/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/040127.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, January 27, 2004, Vol. 8, No. 18 Headlines ACCLAIM: Gets Time Extension to Comply with Nasdaq Requirement ADELPHIA BUSINESS: Pulling Plug on McLeod Indefeasible Use Pact ADELPHIA COMMS: Court Okays Jon Flinker as Special Labor Counsel AIR CANADA: Fixes February 23 as Restructuring Claims Bar Date AK STEEL: Will Implement Stainless Steel Price Increases ALLEGHENY ENERGY: Third-Quarter Net Loss Narrows to $51 Million AMERCO: Citibank N.A. Takes Action to Block Plan Confirmation AMERICA WEST: SEC Declares Registration Statement Effective AMES DEPT.: Wants Nod to Terminate Henrietta Lease and Sublease APPLICA INC: Will Publish Q4 and Year-End Results on February 26 ASTON RANCH, LLC: Case Summary & 2 Largest Unsecured Creditors AURORA FOODS: Court Extends Schedule-Filing Deadline to April 6 BAR SAN CONTRACTORS: Case Summary & Largest Unsecured Creditors BOUTIT INC: Case Summary & 18 Largest Unsecured Creditors BRIAZZ: Brings-In Grant Thornton as New Independent Accountants BROADBAND OFFICE: Intends to Dump Shares in Redback Network BUILDERS PLUMBING: Signs-Up Rome Associates as Tax Accountants BURLINGTON INDUSTRIES: Cases Reassigned to Judge Joel Rosenthal CABLE & WIRELESS: Court Approves Proposed Asset Sale to SAVVIS CABLE & WIRELESS: SAVVIS Comms. Pitches Best Bid for Core Assets CABLE & WIRELESS: SAVVIS Confirms Selection as Winning Bidder CABLE SATISFACTION: Court Extends CCAA Protection Until March 31 CASELLA WASTE: Prices $45-Million 9.75% Senior Sub. Notes Offering CENTERPOINT ENERGY: Reliant Drops Option to Buy Texas Genco Stake CENTRAL WAYNE: US Trustee Appoints Official Creditors' Committee CEPHALON: FTC Wants Additional Information re Pending CIMA Merger CONSTELLATION BRANDS: Declares 5.75% Preferred Share Cash Dividend DIAMETRICS MEDICAL: Arranges New $2.5MM Financing with Mercator DII INDUSTRIES: Court Lifts Stay for Non-Asbestos Actions DOMAN INDUSTRIES: CCAA Stay Extended to March 2, 2004 DVI INC: Wants Clearance for Settlement Pact with US Bank et al. ENCOMPASS SERVICES: James Jones' $1-Million Claim Disallowed ENRON CORP: Court Okays Arnold & Porter's Engagement as Counsel EXIDE TECH.: Has Until March 31 to Make Lease-Related Decisions FLEMING: Claims Classification and Treatment Under Amended Plan FREESTAR TECH.: Cash Resources Insufficient to Fund Operations GENCORP INC: Q4 & FY 2003 Conference Call Scheduled for Tomorrow GENTEK: Court Enters Final Decree Closing 21 Subsidiary Cases GLIMCHER REALTY: Prices B-Rated $150 Mill. Preferred Offering GLIMCHER REALTY: S&P Assigns B Rating to $150M Ser. G Preferreds GLOBAL CROSSING: Court Approves Tekelec Settlement Agreement GRAPHIC PACKAGING: Extends Exchange Offers Until Tomorrow GREENTECH USA: Hires Hunter & Atkins to Replace Sherb as Auditors HARKEN ENERGY: Annual Shareholders' Meeting Set for February 17 HAYES LEMMERZ: Reports Primary and Secondary Offering of Shares HEARTLAND STEEL: District Court Upholds Officer's Retention Bonus HOLLINGER INC: Wants to Defend its Rights re Federal Court Order HOLLINGER: Consents Change in Hollinger International's By-Laws HOLLINGER: Subsidiary Receives Written Consent re By-Laws Changes HUDSON'S BAY: Arranges $300-Million Securitization Replacement INTERNET CAPITAL: Further Reduces Debt to Below $100 Million Mark L.L. KNICKERBOCKER: Distributing New Shares Pursuant to Plan LAZY HAZEL LLC: Case Summary & 3 Largest Unsecured Creditors LOEWEN GROUP: Amends Credit Facility and Redeems Convertible Notes MADASA US LLC: Case Summary & 20 Largest Unsecured Creditors MESA AIR GROUP: Holding December-Quarter Conference Call Today MILLENNIUM CHEM.: Will Present at 3 Analyst Conferences in Feb. MIRANT CORP: Proposes Uniform Safe Harbor Termination Procedures MIRENCO INC: Shareholders Approved Two Proposed Stock Issues NAT'L CENTURY: Court Disallows Int'l Philanthropic's $12MM Claim NATIONSRENT INC: Balks at Lasalle's $14-Million Amended Claim NETDRIVEN SOLUTIONS: Shareholders Approve Proposed Restructuring NORTHWEST AIRLINES: Dec. 31 Balance Sheet Upside-Down by $2 Bil. ORIGEN FIN'L: Fitch Hatchets 3 Note Ratings to Low-B & Junk Levels OWENS CORNING: Asks Court to Disallow Rhode Island's $80MM Claim OZARK AIR LINES: Suspends Service & Files Chapter 11 Petition OZARK AIR LINES: Voluntary Chapter 11 Case Summary PACIFICARE HEALTH: Names Watkins as CFO for Behavioral Subsidiary PARMALAT GROUP: Brazilian Unit Returns Tomato Plant to Unilever PG&E NATIONAL: USGen Sues Rockingham to Recover $72MM in Assets PHYAMERICA: Bankruptcy Court Finds Dr. Steven M. Scott in Contempt PILLOWTEX CORP: Court Approves KPMG's Engagement as Accountants POTLATCH CORP: Fourth-Quarter 2003 Results Enter Positive Zone READER'S DIGEST: Board Okays Sale & Leaseback of NY Headquarters RELIANCE: Robert Steinberg Wants OK to Settle Whalley Litigation RELIANT RESOURCES: Will Not Exercise Texas Genco Purchase Option RELIZON CO: S&P Assigns BB- Credit & $294M Credit Facility Ratings SAFETY-KLEEN: Court OKs Stipulation Settling Ball Corp.'s Claim SIGHT RESOURCE: Terminates Client-Auditor Relationship with KPMG SOLUTIA: Committee Wants to Implement Screening Wall Procedures SPECIAL VALUE: Fitch Ups Class IV Sr. Sec. Notes' Rating to BB+ SPECTRUM SCIENCES: Executes Licensing Pact with German Gov't SUMMITVILLE TILES: Turns to Aurora Management for Financial Advice TELESYSTEM: Extends Sale Pacts for Holders of Less Than 100 Shares TIME WARNER TELECOM: Pitches Winning Bid for EBS Fiber Assets TOWN SPORTS INT'L: Launches Senior Discount Debt Offering TRITON AVIATION: S&P Keeps Low-B & Junk Note Ratings on Watch Neg. TYCO INT'L: Declares Regular Quarterly Dividend Payable on May 3 UAP HOLDING: S&P Assigns B- $82.5M Senior Discount Notes Rating UNIQUE BROADBAND: Nov. 30 Working Capital Deficit Tops C$1 Mill. UNITED AIRLINES: OurHouse Asks Court to Disqualify Kirkland UNITED RENTALS: Prices Senior Notes & Senior Sub. Notes Offers UNITEDGLOBALCOM INC: Extends Rights Offering Until February 12 USA INSPIRED: Case Summary & 20 Largest Unsecured Creditors WEIGHT WATCHERS: Will Publish Q4 and FY 2003 Results on Feb. 24 WELLSFORD REAL: Will Make $46MM Asset Reduction re Whitehall JV WEYERHAEUSER CO.: Reports Slight Decline in Fourth-Quarter Results WORLDCOM INC: Election Form Expiry Date Extended Until Tomorrow XO COMMS: Raises $197 Million in Common Stock Rights Offering ZIM CORPORATION: Liquidity Issues Raise Going Concern Uncertainty * Pillsbury Winthrop's Manhattan Office Moves to 1540 Broadway * Large Companies with Insolvent Balance Sheets ********* ACCLAIM: Gets Time Extension to Comply with Nasdaq Requirement -------------------------------------------------------------- Acclaim Entertainment, Inc. (Nasdaq: AKLM) received notice from The Nasdaq Stock Market, Inc., indicating that, in accordance with Marketplace Rule 4310(c), the Company has been granted an extension, until January 24, 2005, within which to regain compliance with the minimum $1.00 bid price per share requirement of The Nasdaq SmallCap Market. In the notice, the Nasdaq staff noted that since the Company meets the initial inclusion criteria for The Nasdaq SmallCap Market under Marketplace Rule 4310(c), it is eligible for this additional compliance period. The compliance period is extended until January 24, 2005, provided that, if, prior to January 24, 2005, the bid price of the Company's common stock does not close at $1.00 per share or more for a minimum of 10 consecutive trading days, then the Company is required to (1) seek shareholder approval for a reverse stock split at or before it next shareholder meeting and (2) promptly thereafter effectuate the reverse stock split. The Company has committed in writing to Nasdaq to effectuate those measures in the event compliance is not achieved prior to January 24, 2005. If at any time before January 24, 2005, the bid price of the Company's common stock closes at $1.00 per share or more for a minimum of 10 consecutive trading days, the Nasdaq staff will provide notification that the Company complies with Marketplace Rule 4310(c)(8)(D). The Company cannot provide any assurance that it will receive an affirmative vote of its stockholders authorizing a reverse stock split, if required, nor that the Company will regain compliance with the minimum bid price requirement. Based in Glen Cove, N.Y., Acclaim Entertainment, Inc., is a worldwide developer, publisher and mass marketer of software for use with interactive entertainment game consoles including those manufactured by Nintendo, Sony Computer Entertainment and Microsoft Corporation as well as personal computer hardware systems. Acclaim owns and operates five studios located in the United States and the United Kingdom, and publishes and distributes its software through its subsidiaries in North America, the United Kingdom, Australia, Germany, France and Spain. The Company uses regional distributors worldwide. Acclaim also distributes entertainment software for other publishers worldwide, publishes software gaming strategy guides and issues "special edition" comic magazines periodically. Acclaim's corporate headquarters are in Glen Cove, New York and Acclaim's common stock is publicly traded on NASDAQ.SC under the symbol AKLM. For more information please visit its Web site at http://www.acclaim.com/ At September 28, 2003, Acclaim Entertainment's balance sheet shows a total shareholders' equity deficit of about $55 million. ADELPHIA BUSINESS: Pulling Plug on McLeod Indefeasible Use Pact --------------------------------------------------------------- Pursuant to Section 365(a) of the Bankruptcy Code, the Adelphia Business Solutions Debtors seek the Court's authority to reject an indefeasible right of use agreement, as modified by three amendments, between Adelphia Business Solutions Long Haul, L.P. and McLeod USA Telecommunications Services, Inc., as assignee from CapRock Telecommunications Corp. According to Judy G.Z. Liu, Esq., at Weil, Gotshal & Manges LLP, in New York, Long Haul acquired an indefeasible right of use in four dark fibers that covered 2,600 miles or 10,500 fiber miles throughout Texas, Oklahoma, and Louisiana pursuant to the agreement initially executed with CapRock on April 19, 1999. Three amendments were thereafter executed between the parties to meet Long Haul's changing business needs. Subsequently, CapRock transferred its fiber optic communication system to McLeod. Under the terms of the amended IRU Agreement, Long Haul acquired: (1) an IRU in four dark fibers; (2) an associated and non-exclusive IRU in the associated conduit; and (3) associated regeneration facilities. In return, Long Haul is obligated to, among other things, pay McLeod an IRU fee and an annual maintenance and monitoring fee. In addition, Long Haul pays for access to the System and is responsible for supplying any optronics, i.e. technology that processes data from fiber optic cable, and electronics. Long Haul is also responsible for its operating costs in connection with the regeneration facilities. Under the IRU Agreement, Ms. Liu informs the Court that operating costs will reach $16,000,000 over the life of the IRU Agreement. Due to the fact that the Debtors do not have the capital to purchase the required optronics to maintain operation of the network for which the IRU was procured, the Debtors decided that the IRU Agreement is no longer beneficial to their estates. Upon making this determination, Long Haul sought to enter into an agreement with a third party whereby Long Haul would assume the IRU Agreement and subsequently assign it to that certain third party, who would then lease back to Long Haul a limited capacity of the assigned interest in the IRU Agreement. Long Haul has since determined that that arrangement would not serve its best interests. Given that the costs associated with the IRU Agreement far outweigh the Debtors' limited need for capacity, Ms. Liu contends that the obligations of the IRU Agreement no longer serve the Debtors' business needs and became an unnecessary drain on the Debtors' estates, with no corresponding benefit. * * * Judge Gerber promptly grants the Debtors' request. (Adelphia Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service, Inc., 215/945-7000) ADELPHIA COMMS: Court Okays Jon Flinker as Special Labor Counsel ---------------------------------------------------------------- The Adelphia Communications Debtors want to employ Jon C. Flinker, Esq. to continue to assist them with special labor relations and employment matters. Shelley C. Chapman, Esq., at Willkie Farr & Gallagher LLP, in New York, relates that the Debtors employed Mr. Flinker as an ordinary course professional. Pursuant to a Court Order authorizing the employment of ordinary course professionals, the Debtors were authorized to pay compensation to each professional employed under the Ordinary Course Retention Orders for services rendered from the Petition Date through December 31, 2003 up to the lesser of: (1) $50,000 per month per Ordinary Course Professional on average during the Period; (2) $450,000 per month in the aggregate for all ordinary course professionals; or (3) $250,000 per ordinary course professional in the aggregate for the Period. Ms. Chapman states that as of September 2003, Mr. Flinker's fees exceeded the Aggregate Cap. As the Debtors have determined that Mr. Flinker's services are valuable and necessary to their efficient management and handling of the volume of labor relations and employment issues that arise in the ordinary course of operating their businesses, the Debtors seek the Court's authority to employ Mr. Flinker as their special labor relations and employment counsel. Mr. Flinker, a solo practitioner, specializes in labor relations and employment law. In particular, the National Labor Relations Board in Washington, D.C. and Baltimore, Maryland employed Mr. Flinker for four years. In addition, Mr. Flinker served as Assistant General Counsel to the United Food and Commercial Workers Union for several years. Mr. Flinker also was a partner in the law firm of Duvin, Flinker and Cahn for 16 years, specializing in the representation of management in labor and employment relation matters. Since 1987, Flinker was a solo practitioner, specializing in labor and employment relations representing various management clients. According to Ms. Chapman, Mr. Flinker represented the Debtors effectively in several labor relations and employment law matters. Mr. Flinker understands the Debtors' businesses and labor and employment law needs. Moreover, during the past 15 years, Mr. Flinker handled the majority of the Debtors' labor relations and employment law needs. Ms. Chapman explains that Mr. Flinker will provide legal advice and representation to the Debtors in connection with labor relations and employment matters, including representation in proceedings before the National Labor Relations Board involving unfair practices and union election matters. Mr. Flinker also will assist the Debtors in negotiating labor contracts and will represent the Debtors in labor contract arbitration cases. In consideration for Mr. Flinker's services, he will be compensated on an hourly basis, plus reimbursement of actual and necessary expenses incurred. Mr. Flinker's standard hourly rate is $250. The standard hourly rate for his paralegals is $80. These rates are subject to periodic, ordinary course adjustments. According to his books and records, Mr. Flinker received $252,494 in compensation for services rendered and expenses incurred in the Debtors' Chapter 11 cases. Mr. Flinker assures the Court that he: (1) does not have any connection with the Debtors, their creditors, or any party-in-interest, or their attorneys; (2) does not hold or represent an interest adverse to the estate; and (3) is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. * * * Judge Gerber authorizes the ACOM Debtors to employ Jon C. Flinker to continue to assist them with labor relations and employment matters. (Adelphia Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service, Inc., 215/945-7000) AIR CANADA: Fixes February 23 as Restructuring Claims Bar Date -------------------------------------------------------------- Air Canada reported that the Twentieth Report of the Monitor, an update on further developments relating to the restructuring process, has been completed by Ernst and Young Inc. and is available at http://www.aircanada.com/ The Report includes a summary of the following key developments: The Arbitration Process with Respect to the Regional Jet Allocation As a result of the May 2003 labour negotiations, an arbitration process was established to determine certain overlapping scope issues with respect to the Air Canada Pilots Association (ACPA) representing Air Canada mainline pilots and the Airline Pilots Association (ALPA) representing Air Canada Jazz pilots as well as issues related to regional jet aircraft allocation. Given the Company's announcement of its new aircraft orders in December 2003, the arbitration before Mr. Martin Tepltsky, Q.C. commenced on January 17, 2004 and arguments are expected to be heard on February 28 and 29, 2004. Satisfactory conclusion of the arbitration process and the allocation of the new regional jet aircraft is a condition precedent to the amended investment agreement with Trinity Time Investments Limited. New Aircraft Orders and Pre-delivery Deposits Air Canada will be bringing a motion for approval of certain non- refundable pre-delivery deposits respecting the new regional jet orders. Final Claims Bar Date Established The Company will amend the claims procedure order to establish a Restructuring Claims Bar Date of February 23, 2004. This requires all creditors who have not filed a claim to do so by that date. The Company intends to mail the claims information and related instructions no later than February 6, 2004. The Monitor states the view that a Restructuring Claims Bar Date of February 23, 2004 would allow potential claimants sufficient time to prepare and submit their proof of claim. The Monitor is also of the view that setting the Restructuring Claims Bar Date for February 23, 2004 will allow the Company to proceed with its restructuring in a manner which expedites its emergence from CCAA protection in accordance with Justice Farley's direction to proceed towards an expedited emergence and the expiry date contemplated in the Trinity amended investment agreement. The Claims Procedure contemplates that the Monitor, in consultation with the Company, may admit, revise or disallow any claim. AK STEEL: Will Implement Stainless Steel Price Increases -------------------------------------------------------- AK Steel (NYSE: AKS) will increase the price of 200, 300 and 400 series stainless steel sheet, strip and continuous mill plate products by approximately 3%, effective with shipments February 2, 2004, and by an additional 3%, effective with shipments March 1, 2004. The increases will be accomplished through one point reductions in the functional discount rate. AK Steel will also increase prices for polished steel and will amend freight charges and points of freight equalization. AK Steel said that these price increases will apply to all orders not covered by a firm price agreement. The increases are necessary due to significant increases in raw material, energy and freight cost inputs that are not covered by the current alloy surcharge mechanism. 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. ALLEGHENY ENERGY: Third-Quarter Net Loss Narrows to $51 Million --------------------------------------------------------------- Allegheny Energy, Inc. (NYSE: AYE) announced financial results for the third quarter of 2003. Concurrently, Allegheny filed the related quarterly financial report on Form 10-Q with the Securities and Exchange Commission and also its Form 10-Q for the third quarter of 2002. Third Quarter Consolidated Financial Results For the three months ended September 30, 2003, Allegheny reported a consolidated net loss of $51.0 million, or $0.40 per share, compared with a consolidated net loss of $263.0 million, or $2.09 per share, for the same period in 2002. Net losses on energy trading in the Generation and Marketing segment, which totaled $78.7 million ($51.8 million, net of income taxes), were a principal factor contributing to the consolidated net loss for this period. Paul J. Evanson, Chairman and CEO, said: "With our exit from the Western energy markets and a refocus of our trading business on asset optimization, our exposure to energy trading losses and the volatility of our financial results should be significantly reduced in the future. In addition to trading losses, we continue to experience high expenses for consulting, accounting and legal services and interest charges. "The good news is we are now current with our financial reporting and expect to file our 2003 10-K in March as scheduled. We continue to regard 2004 as a year of transition as we concentrate on refinancing our debt and creating a high-performance culture that will improve quality and reduce costs. I am confident that we are taking the right steps for success," Mr. Evanson concluded. Allegheny's consolidated net loss for the third quarter of 2003 decreased by $212.0 million. The following items significantly contributed to the results: -- Net losses on energy trading decreased by $243.1 million ($160.2 million, net of income taxes) compared to the third quarter of 2002. For the third quarter of 2003, Allegheny recorded a net trading loss of approximately $78.7 million compared to a net trading loss of $321.8 million ($198.9 million, net of income taxes) for the third quarter of 2002. Included in the trading losses for the third quarter of 2003 is a net loss of approximately $101.6 million ($66.9 million, net of income taxes) associated with exiting the Western energy trading markets, including the sale of the California energy supply contract and associated hedges and tolling agreements. -- Workforce reduction expenses of $104.2 million ($64.4 million, net of income taxes), which were incurred in the third quarter of 2002. There were no such expenses in the third quarter of 2003. -- An increase in interest charges of $46.1 million ($30.4 million, net of income taxes) as compared to the same period in 2002, primarily due to an increase in debt outstanding, including debt associated with a refinancing in February 2003 and the issuance of convertible trust preferred securities in July 2003. Third Quarter Results by Segment Delivery and Services: The Delivery and Services segment reported net income of $29.2 million for the third quarter of 2003 as compared to a net loss of $23.2 million for the same period in 2002. The improvement is due largely to lower workforce reduction expenses, which amounted to $52.7 million ($32.6 million, net of income taxes) for the third quarter in 2002. There were no such expenses in the same period of 2003. Other reasons for the improved year-over-year results included a $9.6 million gain on the sale of land in the third quarter of 2003 and an aggregate $33.7 million write-down and impairment charge related to unregulated assets and investments in the third quarter of 2002. Regulated electric revenues decreased by $13.6 million, or approximately 2 percent, compared to the third quarter of 2002, primarily due to cooler summer weather. Regulated gas revenues increased by $3.2 million, or approximately 18 percent, due to an increase in residential and commercial sales. Unregulated services revenues decreased by $152.3 million compared to the third quarter of 2002, primarily due to the sale of Alliance Energy Services on December 31, 2002, but this decrease had minimal effect on net income for the segment. Generation and Marketing: The Generation and Marketing segment reported a net loss of $85.1 million for the third quarter of 2003 compared to a net loss of $240.6 million for the comparable period in 2002. The net loss for the third quarter of 2003 decreased by $155.5 million, primarily due to the reduced energy trading losses as described above and the absence of workforce reduction expenses of $51.5 million ($31.9 million, net of income taxes) for the third quarter of 2002. There were no such expenses in the third quarter of 2003. Interest expense increased by $45.8 million ($30.2 million, net of income taxes) for the reasons described above. Nine-Month Consolidated Financial Results For the first nine months of 2003, Allegheny reported a consolidated net loss of $341.3 million, or $2.69 per share, compared to a consolidated net loss of $350.9 million, or $2.80 per share, for the same period in 2002. Before the cumulative effect of previously announced accounting changes, the consolidated loss was $320.6 million, or $2.53 per share, compared to a consolidated loss of $220.4 million, or $1.76 per share, for the same period in 2002. Items contributing to the net loss for the first nine months of 2003 included: -- Net losses on energy trading were $451.0 million ($263.4 million, net of income taxes) for the first nine months of 2003 compared to net losses of $210.7 million ($128.6 million, net of income taxes) for the comparable prior-year period. The net losses for the first nine months of 2003 included approximately $520.0 million associated with exiting the Western energy trading markets, offset in part by $69.0 million representing the net result of settling and terminating energy trading positions in other energy markets. -- Interest charges for the first nine months of 2003 were $350.9 million ($204.9 million, net of income taxes) as compared to interest charges of $229.2 million ($139.8 million, net of income taxes) for the comparable period in 2002 for the reasons described in the third quarter results above. -- Gains of $75.8 million ($56.7 million, net of income taxes) recorded in the first quarter of 2003 for the reapplication of Statement of Financial Accounting Standards No. 71, "Accounting for the Effects of Certain Types of Regulation," to certain electric generation assets in West Virginia; an impairment charge recorded in the first quarter of 2003 of $28.5 million ($16.6 million net of income taxes) for assets held for sale, including the Conemaugh Generating Station; and after-tax charges recorded in the first quarter of 2003 of $20.7 million due to cumulative effect of accounting changes associated with energy trading contracts and asset retirement obligations. A summary of nine-month results by business segment is included in the attached financial charts. Allegheny Energy is an integrated energy company with a portfolio of businesses, including Allegheny Energy Supply, which owns and operates electric generating facilities, and Allegheny Power, which delivers low-cost, reliable electric and natural gas service to about four million people in Pennsylvania, West Virginia, Maryland, Virginia