company by Calixto Chaves, the Company's
Chief Executive Officer. The Company was not required to pay a
prepayment penalty to Citibank.
RFC is the parent Company of the largest poultry producers in
Costa Rica. The Company owns Corporacion Pipasa, S.A. and
Corporacion As de Oros, S.A., which supply approximately 62% of
the total Costa Rican poultry market.
As previously reported, Fitch Ratings withdrew its foreign
currency debt rating of 'BB', Rating Watch Negative, on the
Corporacion Pipasa S.A. and Corporacion As de Oros senior notes
due 2005 issued on a joint and several basis and guaranteed by
Rica Foods Inc. Pipasa and As de Oros are wholly-owned
subsidiaries of Rica Foods.
Fitch Ratings has withdrew the 'BB', Rating Watch Negative, senior
unsecured foreign currency and local currency debts ratings of
Rica Foods, as the company has no other rated debt instruments
outstanding.
SAFETY-KLEEN: Chairman, CEO & President Rittenmeyer Will Resign
---------------------------------------------------------------
Safety-Kleen announced that Ronald A. Rittenmeyer, the Company's
Chairman, CEO and President for the past two-and-a-half years, has
notified the Board of his plans to leave the Company pending
completion of a search for his replacement.
Rittenmeyer joined Safety-Kleen in August 2001 and led the
successful reorganization of the Company, which emerged from
Chapter 11 bankruptcy protection on Dec. 24, 2003. Safety-Kleen
entered into Chapter 11 bankruptcy protection voluntarily on
June 9, 2000.
"Bringing Safety-Kleen out of bankruptcy was an extremely
challenging and rewarding opportunity," Rittenmeyer said. "We've
streamlined the Company's operations, upgraded its financial and
technology systems, and brought in a broad range of new personnel
to augment the Company's industry-leading experience and
expertise."
"Now, it's time to complete the transition and bring in a new
executive to lead the Company for the long-term," Rittenmeyer
said. "With the strong foundation we have established, I believe
appointing a new executive now will provide the continuity and
consistency that will lead the long-term success of the new
Safety-Kleen."
The search for a replacement for Rittenmeyer is expected to take
six to nine months, according to Ron Haddock, lead outside
director on Safety-Kleen's new Board of Directors. Rittenmeyer
has agreed to remain with Safety-Kleen during that time to help
ensure a smooth transition.
Under Rittenmeyer's leadership, Safety-Kleen also sold its former
Chemical Services Division, including assumption by the purchaser
of more than $250 million in potential liabilities, settled major
litigation with Laidlaw, Safety-Kleen's parent company, resolved
all government investigations arising out of the accounting
irregularities that led to the Company's Chapter 11 filing, and
settled with the State of South Carolina critical issues related
to the long-term care of a major hazardous waste landfill.
"Ron Rittenmeyer and his management team did a great job leading
the Company through a difficult, but necessary, transformation,"
Haddock said. "We appreciate Ron agreeing to remain with us
through this transition period."
Safety-Kleen is the leading parts cleaner, industrial waste
management and oil recycling and re-refining company in North
America, with approximately 5,000 employees serving hundreds of
thousands of customers in the United States, Canada and Puerto
Rico.
Prior to joining Safety-Kleen, Mr. Rittenmeyer was CEO and
President of AmeriServe, where he led the restructuring of the $10
billion food industry giant in just 10 months. Mr. Rittenmeyer
continues to serve as the plan administrator for the AFD Fund, the
post-confirmation estate of AmeriServe.
Mr. Rittenmeyer also served as Chairman and CEO of RailTex, Inc.,
the world's largest short-line railroad holding company, and as
President and COO of Ryder TRS, Inc., the nation's second largest
truck rental company, leading successful reorganizations at both
companies.
During his 30-year business career, Mr. Rittenmeyer has held
executive positions with Frito-Lay Inc., PepsiCo Food
International, Burlington Northern Railroad and Merisel, a
distributor of high tech equipment and software. He has served on
the Board of Directors of AmeriServe, RailTex, Ryder TRS,
Groceryworks.com, Sterling Chemicals and Merisel, and currently
serves on the Board of Directors of Safety-Kleen.
Mr. Rittenmeyer earned his MBA from Rockhurst University in Kansas
City, Missouri, and graduate from Wilkes University in Wilkes-
Barre, PA, with a B.S. in Commerce and Economics.
SCARBOROUGH-ST. JAMES: Has Until February 16 to File Schedules
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave Scarborough-St. James Corporation 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 February 16, 2004 to file the required
documents.
Headquartered in New York, New York, Scarborough-St. James
Corporation filed for chapter 11 protection on December 17, 2003
(Bankr. S.D.N.Y. Case No. 03-17966). Michael T. Conway, Esq., at
Lazare Potter Giacovas & Kranjac, LLP, represents the Debtors in
their restructuring efforts. When the Debtors filed for
protection from their creditors, they estimated debts and assets
of more than $10 million.
SEMINIS VEGETABLE: S&P Rates Proposed $140M Sr. Sub Notes at B-
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its B- rating to fruit
and vegetable seed manufacturer and distributor Seminis Vegetable
Seeds Inc.'s proposed $140 million senior subordinated notes issue
due in 2013. At the same time, Standard & Poor's affirmed its 'B+'
corporate credit and 'BB-' senior secured credit facility ratings.
Standard & Poor's also assigned a recovery rating of '1' to the
company's senior secured credit facility. The 'BB-' secured
facility is rated one notch above the corporate credit rating, and
this, in addition to the recovery rating, reflects a high
expectation of full recovery of principal in a default or
bankruptcy scenario. This facility has been amended and restated
to increase the size of the revolving credit facility and reduce
the amount of the term loan outstanding.
Seminis' proposed senior subordinated notes are rated two notches
below the corporate credit rating, reflecting their junior
position to the large amount of secured debt in the capital
structure.
The outlook has been revised to negative from stable.
Oxnard, Calif.-based Seminis Vegetable Seeds is expected to have
about $461 million of lease-adjusted total debt outstanding
following the completion of the notes issue and amendment of the
credit facility.
Proceeds from the proposed subordinated notes issue will be used
to repay $100 million of the company's existing term loan B with
the rest added to cash for potential future acquisitions.
"The revised outlook reflects Seminis' more aggressive financial
policy and incremental increase in debt leverage to prefund future
acquisitions," said Standard & Poor's credit analyst Ronald B.
Neysmith. "These factors are partially mitigated by Seminis' good
market position in the global fruit and vegetable seed industry,
its strong brand equity, and the high barriers to competitor entry
into the industry."
Seminis is the largest player within the fragmented $2.3 billion
vegetable seed industry. It has a market share of about 19%
worldwide, approximately twice that of its nearest competitor.
Seminis' brands have had good acceptance globally, with the
majority of the seed varieties holding either a No. 1 or No. 2
market position. The company has a well-diversified base of about
16,000 customers in more than 150 countries. No customer
represents more than about 3% of sales. The customer base is also
geographically diverse: No region accounts for more than 39% of
revenue.
The company is subject to typical agricultural risk, including
weather conditions, disease, and seasonality. The success in this
industry is highly dependent on research and development of new
seed varieties.
Standard & Poor's expects that Seminis' vegetable and germplasm
bank for new product development will be a competitive advantage
in this environment, and that the company will continue to be an
industry leader in the development of higher margined seed
varieties.
SEROLOGICALS CORP: Completes Sale of Therapeutic Plasma Business
----------------------------------------------------------------
Serologicals Corporation (Nasdaq/NM: SERO) completed the sale of
its Therapeutic Plasma business to Gradipore Limited, an
Australian-based company. The effective date of the sale is
December 28, 2003.
David A. Dodd, President and Chief Executive Officer, stated, "The
completion of the sale of this business marks a major milestone in
the transformation of Serologicals to an innovation-based company
providing novel products in support of life-science research, drug
discovery, development and manufacturing. We are anxious to focus
all of our efforts on the continued development of our ongoing
businesses, with a particular emphasis on increasing our market
positions in the cell culture and research reagent lines of
business. Looking to 2004 and beyond, we are increasingly
confident on achieving significant revenue growth and even higher
annual net income growth rates, while continuing to increase our
investment in R&D resulting in a consistent introduction of high-
value, proprietary new products "
Serologicals Corporation (S&P, B+ Corporate Credit and BB- Senior
Secured Ratings, Stable Outlook), headquartered in Atlanta,
Georgia, is a global provider of biological products and enabling
technologies, which are essential for the research, development
and manufacturing of biologically based life science products. The
Company's products and technologies are used in a wide variety of
innovative applications within the areas of oncology, hematology,
immunology, cardiology and infectious diseases, as well as in the
study of molecular biology. Serologicals has more than 650
employees worldwide, and its stock is traded on the Nasdaq
National Stock Market under the symbol SERO.
SIEBEL SYSTEMS: Look for Fourth-Quarter 2003 Results on Wednesday
-----------------------------------------------------------------
Siebel Systems, Inc. (Nasdaq:SEBL) will announce its financial
results for the fourth quarter 2003, ended December 31, 2003, on
January 21, 2004.