and Ohio. More information about the Company is available at http://www.alleghenyenergy.com/ * * * As reported in Troubled Company Reporter's October 3, 2003 edition, Fitch Ratings downgraded Allegheny Energy Inc., and its subsidiaries. In addition, the Rating Watch status for all related entities is revised to Negative from Evolving, with the exception of West Penn Funding LLC and insured bonds of Allegheny Energy Supply Co. LLC. Ratings downgraded and on Rating Watch Negative by Fitch: Allegheny Energy, Inc. --Senior unsecured debt to 'BB-' from 'BB'; --Bank credit facility maturing in 2005 to 'BB-' from 'BB'; --11 7/8% notes due 2008 lowered to 'B+' from 'BB-'. Allegheny Capital Trust I -- Mandatorily trust preferred stocks to 'B+' from 'BB-'. Allegheny Energy Supply Company LLC --Unsecured bank credit facilities to 'B-' from 'B'; --Senior unsecured notes lowered to 'B-' from 'B'. Allegheny Generating Company --Senior unsecured debentures lowered to 'B-' from 'B'. Rating Watch revised to Negative from Evolving for the following ratings: Allegheny Energy Supply Company LLC --Secured bank credit facilities with first priority lien 'BB-'; --Secured bank credit facilities with a second priority lien 'B+'. Allegheny Energy Statutory Trust 2001-A Notes --Senior secured notes 'B+'. West Penn Power Company --Medium-term notes 'BBB-'. Potomac Edison Company --First mortgage bonds 'BBB'; --Senior unsecured notes 'BBB-'. Monongahela Power Company --First mortgage bonds 'BBB'; --Medium-term notes/pollution control revenue bonds (unsecured) 'BBB-'; --Preferred stock 'BB+'. Ratings affirmed; Rating Outlook Stable: West Penn Funding LLC --Transition bonds 'AAA'. Allegheny Energy Supply Company LLC --Pollution control bonds (MBIA-insured) 'AAA'. AMERCO: Citibank N.A. Takes Action to Block Plan Confirmation ------------------------------------------------------------- Citibank, N.A., as agent under a Synthetic Lease, complains that the AMERCO Debtors' First Amended Joint Plan of Reorganization: (a) does not meet the requirements of Section 1129(b) of the Bankruptcy Code; (b) does not satisfy the good faith requirements of Section 1129(d)(3) of the Bankruptcy Code; and (c) contains overbroad release provisions that violate Section 524(e) of the Bankruptcy Code and applicable Ninth Circuit precedent. The Carey Sale Transaction Jason Farrington, Esq., at Piper Rudnick LLP, in Las Vegas, Nevada, notes that the Plan provides the Debtors with several options for the treatment of the Citibank Claims in the event that the holders thereof reject the Plan. However, none of those options meet the requirements of Section 1129(b). One alternative for treatment of the Citibank Claims is for the Debtors to elect the treatment contained in Section 5.3(a)(i) of the Plan, which provides for payment in full of the Citibank Claims if the Carey Sale Transaction closes. But, Mr. Farrington points out, the Plan does not require that treatment if the Citibank Claimholders vote to reject the Plan. Citibank proposes that the Citibank Claimholders' liens should attach to the sale proceeds, entitling the claimholders to payment of their claims from the sale proceeds, which would be the same treatment if they vote to accept the Plan. By providing separate treatments for an affirmative or negative vote, the Debtors propose treatment that is contrary to the requirements of Sections 363(e) and 1129(b)(2)(A)(iii) of the Bankruptcy Code. Master Lease and Amerco Guaranty Restatement The Plan also provides the Debtors the option of reinstating the Master Lease and the Amerco Guaranty if the Citibank Claimholders vote to reject the Plan. According to Mr. Farrington, the proposed terms of the Restated Master Lease and Guaranty do not meet the requirement under Bankruptcy Code Section 1129(b)(2)(A)(iii) that the Debtors provide the "indubitable equivalent" of the Citibank Claims if the Citibank Claimholders vote to reject the Plan. Since the Debtors are treating the Citibank Claims as a secured loan, the new facility provided to the Citibank Claimholders should be a secured note loan and not a new synthetic lease. In addition, based on the interest rate, loan-to-value rate, tenor and amortization schedule proposed in the Restated Master Lease, the proposed restated facility would not be a market-rate transaction. Surrender of the Citibank Properties The Plan provides the Debtors with the option of surrendering "to the holders of the Citibank Secured Claim all of [the Debtors'] right, title and interest in and to the Citibank Properties," coupled with the potential of requiring Citibank to pay cash to the Debtors in the event that the amount of property so transferred -- voluntarily by the Debtors -- exceeds the allowed amount of the Citibank Claims. Mr. Farrington states that a forced sale is unprecedented and without any support under the Bankruptcy Code or applicable case law and does not meet the requirements of Section 1129(b). Other Alternative Treatments The Plan provides that the Debtors may elect "such other treatment of the Citibank Claims that complies with Section 1129(b)." However, Mr. Farrington tells the Court that the Plan failed to provide any other limitations or guidelines for "such other treatment" or describe how the Debtors' compliance with Section 1129(b) would be determined. Amerco Guaranty Claims Under the Plan, the Debtors provide a subclass for the Citibank guaranty claims against Amerco, for which no treatment is provided unless the Debtors reinstate the Synthetic Lease -- in which case the Debtors propose to reinstate the Amerco Guaranty in full satisfaction of the Citibank Claimholders' guaranty claims against Amerco. Despite this statement, Mr. Farrington says that the Plan does not recognize or propose a separate treatment for the claimholders' claims under the Amerco Guaranty, but instead ignores the separate rights of the Citibank Claimholders as unsecured creditors against Amerco under the Amerco Guaranty. Mr. Farrington explains that the Citibank Claimholders hold a liquidated, non-contingent unsecured claim against Amerco based on the Amerco Guaranty in the full outstanding amount under the Synthetic Lease, which claim must, at a minimum, receive a treatment under the Debtors' plan that does not "discriminate unfairly" against the Citibank Claimholders and is "fair and equitable" pursuant to Section 1129(b) of the Bankruptcy Code. The Plan does not provide definitively for the repayment of the Synthetic Lease in cash, and therefore, the claim under the Amerco Guaranty is due and payable. However, the Plan proposes to leave Citibank Claimholders in a worse situation with respect to their claims under the Amerco Guaranty than that of other creditors who are now receiving a payment of between 26% and 35% in cash under the Plan. Exclusion of Default Rate Interest Under the Plan, the Debtors propose to pay the full amount of the Citibank Claimholders' allowed claim, excluding default rate interest owing under the Synthetic Lease. Mr. Farrington argues that the elimination of default rate interest violates the requirements of Section 1129(b) that a plan not "discriminate unfairly" against a class of claims and that it be "fair and equitable." In Amerco's case, the Plan: (a) provides for a 100% recovery for AREC's unsecured creditors, including prepetition default rate interest and postpetition interest at a non-default rate for the AREC Note Claims; (b) provides for a 100% recovery, including postpetition interest at a non-default rate for Amerco's unsecured creditors; and (c) leaves all equity interests unimpaired. Thus, elimination of default rate interest would discriminate unfairly against the secured Citibank Claimholders and would not be fair or equitable. Accordingly, the Plan was not proposed in good faith and violates Section 1129(a)(3). The Plan Contains Overbroad Release Provisions The third party releases, discharges and injunctions in the Plan violate the explicit language of Section 524(e) and the clear weight of authority in the Ninth Circuit, which prohibits the release of third party non-debtors. Inasmuch as the releases, discharges and injunctions are in favor of several third party non-debtors and are in clear violation of Section 524(e), under well-established Ninth Circuit precedent, the Plan does not comply with Section 1129(a)(1) and is not confirmable. Headquartered in Reno, Nevada, AMERCO's principal operation is U- Haul International, renting its fleet of 96,000 trucks, 87,000 trailers, and 20,000 tow dollies to do-it-yourself movers through over 1,000 company-owned centers and 15,000 independent dealers located throughout the United States and Canada. The Company filed for chapter 11 protection on June 20, 2003 (Bankr. Nev. Case No. 03-52103). Craig D. Hansen, Esq., Jordan A. Kroop, Esq., Thomas J. Salerno, Esq., and Carey L. Herbert, Esq., at Squire, Sanders & Dempsey LLP represent the Debtors in in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,042,777,000 in total assets and $884,062,000 in liabilities. (AMERCO Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000) AMERICA WEST: SEC Declares Registration Statement Effective ----------------------------------------------------------- PR Newswire Jan 23 America West Holdings Corporation (NYSE: AWA), the parent company of America West Airlines, Inc., announced that the registration statement relating to the Airline's 7.25% Senior Exchangeable Notes due 2023 and the common stock of Holdings into which the notes are exchangeable was declared effective by the Securities and Exchange Commission on Jan. 22, 2004. Additionally, Holdings and the Airline filed the prospectus related to the registration statement pursuant to Rule 424 of the Securities Act of 1933, as amended. 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, serving 93 destinations in the U.S., Canada, Mexico and Costa Rica. 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. AMES DEPT.: Wants Nod to Terminate Henrietta Lease and Sublease --------------------------------------------------------------- The Ames Department Stores Debtors seek the Court's authority to terminate their unexpired lease for a warehouse and distribution facility located at 3131 Winton Avenue in Henrietta, New York, with 3131 Winton Road Associates LLC, and to terminate an unexpired sublease with Wegmans Food Markets, Inc., or, alternatively, to assume and assign the Winton Property Lease and Sublease to a party that may submit a higher and better offer for them. Neil Berger, Esq., at Togut, Segal & Segal LLP, in New York, tells the Court that Winton, as successor-in-interest to William D. Lane, and Neisner Brothers, Inc., as predecessor-in-interest to Ames Realty, entered into a written ground lease dated November 22, 1960 for the Henrietta Property. The Property consists of 20 acres with a distribution facility totaling 385,000 square feet. The Lease is in full force and effect and has not been the subject of any prior request by the Debtors for assumption, assignment or rejection. There are no arrears, cure obligations or other defaults existing under the Lease except $8,172 in prepetition rent due. The current term under the Lease will expire on December 31, 2007. The base monthly ground rent for the current term under the Lease is $13,333. The Debtors, as tenant under the Lease, are responsible for the Property's insurance and maintenance. Winton pays the real estate taxes. There are two remaining 10- year renewal options under the Lease that if fully exercised would extend its term to June 30, 2027. Eastern Retailer's Service Corporation, as predecessor-in- interest to Ames Realty, and Wegmans entered into a written Sublease Agreement dated December 1, 1981 for the entire Henrietta Property. The current term of the Sublease expires on December 31, 2007. There are two remaining 10-year renewal options under the Sublease, that if fully exercised would extend its term to June 30, 2027. The annual rent under the Sublease for the current term is $849,200. According to Mr. Berger, Wegmans is current on its rent obligations under the Sublease. There are no outstanding monetary obligations on the part of the Debtors, or non-monetary defaults on their part under the Sublease. Termination Agreement Mr. Berger relates that as a result of the Debtors' Wind-Down efforts, the Henrietta Property is no longer necessary for the conduct of their business. Thus, the Debtors engaged in discussions with Winton's affiliates regarding a transaction concerning the disposition of the Lease and the Sublease. The negotiations concluded in an agreement providing that: * the Lease will be terminated by the Debtors and Winton; * the Sublease will be terminated by the Debtors and Wegmans; and * Winton will pay the Debtors $3,000,000 in consideration of the transaction, but only in the event that no higher and better offer for the assumption and assignment of the Lease and Sublease is received and accepted by the Debtors. In addition, pursuant to the Agreement: (a) the Lease and Sublease will be deemed terminated as of the date that is three business days after the Court's approval, subject to Debtors' receipt of the Purchase Price; (b) on the Closing Date, and subject to certain closing conditions set forth in the Agreement, Winton will pay the Purchase Price, net of a credit for the Lease Obligations, in immediately available funds to the Debtors; (c) other than the Debtors' satisfaction of the Lease Obligations, Winton and Wegmans will have no other claims against the Debtors with respect to the Lease and the Sublease, or otherwise relating to the Henrietta Property, except as are preserved under the Agreement; and (d) the termination of the Lease and the Sublease will be on a "where is, as is" condition without representations or warranties, except as may be provided in the Agreement. The Debtors believe that absent a higher and better offer for the Lease and Sublease, the Agreement is in the best interests of their estates and creditors and represents a prudent and proper exercise of their business judgment. In reaching that conclusion, the Debtors and their advisors have determined, among other things, that: -- the offer received from Winton represents the best overall written proposal to date for the Lease and Sublease; -- with the Agreement being with Winton, potential litigation concerning issues like adequate assurance of future performance by a third party are eliminated; and -- the overall value to be obtained by the Debtors, totaling $3,000,000 represents a significant recovery for the benefit of the Debtors' estates. Mr. Berger explains that the Lease Obligations will be satisfied as a credit against the Purchase Price to be paid by Winton under the Agreement or from the proceeds received under any alternative transaction as may be approved by the Court. There are no outstanding monetary arrears or non-monetary defaults on the Debtors' part under the Sublease. The Debtors will require any party making a higher and better offer that provides for the assignment of the Lease and Sublease to establish its ability to perform all the obligations. The negotiations that culminated in the execution of the Agreement were conducted at arm's length and in good faith. Consequently, the Debtors request that Winton be deemed a good faith purchaser and that it receive the benefits provided under Section 363(m). The Debtors reserve the right to seek a designation for any other party that submits a higher and better offer for the Lease and Sublease. Moreover, the liens and security interests in favor of Kimco Funding LLC pursuant to the Kimco Agreement will attach to the proceeds of the Lease and Sublease. Kimco has no objection to the transactions contemplated by the Agreement. Accordingly, the requirements of Section 363(f) are satisfied. Thus, the Debtors ask the Court to approve the Agreement. Mr. Berger notes that the Debtors have liquidated their inventory, and are disposing of their remaining real estate assets during the Wind-down. The Debtors do not believe any items of value to them are located at the Henrietta Property as it has been utilized by Wegmans under the Sublease. However, any miscellaneous items that may be there are: * of no value or benefit to the Debtors' estates; and * burdensome insofar as the costs of removal and storage of the property is likely to exceed the net proceeds realizable from their sale. Therefore, to the extent any such assets are at the Property, the Debtors are abandoning these pursuant to Section 554(a). New Lease Between Winton and Wegmans Winton and Wegmans have concluded the terms of a new lease for the Henrietta Property to become effective as of the termination of the Lease and the Sublease. Under this new lease, Wegmans will continue to occupy and utilize the Property as it had pursuant to the Sublease. The proposed transactions under the Agreement will not adversely impact on the operations or interests of Wegmans concerning the Property and the Landlord and Wegmans will receive the benefit of the bargain they have reached under the new lease. Accordingly, the Debtors ask the Court to find and rule that Winton and Wegmans have no claims against the Debtors arising out of the Lease and the Sublease termination. The Debtors are disposing of the Lease and Sublease as part of the Wind-down, which is an essential component of the Debtors' liquidation process, and it is contemplated that the Wind-down will culminate in a liquidation plan that the Debtors intend to file in their Chapter 11 cases. Accordingly, in the event of an assignment of the Lease and Sublease, the Debtors will seek a determination that the transactions are transfers made "under a plan" pursuant to Section 1146(c) and is exempt from the imposition of any stamp or similar tax. In the event that a party other than Winton makes a higher and better offer for the assumption and assignment of the Lease and Sublease pursuant to Sections 365(a) and (f) of the Bankruptcy Code, the Debtors will seek to assume and assign the Lease and Sublease to that party. Headquartered in Rocky Hill, Connecticut, Ames Department Stores, Inc., is a regional discount retailer that, through its subsidiaries, currently operates 452 stores in nineteen states and the District of Columbia. The Company filed for chapter 11 protection on August 20, 2001 (Bankr. S.D.N.Y. Case No. 01-42217). Albert Togut, Esq., Frank A. Oswald, Esq. at Togut, Segal & Segal LLP and Martin J. Bienenstock, Esq., and Warren T. Buhle, Esq., at Weil, Gotshal & Manges LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $1,901,573,000 in assets and $1,558,410,000 in liabilities. (AMES Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service, Inc., 215/945-7000) APPLICA INC: Will Publish Q4 and Year-End Results on February 26 ---------------------------------------------------------------- Applica Incorporated (NYSE: APN) will issue its fourth-quarter and year-end financial results before the market opens on Thursday, February 26, 2004. Applica will hold a conference call on the same day at 11:00 a.m., eastern time, to discuss its fourth-quarter and year-end results and to give guidance on future results and trends in operations. Harry Schulman, President and Chief Executive Officer, Terry Polistina, Senior Vice President and Chief Financial Officer, and Michael Michienzi, Senior Vice President - Global Business Development, will host the call. Live audio of the conference call will be simultaneously broadcast over the Internet and will be available to members of the news media, investors and the general public. Broadcast of the event can be accessed on the Company's Web site at http://www.applicainc.com/by clicking on the Investor Relations page. You may also access the call via CCBN at http://www.streetevents.com/ The event will be archived and available for replay through Thursday, March 4, 2004. Applica Incorporated and its subsidiaries (S&P, B Corporate Credit Rating, Negative Outlook) are manufacturers, marketers and distributors of a broad range of branded and private-label small electric consumer goods. The Company manufactures and distributes small household appliances, pest control products, home environment products, pet care products and professional personal care products. Applica markets products under licensed brand names, such as Black & Decker(R), its own brand names, such as Windmere(R), LitterMaid(R) and Applica(R), and other private-label brand names. Applica's customers include mass merchandisers, specialty retailers and appliance distributors primarily in North America, Latin America and the Caribbean. The Company operates manufacturing facilities in China and Mexico. Applica also manufactures products for other consumer products companies. Additional information regarding the Company is available at http://www.applicainc.com/ ASTON RANCH, LLC: Case Summary & 2 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Aston Ranch, LLC 80 West 40th Street, 7th Floor New York, New York 10018 Bankruptcy Case No.: 04-10436 Type of Business: The Debtor owns approximately 152 acres of Real property known as 6801 Capital Creek Road, Snowmass, Colorado, together with certain water rights. Chapter 11 Petition Date: January 24, 2004 Court: Southern District of New York (Manhattan) Debtor's Counsel: Sanford Philip Rosen, Esq. Sanford P. Rosen & Associates, P.C. 747 Third Avenue New York, NY 10017-2803 Tel: 212-223-1100 Fax: 212-223-1102 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 2 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Janet Holmes a Court Loan $39,415 Page Henty Loan $42,570 AURORA FOODS: Court Extends Schedule-Filing Deadline to April 6 --------------------------------------------------------------- The Aurora Foods Debtors obtained the U.S. Bankruptcy Court's approval to the deadline to file their schedules of assets and liabilities and statements of financial affairs to April 6, 2004, without prejudice to their right to seek additional extensions. Judge Walrath also ruled that the requirement to file Schedules and Statements will be permanently waived if the Debtors' Plan is confirmed within the 120-day period. 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) BAR SAN CONTRACTORS: Case Summary & Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Bar San Contractors, Inc. 555 Industrial Road Carlstadt, New Jersey 07072 Bankruptcy Case No.: 04-12362 Type of Business: Contractor of Utilities and Transportation. Chapter 11 Petition Date: January 23, 2004 Court: District of New Jersey (Newark) Debtor's Counsel: Gerald H. Gline, Esq. Cole, Schotz, Meisel, Forman & Leonard 25 Main Street Hackensack, NJ 07601 Tel: 201-489-3000 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Heavy and General Laborers $320,113 Local 472 700 Raymond Boulevard Newark, NJ 07104 Operating Engineers Local 825 $186,634 Van Orden Sand & Gravel of Ringwood $156,609 Tilcon New York/New Jersey Inc. $154,986 Stavola Construction Mater. Sta. $120,272 American Pipe & Plastic $116,362 Stone Industries $87,061 Bassani Bros. Excavating $84,181 A.C. Miller Concrete Products $76,566 R. Young & Sons $73,631 Taylor Oil Co. Inc. $66,090 American Express $64,000 Newark Asphalt Corp. $59,139 Rockland Transit Mix $57,061 Teltek Sales $46,205 Langan Engineering $42,270 Trico $38,369 Progressive Brick $32,778 W&W Leasing Inc. $31,539 SM Electric $31,500 BOUTIT INC: Case Summary & 18 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Boutit Inc. aka No Limit Records 12300 Wilshire Boulevard Suite 300 Los Angeles, California 90025 Bankruptcy Case No.: 03-41618 Type of Business: The Debtor is a Recording Company. Chapter 11 Petition Date: December 17, 2003 Court: Central District of California (Los Angeles) Judge: Thomas B. Donovan Debtor's Counsel: Paul M. Brent, Esq. Steinberg Nutter And Brent 501 Colorado Avenue #300 Santa Monica, CA 90401 Tel: 310-451-9714 Estimated Assets: $1 Million to $10 Million Estimated Debts: $50 Million to $100 Million Debtor's 18 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Priority EMI $47,000,000 Leopold Petrich and Smith 2049 Century Partk East Suite 3110 Los Angeles, CA 90067 Craig Bazile Craig Lawson $10,000,000 Raymond Poole and Odell Vickers Sanders Crochet Chism LLP 400 Broad Street Lake Charles, LA 70601 Darrin Black $2,000,000 Rosoff Schiffres and Barta 11755 Wilshire Blvd. Suite 1450 Los Angeles, CA 90025-1543 Black Entertainment Television $403,000 Charlene Moreau Newton and Associates 3001 Division Street Metalrie, LA 70002 Don Wilson $321,196 4322 Wilshire Blvd. Suite 200 Los Angeles, CA 90010 Loeb and Loeb $188,838 Myco Com Inc. $170,466 Full Pack Music $110,000 Associated Design Group $41,611 Paramount Recording Studios $35,000 The Gary Group $32,075 Take Fo $30,000 Lewis Brisbols Blagaard and Smith $24,650 Citicorp Vendor Finance Inc. $24,324 Vinci Architecture Plus Interiors $18,974 Moss Adams LLP $16,000 EZ Management $15,000 Haynes and Boone LLP $12,000 BRIAZZ: Brings-In Grant Thornton as New Independent Accountants --------------------------------------------------------------- On Dec. 17, 2003, Briazz, Inc., dismissed PricewaterhouseCoopers LLP as the independent accountants for the Company, advising PwC that the Audit Committee of the Company's Board of Directors approved the selection of Grant Thornton LLC as the independent accountants of the Company on December 17, 2003. The reports of PwC on the Company's financial statements for the years ended December 29, 2002 and December 30, 2001 included an explanatory paragraph that contained a reference to the substantial doubt that existed regarding the Company's ability to continue as a going concern. On May 13, 2003, PwC advised management and the Audit Committee that a reportable condition existed. This reportable condition was the result of a significant deficiency, as defined in Statement on Auditing Standards No. 60, Communication of Internal Control Related Matters Noted in an Audit. Management and the Audit Committee have considered this communication and steps are being taken to address the points raised. These steps include increasing the amounts and frequencies of account reconciliations, the hiring of qualified external financial consultants to evaluate and recommend enhancements to the Company's internal control system and a closer monitoring of the Company's financial results by the Audit Committee of the Board of Directors. In addition, the Company has implemented a more formal budgeting process that allows for more effective monitoring of the Company's operations and financial results. PwC has informed the Company that the existence of the reportable condition means internal controls necessary to develop reliable financial statements did not exist at that time. Briazz is dedicated to feeding the teeming white-collar masses. The company operates about 45 cafes in Chicago, Los Angeles, San Francisco, and Seattle offering on-the-go office workers a variety of breakfast and lunch items. Its menu features sandwiches, soups, and salads, as well as bagels, fruit, and coffee. The company also offers box lunch delivery and catering services. Briazz contracts with third parties, including in-flight catering company Flying Food Group, to supply its menu items. Chairman Victor Alhadeff, who opened the first Briazz cafe in Seattle in 1995, owns about 20% of the company. BROADBAND OFFICE: Intends to Dump Shares in Redback Network ----------------------------------------------------------- Broadband Office, Inc., holds a $700,000 general unsecured claim against Redback Networks, Inc. (Nasdaq: RBAKD). Under Redback's plan of reorganization confirmed on Dec. 19, 2003, and declared effective on Jan. 2, 2004, Broadband Office is slated to receive its pro rata share of new Redback equity. BBO tells the U.S. Bankruptcy Court for the District of Delaware that it doesn't want to hold those shares and that doing so would contravene the investment requirements under 11 U.S.C. Sec. 345. Accordingly, BBO asks the Bankruptcy Court for authority to sell its Redback shares at the prevailing market quoted by the NASDAQ Stock Exchange (currently around $8 per share). BBO tells the Court that it doesn't know what the future holds for the value of the Redback Shares, and its business judgment says prompt liquidation of those assets for cash is the most prudent course of action. Broadband Office, Inc. filed a Chapter 11 petition on May 9, 2001 (Bankr. D. Del. Case No. 01-1720). BBO is now a non-operating company in the process of liquidating its assets. Adam Hiller, Esq., and David M. Fournier, Esq., at Pepper Hamilton LLP represent the company. BUILDERS PLUMBING: Signs-Up Rome Associates as Tax Accountants -------------------------------------------------------------- Builders Plumbing & Heating Supply Co., and its debtor-affiliates are seeking permission from the U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division to employ Rome Associates as Tax Accountants in these chapter 11 cases. The Debtors point out that Rome has extensive experience in matters of this character and is qualified to serve them on a postpetition basis. The Debtors selected Rome because: a) it has experience in bankruptcy and insolvency matters and b) it is familiar with the Debtors' business and financial condition, and books and records. Rome proposes to perform tax accounting services for the Debtors including, but not necessarily limited to, the preparations of the Debtors' prepetition and postpetition federal and state income tax returns. Rome's principal, Robert S. Rome, has been a certified public accountant for 34 years. Additionally, Mr. Rome has been engaged as the Debtors' tax accounting firm for the past 50 years inasmuch as his father also performed accounting services for the Debtors. Mr. Rome is therefore suitably knowledgeable of the Debtors' business operations, debt structure and other aspects of the Debtors which is likely to have accounting significance during this case. At present, Mr. Rome's hourly rate is $400 and his associate Jacques Pries' is $300 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 BURLINGTON INDUSTRIES: Cases Reassigned to Judge Joel Rosenthal --------------------------------------------------------------- In her capacity as Chief Judge of the Delaware Bankruptcy Court, Judge Mary F. Walrath, reassigns the jointly administered Chapter 11 cases of BII Liquidation, Inc., formerly known as Burlington Industries, Inc., et al. to Judge Joel B. Rosenthal. In her January 5, 2004 Order, Judge Walrath also directed the Debtors' counsel to file a written status report or appear in person on January 30, 2004 at 11:00 a.m. for a status conference. (Burlington Bankruptcy News, Issue No. 45; Bankruptcy Creditors' Service, Inc., 215/945-7000) CABLE & WIRELESS: Court Approves Proposed Asset Sale to SAVVIS -------------------------------------------------------------- Cable & Wireless USA, Inc. and Cable & Wireless Internet Services, Inc., together with certain of their subsidiaries, announced that the U.S. Bankruptcy Court in Phoenix, Arizona has approved the proposed sale of CWA's hosting and IP solutions assets to SAVVIS Communications Corporation (Nasdaq: SVVS). The sale transaction is expected to close in the first quarter of 2004, subject to certain regulatory approvals. Under terms of a definitive asset purchase agreement signed by the parties today, SAVVIS will acquire substantially all of the CWA assets for $155 million in cash and assumed liabilities of approximately $12.4 million. SAVVIS delivers IP VPNs (Internet protocol virtual private networks), managed hosting and Internet services to enterprises around the world through an IP infrastructure spanning 45 countries. CWA will continue normal operations through completion of this proposed sale. CWA remains focused on its core competencies of hosting and IP services while delivering uninterrupted service to its customers. John S. Dubel, CWA's chief executive officer, said: "We are pleased to be one important step closer to completing the sale transaction with SAVVIS. Both SAVVIS and CWA are committed to growing our combined businesses by providing exceptional quality and service to our customers and ensuring they continue to receive the highest level of care." On December 8, 2003, CWA announced that it had entered into an asset purchase agreement with an affiliate of Gores Technology Group, LLC for the sale of its hosting and IP solutions businesses. In accordance with the terms of this agreement and to facilitate a sale transaction, CWA filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code. In compliance with Section 363 of the Bankruptcy Code, qualifying bidders then had an opportunity to submit higher and better offers for CWA's evaluation through a court-supervised competitive bidding process. SAVVIS was chosen as the winner at a two-day auction concluded on January 22, 2004. The sale proceeds from this process will be applied toward certain outstanding liabilities. CWA is among the leading providers of complex hosting and IP solutions for global enterprises, counting 40% of the Fortune 100 among its customers. Its portfolio of services includes a wide range of flexible and secure IP connectivity and networking solutions along with complete and secure infrastructure to support complex web hosting. For more information about CWA, go to http://www.cwusa.com/ SAVVIS Communications (NASDAQ: SVVS) is a leading Managed Services Provider that delivers private IP VPNs (virtual private networks), hosting, IP voice and application services to businesses. SAVVIS solutions are designed for industries with demanding IP requirements, including legal, media, retail, professional services, healthcare, manufacturing, and financial services. With its recent acquisition of the commercial business of WAM!NET, the company now delivers fully managed media services that enable organizations to share, collaborate, store and manage content with their partners and clients, and accelerate their workflows in the process. SAVVIS was ranked #3 in IP VPN market share by IDC in its 2003 report, trailing only AT&T and MCI/WorldCom. Known as The Network that Powers Wall StreetSM, its network reliability was declared "perfect" in Network World magazine's groundbreaking study of backbone performance. In 2003, SAVVIS won the American Business Awards "Stevie"(TM) in the category of Best Customer Service Organization. SAVVIS' managed hosting services were awarded the Service Provider Excellence Award by Boardwatch magazine for its virtualized approach to managed hosting, and the Market Engineering Award from Frost & Sullivan for product differentiation and innovation. For more information about SAVVIS' Intelligent IP Network(SM) and managed hosting solutions, visit http://www.savvis.net/ For information about WAM!NET visit http://www.wamnet.com/ CABLE & WIRELESS: SAVVIS Comms. Pitches Best Bid for Core Assets ---------------------------------------------------------------- Cable & Wireless USA, Inc. and Cable & Wireless Internet Services, Inc., together with certain of their subsidiaries, accepted a bid submitted by SAVVIS Communications Corporation (Nasdaq: SVVS) in the court-supervised sale of their hosting and IP solutions businesses. Under terms of the accepted bid, SAVVIS will acquire substantially all of the CWA assets for $155 million in cash and assumed liabilities of approximately $12.4 million, subject to court and certain regulatory approvals. CWA sought court approval for the proposed sale transaction with SAVVIS at a hearing scheduled for 10 AM on January 23, 2004 at the U.S. Bankruptcy Court in Phoenix, Arizona. If approved at that time, the sale transaction is expected to close in February. (Please see separate story on court's approval - Ed.). SAVVIS, one of the largest global managed service providers, delivers IP VPNs (Internet protocol virtual private networks), managed hosting and Internet services to enterprises around the world through an IP infrastructure spanning 45 countries. CWA will continue normal operations pending completion of this proposed sale. CWA remains focused on its core competencies of hosting and IP services while delivering uninterrupted service to its customers. John S. Dubel, CWA's chief executive officer, said: "Both CWA and SAVVIS are excited about this acquisition and are committed to growing the combined business. Fulfilling the needs of our customers remains our number one objective. The conclusion of the auction represents a very positive outcome for our customers as well as for our creditors. Our products and market position are strong, our technology is leading edge, and our commitment to providing outstanding customer service is firm. We look forward to completing the sale transaction." On December 8, 2003, CWA announced that it had entered into an asset purchase agreement with an affiliate of Gores Technology Group, LLC for the sale of its hosting and IP solutions businesses. In accordance with the terms of this agreement and to facilitate a sale transaction, CWA filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code. In compliance with Section 363 of the Bankruptcy Code, qualifying bidders then had an opportunity to submit higher and better offers for CWA's evaluation through a court-supervised competitive bidding process. SAVVIS was chosen as the winner among seven bidders at a two-day auction concluded on January 22, 2004, by CWA's financial advisor, The Blackstone Group, pursuant to the sales procedures approved by the U.S. Bankruptcy Court. The sale proceeds from this process will be applied toward certain outstanding liabilities. CWA is among the leading providers of complex hosting and IP solutions for global enterprises, counting 40% of the Fortune 100 among its customers. Its portfolio of services includes a wide range of flexible and secure IP connectivity and networking solutions along with complete and secure infrastructure to support complex web hosting. For more information about CWA, go to http://www.cwusa.com/ SAVVIS Communications (Nasdaq: SVVS) is a leading Managed Services Provider that delivers private IP VPNs (virtual private networks), hosting, IP voice and application services to businesses. SAVVIS solutions are designed for industries with demanding IP requirements, including legal, media, retail, professional services, healthcare, manufacturing, and financial services. With its recent acquisition of the commercial business of WAM!NET, the company now delivers fully managed media services that enable organizations to share, collaborate, store and manage content with their partners and clients, and accelerate their workflows in the process. SAVVIS was ranked #3 in IP VPN market share by IDC in its 2003 report, trailing only AT&T and MCI/WorldCom. Known as The Network that Powers Wall Street(SM), its network reliability was declared "perfect" in Network World magazine's groundbreaking study of backbone performance. In 2003, SAVVIS won the American Business Awards "Stevie"(tm) in the category of Best Customer Service Organization. SAVVIS' managed hosting services were awarded the Service Provider Excellence Award by Boardwatch magazine for its virtualized approach to managed hosting, and the Market Engineering Award from Frost & Sullivan for product differentiation and innovation. For more information about SAVVIS' Intelligent IP Network(SM) and managed hosting solutions, visit http://www.savvis.net/ For information about WAM!NET visit http://www.wamnet.com/ CABLE & WIRELESS: SAVVIS Confirms Selection as Winning Bidder ------------------------------------------------------------- SAVVIS Communications Corporation (NASDAQ: SVVS), a leading global managed IP and managed hosting services provider, confirmed it was selected to acquire substantially all of the assets of Cable & Wireless USA, Inc. and Cable & Wireless Internet Services, Inc., for $155 million in cash and assumed liabilities of approximately $12.5 million. CWA, wholly-owned subsidiaries of Cable and Wireless plc (NYSE: CWP; LSE: CW), filed for protection under Chapter 11 of the U.S. Bankruptcy Code in December of 2003 and conducted an auction completed yesterday for its business operations, for which SAVVIS submitted the winning bid. SAVVIS' shareholders Welsh, Carson, Anderson & Stowe and Constellation Ventures, a Bear Stearns asset management fund, have committed to finance the purchase price and provide ongoing funding to support the acquired assets. In addition, SAVVIS has entered into a Letter of Intent with Du Pont Fabros Interests LLC pursuant to which SAVVIS will sell its rights to acquire five of the CWA data centers to DuPont for $52 million, and to leaseback those data centers for 15 years. Under the proposed terms of sale with CWA, SAVVIS will purchase substantially all of CWA's assets, including CWA's: -- World Class Tier 1 IP Network, serving more than 2,000 enterprise customers, with a footprint encompassing 27% of all Internet routes and providing a range of IP network services from public Internet to private lines; and its -- Comprehensive Hosting Services, with more than 1,000 enterprise customers, 15 data centers, a Fortune 500 focus, and a complete range of managed hosting, consulting and infrastructure services. With the addition of the CWA network and hosting assets to SAVVIS' existing world class IP network and hosting business, SAVVIS becomes one of the world's largest IP/hosting infrastructure providers. The acquired assets will add over 5,000 customers and the combined entity is currently projected to have annualized revenues of approximately $700 million by year end 2004. The purchase of the CWA assets will enable SAVVIS to expand its range of IP network services to include private line services and an expanded range of consulting and hosting infrastructure services. The company currently projects that substantial infrastructure and operating synergies could be generated by this acquisition through the optimization of the combined network and hosting operations and the elimination of duplicate staff functions. Commenting on the successful bid, SAVVIS' chairman and chief executive officer Rob McCormick said, "We are extremely excited about joining Cable & Wireless America's internet and complex hosting capabilities to our leading private network and hosting business, and we look forward to bringing new levels of service and quality to the combined customer base. The companies' network and hosting operations are extremely complementary with one another and with the SAVVIS vision to provide the industry's first truly virtualized managed services infrastructure. Enterprises are beginning to recognize the benefits of virtualization as they struggle with maximizing utilization of their IT infrastructure. SAVVIS' acquisition of these network and hosting assets significantly expands our ability to deliver the full range of value added, managed utility services based on our virtualized approach." "The combination of SAVVIS' unique virtualized and utility-based global services, combined with the CWA Tier 1 IP network and hosting infrastructure, will further accelerate and enhance the set of valued added products the company is already providing to multiple vertical industries, such as Financial Services, Media, Healthcare, and Retail," said Clifford H. Friedman, senior managing director, Constellation Ventures, and member of SAVVIS' Board of Directors. "We believe this combination will yield superior performance and economics for these various vertical industry customers, positioning SAVVIS as an integral partner with their customers." Financial Terms SAVVIS' purchase will be backed by committed financing from Welsh, Carson, Anderson & Stowe and Constellation Ventures and the anticipated proceeds of the sale-leaseback transaction. Upon consummation of the sale leaseback transaction, WCAS and Constellation will provide funding consisting of approximately $170 million in subordinated debt facilities, which the company will use to acquire the CWA assets and fund ongoing capital expenditures and working capital needs of the newly acquired assets. The Shareholder Notes mature five years from the date of initial funding and are subject to redemption by SAVVIS at any time in the first 360 days after the initial funding in an amount equal to the accreted value. During the first 360 days after the initial funding, the Notes will bear interest at 12.5%, payable semi-annually in kind, and are subject to redemption at any time. After 360 days the interest rate will increase to 15%, payable semi-annually in kind. The Notes are redeemable at 101% after the fourth anniversary of the initial funding. In conjunction with this financing, SAVVIS will also issue warrants to purchase 110 million shares of its common stock with a strike price of $1.63. The proposed purchase is subject to approval by the US Bankruptcy Court, a hearing for which is scheduled for later today, and customary regulatory approvals and closing conditions. It is currently expected to close in the first quarter of 2004. If the transaction does not close by March 5, 2004, CWA will have the right to terminate the Asset Purchase Agreement to be executed in connection with the transaction. In conjunction with this bid, SAVVIS made a $5.0 million required deposit into escrow, which is subject to forfeiture to CWA if the transaction is terminated as a result of SAVVIS breaching any material representation, warranty, or covenant in the Asset Purchase Agreement. SAVVIS Communications (NASDAQ: SVVS) is a leading Managed Services Provider that delivers private IP VPNs (virtual private networks), hosting, IP voice and application services to businesses. SAVVIS solutions are designed for industries with demanding IP requirements, including legal, media, retail, professional services, healthcare, manufacturing, and financial services. With its recent acquisition of the commercial business of WAM!NET, the company now delivers fully managed media services that enable organizations to share, collaborate, store and manage content with their partners and clients, and accelerate their workflows in the process. SAVVIS was ranked #3 in IP VPN market share by IDC in its 2003 report, trailing only AT&T and MCI/WorldCom. Known as The Network that Powers Wall Street(SM), its network reliability was declared "perfect" in Network World magazine's groundbreaking study of backbone performance. In 2003, SAVVIS won the American Business Awards "Stevie"(TM) in the category of Best Customer Service Organization. SAVVIS' managed hosting services were awarded the Service Provider Excellence Award by Boardwatch magazine for its virtualized approach to managed hosting, and the Market Engineering Award from Frost & Sullivan for product differentiation and innovation. For more information about SAVVIS' Intelligent IP Network(SM) and managed hosting solutions, visit http://www.savvis.net/ For information about WAM!NET visit http://www.wamnet.com/ CABLE SATISFACTION: Court Extends CCAA Protection Until March 31 ---------------------------------------------------------------- Cable Satisfaction International Inc., (TSX: CSQ.A) announced that the Quebec Superior Court has granted a motion requesting an extension until March 31, 2004 of the protection initially granted on June 27, 2003 under the Companies' Creditors Arrangement Act and of the appointment of Richter & Associes Inc., as interim receiver. A further announcement will be made once a date for the submission to creditors of the previously announced Plan of Arrangement and Reorganization of CSII has been set. There can be no assurance that the Plan will be successfully implemented or implemented on the terms and conditions contained therein. CSII also announced that Richter & Associes Inc. has filed with the Court its first report in its capacity as monitor, including certain background information concerning CSII, the status of its operations, the restructuring process, the progress made in achieving a successful plan of arrangement, and certain financial information regarding the financial position of CSII. As previously announced, because of CSII's limited resources, it continues to be unlikely that it will file its interim financial statements for the period ended September 30, 2003 before successful approval of the Plan. No further announcement is expected to be made in this connection unless there are material developments. The orders rendered under the CCAA in respect of CSII, the current and prior monitor's reports and related materials are available from Richter & Associes Inc. directly. CSII builds and operates large bandwidth (750Mhz) hybrid fibre coaxial (HFC) networks and, through its subsidiary Cabovisao - Televisao por Cabo, S.A. provides cable television services, high- speed Internet access, telephony and high-speed date transmission services to homes and businesses in Portugal through a single network connection. The subordinate voting shares of CSII are listed on the Toronto Stock Exchange (TSX) under the trading symbol "CSQ.A". CASELLA WASTE: Prices $45-Million 9.75% Senior Sub. Notes Offering ------------------------------------------------------------------ PR Newswire Jan 23 Casella Waste Systems, Inc. (Nasdaq: CWST) priced the previously announced offering of an additional $45 million aggregate principal amount of 9.75% senior subordinated notes due 2013 at an issue price of 113.5% of the principal amount of the notes (equal to a per annum yield of approximately 6.91%), resulting in gross proceeds to the company of $51.1 million. The terms of the notes offered will be substantially identical to Casella Waste Systems' existing $150 million aggregate principal amount of 9.75% senior subordinated notes due 2013. The notes will be offered only to qualified institutional buyers under Rule 144A under the Securities Act of 1933 and to non-U.S. persons outside the United States under Regulation S under the Securities Act. The company will use the net proceeds of the offering to repay all outstanding borrowings under its revolving credit facility and the remainder will be used for general corporate purposes, including acquisitions. As of January 16, 2004, Casella Waste Systems had an aggregate of $34.7 million outstanding under its revolving credit facility. The senior subordinated notes issued in this offering have not been registered under the Securities Act of 1933, as amended, or any applicable state laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Casella Waste Systems has agreed to file a registration statement with the Securities and Exchange Commission, pursuant to which it would exchange the privately placed notes for notes which are registered. After the exchange, these notes will be identical to, and will trade as a single series with, the existing 9.75% senior subordinated notes due 2013. Casella Waste Systems (S&P, BB- Corporate Credit Rating, Stable), headquartered in Rutland, Vermont, provides collection, transfer, disposal and recycling services primarily in the northeastern United States. For further information, visit the company's Web site at http://www.casella.com/ CENTERPOINT ENERGY: Reliant Drops Option to Buy Texas Genco Stake ----------------------------------------------------------------- CenterPoint Energy, Inc. (NYSE: CNP) was notified by Reliant Resources, Inc. (NYSE: RRI) that they would not exercise their option to purchase CenterPoint Energy's 81 percent interest in Texas Genco Holdings, Inc. (NYSE: TGN). As previously indicated, CenterPoint Energy intends to pursue alternatives to monetize its interest in Texas Genco that include seeking another purchaser and has engaged a financial advisor to assist in this effort. CenterPoint Energy, Inc. (Fitch, BB+ Preferred Securities and Zero-Premium Exchange Notes' Ratings, Negative), headquartered in Houston, Texas, is a domestic energy delivery company that includes electric transmission and distribution, natural gas distribution and sales, interstate pipeline and gathering operations, and more than 14,000 megawatts of power generation in Texas. The company serves nearly five million customers primarily in Arkansas, Louisiana, Minnesota, Mississippi, Missouri, Oklahoma, and Texas. Assets total approximately $20 billion. CenterPoint Energy became the new holding company for the regulated operations of the former Reliant Energy, Incorporated in August 2002. With more than 11,000 employees, CenterPoint Energy and its predecessor companies have been in business for more than 130 years. For more information, visit the Web site at http://www.CenterPointEnergy.com/ CENTRAL WAYNE: US Trustee Appoints Official Creditors' Committee ---------------------------------------------------------------- The United States Trustee for Region 4 appointed a four-member Official Committee of Unsecured Creditors in Central Wayne Energy Recovery L.P.'s Chapter 11 cases: 1. Nedrow Refractories Co. 150 Landrow Drive P.O. Box 930313 Wixom MI 48393 Attn: Leon Cudnohufsky, General Manager Tel: (248) 669-2500; Fax: (248) 669-3433; 2) Delray Mechanical Corp. 667 So. Post Avenue Detroit MI 48209 Attn: Gordon Ebsch, President Tel:(313) 843-5330; Fax (313) 843-6933; 3) Kalamazoo Boiler Company 6087 Riverview Drive Kalamazoo MI 49004 Attn: Brian George Tel:(269) 342-4851; Fax:(269)342-4976; 4) City of Dearborn Heights, (John J. Riley II, Treasurer) 6045 Fenton Dearborn Heights MI 48127 Attn: Gary Miotke, Corporation Counsel Tel: (313) 388-4809 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Baltimore, Maryland, Central Wayne Energy Recovery LP owns a waste-to-energy system facility that converts the heat energy generated by incinerating waste to electricity, is a proven, environmentally sound technology that is helping to