This announcement will supplement the preliminary financial
results for the fourth quarter of 2003 originally announced on
January 5, 2004, and will address additional financial, customer,
and other information that the Company believes will help
investors better understand and evaluate its business.
Siebel Systems' fourth quarter 2003 financial results press
release will be issued through Business Wire and the company's Web
site -- http://www.siebel.com/-- on January 21, 2004, after the
close of the market. The company will host its fourth quarter 2003
financial results conference call and question-and-answer session
at 2:00 p.m. PST the same day. The call can be accessed live over
the Internet at http://www.siebel.com/investor/or by calling 1-
706-679-7563 in the U.S. or from outside the U.S.
A replay of the call will be available until Siebel Systems' next
quarterly earnings announcement, over the Internet through the
same Web site, or by calling 1-402-977-9140 in the U.S. or from
outside the U.S., with reservation number 21180741.
After the financial results call, Siebel Systems will be
conducting a follow-up Webcast from 4:00-5:00 p.m. PST to give
financial analysts the opportunity to ask any additional questions
needed to finalize their Siebel reports and financial models. To
ensure that all investors have simultaneous access to this
information, this question-and-answer session will be broadcast
publicly live via the Internet at http://www.siebel.com/investor/
or by calling 1-415-247-8544 in the U.S. or from outside the U.S.
A replay of the follow-up Webcast will be available until Siebel
Systems' next quarterly earnings announcement, over the Internet
through the same Web site, or by calling 1-402-977-9140 in the
U.S. or from outside the U.S., with reservation number 21180751.
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.
SIX FLAGS: S&P Assigns B+ Senior Secured Bank Loan Rating
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' senior
secured bank loan rating, the same level as the corporate credit
rating, to Six Flags Theme Park Inc.'s $130 million increase to
its existing $600 million term loan B due 2009. Proceeds of the
increased term loan have been used to redeem the remaining $122.5
million of parent Six Flags Inc.'s 9.75% senior notes due 2007.
At the same time, Standard & Poor's assigned its recovery rating
of '2' to the company's entire $1.13 billion bank credit facility,
indicating substantial recovery of principal (80%-100%) in the
event of a default. In addition, Standard & Poor's affirmed its
ratings, including its 'B+' corporate credit rating, on the
company. Oklahoma City, Okla.-based theme park operator had $2.6
billion of total debt and preferred stock as of Sept. 30, 2003.
The ratings outlook remains negative.
"The rating reflects Six Flags' high debt leverage, currently
depressed profitability, and Standard & Poor's expectation that
the company will report slightly negative discretionary cash flow
for 2003," said Standard & Poor's credit analyst Hal Diamond.
Sources of cash flow pressure in 2003 included reduced
profitability, and the heavy interest expense and preferred
dividend burden. These risks are only partly offset by the
company's good competitive position in the regional theme park
business, and good geographic and cash flow diversity.
Six Flags is the leading regional theme park operator and a
distant second largest among all theme park operators, after The
Walt Disney Co. Six Flags' parks are generally the largest in
their regions. Most of the parks benefit from limited direct
competition, the only exceptions being in the intensely
competitive markets of Los Angeles (against Disney, Universal, and
others) and Cleveland (against regional player Cedar Fair).
However, theme parks have significant fixed costs, with
profitability highly sensitive to attendance levels.
SOLUTIA INC: US Trustee Appoints Official Creditors' Committee
--------------------------------------------------------------
Deirdre A. Martini, the United States Trustee for Region 2,
appoints these nine unsecured claimants to the Official Committee
of Unsecured Creditors in Solutia's Chapter 11 cases:
(1) Pension Benefit Guaranty Corporation
1200 K Street N.W., Suite 340
Washington, D.C. 20004
Attention: Rodney Carter, Financial Analyst
Tel. No. (202) 3276-4070, ext. 3941
(2) Fidelity Management & Research Co.
82 Devenshire Street, E31C
Boston, MA 02109
Attention: Nate Van Duzer, Esq.
Tel. No. (617) 392-8129
(3) Shell Chemical, LP
One Shell Plaza, 910 Louisiana
Houston, TX 77002
Attention: Mary Ann Minjarez, CCE
Credit Manager
Tel. No. (713) 241-1075
(4) J.P. Morgan Chase Bank
Institutional Trust Services
4 New York Plaza, 15th Floor
New York, NY 10004
Attention: James R. Lewis
Tel. No. (212) 623-6759
(5) Austin Industries, Inc.
P.O.B. 1590
Dallas, TX 75221
Attention: Charles E. Hardy, Esq.
Tel. No. (214) 443-5575
(6) Monsanto Company
800 North Lindberg Boulevard
St. Louis, MO 63167
Attention: Robert Paley
Tel. No. (314) 694-2881
(7) Trust Company of the West
1100 Santa Monica Boulevard
Los Angeles, CA 90025
Attention: Nicholas W. Tell, Jr.
Tel. No. (310) 235-5915
(8) Xerion Partners I, LLC
Two American Lane
Greenwich, CT 06836-2571
Attention: Daniel J. Arbess
Tel. No. (212) 940-9825
(9) Toray Industries, Inc.
461 Fifth Avenue, 9th Floor
New York, NY 10017
Attention: Yusuke Orito, Chief Executive Representative
for the Americas
Tel. No. (212) 697-8150
(Solutia Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
SO. CALIF. EDISON: Declares Quarterly Preferred Share Dividends
---------------------------------------------------------------
The Board of Directors of Southern California Edison Company
declared a quarterly dividend of $0.255 per share on the 4.08%
series of cumulative preferred stock, $0.265 per share on the
4.24% series of cumulative preferred stock, and $0.29875 per share
on the 4.78% series of cumulative preferred stock.
Each of these dividends is payable Feb. 29, 2004, to shareholders
of record on Feb. 5, 2004.
SCE also declared a quarterly dividend of $0.27 per share on the
4.32% series of cumulative preferred stock, and $1.5125 per share
on the 6.05% series of $100 cumulative preferred stock. Each of
these dividends is payable March 31, 2004, to shareholders of
record on March 5, 2004.
An Edison International (NYSE: EIX) (S&P, BB+ Corporate Credit
Ratin, Stable) company, Southern California Edison (Fitch, BB
Unsecured Debt and B+ Preferred Share Ratings, Positive) is one of
the nation's largest electric utilities, serving a population of
more than 12 million via 4.5 million customer accounts in a
50,000-square-mile service area within central, coastal and
Southern California.
STAR ACQUISITION: Case Summary & 22 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Star Acquisition III, LLC
6855 S. Havana Suite 300
Englewood, Colorado 80112
Bankruptcy Case No.: 04-10121
Chapter 11 Petition Date: January 5, 2004
Court: District of Colorado (Denver)
Judge: Sidney B. Brooks
Debtor's Counsel: Peter J. Lucas, Esq.
Appel & Lucas, P.C.
1917 Market Street Suite A
Denver, CO 80202
Tel: 303-297-9800
Estimated Assets: $10 Million to $50 Million
Estimated Debts: $10 Million to $50 Million
Debtor's 22 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Concert Capital Resources, Mortgagee $16,860,000
LP
909 Fannin, Suite 1850
Houston, TX 77010
Conley P. Smith Limited Mortgagee $1,500,000
Liability Company
1600 Broadway, Suite 2400
Denver, CO 80202
Crown Oil Partners, LP Interest/Royalty Owner $543,000
P.O. Box 50820
Midland, TX 79710
DNR Oil & Gas Inc. Mortgagee $230,000
Campbell County Treasurer Trade Debt $183,515
King & Spalding LLP Legal Services $107,066
Crook County Treasurer Trade Debt $65,894
The Daube Company Ad Valorem/Property $55,137
Taxes
MBT Marketing Services Trade debt $54,041
Falcon Petroleum LLC Trade Debt $53,114
Universal Compression Trade Debt $48,909
Noble Energy Inc. Property Operator/ $41,620
Trade Debt
Hulls Oilfield Services, Trade Debt $36,204
Inc.
Hummon Corporation Property Operator/ $35,090
Trade Debt
Jin's Water Service, Inc. Trade Debt $34,418
Key Rocky Mountain, Inc. Trade Debt $24,471
Hilcorp Energy Company Property Operator/ $21,530
Trade Debt
LaRoche Petroleum 3rd Party Engineering $18,394
Consultants
Conner & Winters Legal Fees $14,852
Blakeman Propane, Inc. Trade Debt $13,266
Duke Energy Field Services, Trade Debt $12,781
Inc.
D & DJ Oil Tools, Inc. Trade Debt $12,210
STAR GAS PARTNERS; Fitch Expects to Rate $35M Senior Notes at BB
----------------------------------------------------------------
Fitch Ratings expects to rate Star Gas Partners, L.P.'s $35
million principal amount of 10.25% senior notes due 2013, co-
issued under SEC Rule 144A with its special purpose financing
subsidiary Star Gas Finance Company at 'BB'. The new notes will
rank equally with $200 million of a similar series of notes issued
by Star Gas in February 2003. Proceeds will be used for winter
working capital and to pay down bank debt at its operating
subsidiaries, Petroleum Heat and Power Co., and Star Gas Propane,
L.P., senior secured debt rated 'BBB-'.