ensure the preservation of land and other natural resources. The Company filed for chapter 11 protection on December 29, 2003 (Bankr. Md. Case No. 03-82780). Maria Chavez Ruark, Esq., at Piper Rudnick LLP represents the Debtor in their restructuring efforts. When the Company filed for chapter 11 protection, it listed estimated assets of over $10 million and debts of over $100 million. CEPHALON: FTC Wants Additional Information re Pending CIMA Merger ----------------------------------------------------------------- Cephalon, Inc. (Nasdaq: CEPH) and CIMA LABS INC. (Nasdaq: CIMA) received a request for additional information from the Federal Trade Commission pertaining to Cephalon's pending merger with CIMA. The formal request for additional, specific information supplements information already provided in the original Hart- Scott-Rodino filing and in subsequent discussions with the FTC during the past several weeks. This request extends the waiting period under the Hart-Scott- Rodino Antitrust Improvements Act of 1976 (HSR) during which the FTC is permitted to review a proposed transaction. The companies expect to close this transaction upon completion of the HSR clearance process, and the satisfaction of all other closing conditions contained in the merger agreement. Founded in 1987, Cephalon, Inc. (S&P, B+ Corporate Credit Rating, Positive) is an international biopharmaceutical company dedicated to the discovery, development and marketing of innovative products to treat sleep and neurological disorders, cancer and pain. Cephalon currently employs approximately 1,600 people in the United States and Europe. U.S. sites include the company's headquarters in West Chester, Pennsylvania, and offices and manufacturing facilities in Salt Lake City, Utah. Cephalon's major European offices are located in Guildford, England, Martinsried, Germany, and Maisons-Alfort, France. The company currently markets three proprietary products in the United States: PROVIGIL, GABITRIL(R) (tiagabine hydrochloride) and ACTIQ(R) (oral transmucosal fentanyl citrate) [C-II] and more than 20 products internationally. Full prescribing information on its U.S. products is available at http://www.cephalon.com/ Cephalon is a leader in optimizing a data-driven approach to developing new drugs and in expanding the therapeutic potential of existing products. Cephalon's research pipeline is focused on the identification of novel molecules that affect cell survival and death. CIMA develops and manufactures prescription and over-the-counter products based upon its proprietary, orally disintegrating drug delivery technologies, OraSolv(R) and DuraSolv(R). Based on these technologies, an active drug ingredient, which the company frequently taste-masks, is formulated into a new, orally disintegrating dosage form that dissolves quickly in the mouth without chewing or the need for water. CIMA's business involves a dual operating strategy. The company develops and manufactures orally disintegrating versions of drugs for pharmaceutical company partners for whom CIMA currently produces three branded prescription pharmaceuticals and three over-the-counter brands. CIMA is also developing proprietary products utilizing its orally disintegrating technologies, as well as its new OraVescent(R) enhanced absorption, transmucosal drug delivery system. Further information about CIMA is available at http://www.cimalabs.com/ CONSTELLATION BRANDS: Declares 5.75% Preferred Share Cash Dividend ------------------------------------------------------------------ Constellation Brands, Inc. (NYSE: STZ; ASX: CBR), a leading international producer and marketer of beverage alcohol brands, announced that its Board of Directors declared a quarterly dividend on the Company's 5.75% Series A Mandatory Convertible Preferred Stock, payable on March 1, 2004, to shareholders of record on February 17, 2004. Payment will be $0.359375 per depositary share. Constellation Brands, Inc. (S&P, BB Corporate Credit and Senior Unsecured Debt Ratings) is a leading international producer and marketer of beverage alcohol brands, with a broad portfolio across the wine, spirits and imported beer categories. The Company is the largest multi-category supplier of beverage alcohol in the United States; a leading producer and exporter of wine from Australia and New Zealand; and both a major producer and independent drinks wholesaler in the United Kingdom. Well-known brands in Constellation's portfolio include: Corona Extra, Pacifico, St. Pauli Girl, Black Velvet, Fleischmann's, Mr. Boston, Estancia, Simi, Ravenswood, Blackstone, Banrock Station, Hardys, Nobilo, Alice White, Vendange, Almaden, Arbor Mist, Stowells and Blackthorn. DIAMETRICS MEDICAL: Arranges New $2.5MM Financing with Mercator --------------------------------------------------------------- Diametrics Medical, Inc. (OTCBB:DMED) secured new financing of $1.5 million with Mercator Advisory Group and affiliated funds. This financing will be used to fund the Company's renewed efforts to expand its TrendCare(R) Continuous Monitoring business. This new financing is made up of 15,000 shares of Series F preferred stock. An additional 15,000 shares may be issued at the discretion of the Mercator Advisory Group within 30 days of shareholder authorization of additional shares of the Company's common stock. The preferred stock is convertible at any time at 75% of a defined weighted average trading price of the Company's common stock, but in no event greater than $0.25 per share nor less than $0.20 per share. The floor price on the conversion declines to $0.15 per share should the company miss an ongoing cash forecast, and the conversion rate declines to 65% of the weighted average trading price under certain events of default. A five year warrant to purchase up to 6,000,000 shares of common stock at the lower of $0.35 per share or a defined weighted average trading price preceding exercise was also issued. Diametrics Medical is a leader in critical care technology. The Company is dedicated to creating solutions that improve the quality of healthcare delivery through products and services that provide continuous, accurate and cost-effective blood and tissue diagnostic information. Primary products include the TrendCare(R) continuous blood gas monitoring system, including Paratrend(R) and Neotrend(R) for use with adult, pediatric and neonatal patients; and the Neurotrend(R) cerebral tissue monitoring system. At Sept. 30, 2003, Diametrics Medicals's balance sheet shows a total shareholders' equity deficit of about $3.6 million. DII INDUSTRIES: Court Lifts Stay for Non-Asbestos Actions --------------------------------------------------------- The genesis of the Reorganization Cases was the enormous amount of asbestos-related and silica-related personal injury lawsuits against the DII Industries, LLC, and Kellogg, Brown & Root Debtors pending in various parts of the United States. Because they are engaged in ongoing business operations, the Debtors are also parties to a number of lawsuits unrelated to the Asbestos/Silica Lawsuits. One of the key elements of the Debtors' Reorganization Cases is the Permanent Channeling Injunction under Sections 105 and 524(g) of the Bankruptcy Code, pursuant to which all current and future asbestos-related and silica-related personal injury claims involving the Debtors, the Halliburton Entities and the Harbison- Walker Entities will be channeled to the Asbestos PI Trust or Silica PI Trust, for liquidation and payment. All current and future asbestos-related and silica-related personal injury claims will then be permanently enjoined from pursuing claims against the Debtor-Affiliated Protected Parties, including, among others, the Reorganized Debtors. The Debtors clarify that they are not seeking a permanent injunction with respect to the Non-Asbestos/Silica Lawsuits, and these lawsuits should be permitted to continue unabated during their Chapter 11 cases. The Debtors are also not seeking a stay with respect to these coverage actions: (1) Harbison Walker Refractories Co. v. Dresser Indus. Inc., et al, Case No. 02-2151 (Bankr. W.D. Pa.); (2) Dresser Indus Inc. v. Underwriters at Lloyd's London, et al., Case No. 03-1356 (Bankr. W.D. Pa.); (3) Dresser Indus. Inc. v. Underwriters at Lloyd's London, et al., Case No. 01-07414-K (Dallas County, TX, 192 Judicial District); (4) Kellogg Brown & Root, Inc. v. AIU Ins. Co., et al., Case No. 2003-03653 (Harris County, TX, 111 Judicial District); (5) DII Indus. LLC v. Federal-Mogul Prods. Inc., et al., Case No. 01-09018 (Bankr. D. Del.); and (6) Sanchez, et al. v. Cooper Indus., et al., Case No. MDL-875 (E.D. Pa.) (D.N.M., No. 97 Civ. 1569 BB/DJS) (collectively, the "Coverage Actions"). Each of the Debtors is a solvent entity and the sole reason these Chapter 11 cases were filed was due to the asbestos-related and silica-related liabilities faced by each of the Debtors. Each of the Debtors fully intend to continue to operate as normal during the pendency of these bankruptcy cases, including in their prosecution and defense of the Non-Asbestos/Silica Lawsuits, along with the Coverage Actions. In addition, many of the Non-Asbestos/Silica Lawsuits and Coverage Actions have been pending before various state and federal courts for a significant period of time. As a result, the courts in which these cases are pending have an institutional knowledge of the particular cases that would be lost if the cases were stayed and re-filed in the Court. In addition, if the stay were to remain in effect for a significant period of time, there is the possibility that evidence may be lost and witnesses' memories may be negatively impacted. At the Debtors' request, the Court lifts the automatic stay with respect to all of their pending and future Non-Asbestos/Silica Lawsuits and the specific Coverage Actions. 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. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000) DOMAN INDUSTRIES: CCAA Stay Extended to March 2, 2004 ----------------------------------------------------- The Supreme Court of British Columbia issued an order in connection with Doman Industries Limited's proceedings under the Companies' Creditors Arrangement Act, extending the stay of proceedings to March 2, 2004 to allow time to prepare and file a plan of compromise and arrangement. Counsel for certain of the unsecured noteholders advised the Court that the unsecured noteholders have reached a business agreement on a plan to restructure the Company's affairs and refinance the senior secured notes. Doman understands that the plan is expected to include the following: - The secured noteholders' indebtedness will be refinanced in full through a combination of a rights offering and a private placement. - All of the unsecured indebtedness, including the trade debt, will be converted to equity. - The pulp and solid wood assets will be separated on some basis still to be determined, with the potential for further restructuring compromises affecting the Port Alice mill. A copy of the order may be obtained by accessing the Company's Web site at http://www.domans.com/ Doman is an integrated Canadian forest products company and the second largest coastal woodland operator in British Columbia. Principal activities include timber harvesting, reforestation, sawmilling logs into lumber and wood chips, value-added remanufacturing and producing dissolving sulphite pulp and NBSK pulp. All the Company's operations, employees and corporate facilities are located in the coastal region of British Columbia and its products are sold in 30 countries worldwide. DVI INC: Wants Clearance for Settlement Pact with US Bank et al. ---------------------------------------------------------------- DVI, Inc., and its debtor-affiliates, seek permission from the U.S. Bankruptcy Court for the District of Delaware to assume and assign certain contribution and servicing agreements, as modified, and approval of a proposed settlement agreement with U.S. Bank National Association, as Trustee, and various other parties. The Honorable Mary F. Walrath will convene a hearing today, at 4:00 p.m. Eastern Time to consider the Motion. The Debtors want the Court's approval for a settlement agreement among the Debtors, U.S. Bank National Association, as Trustee, each Receivables Corporation and each Issuer that is a party to the Settlement Agreement, the Ad Hoc Committee of Noteholders, Lyon Financial Services, and, solely for the purposes of Section 4 of the Settlement Pact, Goldman Sachs Credit Partners, Ableco Finance LLC and A3 Funding LP. Among other things, the Settlement Pact: 1. amends the Contribution and Servicing Agreements and certain indentures; 2. provides for the assumption and assignment of the Contribution and Servicing agreements to Lyon Financial Services, Inc., and fixes the cure amount and adequate assurance of future performance; 3. liquidates certain claims by and against the Debtors and certain Securitization Trusts; 4. provides that, under certain circumstances, US Bank National Association, as trustee, will release its liens on certain of the Debtors' assets upon any Debtor's request, without the need to obtain any further noteholder consent; 5. provides that, under certain circumstances, the Debtors will assign to US Bank National Association, as Trustee, certain security interests they hold on certain assets; 6. provides that, subject to certain limitations, each party releases and discharges each other from any claims, damages and costs that arise out of the Settlement Agreement or arise out of certain Securitizations, the Contribution and Servicing Agreements, certain contracts or the performance thereof. Headquartered in Jamison, Pennsylvania, DVI, Inc., is the parent company of DVI Financial Services, Inc. and DVI Business Credit Corp. DVI Financial Services, Inc., provides lease or loan financing to healthcare providers for the acquisition or lease of sophisticated medical equipment. DVI Business Credit Corp. extends revolving lines of credit to healthcare providers. The Debtors filed for chapter 11 protection on August 25, 2003, (Bankr. Del. Case No. 03-12656). Bradford J. Sandler, Esq., at Adelman Lavine Gold and Levin, PC represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $1,866,116,300 in total assets and $1,618,751,400 in total debts. ENCOMPASS SERVICES: James Jones' $1-Million Claim Disallowed ------------------------------------------------------------ The Encompass Services Debtors' Disbursing Agent, Todd A. Matherne, asks the Court to expunge 27 Claims. "The Claimants don't have a right to payment from the Debtors' estate," Marcy E. Kurtz, Esq., at Bracewell & Patterson, LLP, in Houston, Texas, contends. Ms. Kurtz explains that the Claims, if determined to be valid obligations, will be fully funded by the Debtors' insurance policies. The ten largest claims are: Claimants Claim No. Claim Amount --------- --------- ------------ Webcor Builders Inc. 4183 $395,634 James Jones 4492 1,000,000 David Gentry 4368 250,000 Petty Boggs 4591 150,000 Edith Alonzo 4273 100,000 Craig Greene 4263 100,000 Kenneth Etheridge 4206 100,000 Annette Suitor 4467 100,000 Kent Sussex 4270 75,000 Joseph Burns 4485 50,000 Stipulation With James Jones In a Court-approved stipulation, Todd A. Matherne and James Jones agreed that Mr. Jones' Claim is disallowed for purposes of distribution from the Debtors' estate. Mr. Jones may pursue compensation for his Claim pursuant to any of the Debtors' applicable insurance policies instead. Mr. Jones may reassert his Claim for distribution from the Debtors' estate if his Claim is denied coverage under the Debtors' applicable policies within 20 days of notification of the denial of coverage. However, a denial of payment due to failure to establish liability under any policies does not constitute a denial of coverage. Mr. Jones does not have any other claims in the Debtors' bankruptcy cases. (Encompass Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., 215/945-7000) ENRON CORP: Court Okays Arnold & Porter's Engagement as Counsel --------------------------------------------------------------- Pursuant to Sections 327(e) and 328(a) of the Bankruptcy Code, the Enron Corporation Debtors seek the Court's authority to employ Arnold & Porter as special counsel for the sole purpose of permitting the firm to seek compensation for legal services provided to the Debtors from February 20, 2002 through November 30, 2002. Arnold & Porter's Employment Melanie Gray, Esq., at Weil, Gotshal & Manges LLP, in New York, relates that the services Arnold & Porter rendered are in connection with the Enron Wind Debtors' sale of their manufacturing assets to GE Wind Energy LLC. Without Arnold & Porter's specialized knowledge of and familiarity with the assets, the prompt sale could not have been consummated. The Enron Wind Debtors employed Arnold & Porter because the firm had represented them on real estate and turbine and project sale issues since 1994. Thus, Arnold & Porter had significant knowledge about the Enron Wind Debtors' businesses and assets. Arnold & Porter was employed under the firm's standard hourly rates and pursuant to its normal policies for reimbursements of expenses. The hourly rates of Arnold & Porter's professionals are: Partners, Special Counsel and Counsel $420 - 485 Associates 165 - 320 Paraprofessionals 150 The Enron Wind Debtors' Prior Application Ms. Gray recalls that on March 29, 2002, the Enron Wind Debtors sought to employ Arnold & Porter. Edward W. Zaelke, Esq., a partner at the firm, disclosed that Arnold & Porter had provided antitrust advice to GE Power Systems Business with respect to the sale and that it believes this was not adverse to its proposed employment since the two representations dealt with wholly separate issues. Accordingly, Arnold & Porter advised the Debtors that it would not proceed with its work until after the March 2002 Application was approved. However, the Debtors asked Arnold & Porter to proceed with the time-sensitive work before the March 2002 Application was approved to avoid possible loss of a favorable sale, which had to be closed by a certain date. In April 2002, the U.S. Trustee informed the Debtors that she would object to the March 2002 Application based on the disclosures Arnold & Porter made. Thus, the Enron Wind Debtors withdrew the March 2002 Application. The Agreement With The U.S. Trustee In light of the fact that Arnold & Porter proceeded with the representation of the Enron Wind Debtors on the Sale Transaction due to the need to close the Sale and that the Sale Transaction was closed promptly, the firm is entitled to be compensated for the services it provided. Ms. Gray reports that the Enron Wind Debtors, Arnold & Porter and the U.S. Trustee have been negotiating for several months regarding the terms on which Arnold & Porter could be retained on a nunc pro tunc basis in connection with the services provided to the Enron Wind Debtors in connection with the Sale Transaction. According to Ms. Gray, in these Chapter 11 cases, Arnold & Porter incurred $489,689 in fees and $14,890 in outstanding disbursements. The Debtors, the U.S. Trustee and Arnold & Porter have reached an agreement under which Arnold & Porter will seek compensation for 60% of its outstanding fees -- $293,813 -- and 100% of its outstanding disbursements. Except for minor post- closing clean-up work, Arnold & Porter has performed no services for the Enron Wind Debtors since May 10, 2002. Arnold & Porter will file its First and Final Fee Application in accordance with the established Compensation Procedures. The U.S. Trustee will not object to the Fee Application. The Debtors seek the Court's authority to pay Arnold & Porter without any holdback in light of: -- the unusual circumstances concerning the employment; -- the significant discount agreed to by Arnold & Porter; and -- the fact that Arnold & Porter will not be seeking future fees. * * * Solely to allow Arnold & Porter to receive compensation and reimbursement for expenses for past legal services provided to the Debtors, the Court permits the Debtors to employ Arnold & Porter as special counsel, nunc pro tunc to February 20, 2002. (Enron Bankruptcy News, Issue No. 95; Bankruptcy Creditors' Service, Inc., 215/945-7000) EXIDE TECH.: Has Until March 31 to Make Lease-Related Decisions --------------------------------------------------------------- The Exide Technologies Debtors obtained the U.S. Bankruptcy Court's approval extending the period within which they must decide whether to reject, assume or assign their Unexpired Leases, through and including March 31, 2004. As previously reported, in connection with the Exide Technologies Debtors' Fourth Amended Joint Reorganization Plan, James E. O'Neill, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C., in Wilmington, Delaware, informs the Court that the Debtors have substantially finalized their determinations whether to assume or reject their unexpired leases. In the event that the Plan is confirmed, the Debtors will not require additional time to make lease decisions. However, in an abundance of caution, in the event that confirmation would be delayed or the Plan would not be confirmed, the Debtors needed an extension of their lease decision deadline to preserve their opportunity to re-evaluate their determinations with respect to the Unexpired Leases. Headquartered in Princeton, New Jersey, Exide Technologies is the world-wide leading manufacturer and distributor of lead acid batteries and other related electrical energy storage products. The Company filed for chapter 11 protection on April 14, 2002 (Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis represent the Debtors in their restructuring efforts. On April 14, 2002, the Debtors listed $2,073,238,000 in assets and $2,524,448,000 in debts. (Exide Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service, Inc., 215/945-7000) FLEMING: Claims Classification and Treatment Under Amended Plan --------------------------------------------------------------- The Fleming Companies Debtors' Amended Plan of Reorganization provides for the classification and treatment of claims and interests, as modified: Class Description Treatment ----- ----------- --------- N/A Administrative Paid in cash, in full. Expense Claims Allowed Claims estimated to be in the range of $96 million to $135 million, as of the Effective Date. Deemed to accept the plan. N/A Priority Tax Claims Paid in cash, in full. Allowed Claims estimated to be in the range of $10 million to $20 million, as of the Effective Date. Deemed to accept the plan. N/A DIP Claims Paid in cash, in full. Allowed Claims estimated to be in the range of $130 million to $135 million, as of the Effective Date. Deemed to accept the plan. 1 Other Priority Paid in cash, in full. Non-Tax Claims Allowed Claims estimated to be in the range of $8 million to $15 million, as of the Effective Date. Deemed to accept the plan. 2 Prepetition Lenders Paid in full. Secured Claims Allowed Claims estimated to be $0, as of the Effective Date. Deemed to accept the plan. 3A Other Secured Claims On the Effective Date, or as soon after that as practicable, each Holder of a Claim in the Class will receive one of three treatments, at the Debtors' option, so that the Holders will be unimpaired: (1) The payment of the Holder's Allowed Other Secured Claim in full, in Cash; (2) The sale or disposition proceeds of the property securing the Allowed Other Secured Claim to the extent of the value of the Holder's interests in the property; or (3) The surrender to the Holder of the property securing the Claim. Allowed Claims estimated to be in the range of $750,000 to $2 million, as of the Effective Date. Deemed to accept the plan. 3B Approved Trade On the Effective Date, or as Creditor Reclamation soon as practicable, Core-Mark Lien Claims Newco, or the Post-Confirmation Trust as applicable, will issue a promissory note in favor of the Holders of Allowed Approved Trade Creditor Reclamation Lien Claims in the estimated aggregate amount of the Allowed Claims, to be reissued as the Claims are Allowed by Final Order or settlement and grant a first priority lien to the Holders on the Post Confirmation Trust Distributable Assets entitling each Holder of an Allowed Approved Trade Creditor Reclamation Lien Claim to its Ratable Proportion of the Post Confirmation Trust Distributable Assets up to the total amount of each Holder's Allowed Approved Trade Creditor Reclamation Lien Claim, in full satisfaction, settlement, release and discharge of each Allowed Approved Trade Creditor Reclamation Lien Claim, unless such Holder agrees to other treatment, and subject at the Debtors' option, to reduction for unpaid postpetition deductions, preference payments, and other applicable set-off rights. Allowed Claims estimated to be in the range of $13 million to $92 million, as of the Effective Date. Impaired. Entitled to vote. 3C DSD Trust Claims In the event that the DSD Trust Claim Holders obtain a Final Order in their favor in the pending litigation allowing their Claims, on the later of (a) the Effective Date; or (b) the date the DSD Trust Claim Holders obtain a final order allowing their claims, or as soon as practicable, each Holder of an Allowed DSD Trust Claim will be paid in Cash, in full, unless the Holder agrees to other treatment, subject, at the Debtors' option, to reduction for the unpaid postpetition deductions, preference payments, and other applicable set-off rights. In the event the DSD Trust Claim Holders do not prevail in their litigation, all Allowed DSD Trust Claims will be treated as Class 6 General Unsecured Claims. Allowed Claims estimated to be in the range of $0 to $22 million, as of the Effective Date. Deemed to accept the plan. 4 PACA & PASA Claims On the Effective Date, or as soon as practicable after that, each Holder of an Allowed PACA or PASA Claim will be paid in full in Cash from the previously established PACA trust or from Core-Mark Newco to the extent the PACA trust is insufficient to satisfy all of the Allowed PACA and PASA Claims, with any remaining proceeds of the PACA trust to be distributed to Core- Mark Newco. Allowed Claims estimated to be in the range of $9 million to $14 million, as of the Effective Date. Deemed to accept the plan. 5 Valid Reclamation To the extent the Court Claims that are not determines that the Holders of Class 3B Claims Reclamation Claims that are not Class 3B Claims are entitled to priority treatment, on the Effective Date, or as soon as practicable thereafter, Core-Mark Newco or the Post Confirmation Trust, as applicable, will issue a promissory note in favor of the Holders in the estimated aggregate amount of their Allowed Claims and grant a second priority lien on the Post Confirmation Trust Distributable Assets entitling each Holder to its Ratable Proportion of Post Confirmation Trust Distributable Assets, after all Class 3B Claims are paid in full. In the event the Court denies the Holders of Reclamation Claims that are not Class 3B Claims priority treatment, the Reclamation Claims will be treated as Class 6 Claims. Allowed Claims estimated to be in the range of $0 to $150 million, as of the Effective Date. 6 General Unsecured On the Effective Date, each Claims other than Holder of an Allowed General Convenience Claims Unsecured Claim will be paid in full satisfaction, settlement, release and discharge of and in exchange for each and every Allowed General Unsecured Claim, at the Debtors' option, in one or a combination of: (i) issuance of a Ratable Proportion of New Common Stock, subject to dilution from the issuance of warrants to the Tranche B Lenders or the shares of New Common Stock issued upon the conversion of Preferred Stock issued pursuant to the Rights Offering and through the Management Incentive Plan; and/or (ii) in the event the Debtors, with the consent of the Creditors Committee, elect to sell some or all of their assets, a Ratable Proportion of Cash remaining from the sale of those assets after all of the Allowed Unclassified Claims and Claims in Classes 1 through 5 have been satisfied in full. As additional consideration, each Holder of an Allowed General Unsecured Claim will be entitled to a Ratable Proportion of Excess Proceeds, if any, available from the Post Confirmation Trust after payment by the Post Confirmation Trust of all claims and obligations required to be made by the Post Confirmation Trust under the Plan, the Post Confirmation Trust Agreement, or otherwise. Further, in the event the Debtors utilize a Rights Offering, each Holder of a General Unsecured Claim that is listed on the Rights Participation Schedule will be entitled to receive in exchange for the Holder's Claim its Equity Subscription Rights for shares of Preferred Stock. Allowed Claims estimated to be in the range of $2.6 billion to $3.2 billion, as of the Effective Date. Impaired. Entitled to vote. 7 Convenience Claims On or as soon as practicable after the Effective Date, each Holder of an Allowed Convenience Claim will receive a Cash distribution equal to 10% of the amount of its Claim; provided however, the aggregate amount of the Allowed Class 7 Claims will not exceed $10,000,000. If the aggregate amount of the Allowed Class 7 Claims exceeds $10,000,000, each Holder will receive its Ratable Proportion of $1,000,000. Allowed Claims estimated to be in the range of $5 million to $10 million, as of the Effective Date. Impaired. Entitled to vote. 8 Equity Interests No distribution. Deemed to reject the Plan. 9 Intercompany Claims No distribution. Deemed to reject the Plan. 10 Other Securities No distribution. Claims and Interests Deemed to reject the Plan. 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) FREESTAR TECH.: Cash Resources Insufficient to Fund Operations -------------------------------------------------------------- FreeStar Technology Corporation (formerly Freestar Technologies), was formed on November 17, 1999 as a Nevada corporation. Its principal offices are in Santo Domingo, Dominican Republic. FreeStar has developed software-enabling e-commerce transactions over the Internet, using credit, debit, ATM (with PIN), or smart cards. The Company intends to have four main revenue sources: (1) sales of its PaySafe devices "ePayPad"; (2) processing fees related to the transactions through the use of ePayPad and merchant services (the Company intends to charge a fee for these transactions ranging from 0.3% to 1.3% of the value of the transaction); (3) revenue from the Company's transaction fees stemming from its Internet Payment Gateway (estimated to be about 0.5% to 3.5% of the value of the transaction); and (4) revenue stemming from Rahaxi Processing Oy. which, derives income from the transaction fees it receives from processing online point of sale terminal transactions in Finland. ePayPad is one of several card swipe devices that FreeStar is currently utilizing to deliver its pay safe now solution. The ePayPad is a small desktop hardware device resembling a credit card reader found at your local supermarket or bank. This unobtrusive box is equipped with a credit card reader and a ten key numeric keypad. The ePayPad allows the consumers to securely shop and pay bills on-line. Through June 30, 2003, the Company has sold approximately 2,500 units of ePayPad. The Company's consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, the Company has reported net losses of $11,442,379 for the year ended June 30, 2003, and has an accumulated deficit of $15,676,201 as of June 30, 2003. The Company cannot be certain that anticipated revenues from operations will be sufficient to satisfy its ongoing capital requirements. Management's belief is based on the Company's operating plan, which in turn is based on assumptions that may prove to be incorrect. If the Company's financial resources are insufficient the Company may require additional financing in order to execute its operating plan and continue as a going concern. The Company cannot predict whether this additional financing will be in the form of equity or debt, or be in another form. The Company may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. In any of these events, the Company may be unable to implement its current plans for expansion, repay its debt obligations as they become due or respond to competitive pressures, any of which circumstances would have a material adverse effect on its business, prospects, financial condition and results of operations. Management plans to take the following steps that it believes will be sufficient to provide the Company with the ability to continue as a going concern. Management intends to raise financing through the sale of its stock both on the public market and in private placements to individual investors. Management believes that with this financing, the Company will be able to generate additional revenues that will allow the Company to continue as a going concern. This will be accomplished by hiring additional personnel and focusing sales and marketing efforts on the distribution of product through key marketing channels currently being developed by the Company. The Company also intends to pursue the acquisition of certain strategic industry partners where appropriate. GENCORP INC: Q4 & FY 2003 Conference Call Scheduled for Tomorrow ---------------------------------------------------------------- GenCorp Inc. (NYSE: GY) announced that its analyst conference call to discuss fourth quarter and full year 2003 earnings will be webcast live on the Internet at 8:00 AM (PST) on Wednesday, January 28, 2004. The webcast will be accessible from the Company's Web site at http://www.GenCorp.com/ The Company will release earnings that morning before the market opens. The webcast is anticipated to be about one hour in length. Participants will be in a listen-only mode and must have Windows Media(R) Technologies loaded onto their computers. To hear the live or replayed conference call, look for the link on the GenCorp Web site and follow the instructions provided there. GenCorp (S&P, BB Corporate Credit Rating, Negative) is a technology-based company with positions in the aerospace and defense, pharmaceutical fine chemicals and automotive industries. For more information, visit the Company's Web site at http://www.GenCorp.com/ GENTEK: Court Enters Final Decree Closing 21 Subsidiary Cases ------------------------------------------------------------- All 32 of Reorganized GenTek Debtors, including Noma Company, ask the Court for a final decree, under Sections 105 and 350 of the Bankruptcy Code and Rule 3022 of the Federal Rules of Bankruptcy Procedure, closing all of the Reorganized Debtors' subsidiary cases as of December 31, 2003, leaving open the jointly administered case of GenTek Inc. -- Case No. 02-12986. Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, in Wilmington, Delaware, explains that the Plan Confirmation Order approved, among other things, the substantive consolidation of the Reorganized Debtors' liabilities and properties. The Court noted that "substantive consolidation is appropriate because the various business segments of the Debtors operate as integrated units, notwithstanding the fact that they are composed of separate corporate entities; the Debtors have common direct or indirect ownership, have common officers and directors, and employ centralized cash management systems; and the Existing Lenders hold debt which is secured by an asserted lien against all of the Debtors, and a substantial portion of the Claims against the Debtors are subject to inter-Debtor guarantees." The effects of the substantive consolidation are: (a) The Chapter 11 cases will be consolidated into the case of GenTek as a single consolidated case; (b) All property of the estate of each Debtor will be deemed to be property of the consolidated estates; (c) All claims against each estate will be deemed to be claims against the consolidated estates, any proof of claim filed against one or more of the Debtors will be deemed to be a single claim filed against the consolidated estates, and all duplicate proofs of claim for the same claim filed against more than one Debtor will be deemed expunged; (d) Except as otherwise provided in the Plan, no distributions under the Plan will be made on account of claims based on intercompany obligations by and against the Debtors; (e) All claims based on prepetition unsecured guarantees by one Debtor in favor of any of the other Debtors -- other than the guarantees existing under any assumed executory contracts or unexpired leases -- will be eliminated, and no distributions under the Plan will be made on account of claims based on the guarantees; (f) For purposes of determining the availability of the right of set-off under Section 553, the Debtors will be treated as one consolidated entity so that, subject to the other provisions of Section 553, prepetition debts due to any of the Debtors may be set off against the prepetition debts of any of the other Debtors; and (g) No distributions under the Plan will be made on account of any subsidiary interests. However, the substantive consolidation will: (i) not merge or otherwise affect the separate legal existence of each Debtor; (ii) have no effect on valid, enforceable and unavoidable liens, except for liens that secure a claim that is eliminated by virtue of substantive consolidation and liens against collateral that are extinguished by virtue of substantive consolidation; (iii) not have the effect of creating a claim in the class different from the class in which a claim would have been placed in the absence of substantive consolidation; and (iv) not affect the obligation of each Debtor, pursuant to 28 U.S.C. Section 1930, to pay quarterly fees to the Office of the United States Trustee until a Debtor's Chapter 11 case is closed, dismissed or converted. According to Mr. Chehi, the remaining proceedings in the Debtors' Chapter 11 cases essentially consist of matters related to claims allowance and disallowance, distributions with respect to allowed claims, potential preference actions and other aspects of plan implementation, which does not involve issues that would require separate proceedings by any particular Reorganized Debtor. Mr. Chehi tells the Court that the objection process will continue to be administered by GenTek's management for all of the subsidiary Reorganized Debtors. Moreover, GenTek's management will continue to be responsible for distributions and other implementation matters under the Plan. Other than certain cash distributions required by the Plan, creditor claims are being treated primarily with notes against and stock and warrant interests in GenTek and not by consideration issued by any other subsidiary Reorganized Debtors. With respect to any avoidance or other actions, including actions with respect to litigation rights to be commenced by Reorganized Debtors or with respect to preference rights to be commenced by the Preference Claim Litigation Trust, the actions will be brought as adversary proceedings that may be adjunct to the main case. Mr. Chehi says that, in any event, all preference rights -- and all rights to pursue the preference rights -- were duly transferred to the Preference Claim Litigation Trust. In short, there is no reason to maintain the separate cases of the subsidiary Reorganized Debtors. Maintenance of the subsidiary cases will serve no useful purpose but will impose continuing financial burdens on the Reorganized Debtors. Mr. Chehi maintains that closing the subsidiary cases as of December 31, 2003 will allow the Reorganized Debtors to reduce a substantial expense, benefiting the creditors who now hold the equity ownership. * * * Accordingly, Judge Walrath issues a final decree closing Case Numbers 02-12987 through 02-12990, Case Numbers 02-12987 through 02-12990, Case Numbers 02-12992 through 02-12994, and Case Numbers 02-12996 through 02-13109, effective immediately. Case Number 02-12986 -- In re GenTek Inc. -- will remain open. Judge Walrath rules that any and all adversary proceedings or any other actions or proceedings whether ongoing or not yet commenced regarding preference rights or any avoidance actions or other litigation rights retained by the Reorganized Debtors may still be commenced, prosecuted and determined according to the terms of the Plan. The Debtors remain obligated to pay quarterly fees for each subsidiary case for the period ending on January 20, 2004, provided, that the fees will be based only on disbursements through that date. (GenTek Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service, Inc., 215/945-7000) GLIMCHER REALTY: Prices B-Rated $150 Mill. Preferred Offering ------------------------------------------------------------- Glimcher Realty Trust (NYSE: GRT) announced a $150 million public offering of 6,000,000 shares of 8.125% Series G Cumulative Redeemable Preferred Shares of Beneficial Interest at a price of $25.00 per share. The net proceeds of the offering of approximately $144.85 million will be used to repay $16.9 million in subordinated mortgage debt relating to the Company's Great Mall of the Great Plains located in Olathe, Kansas and to partially fund the redemption of all of the Company's outstanding 9.25% Series B Cumulative Redeemable Preferred Shares of Beneficial Interest. Morgan Stanley & Co. Incorporated and McDonald Investments Inc. acted as co-managers of the offering. A shelf registration statement relating to these securities was previously filed with the Securities and Exchange Commission and declared effective. The Company also announced that it will redeem all of its outstanding Series B Preferred Shares. The redemption date for the Series B Preferred Shares is February 27, 2004 and the redemption price is $25.366146 per Series B Preferred Share, which consists of $25.00 per Series B Preferred Share plus accumulated and unpaid dividends through the redemption date of $.366146 per Series B Preferred Share. The redemption price will be paid to the holders of record of the Series B Preferred Shares as of January 27, 2004. From and after the redemption date, the Series B Preferred Shares to be redeemed will no longer be deemed outstanding, dividends will cease to accrue and all of the rights of the Series B Preferred Shareholders with respect to the Series B Preferred Shares will cease, except the right to receive the redemption price, without interest. Shareholders of record will be mailed a redemption notice and letter of transmittal to be used in surrendering their certificates for redemption. The redemption price will be paid only to shareholders of record who complete and sign the letter of transmittal and submit certificates for their Series B Preferred Shares to Computershare Trust Company of New York, as redemption agent, at 88 Pine Street, 19th floor, Wall Street Plaza, New York, New York 10005. The Series B Preferred Shares trade on the New York Stock Exchange under the symbol "GRT PrB" and have an annual dividend rate of $2.3125 per share. The Series B Preferred Shares pay distributions quarterly. Glimcher Realty Trust, a real estate investment trust, is a recognized leader in the ownership, management, acquisition and development of enclosed regional and super-regional malls and community shopping centers. Glimcher Realty Trust's common shares are listed on the New York Stock Exchange under the symbol "GRT". Glimcher Realty Trust is a component of both Russell 2000(R) Index, representing small cap stocks, and the Russell 3000(R) Index, representing the broader market. GLIMCHER REALTY: S&P Assigns B Rating to $150M Ser. G Preferreds ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' rating to Glimcher Realty Trust's $150 million 8.125% series G preferred stock issuance. At the same time, Standard & Poor's affirmed its 'BB' corporate credit rating on Glimcher and its 'B' preferred stock rating. The affirmation impacts $188 million of preferred stock outstanding. The outlook is stable. "The assigned rating acknowledges Glimcher 's below-average business position and its relatively aggressive financial profile," said credit analyst Elizabeth Campbell. "The ratings are supported by a relatively well-occupied and profitable (but comparatively smaller) portfolio, which generates stable, predictable cash flow from a diverse and moderately creditworthy tenant base. Glimcher management has been successful in buying out its joint venture partners' interests in seven mall properties, which helps leverage the company's existing operating platform and reduce complexity. The company now wholly-owns all of its 25 mall properties. However, these strengths are offset by generally higher leverage and historically high bank line usage, a mostly encumbered portfolio and weak coverage of total obligations (including the common dividend), and vacancy issues in its non- core community center portfolio." Glimcher ably met relatively large debt maturities over the prior few years from diverse sources of capital (debt, equity, and asset sales) while maintaining a stable financial profile. Standard & Poor's will continue to look to the company's mall portfolio, with its stable occupancy and modest rent increases, to adequately support debt coverage measures. It is expected that modest asset sales proceeds will be applied toward debt reduction; however, overall leverage is not expected to decline materially. GLOBAL CROSSING: Court Approves Tekelec Settlement Agreement ------------------------------------------------------------ The Global Crossing Debtors obtained the U.S. Bankruptcy Court's approval of a Settlement Agreement with Tekelec. Tekelec is one of the Global Crossing Debtors' largest vendors. Tekelec provides the Debtors with hardware and software products for the transport of voice signals on their Network in various locations worldwide. The Debtors entered into a number of separate agreements with Tekelec for the provision of equipment and support services. The Agreements provided that the Debtors would purchase a variety of equipment, software, maintenance, warranties and support from Tekelec over a period of several years. In 2001, when the Debtors entered into the Agreements, they anticipated a large scale build-out of their Network. Accordingly, the Debtors entered into the Agreements to obtain the hardware and software necessary for the large expansion. Since that time, the Debtors have significantly reduced their operating costs and streamlined their businesses. As a result, much of the purchased hardware and software is now unnecessary for the Debtors' ongoing operations. Specifically, the Agreements are: (1) World Master Agreement between Global Crossing North America, Inc. and Tekelec, dated August 2, 2001, which is the master agreement to all of the other agreements between the parties; (2) European Supplement Agreement No. 1 to the World Master Agreement, dated August 3, 2001, between Tekelec and GC Pan European Crossing Holdings B.V., wherein the Debtors agreed to purchase $5,100,000 of hardware to support voice signaling services in Europe; (3) Letter of Commitment, dated March 30, 2001, between Global Crossing Ltd. and Tekelec, wherein the Debtors agreed to purchase $13,600,000 of telecommunications equipment to be used throughout various locations worldwide; (4) (a) Tekelec Quote for European Sentinel Monitoring Equipment and Three Year Millennium Warranty, and the related Support Services and Millennium Service Plan, and (b) Tekelec Quote for Tier 3 Custom Extended Warranty including (i) the Tekelec Standard Warranty and Tekelec Custom Extended Warranty and (ii) the Tekelec Customer Services Catalog Publication No. 910-0124-01, pursuant to which Tekelec agreed to provide maintenance, warranties and support services to the Debtors for the hardware that they purchased under the other agreements. A number of different disputes have arisen under the Agreements. First, under the Commitment Letter, the Debtors agreed to purchase $13,600,000 of telecommunications equipment from Tekelec to be used throughout various locations worldwide. The salient terms of the Court-approved Settlement Agreement are: (A) Return of Equipment The Debtors will take all actions reasonably required to effectuate title transfer of the equipment that was delivered to them pursuant to the Commitment Letter to Tekelec free and clear of liens, claims and encumbrances. In the event of default by the Debtors, the Settlement Agreement provides that Tekelec will have a single Allowed Administrative Expense Claim against the Debtors pursuant to Section 503 of the Bankruptcy Code, not to exceed the value of any equipment they fail to return. The parties agree that the aggregate value of all equipment is $5,460,000; (B) Allowed General Unsecured Claim Tekelec will have an allowed general unsecured claim in the Debtors' Chapter 11 cases aggregating to $8,058,000; (C) Release by the Parties Without further delay, the Debtors and Tekelec fully and finally release, acquit and forever discharge each other, from any and all Claims, demands, obligations, actions, causes of action, rights or damages under any legal theory, including under contract, tort, or otherwise, which they now have, may claim to have or ever had, whether known or unknown in connection with the Agreements, other than Claims arising under any warranties contained in the Agreements or applicable law, provided, however, that the releases do not affect obligations expressly preserved by or contained in the Settlement Agreement; (D) Collection of VAT Refund If Tekelec receives a VAT bad debt relief refund, the Debtors agree not to object to or contest this VAT refund. The Debtors also agree that any bad debt relief notices required to be sent by Tekelec to the Debtors pursuant to the VAT regulations will not be deemed a violation of the automatic stay pursuant to Section 362 of the Bankruptcy Code. The Debtors, however, will not be responsible to Tekelec for the payment of the VAT refund. Without further delay, Tekelec will escrow an amount equal to GBP61,722, representing 20% of the expected VAT refund. If the Debtors are required to pay the VAT Refund to the appropriate authorities in the United Kingdom, the Debtors will be entitled to receive 20% of any amounts that they are required to pay, plus interest, from the Escrowed Funds; (E) Assumption of the World Master Agreement and Maintenance Agreements The Debtors will assume the World Master Agreement and the Maintenance Agreements. Upon assumption, there is no cure required in connection with or arising from the assumption of the World Master Agreement and Maintenance Agreements pursuant to Section 365 of the Bankruptcy Code; and (F) Rejection of European Supplement Agreement No. 1 and the Commitment Letter The Debtors will reject the European Supplement Agreement No. 1 and the Commitment Letter. (Global Crossing Bankruptcy News, Issue No. 54; Bankruptcy Creditors' Service, Inc., 215/945- 7000) GRAPHIC PACKAGING: Extends Exchange Offers Until Tomorrow --------------------------------------------------------- Graphic Packaging International, Inc., a Delaware corporation, extended its exchange offers regarding its 8.50% Senior Notes due 2011 and its 9.50% Senior Subordinated Notes due 2013 to 5:00 p.m., New York City time, on Wednesday, January 28, 2004, unless further extended by Graphic. In the exchange offers, Graphic is offering to exchange the New Notes, which are registered under the Securities Act of 1933, for any and all of its 8.50% Senior Notes due 2011 in aggregate principal amount of $425 million and 9.50% Senior Subordinated Notes due 2013 in aggregate principal amount of $425 million, respectively, which were not registered under the Securities Act. The exchange offers were originally scheduled to expire at 5:00 p.m., New York City time, on January 23, 2004. As of the close of business on January 23, 2004, $415,600,000 in aggregate principal amount of the Old Senior Notes and $424,925,000 in aggregate principal amount of the Old Senior Subordinated Notes have been confirmed as tendered in exchange for a like principal amount of the New Senior Notes and the New Senior Subordinated Notes, respectively. The Old Notes may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the applicable state securities laws. Graphic Packaging International, Inc. (S&P, B+ Corporate Credit Rating), a wholly-owned subsidiary of Graphic Packaging Corporation (NYSE: GPK), is a leading provider of paperboard packaging solutions to the beverage, food and other consumer product industries. Additional information about Graphic Packaging, its business and its products is available at http://www.graphicpkg.com/ GREENTECH USA: Hires Hunter & Atkins to Replace Sherb as Auditors ----------------------------------------------------------------- On December 1, 2003, Greentech USA, Inc. dismissed Sherb & Co. P.A., Certified Public Accountants, the Company's independent public accountants. Sherb & Co, P.A.'s report on the consolidated financial statements of the Company for the two most recent fiscal years ended December 31, 2002 contained an explanatory paragraph relating to the Company's ability to continue as a going concern. On December 1, 2003, the Company retained Hunter & Atkins, Certified Public Accountants, as its independent public accountants. The Company's Board of Directors approved a resolution on October 31, 2003 approving HA's selection as well as approving the dismissal of Sherb & Co., P.A. HARKEN ENERGY: Annual Shareholders' Meeting Set for February 17 --------------------------------------------------------------- The Annual Meeting of Stockholders of Harken Energy Corporation, a Delaware corporation, will be held at the offices of the Company's counsel, McGuireWoods LLP, 65 East 55th Street, 