The Rating Outlook for the above companies is Stable.
Star Gas' 'BB' rating reflects its subordinated position to
approximately $307 million of secured notes, and $258 million of
other liabilities at Petro and Star Propane. Consolidated credit
measures generated during fiscal year 2003 remain on the low end
for Star's 'BB' rating category, but should improve in 2004 as the
result of the positive contribution from approximately $75 million
of acquisitions that were transacted following the 2003 heating
season along with expected benefits from a nearly completed
reorganization of Petro's business processes. Funds from
operations coverage of interest for the fiscal year-ended
Sept. 30, 2003 was approximately 2.6 times. With normal weather,
Fitch expects this ratio to be closer to 2.8x for fiscal year
2004.
Star Gas through Petro and Star Propane is the largest domestic
distributor of home heating oil and the seventh largest retail
distributor of propane, respectively. Home heating oil operations
serve customers in the Northeast and Mid-Atlantic regions and
propane operations serve customers in the Northeast, Midwest, and
Southeast regions of the U.S. Primary concerns are the negative
impact of warm heating-season weather on profits and volumes sold
and the potential adverse impact of supply price volatility where
rapid increases in wholesale prices may not be immediately passed
through to customers. In addition, Star's aggressive acquisition
program increases event risk and results in a lag in reported cash
flows from acquired operations.
Favorable considerations include: A demonstrated willingness to
issue equity. A history of stable unit margins at both Petro and
Star Propane irrespective of pricing and volume conditions.
Manageable maintenance capital expenditures, totaling about $6
million per annum. The procurement of $20 million of weather
insurance for the 2003-2004 winter limits weather induced
financial volatility.
STAR GAS PARTNERS: Will Publish Q1 FY 2004 Results on January 29
----------------------------------------------------------------
Star Gas Partners, L.P. (NYSE: SGU, SGH) will release its fiscal
2004 first quarter financial results before the market opens on
Thursday, January 29. Star's Chairman and Chief Executive Officer
Irik Sevin will host a conference call and webcast that morning at
11:00 a.m. EST.
Conference Call: Thursday, January 29, 2004 at 11:00 a.m. EST
Dial-in Number: 877/809-7604 (U.S. & Canada), 706/679-4996
(International)
Webcast: http://www.vcall.com/CEPage.asp?ID=85506/
Web Replay: 30 days
Call Replay Until: January 31, 2004 at 1:00 p.m. EST
Replay Number: 800/633-8284 or 402/977-9140 (International)
Access Code: 21182219
For the conference call, please call five minutes in advance to
ensure that you are connected. Questions and answers will be taken
only from participants on the conference call. For the webcast,
please allow 15 minutes to register and download and install any
necessary software.
Star Gas Partners, L.P. is a leading distributor of home heating
oil, propane and deregulated natural gas and electricity. Star Gas
Partners, L.P. is the nation's largest retail distributor of home
heating oil and the nation's seventh largest retail propane
distributor. Star Gas Partners. L.P., through its wholly owned
subsidiary Total Gas & Electric, also sells natural gas and
electricity in the Northeast, Mid-Atlantic and Florida.
STATION CASINOS: Affirms Existing Financial Guidance for Q4 2003
----------------------------------------------------------------
Station Casinos, Inc. (NYSE: STN) announced the following:
-- Reiterated guidance for EBITDA for the fourth quarter of
2003 of approximately $81 million to $84 million and
Adjusted Earnings per share of approximately $0.38 to
$0.41, excluding development costs and nonrecurring items.
-- Reiterated full year guidance for EBITDA in 2003 and 2004,
excluding development costs and nonrecurring items, of
approximately $292 million to $295 million and
approximately $340 million to $350 million, respectively.
Further, the Company reiterated its full year guidance for
2003 and 2004 for Adjusted Earnings per share, excluding
development costs and nonrecurring items, of approximately
$1.21 to $1.24, and approximately $1.68 to $1.78,
respectively.
-- Plans to begin development of Red Rock Station in mid-2004
at an anticipated cost of approximately $450 million to
$475 million, of which about $375 million to $400 million
remains to be spent. The project is expected to be
complete in late 2005 or early 2006. Red Rock Station is
projected to generate approximately $60 million to
$65 million of EBITDA and be $0.06 to $0.11 accretive to
annual earnings per share during its first full year of
operation growing to $80 million to $85 million of EBITDA
in the third year, resulting in annual earnings per share
accretion of $0.25 to $0.31.
-- Based on these projected results for Red Rock Station,
continued strength in the existing Las Vegas operations
and anticipated growth in our management franchise, the
Company has established the following three year financial
goals:
-- Grow EBITDA at a compounded annual growth rate of
16% to 18%,
-- Grow Adjusted Earnings per share at a compounded
annual growth rate of 25% to 28%, and
-- Generate approximately $3.60 to $3.75 in Free Cash
Flow per share for the year ended December 31,
2006.
-- Financing plans for a new $325 million senior subordinated
notes offering, the proceeds of which will be used to:
-- Make an offer to purchase and/or redeem the
Company's existing $199.9 million 8-7/8% senior
subordinated notes,
-- Reduce the outstanding balance on the Company's
revolving credit facility and
-- for general corporate purposes.
The offering will position the Company to capitalize
on incremental growth opportunities in both our Las
Vegas and management services franchises.
Red Rock Station
The Company announced that it is developing Red Rock Station at
the intersection of I-215 and West Charleston Boulevard in Las
Vegas. The initial phase of the property is expected to include
60 table games and 2,700 slot machines. The property is expected
to also include 400 hotel rooms, 45,000 square feet of meeting
space, 16 movie theaters, a 20,000 square foot spa facility and
several restaurants, including a buffet. The cost of the project
is expected to be approximately $450 million to $475 million. We
believe the construction of the project will begin in mid-2004 and
be complete in late 2005 or early 2006. We expect that the
project will be financed through a combination of Free Cash Flow,
our bank line of credit and the proposed senior subordinated notes
offering. We expect, consistent with previous Station developed
properties in Las Vegas, the project will generate a low-teens
return on investment in its first year of operations growing over
time to high-teens or greater return on investment. The Company's
existing portfolio of properties that it has developed is
currently generating about 20% return on investment. We project
that Red Rock Station will produce approximately $60 million to
$65 million in EBITDA in its first year of operation.
"Red Rock Station will be the premier property in the Las Vegas
locals market," said Frank J. Fertitta III, Chairman and Chief
Executive Officer. "The project represents the next level in the
evolution of regional entertainment complexes for locals. We
expect that the quality and location of Red Rock Station will
drive business from all over the Valley. In addition, the
demographics in Summerlin are outstanding. We are also pleased
that a substantial portion of the project can be funded from Free
Cash Flow."
The Company believes that the project will be $0.06 to $0.11
accretive to earnings per share in its first full year of
operations and $0.25 to $0.31 accretive to annual earnings per
share by the third year of operation.
Red Rock Station is expected to cost $25 million to $50 million
more than Green Valley Ranch Station Casino after completion of
the current $110 million expansion. Of this difference,
approximately $34 million is incremental land cost. The balance
of the incremental costs reflects the fact that Red Rock Station
is expected to include significant additional amenities including
more gaming capacity, restaurants, movie theaters and other
entertainment venues.
Growth Goals
The Company believes that the combination of organic growth from
its Las Vegas locals' franchise, increased management fees from
Native American gaming operations, the previously disclosed
expansions of Green Valley Ranch Station and Santa Fe Station, and
the opening of Red Rock Station in late 2005 or early 2006 will
result in substantial growth over the next three years. As a
result of the growth visibility, all of which relates to projects
which have previously been communicated, our goal is to generate
compounded annual growth rates in EBITDA of 16% to 18% and
Adjusted Earning per share of 25% to 28% over the next three
years. "We are pleased with the strength of the Las Vegas locals'
market and the markets where we currently plan to manage
properties for our tribal partners are very solid," said Fertitta.
We expect the Thunder Valley management fee for a full year in
2004 will account for significant growth. Previous guidance has
been that Thunder Valley would generate approximately $65 million
to $75 million in management fees to Station Casinos in its first
full year of operations. We expect growth in 2005 to come from
(i) the Green Valley Ranch expansion being open for a full year in
2005, (ii) the Santa Fe expansion to open late in the first
quarter of 2005, and (iii) we expect to begin managing a property
in Allegan County, Michigan for the Gun Lake Tribe sometime in
2005. We believe growth will come in 2006 from the opening of Red
Rock Station in late 2005 or early 2006. We also expect that our
same store Las Vegas locals' market operations will continue to
grow with the expanding population and improving economy and that
there are continuing opportunities for growth at Thunder Valley
over this period.
New Senior Subordinated Notes Offering
and Tender Offer for 8-7/8% Senior Subordinated Notes
The Company also announced that it plans to issue and sell $325
million of Senior Subordinated Notes due in January 2014.