31st Floor, New York, New York 10022 on February 17, 2004 beginning at 2:00 p.m. local time for the following purposes: (1) to approve an amendment to Harken's Certificate of Incorporation to eliminate the classification of directors; (2) to approve an amendment to Harken's Certificate of Incorporation to eliminate the requirement that the holders of two-thirds of the outstanding shares vote for the removal of any or all directors; (3) to approve an amendment to Harken's Certificate of Incorporation to eliminate cumulative voting; (4) to elect five directors to serve until the next annual meeting of stockholders, or until their successors are duly elected and qualified; (5) solely in the event that the stockholders do not approve the amendment of Harken's Certificate of Incorporation to eliminate the classification of directors, to elect two Class A Directors to hold office until the 2006 Annual Meeting of Stockholders and until their respective successors are duly elected and qualified; (6) to approve an amendment to Harken's Certificate of Incorporation to increase the number of shares of Harken's common stock, par value $0.01, authorized for issuance; and (7) to transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof. The Board of Directors has fixed the close of business on January 20, 2004 as the date of record for determining the stockholders entitled to notice of, and to vote, either in person or by proxy, at the Annual Meeting and any adjournment or postponement thereof. * * * As reported in Troubled Company Reporter's December 17, 2003 edition, Harken Energy Corporation (Amex: HEC) sold the majority of its oil and gas properties located in the Panhandle region of Texas. The purchasers agreed to pay approximately $7 Million in cash for the Panhandle assets. Harken repaid all outstanding bank debt, approximately $4 Million, with a portion of the Panhandle asset sales proceeds. In another previous report, Harken Energy Corporation retained Petrie Parkman & Co., Inc., to evaluate its domestic oil and gas assets and to make recommendations to maximize their value. Harken's domestic assets currently consist of its productive properties and prospects along the Gulf Coast of Texas and Louisiana, as well as the Panhandle region of Texas. Harken's management spent the last few months actively restructuring the liability side of its balance sheet and examining and taking action on its cost structure. While Harken is still burdened with significant long-term debt, the Company has effectively dealt with most of its short-term debt without causing excessive dilution. HAYES LEMMERZ: Reports Primary and Secondary Offering of Shares --------------------------------------------------------------- PR Newswire Jan 23 Hayes Lemmerz International, Inc. (Nasdaq: HAYZ) announced a primary offering of approximately 5.45 million shares of its common stock and a secondary offering of approximately 5.35 million shares of its common stock. In addition, Hayes Lemmerz has granted the underwriters an option to purchase approximately 1.62 million additional shares to cover over-allotments. The secondary offering is for shares owned by AP Wheels, LLC, an affiliate of Apollo Management V, L.P. Lehman Brothers and Merrill Lynch & Co. are the managing underwriters and joint bookrunners for the offering and Citigroup Global Markets Inc., Lazard Freres & Co. LLC and UBS Securities LLC will serve as co-managers. The offering is being made by means of a preliminary prospectus, copies of which may be obtained from Lehman Brothers Inc. c/o ADP Financial Services, Integrated Distribution Services, 1155 Long Island Avenue, Edgewood, New York, 11717 or by calling (631) 254-7106 or at the Securities and Exchange Commission's Web site at http://www.sec.gov/ Hayes Lemmerz International, Inc. is a 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. HEARTLAND STEEL: District Court Upholds Officer's Retention Bonus ----------------------------------------------------------------- Margaret M. Good, the Liquidating Agent for Debtor Heartland Steel Inc., took an appeal to the United States District Court for the Southern District of Indiana, Indianapolis Division (Case No. 1:03-CV-802-DFH) from an order of the United States Bankruptcy Court for the Southern District of Indiana. The bankruptcy court authorized payment of a retention bonus, as an administrative claim, to Milton E. Blankenship, who had been vice president of technology for Heartland and who continued to work for the company for about six months after it filed its chapter 11 bankruptcy petition. The liquidating agent, in her appeal, raises several objections to payment of the bonus as a post-petition administrative claim. In the Appeal, Judge Hamilton says none of Ms. Good's complaints have merit, adding, "This is an appeal that never should have been filed. It is telling that [Ms. Good's] strongest argument on appeal is that the bankruptcy court abused its discretion by allowing Mr. Blankenship to file his administrative claim after the deadline the court had set, so that the claim could be decided on the merits rather than rejected as too late." Judge Hamilton affirms the Bankruptcy Court's order granting payment of the administrative claim. Background Mr. Blankenship began working for Heartland in August 1997. On January 24, 2001, Heartland filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. At the same time, Heartland filed an emergency motion for authorization to pay certain of its officers. In that emergency motion, Heartland identified Mr. Blankenship as one of three officers it wished to compensate, referring to him as "critical to the Debtor's efforts . . . to confirm a Chapter 11 plan." Heartland also told the bankruptcy court that it would later file a motion with the court to get approval to pay retention bonuses to the three listed officers, including Mr. Blankenship. The bankruptcy court found, as Mr. Blankenship testified, that in a meeting on January 15, 2001 - nine days before filing of the voluntary petition - he was informed by Heartland and its attorneys that he would receive a retention bonus as incentive to remain with the company after the bankruptcy petition was filed. And at that meeting, Mr. Blankenship received a copy of an unsigned motion that was to be filed with the bankruptcy court requesting that Heartland be permitted to pay a retention bonus to certain officers and employees, including Mr. Blankenship. On March 29, 2001, Heartland filed the motion formally asking the bankruptcy court to approve retention bonuses for certain officers and employees. Contrary to the earlier statements, Heartland did not include Mr. Blankenship's name in that motion. On July 11, 2001, Mr. Blankenship asked whether he was being retained in connection with a bankruptcy sale of the business and was told, "no." His last day of work was July 13, 2001. He never received a retention bonus for his post-petition work for Heartland. On September 27, 2001, Mr. Blankenship filed a proof of claim as an unsecured creditor seeking the bonus and other payments. Bankruptcy Court Judge Otte later issued an order confirming a plan of reorganization for Heartland. In that order, Judge Otte set a final date for the filing of administrative claims: January 3, 2002, 30 days past the effective date of the confirmation order. Nearly ten months later, on October 29, 2002, Mr. Blankenship filed a Request for Payment of Administrative Expenses, pursuant to 11 U.S.C. section 503(a). This section allows the court to consider "for cause" administrative claims that were filed past a deadline. After an evidentiary hearing, the bankruptcy court approved Mr. Blankenship's late-filed administrative claim. Judge Otte's order cited the evidence upon which he rested his approval of Mr. Blankenship's claim: 1) the January 24, 2001 emergency motion for compensation filed by Heartland; 2) the January 15, 2001 meeting at which Mr. Blankenship was informed he would receive a retention bonus; and 3) the copy of the draft motion shown him at the January 15 meeting which listed Mr. Blankenship as an officer slated to receive a retention bonus. Judge Otte concluded that Mr. Blankenship had been "purposely excluded" from the final retention bonus motion of March 29, 2001, filed by Heartland. Judge Otte further held that Mr. Blankenship had performed the duties required by his office, and more, under the assumption that he would receive the retention bonus. Judge Otte decided that Mr. Blankenship had met the requirements for filing an administrative claim and was entitled to receive the retention bonus. Judge Hamilton Examines Extending the Deadline & the Claim's Validity I. Allowing The Late Claim Administrative claims have first priority under bankruptcy law, writes Judge Hamilton. 11 U.S.C. section 507 (a). And, the judge points out that provision has been made in the Bankruptcy Code to save an administrative claim which is not timely filed before a deadline: "An entity may timely file a request for payment of an administrative expense, or may tardily file such request if permitted by the court for cause." 11 U.S.C. section 503 (a) of the Bankruptcy Code. Mr. Blankenship filed his administrative claim after the deadline set by the bankruptcy court for filing administrative claims. However, says Judge Hamilton, pursuant to section 503 (a), Judge Otte allowed the belated filing of Mr. Blankenship's claim for cause. Liquidating agent Margaret Good contends that Mr. Blankenship fails to show sufficient cause to satisfy the requirements of section 503(a). The Court disagrees, states Judge Hamilton and finds that Judge Otte did not abuse his discretion by finding cause and allowing the late claim. The deadline in question was not jurisdictional, and the broad term "cause" gives the presiding court wide discretion to allow such belated filings in the interests of justice. Troxell v. Fedders of North America Inc., 160 F.3d 381, 383 (7th Cir. 1998) (whether "good cause" exists to extend time for service of process is entrusted to district court's discretion). Accordingly, continues Judge Hamilton, the liquidating agent faces the high burden of showing that the bankruptcy court abused its discretion by deciding Mr. Blankenship's claim on the merits rather than rejecting it because of its lateness. When a judgment is discretionary, a reasonable decision either way can and should be affirmed, adds Judge Hamilton. The liquidating agent suggests that because the term "cause" is not defined, the court should have borrowed and applied the "excusable neglect" standard from Bankruptcy Rule 9006(b). This Court disagrees with that approach, says Judge Hamilton, at least as applied in a reviewing court. The bankruptcy statutes and rules use words carefully. Different words ordinarily communicate different meanings. In fact, in the federal court rules dealing with extensions of time, the term "excusable neglect" has been held to have a narrower scope than the expression "good cause." Mr. Blankenship has proved his administrative claim to the satisfaction of the bankruptcy court. Allowing that claim was in the interest of justice and did no violence to other interests in procedural regularity. Long before Mr. Blankenship filed his administrative claim, he filed papers claiming his right to the retention bonus. His mistake was that he failed to designate that part of his claim as an administrative claim and thus give to it the proper priority among the competing creditors. It is clear, continues, Judge Hamilton that Judge Otte, based on his supervision of the entire Heartland Steel bankruptcy, believed that he should allow the tardy filing so that justice could be done. He found that Mr. Blankenship had been misled. Judge Otte's order specifically referred to the January 24, 2001 emergency compensation motion filed by the Debtor. That motion told the court that Heartland would soon be filing a motion to allow payment of retention bonuses to three officers, including Mr. Blankenship. When the motion was actually filed, however, Mr. Blankenship's name was omitted. Judge Otte said that the exclusion bordered on wrongdoing and had he known what was happening "we would have had a full blown hearing on all those people who were left out of it." Judge Hamilton writes that the Bankruptcy Code, as indicated above, has given Judge Otte broad discretion to allow Mr. Blankenship to file his administrative claim late, and that discretion was not abused. II. Validity of the Claim To have his claim treated as a proper administrative claim, Mr. Blankenship was required to show that his claim arose from a post- petition transaction with the bankruptcy estate and that he provided some demonstrable benefit to that bankruptcy estate. Judge Otte did not clearly err by finding that these standards were met, asserts Judge Hamilton. The evidence before the bankruptcy court supported a finding that Mr. Blankenship continued to provide services to Heartland post- petition rather than leaving the company to look for other work with more solvent employers. Also, as Judge Otte said, Mr. Blankenship was actually out on the plant floor, doing what he was supposed to be doing. Also, there was evidence that Mr. Blankenship took on substantially more duties after the bankruptcy filing because the other officers were busy with the bankruptcy, the lawyers and the bankers. Judge Hamilton writes that it is the Court's conclusion that the order of the bankruptcy court allowing Mr. Blankenship's administrative claim is affirmed. HOLLINGER INC: Wants to Defend its Rights re Federal Court Order ---------------------------------------------------------------- Hollinger Inc. (TSX: HLG.C; HLG. Pr. B; HLG.PR.C) moved to intervene in the U.S. District Court for the Northern District of Illinois to defend its rights with regard to a Partial Final Judgment and Order of Permanent Injunction entered against Hollinger International on January 16. The January 16 order was consented to on behalf of Hollinger International by Gordon A. Paris, interim Chief Executive Officer of International and Chairman of its special committee, without prior authorization of the Hollinger International Board of Directors. The order served the interests of Mr. Paris and the special committee by creating practical constraints on Hollinger Inc.'s rights as a controlling shareholder, including the right to remove and elect directors of Hollinger International. Hollinger Inc. had a strong interest in opposing entry of the order, but was given no notice or opportunity to be heard regarding the order. Through its motion to intervene filed with the Court Friday last week, Hollinger Inc. is seeking to protect its rights and investment in Hollinger International and ensure that it has a voice in proceedings that substantially affect its ownership and property rights. Hollinger's principal asset is its approximately 72.6% voting and 30.3% equity interest in Hollinger International Inc. Hollinger International is a global newspaper publisher with English- language newspapers in the United States, Great Britain, and Israel. Its assets include The Daily Telegraph, The Sunday Telegraph and The Spectator and Apollo magazines in Great Britain, the Chicago Sun-Times and a large number of community newspapers in the Chicago area, The Jerusalem Post and The International Jerusalem Post in Israel, a portfolio of new media investments and a variety of other assets. On June 30, 2003, the company's net capital deficit tops $442 million while working capital deficit is at $398.8 million. HOLLINGER: Consents Change in Hollinger International's By-Laws --------------------------------------------------------------- Hollinger Inc. (TSX:HLG.C) (TSX:HLG.PR.B) (TSX:HLG.PR.C) announced that as the controlling shareholders of Hollinger International Inc., it and its indirect wholly-owned subsidiary, 504468 N.B. Inc., have executed and delivered to Hollinger International a written consent adopting certain changes to Hollinger International's corporate by-laws. These changes to the corporate by-laws were adopted unanimously by the Hollinger Inc. Board of Directors and delivered today to Hollinger International's corporate offices. The by-law changes are intended to ensure that all of the directors of Hollinger International have a meaningful opportunity to consider, with appropriate notice and adequate information, all important actions and proposals affecting the company. The by-law changes include requirements that the full Board of Hollinger International consider major issues before the company. The changes do not diminish or limit, in any way, the mandate or powers of the Special Committee of the Hollinger International Board of Directors or any actions previously taken by the Special Committee. Peter White, Co-Chief Operating Officer of Hollinger Inc., said, "These steps will ensure that the Board of Hollinger International puts the interests of all of its shareholders first in whatever actions it takes. Hollinger International has said it is reviewing the implications for the company of the tender offer proposed by Press Holdings International for Hollinger Inc. shares. These by- law changes will promote full and fair consideration by all Hollinger International directors of the proposed offer and any other major matters that may come before its Board." Specifically, these amendments to the by-laws will ensure the following: -- Written notice of any meeting of the Hollinger International Board of Directors must be given at least seven days before the meeting. -- Any notice of a special meeting of the Board must include a statement of all business to be conducted at the meeting. -- Committees must provide directors at least 24 hours' written notice of the committee meetings. -- Committees, other than the Special Committee, must provide a report of the substance of all actions they take at their meetings to the full Board within five days of their meetings. -- The presence of at least 80% of the directors is required to have a quorum at a meeting of the Board for the transaction of most business. -- A quorum of all of the directors holding office is required for the Board to take action on certain "Special Board Matters" which include, among other things, changing the number of directors or filling any vacancy on the Board; approving a merger or a sale of all or substantially all of the assets of the company; approving a sale of assets having a value of more than US$1 million; and amending or repealing any by-law of the company. -- The unanimous assent of all directors is required for the approval of any Special Board Matter. -- The Audit Committee and the Special Committee will remain in place, with all of their current powers and authority. All other committees of the Board are dissolved. New committees may be established only by a unanimous vote of the Board at a meeting at which all directors are present. Hollinger Inc.'s principal asset is its approximately 72.6% voting and 30.3% equity interest in Hollinger International Inc. Hollinger International is a global newspaper publisher with English-language newspapers in the United States, Great Britain, and Israel. Its assets include The Daily Telegraph, The Sunday Telegraph and The Spectator and Apollo magazines in Great Britain, the Chicago Sun-Times and a large number of community newspapers in the Chicago area, The Jerusalem Post and The International Jerusalem Post in Israel, a portfolio of new media investments and a variety of other assets. On June 30, 2003, the company's net capital deficit tops $442 million while working capital deficit is at $398.8 million. HOLLINGER: Subsidiary Receives Written Consent re By-Laws Changes ----------------------------------------------------------------- Hollinger International Inc. (NYSE: HLR) announced that the Corporate Review Committee of its Board of Directors, formed on Tuesday of this week, met Friday to consider the implications of the pending tender offer for Hollinger Inc. by Press Holdings International Limited. The Corporate Review Committee, comprised of all directors on the Board other than Lord Black, Barbara Amiel Black and Dan Colson, all of whom have direct or indirect interest in Hollinger Inc. and therefore in the PHIL transaction, met at length this morning with outside financial and legal advisors to discuss the adoption by the Company of a shareholder rights plan, commonly known as a "poison pill," to protect the interests of all shareholders of Hollinger International in the event of a change of control at Hollinger Inc. A further meeting was scheduled within the next few days for the purpose of voting on adoption of the shareholder rights plan. Shortly following the adjournment of Friday's Committee meeting, the directors received notice from the Company's controlling shareholder, Hollinger Inc., that Hollinger Inc. and another affiliate of Lord Black had executed a written consent to amend the by-laws of Hollinger International. The amendments purport to disband the Corporate Review Committee and materially alter the functioning of the Board. By these actions, it has purported to take away from the independent directors the ability to respond to a transaction that benefits the interested directors. Among other things, under the purported new by-laws, a shareholder rights plan or sale of any material asset would require unanimous approval of the Board, including Lord Black, given at a meeting at which every director is present. While reserving judgment on the legality and validity of the Hollinger Inc. amendment, Hollinger International believes that its Board must be able to exercise independent judgment and discharge its fiduciary duties. In this regard, it is in the interests of all shareholders that the entirety of the Hollinger International Board meets quickly to discuss the governance issues raised in this consent, the adoption of a shareholder rights plan and the strategic alternatives available to the Company at this time. Again, while reserving judgment on the legality and validity of the Hollinger Inc. amendment, Hollinger International will comply with the new, purported extended notice provisions and, in the meantime, will seek a waiver of the purported notice requirement from Hollinger Inc., so that the directors of Hollinger International can meet before the PHIL tender offer is launched in Canada. The written consent will be filed by the Company with the Securities and Exchange Commission on a Form 8-K promptly. Hollinger International Inc. is a global newspaper publisher with English-language newspapers in the United States, Great Britain, and Israel. Its assets include The Daily Telegraph, The Sunday Telegraph and The Spectator magazine in Great Britain, the Chicago Sun-Times and a large number of community newspapers in the Chicago area, The Jerusalem Post and The International Jerusalem Post in Israel, a portfolio of new media investments and a variety of other assets. Hollinger's principal asset is its approximately 72.6% voting and 30.3% equity interest in Hollinger International Inc. Hollinger International is a global newspaper publisher with English- language newspapers in the United States, Great Britain, and Israel. Its assets include The Daily Telegraph, The Sunday Telegraph and The Spectator and Apollo magazines in Great Britain, the Chicago Sun-Times and a large number of community newspapers in the Chicago area, The Jerusalem Post and The International Jerusalem Post in Israel, a portfolio of new media investments and a variety of other assets. On June 30, 2003, the company's net capital deficit tops $442 million while working capital deficit is at $398.8 million. HUDSON'S BAY: Arranges $300-Million Securitization Replacement -------------------------------------------------------------- Hudson's Bay Company replaced $300 million of its $900 million credit card receivables securitization program scheduled for payment beginning January 31, 2004. HBC has sold an additional undivided co-ownership interest of $300 million scheduled for payment beginning January 31, 2007 under the Program to a highly rated, independent trust. The sale was completed under Hbc's existing securitization program, originally established in 1997. Under the Program, Hbc sells undivided co-ownership interests in pools of their credit card receivables to independent trusts. The aggregate outstanding amount of the securitized receivables varies depending on the volume of credit card transactions and payments. The undivided co-ownership interests in excess of those of the trusts' are retained by and belong to Hbc. The retained interest must be maintained at a level between 14% and 19% of the aggregate amount of the trusts' invested amounts under the Program. The financial and accounting implications of the transactions completed today will include the following: - A net after tax loss on sale of between $2 and $3 million will be recorded in the fourth quarter reflecting both the accounting for the termination of the portion of the Program scheduled for payment beginning January 31, 2004 and the introduction of the replacement transaction. - Hbc's costs to maintain the Program are anticipated to increase by a minor amount on an annual basis, due primarily to the maintenance of a standby servicing arrangement recently established with a third party. This standby servicing arrangement has been established under the Program to protect the Program in the event that certain adverse circumstances arise, including covenant non-compliance (subject to applicable cure periods); insolvency events; a reduction in the rating of Hbc's senior unsecured debt below a certain level; or a significant reduction in the rate of collections of the securitized receivables. Absent these circumstances, Hbc will continue to service the Program for itself and as an agent of the trusts. Hudson's Bay Company (S&P, BB+ Long-Term Corporate Credit and Senior Unsecured Debt Ratings, Negative Outlook), established in 1670, is Canada's largest department store retailer and oldest corporation. The Company provides Canadians with the widest selection of goods and services available through retail channels including more than 500 stores led by the Bay, Zellers and Home Outfitters chains. Hudson's Bay Company is one of Canada's largest employers with 70,000 associates and has operations in every province in Canada. Hudson's Bay Company's common shares trade on The Toronto Stock Exchange under the symbol "HBC". INTERNET CAPITAL: Further Reduces Debt to Below $100 Million Mark ----------------------------------------------------------------- Internet Capital Group, Inc. (Nasdaq: ICGE) continued to exchange shares of its common stock for its 5-1/2% convertible subordinated notes due December 2004. At January 22, 2004 the outstanding balance of the notes is $96.8 million and the company has 606.7 million common shares outstanding. "Reducing our debt to below the $100 million threshold is an important milestone for our company," said Walter Buckley, ICG's chairman and CEO. "At this level we are better positioned and are actively pursuing refinancing opportunities to resolve the remainder of our convertible debt obligations. As we continue to drive our partner companies to profitability, retiring the outstanding convertible notes through exchanges or refinancing continues to be a top priority. Ultimately, we believe this improvement to our balance sheet, along with the growth of our partner companies, will result in long-term stockholder value." Internet Capital Group, Inc. -- http://www.internetcapital.com/-- is an information technology company actively engaged in delivering software solutions and services designed to enhance business operations by increasing efficiency, reducing costs and improving sales results. ICG operates through a network of partner companies that deliver these solutions to customers. To help drive partner company progress, ICG provides operational assistance, capital support, industry expertise, access to operational best practices, and a strategic network of business relationships. Internet Capital Group is headquartered in Wayne, Pa. At September 30, 2003, Internet Capital's balance sheet shows a total shareholders' equity deficit of about $47 million. L.L. KNICKERBOCKER: Distributing New Shares Pursuant to Plan ------------------------------------------------------------ On December 23, 2003, RG Global Lifestyles, Inc., formerly known as The L. L. Knickerbocker Co., Inc., commenced a distribution of new shares to the former shareholders of LLK and its creditors. The distribution was made pursuant to the Debtor's and Committee's Third Amended Joint Chapter 11 Plan which was confirmed by an order of the United States Bankruptcy Court for the Central District of California entered on August 15, 2002. The Plan became effective September 6, 2002. Pursuant to the Plan, all outstanding shares of capital stock in LLK and securities convertible into capital stock of LLK were canceled and are being replaced by new shares of common stock in the Company. The Plan provides that the new shares will be distributed as follows: 5% to the former shareholders of LLK as a group, 5% to John Wolfe, as the Liquidating Trustee for the benefit of the unsecured creditors of LLK, and 90% to RG International Ltd., or its designee or assignee. The total number of shares outstanding immediately following completion of the distribution will be 20 million with 1 million shares being distributed to the former shareholders of LLK, 1 million shares being distributed to the Liquidating Trustee, and 18 million shares being distributed to Pacific Century Investments, Ltd. as designee of RG. LAZY HAZEL LLC: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Lazy Hazel LLC 725 West Hazel Mount Vernon, Washington 98273 Bankruptcy Case No.: 04-10155 Type of Business: The Debtor owns a Senior Apartments. Chapter 11 Petition Date: January 8, 2004 Court: Western District of Washington (Seattle) Judge: Samuel J. Steiner Debtor's Counsel: Steven C. Hathaway, Esq. 115 W Magnolia #211 P.O. Box 2147 Bellingham, Washington 98227-2147 Tel: 360-676-0529 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 3 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Skagit State Bank Bank loan $80,000 Skagit County Property Taxes $40,000 Skagit Valley Herald Business Debt $5,000 LOEWEN GROUP: Amends Credit Facility and Redeems Convertible Notes ------------------------------------------------------------------ Alderwoods Group, Inc. (NASDAQ:AWGI) (fka The Loewen Group, Inc.) announced three initiatives that will further improve its capital structure and reduce its interest costs. The first initiative is entering into a new subordinated facility to be used to fully redeem the Company's $24.7 million 12.25% convertible subordinated notes, due 2012, which became fully redeemable, at par, on January 2, 2004, plus accrued interest to the redemption date. This facility, which matures on March 31, 2005, carries an interest rate of LIBOR + 450 basis points (bps). The Company entered into this facility with Banc of America Securities LLC. The redemption of the notes is expected to be completed within the next 30 days and will result in the recognition in income of unamortized premium of $7.2 million in the first quarter of 2004. The second initiative is the amendment of the Company's senior secured facility to reduce the applicable interest rate on the Term Loan by 50 basis points (bps), from LIBOR + 325 bps to LIBOR + 275 bps. This rate change is effective immediately. The third initiative is to amend the Company's senior secured facility to allow the Company to borrow up to $25 million of additional term loans under this facility, and use the proceeds, at the Company's discretion and subject to the terms of the amendment, for the purpose of either repurchasing a portion of the Company's $330 million 12.25% senior notes, due January 2, 2009, or repaying the Company's new subordinated facility described above. Over the past two years the Alderwoods Group's strong operating cash flow and balance sheet management, together with asset sale proceeds have enabled the Company to undertake a significant improvement in its balance sheet. In fiscal 2003, the Company reduced its debt outstanding by approximately $125 million and since the Company was launched on January 2, 2002, debt has been reduced by approximately $206 million from $836 million to approximately $630 million as at January 3, 2004. The Company has no remaining mandatory principal repayments on its senior secured facility in 2004. Paul Houston, President and CEO stated, "This announcement further demonstrates our ongoing commitment to balance sheet management, and focus on reducing the Company's interest costs. With interest rates continuing at historic lows, we felt it was an appropriate time to refinance additional indebtedness, and we will continue to take similar steps in the future whenever opportunities present themselves." Launched on January 2, 2002, the Company is the second largest operator of funeral homes and cemeteries in North America. As of January 3, 2004, the Company operated 730 funeral homes, 150 cemeteries and 60 combination funeral home and cemetery locations in the United States and Canada. Of the Company's total locations, 64 funeral homes, 72 cemeteries and 4 combination funeral home and cemetery locations are held for sale as at January 3, 2004. The Company provides funeral and cemetery services and products on both an at-need and pre-need basis. In support of the pre-need business, it operates insurance subsidiaries that provide customers with a funding mechanism for the pre-arrangement of funerals. MADASA US LLC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Madasa US LLC 319 Business Lane, Suite 500 Ashland, Virginia 23005 Bankruptcy Case No.: 04-30321 Type of Business: The Debtor provides the source of Red Bull Energy Drink in Virginia, including the cities surrounding Blacksburg, Charlottesville, Hampton Roads, and Richmond. See http://www.madasaus.com/ Chapter 11 Petition Date: January 14, 2004 Court: Eastern District of Virginia (Richmond) Judge: Douglas O. Tice Jr. Debtor's Counsel: Alan Rosenblum, Esq. Rosenblum & Rosenblum 228 South Washington Street Suite 300 Alexandria, VA 22314 Tel: 703-548-9002 Fax: 703-548-8774 Estimated Assets: $0 to $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Red Bull North America Trade debt $2,021,050 70 Hudson Street, 6th Floor Hoboken, NJ 07030 Alex Abecia Bonus due of 40,000 $90,060 Wages due of 50,000 Reimbursed expenses due 60.01 George Whittenburg, Esquire Trade debt - Legal $50,000 Services Madasa Trading Trade debt $45,000 Alberto Carrero Bonus due of 40,000 $43,119 Reimbursed expenses of 3119.04 Enterprise Fleet Services Trade debt - Leases $29,763 for 19 automobiles The Hartford Trade Debt $27,580 Crowell & Moring Trade Debt $13,823 Nextel Trade debt $12,691 John Robert Fitzpatrick Trade debt $10,443 Hogan & Hartson Trade debt - $8,000 Immigration services Netledger, Inc. Trade debt $7,726 Piasick & Associates Trade debt - $7,173 Accounting services Wright Express Trade Debt - Gasoline $5,944 Alberto Carrero Wages due $5,000 Alex Abecia Wages due $5,000 Blue Ridge Beverage Trade debt - Sub $5,000 distributor SunCom Trade debt $3,727 Anthem Dental Trade debt $3,384 Adelphia Trade debt $2,797 MESA AIR GROUP: Holding December-Quarter Conference Call Today -------------------------------------------------------------- Mesa Air Group, Inc. (Nasdaq: MESA) will release financial and operating results for the first quarter ended December 31, 2003 today. The company will also hold an investor call to discuss financial results at 11:00 a.m. Mountain Standard Time today. Interested investors can access the Company's webcast of the conference call at http://www.mesa-air.com/ The call leader will be Jonathan Ornstein, Chairman and CEO of Mesa and the call will last approximately one hour. A replay of the call will also be available approximately one hour after its conclusion. Representatives from Mesa may make material non-public disclosures during the conference call. The company does not intend to make any further disclosure of such information and encourages all interested parties to listen to the conference call live or via a rebroadcast. Mesa currently operates 158 aircraft with 1,002 daily system departures to 153 cities, 40 states, the District of Columbia, Canada, Mexico and the Bahamas. It operates in the West and Midwest as America West Express; the Midwest and East as US Airways Express; in Denver, Los Angeles, and Chicago as United Express; in Kansas City with Midwest Airlines and in New Mexico and Texas as Mesa Airlines. The Company, which was founded in New Mexico in 1982, has approximately 4,000 employees. Mesa is a member of the Regional Airline Association and Regional Aviation Partners. MILLENNIUM CHEM.: Will Present at 3 Analyst Conferences in Feb. --------------------------------------------------------------- The management of Millennium Chemicals (NYSE:MCH) will be presenting to the financial community at three analyst conferences in February. Following each of the presentations, you will be able to access the speech and slides on the Company's home page http://www.millenniumchem.com/ John E. Horan, Treasurer, will be presenting at the JPMorgan Annual High Yield Conference on Wednesday, February 4, 2004, at 8:30 AM CST. Gary L. Cianfichi, Vice President, Marketing and Sales (TiO2), will be presenting at the UBS Grass Roots Chemical Conference on Tuesday, February 10, 2004 at 10:50 AM CST. To listen live to this presentation, please go to http://www.ubs.ibb.com/and click "Grass Roots Chemical Conference". Robert E. Lee, President and Chief Executive Officer, will be presenting at the Morgan Stanley Basic Materials Conference on Tuesday, February 24, 2004 at 3:00 PM EST. To listen live please go to http://www.millenniumchem.com/and click on Investor Relations. Millennium Chemicals -- http://www.millenniumchem.com/-- is a major international chemicals company, with leading market positions in a broad range of commodity, industrial, performance and specialty chemicals. Millennium Chemicals is: -- The second-largest producer of TiO2 in the world, the largest merchant seller of titanium tetrachloride and a major producer of zirconia, silica gel and cadmium-based pigments; -- The second-largest producer of acetic acid and vinyl acetate monomer in North America; -- A leading producer of terpene-based fragrance and flavor chemicals; and, -- Through its 29.5% interest in Equistar Chemicals, LP, a partner in the second-largest producer of ethylene and third- largest producer of polyethylene in North America, and a leading producer of performance polymers, oxygenated chemicals, aromatics and specialty petrochemicals. As previously reported, Standard & Poor's Ratings Services assigned its 'BB-' rating to Millennium Chemicals Inc.'s $125 million convertible debentures due 2023, based on preliminary terms and conditions. At the same time, Standard & Poor's affirmed its 'BB-/Stable/--' corporate credit rating on Millennium Chemicals Inc. and raised the ratings on the existing $150 million revolving credit facility to 'BB' from 'BB-', to recognize the benefits of a pending amendment (subject to the successful sale of at least $110 million of long-term notes) that will improve lenders prospects for full recovery in the event of a default. Hunt Valley, Maryland-based Millennium, with about $1.6 billion of annual sales and approximately $1.3 billion of outstanding debt (excluding adjustments to capitalize operating leases), is primarily engaged in the production of commodity chemicals. The outlook is stable. MIRANT CORP: Proposes Uniform Safe Harbor Termination Procedures ---------------------------------------------------------------- The Mirant Debtors use various contracts for physical delivery and derivative financial instruments primarily to hedge and optimize their generating assets, and also take proprietary commodity positions. Hedging contracts are part of a larger category of contracts referred to as "derivative contracts." As a general matter, Meredyth A. Purdy, Esq., at Haynes and Boone LLP, in Dallas, Texas, relates that derivative contracts are financial contracts whose values are based on, or "derived" from, the price of a traditional security, an asset or a market index. Physical and financial derivative contracts take many forms, including: * Back-to-back forward contracts, in which a trader buys power from one source, and then resells it to another party at a higher price. These arrangements can "lock in" a profit on a power sale; * Privately negotiated options to purchase a portion of the required power from another source at a given price -- so that if a seller is unable to deliver the power from its own plant, the seller can exercise the option and have the power delivered to the buyer at a known price; * Electricity and natural gas futures contracts purchased on a commodity exchange like the New York Mercantile Exchange. NYMEX offers standardized futures contracts for delivery of natural gas at Henry Hub in Louisiana and for delivery of electricity at PJM; * Options to purchase electricity futures contracts at a future date on a commodity exchange; * Contracts or options to purchase the required fuel for delivery at a given time to a power plant, thus "locking in" one major variable cost in producing the power; * Collars, which provide financial protection if the price goes outside a defined range, either up or down; and * Contracts that will provide financial protection if transmission line congestion makes it impossible or more costly to deliver power to the recipient. Recognizing the unique status of forward contracts, commodities contracts, securities contracts, certain repurchase agreements and swap agreements in the financial and commodity markets, Congress added to the Bankruptcy Code the "safe harbor" provisions of Section 555, 556, 559 and 560, which generally permit non-debtor counterparties to the contracts to exercise certain rights and remedies not generally available to other contract counterparties in a bankruptcy case. Among the same harbor rights and protections under the Bankruptcy Code are provisions that: (a) allow the non-debtor party to terminate, liquidate and apply collateral held under a safe harbor contract upon a bankruptcy of the other party, notwithstanding Section 365(e)(1) of the Bankruptcy Code; (b) protect prepetition payments made under a safe harbor contract by the debtor to the non-debtor party from the avoidance powers of a trustee or debtor-in-possession except in cases of actual intent to defraud other creditors; and (c) permit the non-debtor party to set off mutual debts and claims against the debtor under a safe harbor contract without the need to obtain relief from the automatic stay. In connection with the operation of their core businesses, Ms. Purdy states, the Debtors historically engaged in asset risk management and optimization activities as well as proprietary trading activities pursuant to their internal risk management policy, as amended or modified from time to time. As a result of their historic Trading Activities, the Debtors maintain a portfolio consisting of active physical commodities and financial products trading positions. Ms. Purdy reports that prior to the Petition Date, in connection with their Trading Activities, the Debtors utilized and entered into with counterparties various industry standard trading contracts, including ISDA, EEI, WSPP, GISB and NAESB master agreements and various other master agreements, "long-form confirmations," netting agreements, master netting agreements, collateral agreements and credit support agreements. Prior to the Petition Date, the Debtors and certain counterparties to the Prepetition Trading Contracts entered into Assurance and Amendment Agreements to, among other things, limit the risks and uncertainties that may arise with respect to the Prepetition Trading Contracts after the Petition Date. When the Debtors filed for Chapter 11 protection, they obtained the Court's authority to continue trading in a manner consistent with their prepetition practice and provide certain protections to the non-debtor counterparties to the Prepetition Trading Contracts. Then, the Debtors and certain counterparties entered into Postpetition Assurance Agreements. The Assurance Agreements provide, among other things, the parameters under which the Protected Counterparties agree to continue their relationships with the Debtors under the Prepetition Trading Contracts. The Assurance Agreements further indicate the Debtors' desire and intent to conduct postpetition trading activity in the ordinary course of business and grant appropriate credit support. The Debtors were willing to enter into the Assurance Agreements and grant certain protections to the Protected Counterparties, including agreeing to seek authority to assume the Prepetition Trading Contracts of the Protected Counterparties and to pay the prepetition claims arising thereunder, because the Protected Counterparties possessed the right to terminate or liquidate their Prepetition Trading Contracts notwithstanding the commencement of these cases. "The Debtors' relationships with the Protected Counterparties are integral to the on-going and future success of the Debtors' operations and maintaining the value of the Debtors' estates," Ms. Purdy remarks. Ms. Purdy notes that not all Prepetition Trading Contracts have been, or will be, assumed by the Debtors. In fact, since the Petition Date, some of the Prepetition Trading Contracts have been terminated. Each time a contract is terminated, a termination payment must be calculated. Under most terminated trading contracts, a termination payment would be payable by either the defaulting party or the non- defaulting party. Thus, termination could, and often will, result in a net payment to the Debtors. These "in-the-money" agreements, which have not been assumed by the Debtors, where an embedded net amount due to the Debtors is present, constitute significant assets of the Debtors' estates. For agreements that are "out of the money" for the Debtors, it is appropriate to set the Debtors' liability to the counterparty as to the claims. In some cases, both the Debtors and the contract counterparty will agree from the outset on the value of the termination payment at issue based on the guidelines or equations set forth in the terminated contract. In this case, the agreement as to the value of the termination payment would not constitute a "settlement" under Rule 9019 of the Federal Rules of Bankruptcy Procedure and Bankruptcy Court approval would not be required. However, when the Debtors and the contract counterparty initially disagree on the amount of the termination payment and only later negotiate an agreed value for the termination payment, the settlement would constitute a settlement requiring Court approval under Bankruptcy Rule 9019. Many trading contracts expressly address the rights of set-off and netting. Some agreements may restrict common law set-off rights. Other agreements may expand set-off and netting rights to include multiple agreements and multiple affiliates of the contracting parties. Ms. Purdy continues that prior to the Petition Date, the Debtors and their counterparties also entered into master netting, set- off and security agreements pursuant to which the Debtors, on the one hand, and one or more affiliated counterparties, on the other hand, agree to aggregate their exposures under two or more agreements for purposes of determining exposure thresholds and collateral requirements. As a rule, the counterparties under a Master Netting Agreement are affiliated entities, usually under the ownership of a common parent company. As with ordinary Master Agreements, Master Netting Agreements that provide triangular offsets permit the Debtors to minimize collateral requirements, and therefore, are an important tool in the efficient management of the Debtors' businesses. Where the Debtors and the counterparties have entered into a Master Netting Agreement, if provided therein, the default and termination remedies of the Master Netting Agreement replace the default and termination remedies of those particular Transaction Agreements covered by the Master Netting Agreement. In these instances, the Master Netting Agreement provides its own termination payment payable upon the occurrence of an early termination event. Because of the admittedly complex substance of the contracts, and the importance to the Debtors of resolving termination payment issues that in many instances will result in positive cash payments to the Debtors, a streamlined and efficient protocol to resolve the ordinary course of business issues must be implemented. To minimize the time and expense to the Debtors' estate as well as the parties-in-interest and to preserve the confidential nature of the sensitive settlements, the Debtors seek the Court's authority to settle any disputed termination payments pursuant to Bankruptcy Rule 9019 and to execute all documents in accordance to the proposed Trading Contract Settlement Protocol. Generally, the Trading Contract Settlement Protocol provides: A. Category 1: De Minimus Settlements The fist category governs settlements with relatively small dollar amounts. These settlements may be settled without prior notice to the Committees or Court approval. However, the Debtors are required to inform the Committees and any entity that provided postpetition financing not later than the first and 15th day of each calendar month as to the details of any "de minimus" settlements. Moreover, the Debtors have an ongoing obligation to respond to reasonable inquiries and information requests in regard to the de minimus settlements. Thus, the Committee maintains the ability to keep appraised of the liquidation and settlement of claims with even a relatively small dollar value. B. Category 2: Non-De Minimus Settlements This category caters to settlements where the settlement amounts exceed the "de minimus" settlement amounts but are still within a reasonable range designed to ensure the fairness of a proposed settlement. This non-de minimus settlement category contains basket amounts and percentages within which the Debtors must settle to come within the Trading Contract Settlement Protocol. These Settlements require advance notice to the Notice Parties. If no one objects to the proposed settlement within 10 days after notice, the Debtors are authorized to consummate the settlement without further Court order. If any Notice Party timely objects, the Debtors may obtain a hearing date seeking the Court's approval of the proposed settlement within at least five days of the date of objection. C. Information to be Provided to the Notice Parties The Debtors will provide to the Notice Parties in connection with the Trading Contract Settlement Protocol: (a) copies of all the Trading Contracts being settled; (b) spreadsheet listing the detail of each of the Trading Contracts being settled, including but not limited to, the term of the contract, when and by which party the contract is terminated, the amount of collateral held by the settling party and the amount of damages or replacement costs and associated methodology; (c) spreadsheet listing the details of other balances included within the settlement agreement, including accounts receivable and accounts payable; and (d) a copy of the proposed settlement agreement and the history of settlement negotiations. D. Set-off and Recoupment Settlements may provide for set-off or recoupment of claims and debts, and result to collateral. E. Provisional Allocation Any monies paid to or received by the Debtors under the protocol will be provisionally allocated in accordance with the Debtors' prior practice, subject to reallocation. All rights are reserved in regard to final allocation. F. Modifications to the Protocol The Notice Parties' right to seek relief from the Court to request modifications to the protocol, if deemed to be necessary, is reserved. Ms. Purdy contends that the proposed protocol should be approved because: -- it will enhance the efficient administration of the Debtors' cases and thereby serve to protect and preserve the value of the Debtors' estates; -- the settlement parameters are designed to give the Debtors a flexible and reasonable range within which to settle terminated Trading Contracts; -- it expedites the collection of payments owed to the Debtors; and -- it reduces the costs associated with the determination of the termination payments. Settlement Protocol Filed Under Seal The details of the Trading Contracts Settlement Protocol are filed under seal. Ms. Purdy points out that the Protocol represents proprietary commercial information -- the settlement parameters to be used in the settlement of terminated commercial contracts -- of the Debtors. In fact, the Protocol contains the Debtors' specific settlement parameters that, if made public to, among other parties, the trading contract counterparties with whom the Debtors are settling, this knowledge would severely hinder the Debtors' ability to achieve the best settlement under the Protocol. Accordingly, Ms. Purdy asserts that public revelation of the Protocol would put the Debtors' estate at great peril of needless loss of favorable settlement terms, and possibly, estate funds. Revelation of the Protocol would result in a direct and adverse impairment of the Debtors' ability to negotiate favorable settlement with counterparties. (Mirant Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., 215/945-7000) MIRENCO INC: Shareholders