Proceeds from the sale will be initially used to redeem its $199.9
million in 8-7/8% Senior Subordinated Notes due in December of
2008. The balance will be used to reduce the Company's revolving
credit facility, which along with Free Cash Flow generated from
operations, will be used to develop Red Rock Station, other
development capital expenditures and for general corporate
purposes. The Company believes that this financing enhances its
capital structure by extending a significant portion of the
maturities of long term debt out to 2014 and provides flexibility
to continue our investments in the Las Vegas locals' market and
management contracts with Native American tribes.
We expect that during the course of construction of Red Rock
Station and considering the advances we are making during the
development phase of the Native American projects, our debt to
cash flow ratio will generally stay in a range of 3 to 4 times.
We expect leverage to peak at just over 4.0 times as we open Red
Rock Station in late 2005 or early 2006, but proforma for the
return on the Red Rock Station investment, the debt to cash flow
ratio is expected to be under 3.5 times.
The Senior Subordinated Notes have not been registered under the
Securities Act of 1933 and may not be offered or sold in the
United States absent registration or an applicable exemption from
the registration requirements.
The Company also recently announced that it has commenced a cash
tender offer for any and all of its $199.9 million aggregate
principal amount of 8-7/8% Senior Subordinated Notes due 2008.
The terms of the cash tender offer are contained in the Offer to
Purchase and Consent Solicitation Statement dated January 14,
2004.
Other Capital Expenditures
The Company is planning other capital expenditures over the next
several years. An expansion at Santa Fe Station that is expected
to cost approximately $50 million and include a new movie theater
complex, additional slot machines and other amenities was recently
announced, as was the development of an ice skating rink at Fiesta
Rancho at a cost of approximately $6.5 million. Also previously
announced was the Company's intention to accelerate the
replacement cycle of certain of its existing slot machines for new
machines that have ticket-in ticket-out technology. The Company
recently exercised its option to purchase the land under the Wild
Wild West Gambling Hall and Hotel. The purchase will take place
in July 2005 at the fair market value of the land but not less
than $27 million or not more than approximately $36 million.
After the purchase is complete, rent expense will be reduced by
approximately $2.7 million annually.
"Given the expected continued growth in Las Vegas, we are excited
about the master-planned expansion at Santa Fe Station. This is a
demand generated enhancement to the property in an area of Las
Vegas where the population is growing rapidly. We also believe
the ice rink at Fiesta Rancho and the acceleration of the
replacement of our slot machines with ticket-in ticket-out
technology is consistent with the growing demand for locals'
entertainment," said Fertitta. "The Wild Wild West option was
exercised now because under the terms of the lease we would not
have another opportunity to acquire the property for almost ten
years," said Fertitta. The timing of the cash payment for these
capital expenditures can be found in a table included herein.
In addition, over the next several years the Company expects to
advance approximately $6 million and approximately $8 million for
non-reimbursable project costs related to the Gun Lake and Graton
Rancheria management contracts, respectively, as certain
milestones are met on each development project. "We continue to
be very excited about working with the Gun Lake and Graton
Rancheria tribes and expect that these capital contributions will
help bring their respective projects to fruition," said Fertitta.
We expect to have reimbursable advances related to the Gun Lake
and Graton Rancheria projects but the timing of these advances is
difficult to project. These advances are expected to be repaid at
the time the permanent financing is put in place for the
respective projects.
Depreciation expense related to the capital expenditures noted
above is expected to be approximately $25 million annually for Red
Rock Station, approximately $3 million annually for the Santa Fe
expansion and the slot machines will be depreciated over 5 years
from the date they are placed in service. Capitalized interest is
expected to be approximately $7 million to $9 million in 2004 and
approximately $21 million to $23 million in 2005.
Fourth Quarter 2003 and Year 2004 Guidance Reiterated
The Company is currently undergoing its annual audit and expects
EBITDA of approximately $81 million to $84 million for the fourth
quarter of 2003 (excluding development expense and nonrecurring
items), consistent with previous guidance. This would result in
Adjusted Earnings per share of approximately $0.38 to $0.41 for
the fourth quarter of 2003. The Company has scheduled its
quarterly earnings conference call on January 29, 2004.
Other Matters
The Company has not completed its annual audit. However, we are
looking closely at the valuation of goodwill related to the Fiesta
Rancho acquisition in 2001. While we anticipate a write down of
goodwill, which is a non-cash charge, we have not finalized the
amount at this time. In addition, as a result of the recent
refinancing of Green Valley Ranch Station, there will be a write-
off in the fourth quarter of the debt issuance costs related to
the previous financings. There will also be a write-off at Green
Valley Ranch Station for certain assets that have been or will be
removed to allow for an expansion of the property. In the first
quarter of 2004 there will also be a write-off of financing costs
related to the redemption of the $199.9 million 8-7/8% Senior
Subordinated Notes due 2008.
Station Casinos, Inc. (S&P, BB Corporate Credit Rating, Stable
Outlook) is the leading provider of gaming and entertainment to
the residents of Las Vegas, Nevada. Station's properties are
regional entertainment destinations and include various amenities,
including numerous restaurants, entertainment venues, movie
theaters, bowling and convention/banquet space, as well as
traditional casino gaming offerings such as video poker, slot
machines, table games, bingo and race and sports wagering.
Station owns and operates Palace Station Hotel & Casino, Boulder
Station Hotel & Casino, Santa Fe Station Hotel & Casino, Wildfire
Casino and Wild Wild West Gambling Hall & Hotel in Las Vegas,
Nevada, Texas Station Gambling Hall & Hotel and Fiesta Rancho
Casino Hotel in North Las Vegas, Nevada, and Sunset Station Hotel
& Casino and Fiesta Henderson Casino Hotel in Henderson, Nevada.
Station also owns a 50 percent interest in both Barley's Casino &
Brewing Company and Green Valley Ranch Station Casino in
Henderson, Nevada and a 6.7 percent interest in the Palms Casino
Resort in Las Vegas, Nevada. In addition, Station manages the
Thunder Valley Casino in Sacramento, California on behalf of the
United Auburn Indian Community.
STATION CASINOS: Will Issue $400M 6.5% Senior Subordinated Notes
----------------------------------------------------------------
Station Casinos, Inc. (NYSE: STN) agreed to issue $400 million in
aggregate principal amount of 6.50% senior subordinated notes due
February 1, 2014.
Subject to customary conditions, the transaction is expected to
close on January 29, 2004. Proceeds from this offering will be
used to purchase or redeem the Company's $199.9 million in
aggregate principal amount of outstanding 8-7/8% senior
subordinated notes due in December 2008, reduce the Company's
revolving credit facility and for general corporate purposes.
Station Casinos, Inc. (S&P, BB Corporate Credit Rating, Stable
Outlook) is the leading provider of gaming and entertainment to
the residents of Las Vegas, Nevada. Station's properties are
regional entertainment destinations and include various amenities,
including numerous restaurants, entertainment venues, movie
theaters, bowling and convention/banquet space, as well as
traditional casino gaming offerings such as video poker, slot
machines, table games, bingo and race and sports wagering.
Station owns and operates Palace Station Hotel & Casino, Boulder
Station Hotel & Casino, Santa Fe Station Hotel & Casino, Wildfire
Casino and Wild Wild West Gambling Hall & Hotel in Las Vegas,
Nevada, Texas Station Gambling Hall & Hotel and Fiesta Rancho
Casino Hotel in North Las Vegas, Nevada, and Sunset Station Hotel
& Casino and Fiesta Henderson Casino Hotel in Henderson, Nevada.
Station also owns a 50 percent interest in both Barley's Casino &
Brewing Company and Green Valley Ranch Station Casino in
Henderson, Nevada and a 6.7 percent interest in the Palms Casino
Resort in Las Vegas, Nevada. In addition, Station manages the
Thunder Valley Casino in Sacramento, California on behalf of the
United Auburn Indian Community.
SUMMITVILLE TILES: Look for Schedules and Statements by Jan. 26
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Ohio.
Eastern Division, gave Summitville Tiles, Inc., an extension to
file schedules of assets and liabilities, a statement 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 26, 2004 to file these financial
disclosure documents.
Headquartered in Summitville, Ohio, Summitville Tiles, Inc.,
manufactures tile and installation products including a complete
line of grouts, mortars, epoxies, furan, latex, water proofing and
tile care products. The Company filed for chapter 11 protection
on December 12, 2003 (Bankr. N.D. Ohio Case No. 03-46341).
Matthew A Salerno, Esq., and Shawn M Riley, Esq., at McDonald,
Hopkins, Burke & Haber Co LPA, represent the Debtor in its
restructuring efforts. When the Company filed for protection from
its creditors, it estimated debts and assets of more than $10
million.
TIMKEN COMPANY: Will Publish Fourth-Quarter Results on Thursday
---------------------------------------------------------------
The Timken Company (NYSE: TKR) will announce its fourth quarter
financial results on Thursday, January 22, 2004 before the opening
of the New York Stock Exchange. The financial results will be
available through the Internet at http://www.timken.com/
The company will host a conference call that day for investors and
securities analysts to discuss the financial results.
Conference Call: Thursday, January 22, 2004
11 a.m. Eastern Time
All Callers: Live Dial-In: 706-634-0975
(Call in 10 minutes prior to be included)
Replay Dial-In: 706-645-9291
Replay Passcode: 4536689
Live Webcast: http://www.timken.com/
The Timken Company (Moody's, Ba1 Senior Unsecured Debt, Senior
Implied and Senior Unsecured Issuer Ratings) --
http://www.timken.com/-- is a leading international manufacturer
of highly engineered bearings, alloy and specialty steels and
components, and a provider of related products and services.
Following its February 2003 acquisition of The Torrington Company,
Timken employed 28,000 people worldwide with operations in 29
countries. In 2002, the combined companies had sales of
approximately $3.8 billion.
TORPEDO SPORTS USA: July 31 Balance Sheet Upside-Down by $2 Mil.
----------------------------------------------------------------
Torpedo Sports USA Inc. reported a net loss of $3,458,072 for the
year ended July 31, 2003, and a shareholders' deficit of
$2,152,023 as of July 31, 2003. These factors raise substantial
doubt about the Company's ability to continue as a going concern.
For the fiscal year ending July 31, 2004, management anticipates
that liquidity and capital resource needs will not be satisfied
from cash flows generated from Company operating activities, or
from its credit facility arrangement. It will be necessary to rely
on other sources available to it, including the sale of equity
securities through private placements of common or preferred
stock, the exercise of stock options or warrants, advances or
loans from shareholders and/or other related parties, some of
which may cause dilution to stockholders. Additionally, the
Company can give no assurances that it will be successful in
continuing to raise the capital required to pay its past due, as
well as continuing, obligations.
TURTLE SHELL: Case Summary & 6 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Turtle Shell, LLC
910 E. Cheyenne Road
Colorado Springs, Colorado 80906-7105
Bankruptcy Case No.: 04-10629
Chapter 11 Petition Date: January 13, 2004
Court: District of Colorado (Denver)
Judge: Howard R. Tallman
Debtor's Counsel: Jeffrey Weinman, Esq.
Weinman & Associates
730 17th Street Suite 240
Denver, CO 80202
Tel: 303-572-1010
Total Assets: $1,438,596
Total Debts: $1,289,378
Debtor's 6 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Beltz Edwards & Sabo, LLP $1,500
Capital One, F.S.B. $700
Colorado Springs Utilities $561
Waste Management $100
Kelly Moore Paint Co. $28
Fowler & Peth $0
TXU ENERGY: Fitch Raises S-T Rating to F2 with Stable Outlook
-------------------------------------------------------------
After reviewing the credit ratings of all of the companies within
the TXU group, Fitch Ratings has raised the short-term rating for
TXU Energy LLC to 'F2' from 'F3' and affirmed the other ratings of
TXU Corp and its subsidiaries as indicated below. The Rating
Outlook is Stable for TXU and its US subsidiaries, and Positive
for TXU Australia Holdings Limited Partnership.
TXU Corp benefits from the strong earning and cash flow it
receives from its regulated and non-regulated electric and gas
operations in Texas. On a consolidated basis, TXU's leverage
remains high for the ratings category with debt-to-EBITDA at 4.9
times for the twelve months-ending Sept. 30, 2003. Leverage is
expected to decline as, TXU's Oncor Electric Delivery will use the
proceeds from the issuance of $800 million in stranded asset
securitization bonds in 2004 to pay down corporate debt. TXU is
evaluating a partial initial public offering of TXU Australia. If
the company decides to proceed, it is expected that the proceeds
would be used to reduce leverage. Additionally, Fitch's believes
that TXU will not have a material liability for any obligations of
TXU Europe (rated 'D' by Fitch) obligations.
The upgrade of TXU Energy LLC's short-term rating is based upon
the consistent cash flow derived from its non-utility power
generation and supply operations. The ratings take into
consideration TXU Energy's capital structure of approximately 3.5x
adjusted debt-to-EBITDA, improved access to bank and capital
markets, sufficient liquidity to meet refinancing needs and solid
cash flow coverage of interest expense of 5.2x. The rating also
considers Fitch's view that currently high margins earned by TXU
Energy LLC, TXU's non-regulated retail power supplier in Texas,
are likely to moderate over time as price competition becomes more
prevalent in that market. However, because of the company's low
cost nuclear and lignite capacity, Fitch expects TXU Energy will
to continue to be competitive and profitable albeit at lower
margins.
The ratings of Energy's direct parent, TXU US Holdings take into
consideration the expectation of stable revenues and cash flow
from its subsidiaries, Energy and Oncor. The ratings of Oncor take
into consideration the strong and stable earning and cash flow
generated from its regulated utility operations, the lack of
commodity price risk and a leverage level commensurate with the
risk profile of a distribution and transmission business. Holdings
and its subsidiaries have sufficient liquidity from operating cash
flow augmented by availability under its bank lines of almost $2
billion and cash-on-hand at $603 million as of Sept. 30, 2003 to
more than cover all expected needs for collateral, capital
expenditures and maturing debt.
The rating of the Pinnacle One's $810 million senior secured notes
is based upon TXU's support of the repayment of principal and an
overfund account designed to pre-fund the interest payments.
Principal payments due in 2004 rely on the sale of the business,
the posting of cash to the trustee or the remarketing of TXU
mandatory convertible preference stock. TXU has stated its intent
to sell the business. In the event the proceeds from the
remarketing are not sufficient, TXU would be called upon to
present additional shares of the convertibles, thus the notes are
rated the same as the preferred stock of TXU Corp.
The 'BBB-' ratings of the senior unsecured debt of TXU Australia
Holdings (Partnership) Limited Partnership are based on the
valuable portfolio of gas and electricity assets that are well
spread along the supply chain that offer strong and stable cash
flow. The ratings also take into consideration the company's
somewhat high leverage that is expected to decline if the IPO goes
forward and the bulk of the proceeds are used to pay down debt.
TXU Corp. is a holding company that is engaged in the generation,
delivery and sale of electricity to both the wholesale and retail
customers, as well as the sale and delivery of natural gas in the
US, primarily in Texas. The company is also engaged in the
generation, distribution and sale of electricity, and the sale and
distribution of natural gas in Australia.
Rating upgraded by Fitch:
TXU Energy
--Commercial paper to 'F2' from 'F3'.
Ratings affirmed:
TXU
--Senior notes 'BBB-';
--Preference stock 'BB+';
--Commercial paper 'F3''.
U.S Holdings
--Senior unsecured debt 'BBB-';
--Preferred stock 'BBB-'.
Oncor
--First mortgage bonds 'BBB+';
--Debentures 'BBB';
--Commercial paper 'F2'.
TXU Energy
--Senior unsecured bonds 'BBB'.
TXU Gas Co.
--Senior notes 'BBB-'.
TXU Australia Holdings (Partnership) Limited Partnership
--Senior unsecured debt 'BBB-'.
Pinnacle One Partners, L.P.
--Senior secured notes 'BB+'.
UNITED AIRLINES: Wants to Pull Plug on 2 Boeing Aircraft Leases
---------------------------------------------------------------
The United Airlines Debtors need to maximize their fleet utility
at the lowest possible cost. James H.M. Sprayregen, Esq., at
Kirkland & Ellis, explains that the Debtors analyzed several
aircraft financings. The analysis considered the financing
structure and related equipment in light of the projected demand
for air travel, flight schedules, maintenance requirements, labor
costs and other business factors. After careful review, the
Debtors determined that the lease for one Boeing 747-400, with
Tail No. N190UA and the mortgage on a Boeing 777-200ER, with Tail
No. N789UA, are burdensome to the estates. The rates under the
Lease exceed the current market value and the payment obligations
far outweigh the benefits that the Debtors receive from using the
Aircraft.
Mr. Sprayregen says that the Debtors have an excess supply of
Boeing 747-400 and 777-200ER. In fact, the Leased Aircraft and
the Mortgaged Aircraft are currently grounded.
The Lease was entered into as part of a U.S. leveraged lease
financing arrangement. The lessor under each of the Leases is a
common law trust that holds the legal title to the equipment on
behalf of various equity participants. An Indenture Trustee
holds a security interest in the relevant pieces of equipment on
behalf of lending parties to the financing arrangement.
United owns the Mortgaged Aircraft. United obtained financing
for this Aircraft by issuing Equipment Notes to pass-through
trusts, which, to finance their purchase of the Equipment Notes,
in turn issued Enhanced Equipment Trust Certificates in public
offerings. Each Equipment Note is secured by particular pieces
of the Mortgaged Aircraft and its Engines.
By this motion, the Debtors seek the Court's authority to reject
the Lease and abandon the Mortgage.
The Leased Aircraft is located at Southern California Aviation,
in Victorville, California. The Mortgaged Aircraft is parked at
Timco Aviation Services, in Goodyear, Arizona. The Debtors are
currently bearing the expense of storing and maintaining
insurance on the Aircraft. To ensure that each Controlling Party
promptly relieves them of these costs, the Debtors ask the Court
to require each Controlling Party to take possession of the
Aircraft as soon as possible. Otherwise, the Controlling Party
should be required to reimburse the Debtors for any related
costs. (United Airlines Bankruptcy News, Issue No. 36; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
US AIRWAYS: Reports Several Key Management Team Promotions
----------------------------------------------------------
US Airways announced several key promotions within its management
team which have been approved by its board of directors, and the
resignation of four of its officers, each of whom have accepted
positions at other companies.
David M. Davis, formerly vice president - financial planning and
analysis, has been promoted to senior vice president - finance,
and will assume purchasing and fleet management functions. In
addition, Andrew P. Nocella, previously vice president - pricing
and revenue management, will now serve as vice president - network
and revenue management, and will be responsible for both pricing
and scheduling. Executive Vice President - Corporate Affairs and
General Counsel Elizabeth K. Lanier will assume the
responsibilities of corporate secretary.
Previously, US Airways had announced the promotion of Donna
Paladini to vice president - customer service.
"These are well deserved promotions of talented and dedicated
employees who will play an even greater role in the future of our
company," said US Airways President and Chief Executive Officer
David N. Siegel. "By consolidating the duties of some of the
departing executives, US Airways will continue its trend of
maintaining a very lean and highly qualified management team."
The resignations are:
Vice President - Deputy General Counsel and Corporate Secretary
Jennifer C. McGarey will join MCI as vice president, corporate
secretary in Ashburn, Va., effective Jan. 23, 2004.
Vice President - Fleet Jeffery A. McDougle will join Naperville,
Ill.,-based Laidlaw International as vice president, treasurer
effective Feb. 2, 2004.
Vice President - Planning and Scheduling Daniel M. McDonald will
take on the responsibilities as DHL's senior vice president,
network planning - the Americas in Cincinnati effective Jan. 28,
2004.
Vice President - Labor Relations and Benefits P. Douglas McKeen
will remain with US Airways through the end of the first quarter,
and then will return to labor consulting in Minneapolis.
"These four individuals have distinguished themselves over and
again during a very challenging period for this airline, and I
want to thank each of them for their commitment and
accomplishments while at US Airways. I wish them the best in
their endeavors," said Siegel.
US AIRWAYS: Allows Voluntary Furloughs After Flight Attendant Suit
------------------------------------------------------------------
US Airways flight attendants, represented by the Association of
Flight Attendants-CWA, AFL-CIO, won a major victory Wednesday last
week after an arbitrator ruled that the airline had improperly
furloughed 552 flight attendants.
"With 552 jobs and the integrity of our contract on the line, this
is an enormous victory for our flight attendants," said AFA US
Airways Master Executive Council President Perry Hayes. "US
Airways treatment of our flight attendants during this furlough is
just another example of management's blatant disregard for our
contract and our rights. Since the arrival of CEO Dave Siegel and
CFO Neil Cohen, management has focused more on harassing employees
rather than getting this airline back on track."
In December, US Airways management announced that it was
involuntarily furloughing 552 flight attendants. According to the
collective bargaining agreement between AFA and US Airways, before
flight attendants are involuntarily furloughed, the airline must
first offer a voluntary furlough. The flight attendants filed a
lawsuit on Jan. 8 to stop the illegal process. The next day,
airline management agreed to expedited arbitration to resolve the
issue before the furloughs became effective on Jan. 15.
US Airways management has made a public spectacle of asking for
employee cooperation in turning the airline around. At the same
time, management has set off this clash over furloughs, as well as
a number of other disputes over issues related to the flight
attendant reserve system, sick leave, medical benefits, and cuts
in the amount of time flight attendants are credited for working.
The groundwork for this victory was laid last summer when
management attempted to bypass the voluntary process but was
ultimately forced to follow the contract after an arbitrator ruled
in favor of the flight attendants in an expedited process.
US Airways must now determine how it will comply with the
arbitrator's ruling and the flight attendant contract. AFA
believes that the airline should allow at least 15 days for flight
attendants to bid for the voluntary furloughs. If not enough
flight attendants apply for a voluntary furlough, then the
remaining furloughs will be made through the involuntary process.
By adhering to the contract and conducting a voluntary furlough,
workers with more seniority can elect to take a pre-determined
amount of time off, in order to prevent the workers at the bottom
of the seniority list from being put out on the street without a
choice.
More than 45,000 flight attendants, including the 5,200 flight
attendants at US Airways, join together to form AFA, the world's
largest flight attendant union. AFA is part of the 700,000 member
strong Communications Workers of America, AFL-CIO.
VAIL RESOURS: Caps Price of $390-Mill. Senior Sub. Note Offering
----------------------------------------------------------------
Vail Resorts, Inc. (NYSE: MTN) priced $390 million in aggregate
principal amount of its new issue of senior subordinated notes due
2014 at a coupon of 6.75% at 100% of face value (rated B by
Standard & Poor's).
Commenting on the refinancing, Vail Resorts Chairman and CEO Adam
Aron said, "This refinancing is extremely good news for Vail
Resorts. We expect it will reduce cash interest expense by more
than $5 million per year for the next decade. Importantly, we
have locked in a 6.75% interest rate on a large portion of our
debt through 2014. The fact that Vail Resorts was able to secure
this new low interest rate demonstrates the real confidence
enjoyed by our company among institutional debt investors. There
is of course a one-time cost to complete this transaction, but in
total this is a highly favorable outcome for Vail Resorts."
The closing of the offering is expected to occur January 29, 2004,
and is subject to customary closing conditions. The Company plans
to use the proceeds of the offering to consummate the cash tender
offer and consent solicitation for any and all of its $200,000,000
outstanding principal amount of its 8.75% Senior Subordinated
Notes due 2009, CUSIP Number 91879QAC3 and $160,000,000
outstanding principal amount of its 8.75% Senior Subordinated
Notes due 2009, CUSIP Number 91879QAF6. As previously announced
the Offer commenced on January 13, 2004.
The senior subordinated notes are being offered to qualified
institutional buyers pursuant to Rule 144A under the Securities
Act of 1933, as amended and to persons outside the United States
under Regulation S of the Securities Act.
Vail Resorts, Inc. is the premier mountain resort operator in
North America. The Company's subsidiaries operate the mountain
resorts of Vail, Beaver Creek, Breckenridge and Keystone in
Colorado, Heavenly Resort in California and Nevada and the Grand
Teton Lodge Company in Jackson Hole, Wyoming. In addition, the
Company's RockResorts luxury resort hotel company operates 10
resort hotels throughout the United States. The Vail Resorts
corporate Web site is http://www.vailresorts.com/and the consumer
Web sites are http://www.snow.com/and http://www.rockresorts.com/
Vail Resorts, Inc. is a publicly held company traded on the New
York Stock Exchange (NYSE: MTN).
VAIL RESORTS: Planned $350M Senior Sub. Notes Get S&P's B Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its B rating to Vail
Resorts Inc.'s proposed $350 million senior subordinated notes due
2014. Net proceeds will be used to refinance existing debt.
At the same time, Standard & Poor's affirmed its existing ratings,
including the 'BB-' corporate credit rating, on the company.
Vail, Colo.-based ski resort operator had total debt outstanding
of $580.4 million at Oct. 30, 2003.
The rating reflects Vail Resorts' limited geographic diversity,
high capital expenditures, and risks associated with a highly
seasonal and cyclical industry. This is only partly offset by
solid operating performance, a dominant market share in Colorado,
and good product revenue mix.
"The negative rating outlook is based on Vail's high debt leverage
and moderate cushion under its covenants," said Standard & Poor's
credit analyst Andy Liu. Capital expenditures for fiscal 2003 were
higher due to renovation and upgrades associated with recently
acquired properties. Spending is expected to decline modestly in
fiscal 2004, which would benefit discretionary cash flow.
Standard & Poor's will review the rating outlook upon completion
of the current ski season. A further weakening of the credit
profile or covenant cushion, due to either earnings weakness or
acceleration of capital spending, could cause a review of the
ratings.
VENTAS INC: Will Publish Q4 and 2003 Year-End Results on Feb. 26
----------------------------------------------------------------
Ventas, Inc. (NYSE: VTR) will issue its 2003 fourth quarter and
year-end earnings on Thursday evening, February 26, 2004. A
conference call to discuss those earnings will be held on Friday,
February 27, 2004 at 10:00 a.m. Eastern Time (9:00 a.m. Central
Time). The call will be webcast live by CCBN and can be accessed
at the Ventas Web site at http://www.ventasreit.com/or at
http://www.fulldisclosure.com/
Ventas, Inc. -- whose September 30, 2003 balance sheet shows a
total shareholders' equity deficit of about $24 million -- is a
healthcare real estate investment trust that owns 42 hospitals,
194 nursing facilities and nine other healthcare and senior
housing facilities in 37 states. The Company also has investments
in 25 additional healthcare and senior housing facilities. More
information about Ventas can be found on its Web site at
http://www.ventasreit.com/
WAVING LEAVES: Court Okays Critchfield as Compensation Counsel
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Ohio,
Eastern Division, gave its stamp of approval to Waving Leaves,
Inc., and its debtor-affiliates' application to employ
Critchfield, Critchfield & Johnston, Ltd., as workers'
compensation counsel.
Critchfield is expected to:
a. perform all necessary services as the debtors' counsel
in connection with all pending and future workers'
compensation claims, including, without limitation,
providing the Debtors with advice concerning their
rights and duties as a state fund employer under the
Workers' Compensation Statute of the State of Ohio,
representing the Debtors, and preparing all necessary
documents, motions, applications, answers, orders,
reports and paper in connection with the administration
and defense of these workers' compensation cases on
behalf of the Debtors;
b. represent the debtors at administrative hearings and
court matters on matters pertaining to the affairs of
the debtors as complying State Fund Employers; and
c. perform all other necessary legal services with regard
to workers' compensation matters.
Critchfield's customary hourly rates are:
Partners $175 per hour
Associates $140 per hour
Paraprofessionals $ 75 per hour
Headquartered in Wooster, Ohio, Waving Leaves, Inc., along with
Leaf Investments, LTD, filed for chapter 11 protection on December
3, 2003 (Bankr. N.D. Ohio Case No. 03-66524). R. Timothy Coerdt,
Esq., at Wegman, Hessler & Vanderburg represent the Debtors in
their restructuring efforts. When the Company filed for protection
from their creditors, they listed debts and assets of:
Total Assets Total Debts
------------ -----------
Waving Leaves, Inc. $6,806,785 $8,178,503
Leaf Investments, LTD $3,818,990 $22,999,163
WCI STEEL: Initiates Cost-Cutting Plan to Save $3 Mill. Annually
----------------------------------------------------------------
WCI Steel, Inc. announced a series of cost-cutting measures that,
when fully implemented, will save the company approximately $3
million annually.
The plan entails a 10% voluntary reduction in WCI's salaried
workforce and a decrease in the company's contributions to
salaried employees' 401(k) savings plans.
Patrick G. Tatom, WCI's president and chief executive officer,
said that reducing WCI's costs is critical to the company
successfully restructuring and emerging from bankruptcy.
"Our restructuring plan as well as our ability to compete on a
long-term basis requires us to significantly lower our cost
structure," Tatom said. "We will do everything prudently possible
to accomplish this task."
A group of salaried employees will receive a letter in the next
week detailing a financial retirement incentive. The employees
will have until March 1 to accept or reject the retirement
proposal. WCI will accept 35 retirements through this program.
Meanwhile, effective February 1, the company will reduce its base
contribution to salaried employees' 401(k) plans by 50 percent as
well as suspend the company's additional match to employees'
contributions. These changes will in no way affect employees'
vested balances in their 401(k) plans.
As these actions are outside the normal course of business, they
will require bankruptcy court approval. On Sept. 16, 2003, WCI
filed a voluntary petition for protection under Chapter 11 of the
U.S. Bankruptcy Code in the United States Bankruptcy Court for the
Northern District of Ohio, Eastern Division in Youngstown.
WCI is an integrated steelmaker producing more than 185 grades of
custom and commodity flat-rolled steel at its Warren, Ohio
facility. WCI products are used by steel service centers,
convertors, electrical equipment manufacturers and the automotive
and construction markets. The company has approximately 1,700
employees.
WEIRTON STEEL: Details Temporary Production Curtailment Program
---------------------------------------------------------------
Weirton Steel Corp. (OTC Bulletin Board: WRTLQ) reported that
employee reductions could reach 800 as a result of its upcoming
temporary curtailment of certain operations caused by a shortage
of ironmaking coke.
The staggered reductions, which include union represented and
management personnel, begin Saturday and will continue at least
through February. The effect on various operations also will begin
this weekend and continue through the end of next month, including
the idling of one of the company's two blast furnaces.
"Coke is needed to operate our blast furnaces. As we reported last
week, the ongoing coke shortage has triggered this unfortunate
situation. We again want to assure our employees and customers
that we're doing everything we can to mitigate the effects of this
problem," said D. Leonard Wise, Weirton Steel chief executive
office.
On Jan. 9, Weirton Steel announced the curtailments and reductions
because of the shortage of ironmaking coke. However, at that time,
company officials had not made a definitive decision on which
units would be curtailed or the number of employees who would be
reduced.
The operations to be temporarily affected include: the idling of
No. 1 blast furnace, No. 3 three pickler, No. 7 tandem mill, No. 8
tandem mill and galvanizing facilities; and the reduction in
operations involving steelmaking, tin mill and No. 5 pickler.
The No. 1 furnace will be idled on Feb. 1 with company employees
requiring about two weeks to make repairs to the unit before it is
restarted. Once restarted, the No. 4 furnace will be temporarily
idled.
No. 1 blast furnace produces nearly 4,000 tons of molten iron per
day while the No. 4 furnace produces 3,000 tons daily.
U.S. Steel Corp., which is Weirton Steel's primary coke supplier,
began in early December to reduce coke shipments following a fire
at a West Virginia coal mine. The mine, yet to reopen, yields
metallurgical coal that U.S. Steel manufactures into coke at its
Pennsylvania coking operations.
Coke serves as a fuel for blast furnaces, which produce molten
iron. The iron is used as a component in producing steel.
China, which is purchasing significant amounts of coke and other
raw materials to feed its rapidly growing steel industry, is
contributing to the world shortage of the product.
Meanwhile, Weirton Steel continues to explore all options in
regard to its bankruptcy. Regardless, company officials state that
for the plant to continue operations, it is necessary to arrive at
a new labor agreement that is competitive with the new industry
pattern.
There have been no negotiations for a new contract between the
company and the Independent Steelworkers Union in over a month.
Weirton Steel, the fifth largest U.S. integrated steel company,
filed for bankruptcy protection on May 19, 2003. It is the second
largest producer of tin mill products and employs 3,330.
WESTERN UNITED: A.M. Best Lowers Financial Strength Ratings to R
----------------------------------------------------------------
A.M. Best Co., downgraded the financial strength ratings to C
(Weak) from C++ (Marginal) of Western United Life Assurance
Company (Spokane, WA) and its affiliates, Old Standard Life
Insurance Company (Boise, ID) and Old West Annuity & Life
Insurance Company (Phoenix, AZ).
The ratings have been removed from under review, but the outlooks
are negative.
On December 23, 2003, A.M. Best downgraded the insurance
companies' financial strength ratings to C++ (Marginal) because of
concerns with the very high leverage, negative operating
performance, illiquidity and stock suspension of the parent
concerns, Metropolitan Mortgage & Securities Company, Inc. and
Summit Securities, Inc. On December 26, 2003, the companies
publicly announced that they had agreed to be placed under
voluntary administrative supervision by their respective
Departments of Insurance. The actions by the Insurance Departments
were taken following their review of intercompany transactions
between the insurance companies and their parents and the concern
with the overall financial condition of the parent organizations.
A.M. Best believes that the insurance companies remain solvent and
notes that while they continue to operate under the administrative
order, they have limited financial flexibility due to the
significant liquidity issues at the parent companies. During the
last several years, the insurance companies received capital
contributions from their parent concerns; however, going forward,
the parent companies will no longer be able to provide capital due
to their financial stress.
In addition, A.M. Best continues to have concerns with the
insurance companies' high concentration of real estate related
investments relative to capital and surplus and the nature of
their liability structure, which is almost entirely comprised of
individual annuity reserves.
A.M. Best will continue to monitor the status of the three
insurance entities and what additional impact the financial
condition of the parent concerns may have on them.
A.M. Best Co., established in 1899, is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit A.M. Best's Web site at http://www.ambest.com/
WISCONSIN AVE: Fitch Affirms Ser. 1996-M5 Class C Rating at BB-
---------------------------------------------------------------
Fitch upgrades Wisconsin Avenue Securities, subordinate REMIC
mortgage pass-through certificates, Series 1996-M5 $3.3 million
class B to 'A' from 'BBB-'. Fitch affirms the $9.2 million class C
at 'BB-'.
The $52.6 million class A-3 certificates were exchanged for
Federal National Mortgage Association guaranteed REMIC pass-
through certificates and are not rated by Fitch. Fitch also does
not rate the class D certificates.
The certificates are collateralized by 28 mortgage loans, secured
by multifamily properties. The properties are diversified among 15
states with the highest concentration in Texas, Indiana, and
Georgia.
As of the December 2003 distribution date, the transaction's
aggregate principal balance has decreased 66% to $73 million from
$216.0 million at issuance. ORIX Real Estate Capital Markets, LLC,
the master servicer, collected operating statements for 99% of the
loans in the pool. The year-end 2002 weighted-average debt service
coverage ratio is 1.25 times, a decrease from 1.36x at YE 2001 and
1.28x at issuance. One loan (7%) is delinquent and in special
servicing due to the inability to obtain refinancing at maturity.
Fitch will continue to monitor this transaction, as surveillance
is ongoing.
WOMEN FIRST: Edward F. Calesa Returns to President & COO Posts
--------------------------------------------------------------
Women First HealthCare Inc. (Nasdaq: WFHC) announced that Edward
F. Calesa has resumed his former roles of chief operating officer
and president. This is in addition to his role as chairman, chief
executive officer and co-founder.
The management team, who report directly to Calesa, will support
him as an integrated group. The management team includes Randi
Crawford, co-founder and vice president, consumer business;
Saundra Pelletier, vice president, pharmaceuticals; and Richard
Vincent, chief financial officer. Calesa assumes the role and
responsibilities of Michael Sember, former chief operating officer
and president. Sember is leaving to pursue other interests.
Commenting, Calesa said, "This team of experienced pharmaceutical
executives has tremendous spirit and dedication. I believe their
leadership and experience will help keep Women First HealthCare
firmly on course to achieve our goals."
Women First HealthCare Inc. (Nasdaq:WFHC) is a San Diego-based
specialty pharmaceutical company. Founded in 1996, its mission is
to help midlife women make informed choices regarding their health
care and to provide pharmaceutical products -- the company's
primary emphasis -- and lifestyle products to meet their needs.
Women First HealthCare is specifically targeted to women age 40+
and their clinicians. Further information about Women First
HealthCare can be found online at http://www.womenfirst.com/
* * *
At June 30, 2003, the Company's balance sheet shows a working
capital deficit of about $7 million, while total net
capitalization dropped to about $15 million from $46 million six
months ago.
As reported in Troubled Company Reporter's May 15, 2003 edition,
Women First HealthCare Inc. received $2.5 million of new capital
through a private placement of its common stock and completed
agreements to obtain waivers of past defaults and restructure the
terms of both its $28.0 million principal amount of senior secured
notes and convertible redeemable preferred stock issued to finance
the company's acquisition of Vaniqa(R) Cream.
WOMEN FIRST HEALTHCARE: Strikes Strategic Partnership with PCOSA
----------------------------------------------------------------
Women First HealthCare, Inc. (Nasdaq: WFHC) have entered into a
partnership with the Polycystic Ovarian Syndrome Association
(PCOSA) to work together to educate and promote Vaniqa(R)
(eflornithine hydrochloride) Cream, 13.9% to patients with PCOS,
as well as the Endocrinologists that serve the members of the
PCOSA. This partnership creates a significant opportunity for
Women First to expand the Vaniqa(R) franchise.
PCOS affects an estimated 15 million women in the United States
alone. The goal of this alliance is to open an untapped venue for
women to gain access to important patient education and
information regarding Vaniqa(R) that will assist them in managing
unwanted facial hair, a common symptom of PCOS.
This partnership extends the reach of Vaniqa(R):
-- 2,000 Endocrinologists will be sent an announcement letter
about the Polycystic Ovarian Syndrome Association endorsement
of Vaniqa(R).
-- A website link will be established on the Polycystic Ovarian
Syndrome Association Web site to http://www.Vaniqa.com/
-- Members of The Polycystic Ovarian Syndrome Association will
receive information about Vaniqa(R)
-- Women First will contribute to the monthly and quarterly PCOS
newsletters and participate at the annual PCOSA conference.
Commenting on the partnership, Women First Consumer Vice
President, Randi Crawford said, "This partnership allows Women
First HealthCare to achieve our mission of helping women by
informing and educating PCOS patients about Vaniqa(R) and how it
can help."
Ashley Tabeling, Executive Director for the PCOSA commented, "We
are thrilled to be partnering with Women First HealthCare on
Vaniqa(R) to offer women and girls with PCOS much needed services
that will help them manage their symptoms."
Vaniqa(R) is indicated for the reduction of unwanted facial hair
in women. In controlled trials, Vaniqa(R) provided clinically
meaningful and statistically significant improvement in the
reduction of facial hair growth around the lips and under the chin
for nearly 60% of women using Vaniqa(R). Vaniqa(R) is not a hair
remover but complements other current methods of hair removal such
as electrolysis, shaving, depilatories, waxing, and tweezing. The
patient should continue to use hair removal techniques as needed
in conjunction with Vaniqa(R). Improvement in the condition may be
noticed within four to eight weeks of starting therapy. Continued
treatment may result in further improvement and is necessary to
maintain beneficial effects. The condition may return to pre-
treatment levels within eight weeks following discontinuation of
treatment. The most frequent adverse events related to treatment
with Vaniqa(R) were skin-related adverse events. There are no
adequate and well controlled studies in pregnant women, therefore
use cannot be recommended for these patients.
Women First HealthCare, Inc. (Nasdaq:WFHC) is a San Diego-based
specialty pharmaceutical company. Founded in 1996, its mission is
to help midlife women make informed choices regarding their health
care and to provide pharmaceutical products -- the Company's
primary emphasis -- and lifestyle products to meet their needs.
Women First HealthCare is specifically targeted to women age 40+
and their clinicians. Further information about Women First
HealthCare can be found online at http://www.womenfirst.com/About
Us and Investor Relations.
The Polycystic Ovarian Syndrome Association is a national non-
profit organization, primarily operated by women with PCOS. PCOSA
exists to provide comprehensive information, support, and advocacy
for women and girls with the condition known as polycystic ovary
syndrome. Further information about the PCOSA can be found online
at http://www.pcosupport.org/
WORLDCOM INC: Election Forms Expiry Date Extended to January 26
---------------------------------------------------------------
MCI (WCOEQ, MCWEQ) announced that the expiration date for the
delivery of election forms by the holders of claims in classes 5,
11 and 13 of the Company's plan of reorganization is being
extended to 4:15 p.m. (Eastern Time) on Monday, January 26, 2004.
These election forms allow the holders to elect to receive notes
and/or common stock of the reorganized Company upon its emergence
from bankruptcy. The previous expiration date was 4:15 p.m.
(Eastern Time) on Tuesday, January 20, 2004.
WorldCom, Inc. (WCOEQ, MCWEQ), which, together with its
subsidiaries, currently conducts business under the MCI brand
name, is a leading global communications provider, delivering
innovative, cost-effective, advanced communications connectivity
to businesses, governments and consumers. With the industry's most
expansive global IP backbone, based on the number of company-owned
POPs, and wholly-owned data networks, WorldCom develops the
converged communications products and services that are the
foundation for commerce and communications in today's market. For
more information, go to http://www.mci.com/
XTO ENERGY: Prices $500 Million of 4.9% Senior Notes Due 2014
-------------------------------------------------------------
XTO Energy Inc. (NYSE: XTO) priced its previously announced
offering of $500 million (increased from $400 million) of Senior
Notes due 2014 which will bear a coupon of 4.9%. The notes were
issued at 99.34% of par to yield 4.98% to maturity. Net proceeds
from the offering will total approximately $490 million and are
expected to be used to finance recently announced property
transactions and repay a portion of the Company's bank
indebtedness.
The offering was underwritten by joint book-runners Lehman
Brothers and JP Morgan; joint lead-managers include Banc of
America Securities LLC, Citigroup, Morgan Stanley, UBS Investment
Bank and Wachovia Securities; co-managers include ABN AMRO
Incorporated, Banc One Capital Markets, Inc., BNP Paribas, Fleet
Securities, Inc., BNY Capital Markets, Inc., Credit Lyonnais
Securities (USA), Harris Nesbitt and Scotia Capital. A prospectus
regarding the notes can be obtained from Lehman Brothers or JP
Morgan. The offering is expected to close on January 22, 2004.
XTO Energy Inc. (S&P, BB+ Corporate Credit Rating, Positive
Outlook) is a premier domestic natural gas producer engaged in the
acquisition, exploitation and development of quality, long-lived
gas and oil properties. The Company, whose predecessor companies
were established in 1986, completed its initial public offering in
May 1993. Its properties are concentrated in Texas, New Mexico,
Arkansas, Oklahoma, Kansas, Wyoming, Colorado, Alaska and
Louisiana.
* BOND PRICING: For the week of January 19 - 23, 2004
-----------------------------------------------------
Issuer Coupon Maturity Price
------ ------ -------- -----
Adelphia Communications 3.250% 05/01/21 56
American & Foreign Power 5.000% 03/01/30 73
AnnTaylor Stores 0.550% 06/18/19 75
Armstrong World Industries 6.500% 08/15/05 57
Burlington Northern 3.200% 01/01/45 57
Comcast Corp. 2.000% 10/15/29 36
Cons Container 10.125% 07/15/09 73
Cox Communications Inc. 2.000% 11/15/29 33
Delta Air Lines 8.300% 12/15/29 70
Delta Air Lines 9.000% 05/15/16 75
Delta Air Lines 9.250% 03/15/22 74
Elwood Energy 8.159% 07/05/26 69
Fibermark Inc. 10.750% 04/15/11 70
Finova Group 7.500% 11/15/09 63
Gulf Mobile Ohio 5.000% 12/01/56 69
Inland Fiber 9.625% 11/15/07 50
International Wire Group 11.750% 06/01/05 72
Levi Strauss 7.000% 11/01/06 69
Levi Strauss 11.625% 01/15/08 70
Levi Strauss 12.250% 12/15/12 68
Liberty Media 3.750% 02/15/30 66
Liberty Media 4.000% 11/15/29 70
Mirant Corp. 2.500% 06/15/21 67
Mirant Corp. 5.750% 07/15/07 68
Missouri Pacific Railroad 4.750% 01/01/30 73
Northern Pacific Railway 3.000% 01/01/47 57
RCN Corporation 10.125% 01/15/10 51
Southern Energy 7.400% 07/15/04 70
Universal Health Services 0.426% 06/23/20 65
Worldcom Inc. 6.400% 08/15/05 36
Worldcom Inc. 7.550% 04/01/04 36
*********
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.
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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.
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