Approved Two Proposed Stock Issues ------------------------------------------------------------ Mirenco, Inc., (OTCBB:MREO) conducted a special meeting on Saturday, January 17, 2004 at Ames Auditorium, 615 Clark, Ames, IA to request shareholders to approve the increase of authorized common shares of stock from 30 million to 100 million as well as authorize 50 million shares of preferred stock. "We foresee great potential in the marketplace and want to position ourselves in order to capitalize on them, if and when these opportunities present themselves," said Dwayne Fosseen, Mirenco's Chairman and Chief Executive Officer. "I was pleased to see the positive responses we had from the shareholders and appreciate all their enthusiastic support," Fosseen said. Rich Musal, Mirenco's Chief Operating Officer and Chief Financial Officer, stated, "The shareholders attending the meeting, voted unopposed to the two stock proposals." Mirenco is a Radcliffe, Iowa-based company that specializes in patented vehicle management technology and consultative services for reducing vehicle emissions, improving fuel economy, and lengthening the service life of heavy-duty diesel vehicles. More information is available at http://www.mirenco.com/ Mirenco Inc.'s September 30, 2003 balance sheet shows a total shareholders' equity deficit of about $6 million. NAT'L CENTURY: Court Disallows Int'l Philanthropic's $12MM Claim ---------------------------------------------------------------- According to Charles M. Oellermann, Esq., at Jones, Day, Reavis & Pogue, in Columbus, Ohio, 13 Claimants filed Claims asserting certain liabilities against the National Century Financial Enterprises Debtors. Subsequently, however, the Claimants filed additional claims, which amended and superseded the Original Claims. By filing the Surviving Claims, the Claimants liquidated, reduced, increased, reclassified or otherwise modified the liabilities originally asserted in the Amended Claims. Although the Surviving Claims are identified on their face as claim amendments that supersede and replace the Amended Claims, the Amended Claims, as a technical matter, arguably remain on the claims docket as outstanding liabilities until withdrawn by the Claimants or disallowed by the Court. As a result, the Amended Claims remain potential liabilities of the Debtors that either: (a) duplicate amounts included in the Surviving Claims; or (b) are no longer identified as outstanding liabilities by the Claimants. Thus, at the Debtors' request, the Court disallowed these Amended Claims: Claim to be Remaining Claim Creditor Disallowed Claim No. Amount -------- ----------- --------- ------ County of Wise 31 849 $226 Doctors Community Healthcare 392 734 unliquidated Doctors Community Healthcare 393 735 unliquidated Doctors Community Healthcare 394 736 unliquidated Doctors Community Healthcare 395 737 unliquidated Doctors Community Healthcare 396 739 unliquidated Doctors Community Healthcare 397 738 unliquidated Doctors Community Healthcare 398 733 unliquidated Great Lakes Reit 87 848 127,526 IBM Corporation 68 846 5,002 Intl Philanthropic Hosp. Found 366 836 11,966,076 Premier Courier, Inc. 43 109 1,201 State of Tennessee Rev Dept 850 851 13,911 The disallowance of the Amended Claims: (a) prevent the Claimants from obtaining a double recovery on account of any single obligation; and (b) limit the Claimants to a single claim for those amounts currently identified by the Claimant as owing. The elimination of the Amended Claims is consistent with the apparent intent of the Claimants in filing the Surviving Claims. Mr. Oellermann adds that the Claimants' rights to assert these liabilities against the Debtors' estates will be preserved, subject to the Debtors' ongoing rights to object to the Surviving Claims on any grounds. (National Century Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., 215/945-7000) NATIONSRENT INC: Balks at Lasalle's $14-Million Amended Claim ------------------------------------------------------------- The NationsRent Debtors identified 46 objectionable proofs of claim filed in their bankruptcy cases. Each of the 46 claims has been amended and superseded by another proof of claim subsequently filed. Some of the Amended Claims are: Remaining Amended Claim Claimant Claim No. Claim No. Amount -------- --------- --------- --------- City of Fraser 506 14 $2,308 Ford Motor Credit Company 3066 3068 2,234,301 Ford Motor Credit Company 3067 3071 42,278 ISD of Pearland 3394 3290 24,813 ISD of Pearland 3346 3394 24,813 Lasalle National Leasing Corp. 3437 2477 14,280,904 R & R Distributing Co. Inc. 1896 1216 4,557 State of New Hampshire 1871 340 925 State of Rhode Is. Div. of Tax 3510 3310 100,743 State of Tenn. Dept. of Revenue 3506 433 23,297 Rebecca L. Scalio, Esq., at Richards Layton & Finger, in Wilmington, Delaware, tells the Court that the Claimants filed the Amended Claims in respect of certain liabilities asserted against the Debtors. However, the Claimants filed additional proofs of claim in respect of the same liabilities. By filing the Remaining Claims, the Claimants liquidated, reduced, increased, reclassified or otherwise modified the liabilities originally identified in the Amended Claims. The Amended Claims remain on the claims docket as outstanding liabilities until withdrawn by the Claimants or disallowed by the Court. Accordingly, the Debtors ask the Court to disallow the Amended Claims. Ms. Scalio contends that disallowing the Amended Claims will: (a) prevent the Claimants from obtaining a double recovery on account of any single obligation; and (b) limit the Claimants to a single claim for those amounts currently asserted. The Claimants' rights to assert these liabilities against the Debtors' estates will be preserved, subject to the Debtors' ongoing rights to object to the Remaining Claims on any applicable grounds. (NationsRent Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service, Inc., 215/945-7000) NETDRIVEN SOLUTIONS: Shareholders Approve Proposed Restructuring ---------------------------------------------------------------- NetDriven Solutions Inc. (NDS:TSX), announced that all resolutions proposed at the Annual General and Special Meeting held on January 19, 2004 were approved by the shareholders of NDS. With restructuring now substantially completed, NDS is considering potential acquisition or merger opportunities with the view to reestablishing value for the shareholders of the Company. The Company has been in discussion with a number of parties who have expressed an interest in either being acquired by or merging with NetDriven, however, as yet there are no firm offers. NetDriven is also pursuing potential merger opportunities or other arrangements with organizations positioned to take advantage of the Company's substantial tax loss carry forward. The restructuring plan approved by the NetDriven shareholders remains subject to TSX approval. Upon completing a merger or acquisition transaction, NDS will seek to reestablish trading of the Company's common shares on the TSX. The Company's September 30, 2003 balance sheet shows a working capital deficit of about $130,000 and a total shareholders' equity deficit of about $1.6 million. NORTHWEST AIRLINES: Dec. 31 Balance Sheet Upside-Down by $2 Bil. ---------------------------------------------------------------- Northwest Airlines Corporation (Nasdaq: NWAC), the parent of Northwest Airlines, realized a net loss of $129 million or $1.49 per common share for its fourth quarter, excluding unusual gains. This compares to the fourth quarter of 2002, when Northwest reported a net loss of $178 million or $2.08 per common share, excluding unusual items. Northwest reported a full-year net loss of $565 million or $6.57 per common share, excluding unusual items. This compares to a net loss of $488 million or $5.71 per common share in 2002, excluding unusual items. For the fourth quarter, Northwest reported net income of $363 million or $4.18 per common share, including unusual gains. This compares to a fourth quarter 2002 net loss of $488 million or $5.68 per common share, including unusual items. For the full year 2003, Northwest reported net income of $236 million or $2.74 per common share, including unusual gains. This compares to a full year 2002 net loss of $798 million, or $9.32 per common share, including unusual items. In the fourth quarter of 2003, Northwest realized $492 million of unusual gains resulting from the following non-recurring transactions: the completion of an initial public offering (IPO) of Pinnacle Airlines Corp., which generated a gain of $299 million; the sale of Northwest's holdings in Hotwire, the partial sale of its stock holdings in Orbitz, and the completion of a debt exchange, which together resulted in a net $45 million gain; and a transaction pertaining to Northwest debt secured by foreign real property, which resulted in a non-cash gain of $148 million. For the full year, Northwest realized unusual gains of $801 million. In addition to the $492 million of fourth quarter unusual gains, Northwest realized unusual gains earlier in the fiscal year, including the sale of Northwest's interest in Worldspan and the benefits from federal legislation suspending certain security fees and taxes. Richard Anderson, chief executive officer, said, "Like the other network airlines, we are reporting our third consecutive year of massive losses from airline operations. During the past three years, Northwest has experienced pre-tax losses totaling nearly $2.2 billion from airline operations. This financial performance is clearly not sustainable. "Since 2001, Northwest has pursued virtually all non-labor cost reduction opportunities. We have completed eight rounds of cost reductions, resulting in $1.6 billion in savings. As a result, Northwest has reduced non-labor costs to a very competitive level against all airlines in the industry. Northwest's non-labor CASM (cost per available seat mile) is lower than all of the major airlines and several of the low cost carriers. Unfortunately, this is not enough. For Northwest to succeed, we must now reduce our labor costs to competitive levels." Anderson continued, "The airline business has fundamentally changed and we must bring our costs in line with our revenue expectations. Relying on the possibility of a cyclical recovery is futile. Relying on the sale of assets and other one-time transactions is also not the answer. The airline must produce profits from operations to succeed over the long term. In 2003, Northwest benefited from the sale of assets that were not critical to the airline's operation and these transactions were sufficient to offset the large loss that the carrier suffered. However, by definition, these transactions are one-time events. "While the 2003 financial results generated by the airline were unacceptable, Northwest did succeed in a number of other areas. Thanks to the hard work of our 39,000 employees, we ran one of the best operations in the industry as evidenced by Department of Transportation (DOT) performance statistics. We also further increased our significant unit revenue premium to the industry." Looking to the future, Anderson said, "With restructured labor costs, Northwest has the core assets to be a profitable and successful network carrier -- a strong route system supplemented by world-class alliances, a flexible fleet strategy including our fleet modernization program, and state-of-the-art airline technology which makes our customers' travel experience efficient and convenient." Regarding the achievement of competitive labor costs, Douglas Steenland, president, said, "We have been meeting regularly with our union leaders to share financial information and discuss the challenges facing Northwest. Contracts for the Air Line Pilots Association (ALPA) and the International Association of Machinists and Aerospace Workers (IAM) became amendable in 2003 and we are engaged in negotiations with ALPA and the IAM, pursuant to the U.S. Railway Labor Act, with the goal of realizing competitive labor costs." Steenland added, "Northwest employees, labor leaders, management, and the board of directors have worked together effectively in the past to meet industry challenges and are now committed to working together to stop the losses and ensure the company's long term success." Bernie Han, executive vice president and chief financial officer, added, "As evidenced by Northwest's one-time transactions in 2003, we believe Northwest has been a careful steward of its capital and has prudently managed its investments in aircraft, non-aircraft assets and ventures. Through the disposition of most of its non- core investments and the timely accessing of the capital markets, Northwest was able to end 2003 with the highest, size-adjusted liquidity among the network carriers." Financial Results Operating revenues in the fourth quarter increased by 2.9% versus the fourth quarter of 2002 to $2.41 billion. This included an increase in passenger revenue of $52 million, partially offset by a decrease in cargo revenue. Passenger revenue per available seat mile increased by 11.8% on 7.3% fewer available seat miles (ASMs). Operating expenses in the quarter decreased 3.9%, excluding unusual items, versus a year ago to $2.42 billion. Unit costs excluding fuel increased by 4.2% on 7.3% fewer ASMs. During the quarter, fuel price averaged 82.3 cents per gallon, up 5.8% versus the fourth quarter of last year. This quarter's fuel expense included approximately $22 million, or 5 cents per gallon, of gains realized from hedging. Northwest's quarter-ending cash balance was $2.9 billion, of which $2.8 billion was unrestricted. At December 31, 2003, Northwest Airlines' balance sheet shows a total shareholders' equity deficit of about $2 billion. Other In 2003, Northwest satisfied its pension funding obligations and contributed $413 million in cash and stock of its regional carrier, Pinnacle Airlines, to its pension plans. Subsequent to Northwest's contributions of Pinnacle stock to the pension plans, an IPO of Pinnacle Airlines was completed and the proceeds were received by the pension plans. Earlier this month, Northwest announced that in June 2004, it will begin daily nonstop service between Portland, Ore. and Tokyo. The new service will give Northwest eight U.S.-Japan gateways and four West Coast connections to Tokyo. During the fourth quarter, Northwest announced new and enhanced service to a number of international and domestic markets from its three domestic hubs, including the resumption of two seasonal routes: Honolulu-Osaka, Japan and Detroit-Rome. The airline also announced a number of new jet flights to cities in the South, West and Midwest. During 2003, Northwest continued to leverage the power of technology. For the full year, nearly 27 million customers checked in using the airline's Internet site or its airport self- service kiosks. In December, usage of the airline's convenient self-service check-in options increased to a record 70.3% of eligible customers. In October, Northwest made its nwa.com Check-In service available to even more customers by expanding the check-in window to 36 hours prior to departure. In November, Northwest began offering Internet check-in on multi-carrier itineraries involving partner airlines KLM Royal Dutch Airlines, Continental Airlines, Delta Air Lines, Alaska Airlines, Horizon Air, and Hawaiian Airlines. During the quarter, Northwest and Delta Air Lines expanded code sharing through their marketing agreement to 650 daily flights operated by each carrier within the U.S. and between the U.S. and Canada and the Caribbean, the maximum permitted by the DOT. In addition to offering Northwest customers connections to Delta- operated flights out of that airline's Atlanta, Cincinnati, Dallas/Ft. Worth and Salt Lake City hubs, Delta offers its customers connections through Northwest's Detroit, Minneapolis/St. Paul and Memphis domestic hubs, as well as marketing its code on Northwest-operated flights from Los Angeles, New York (Kennedy), San Francisco and Seattle/Tacoma to Northwest's Narita Airport hub near Tokyo. Northwest Airlines is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo, and Amsterdam, and approximately 1,500 daily departures. With its travel partners, Northwest serves nearly 750 cities in almost 120 countries on six continents. ORIGEN FIN'L: Fitch Hatchets 3 Note Ratings to Low-B & Junk Levels ------------------------------------------------------------------ Fitch Ratings has performed a review of Origen Financial, Inc. Manufactured Housing Contracts, series 2001-A. Based on the review, the following rating actions have been taken: -- Class A-4 affirmed at 'AAA'; -- Class A-5 is downgraded to 'AA' from 'AAA'; -- Classes A-6 and A-7 are downgraded to 'A' from 'AAA'; -- Class M-1 is downgraded to 'BB' from 'AA'; -- Class M-2 is downgraded to 'B-' from 'A'; -- Class B-1 is downgraded to 'C' from 'BB'. Origen Financial, Inc. is a privately held company owned by a number of qualified institutional buyers and accredited investors. Sun Communities, rated 'BBB' by Fitch, owns approximately 33% of the outstanding shares of the company. Origen has been providing financing to borrowers for the purchase of manufactured housing since 1996. Origen, formerly named Dynex Financial, originated $188 million in 2003 and has a servicing portfolio of approximately $1.3 billion. Origen has a national servicing center in Ft. Worth, Texas. Their chattel lending operations and corporate headquarters are located in Southfield, Michigan. Origen has completed seven public securitizations - five under the Merit Securities name and two under the Origen name. Vanderbilt Mortgage and Finance acted as the back-up servicer on both Origen transactions. Loss severity on Origen's liquidated loans have been better than the industry average due to the company's dealer relationships and ability to provide financing for purchasers of repossessed units. Despite this advantage, problems in the manufactured housing sector have caused loss severities to be higher than Fitch's initial expectations. This, coupled with higher default rates, has reduced the relationship between expected losses and credit enhancement. OWENS CORNING: Asks Court to Disallow Rhode Island's $80MM Claim ---------------------------------------------------------------- The State of Rhode Island Department of Environmental Management seeks to recover, based on the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, various Rhode Island environmental statutes, and the common law, "costs that have been and will be incurred by the State in connection with responses to the release or threatened release of hazardous substances at several sites within the State of Rhode Island at which [Owens Corning] debtor(s) have been identified as potentially responsible parties." The State estimates its claim at $80,000,000, which consists of $76,000,000 in past and future costs allegedly required for the environmental remediation of four waste disposal sites -- Dupraw Dump, Mackland Farms, Cumberland Municipal Landfill and Boulter Farms -- and an additional $4 million in past and future oversight costs with respect to a fifth waste disposal site -- Peterson/Puritan -- where investigation and remediation are proceeding under authority and supervision of the United States Environmental Protection Agency. The Debtors dispute Rhode Island's Claim No. 8766. J. Kate Stickles, Esq., at Saul Ewing LLP, in Wilmington, Delaware, notes that the State cited in the Disputed Claim no provision of the Rhode Island Hazardous Waste Management Act of 1978, the Rhode Island Groundwater Protection Act of 1985, or the Rhode Island Water Pollution Act and no case law establishing principles of nuisance or strict liability that authorize its claim against the Debtors for the State's past and future costs with respect to the five waste disposal sites. In the absence of more specific allegations, the Debtors deny that they are liable under the referenced Rhode Island statutes or common law principles. Section 106 of the CERCLA, on which the State specifically relies, does not provide a basis for the Disputed Claim. That section, by its terms, authorizes the federal government to respond to "an imminent and substantial endangerment to the public health or welfare or the environment because of an actual or threatened release of a hazardous substance from a facility" by obtaining an injunctive order from a federal district court. Thus, Ms. Stickles concludes, its only cost recovery provision authorizes persons who comply with that order to seek reimbursement of their costs from the federal superfund. Section 106 does not authorize cost recovery against private entities. The State also bases the Disputed Claim on Section 107 of the CERCLA, which authorizes the recovery of cleanup costs from four specified categories of persons: (1) current owners and operators of facilities where there has been a release or threatened release of hazardous substances; (2) owners or operators of the facilities at the time of the release or threatened release; (3) persons who arranged for the disposal of a hazardous substance at the facilities; and (4) transporters of hazardous substances to the facilities. The State did not specify which of these categories it believes includes the Debtors, and its reliance on "statements by former employees and observations of glass fiber products and raw materials associated with a former Owens Corning mill facility in Cumberland, Rhode Island" does not establish liability in any category. In the absence of more specific allegations, the Debtors deny that they have any liability under Section 107. In fact, the Debtors deny that they ever owned or operated any of the five waste disposal sites at issue in the State's proof of claim. Furthermore, the State cited no total amount or individual item of past costs that it allegedly incurred with regard to any of the five disposal sites, and it provided no supporting documentation whatsoever with regard to any costs. Moreover, Ms. Stickles points out, the State presented no documentation in support of its assertion that it has or will incur an additional $4,000,000 with respect to cleanup at the Peterson/Puritan site. Peterson/Puritan is also a site where investigation, required remediation, and oversight are being handled and the associated costs incurred by the Agency. The State will incur minimal, if any, costs with respect to this site. The only factual basis for any liability alleged by the State is "statements by former employees and observations of . . . [waste materials] associated with a former Owens Corning mill facility in Cumberland, Rhode Island." Nevertheless, the State asserted its claim against all of the Debtors, including those that never owned or operated the mill. The Debtors objected to the assertion that any Debtor, other than the owner or operator of the mill, has any liability whatsoever to the State with respect to response costs at the five waste disposal sites at issue. Owens Corning, which owned and operated the mill, objects to the State's claim to the extent that it seeks from it 100% of the State's past and future response costs with respect to the five waste disposal sites. Owens Corning is only one of many entities that transported or arranged for the disposal of wastes at these sites and that, in addition to the current and former owners and operators of those sites, would therefore be liable for cleanup costs under the CERCLA. In addition, there is no basis for assuming that the waste consisting primarily of glass fibers or marbles disposed of at the site by Owens Corning caused or contributed to any contamination requiring cleanup. Although the Act was interpreted as providing for joint and several liability, cost recovery cases are typically settled among potentially responsible parties by sharing costs on an equitable basis that accounts for the relative volume and toxicity of waste sent to a site by each party. The Debtors further object to the State's characterization of its claim as "unsecured priority." Because the Debtors do not own or lease and are not seeking to abandon a possessory interest in any of the five waste disposal sites at issue, costs incurred by the State for their cleanup are not "actual, necessary costs and expenses of preserving the estate" within the meaning of Section 503(b)(1)(A) of the Bankruptcy Code. In general, courts denied administrative status to environmental claims that arose from prepetition conduct of the debtor where the site to be cleaned up was not the property of the estate. Accordingly, the Debtors ask the Court to disallow Claim No. 8766 in its entirety. (Owens Corning Bankruptcy News, Issue No. 66; Bankruptcy Creditors' Service, Inc., 215/945-7000) OZARK AIR LINES: Suspends Service & Files Chapter 11 Petition ------------------------------------------------------------- Ozark Air Lines, Inc., doing business as Great Plains Airlines, sought protection under Chapter 11 of the Federal Bankruptcy Code last week. Chairman and CEO David A. Johnson stated: "We regret having to make this filing, but we remain committed to our plan of providing direct air service to the people of Oklahoma, New Mexico, Illinois, Tennessee and Washington D.C., and we are hopeful that we will be able to come out of this by March." During these proceedings, Great Plains will suspend discontinue its scheduled service and fly charters only. Passengers who have purchased transportation from Great Plains Airlines should attempt to make arrangements on another carrier if they still wish to travel. For more information on transportation options and refund options, please refer to the Great Plains website at http://www.gpair.com or to http://airconsumer.ost.dot.gov/rules/20030123.pdf Johnson stated: "One of our hardest decisions about this matter was the realization that we were going to inconvenience our passengers again. We really care about our passengers, and we hope that they will understand that we really had no choice." Johnson expressed similar concerns about MidAmerica Airport. He stated: "MidAmerica is a beautiful facility with a growing population base in the area. They have visionary leadership and we do not want to quit our service there. We plan to restore service to MidAmerica in March and are excited about the potential results of the Mead and Hunt route study out of MidAmerica. There will be a reduction in employment during this period, but Johnson stated, "We are expecting that this will be temporary and that we will be able to rehire our people quickly." There have been significant training dollars spent in up-grading the skills of our employees and it is truly regretful that we have to lay off anyone at this time." Johnson added that the airline ahs been in contact with its parts and aircraft supplier and he things that they will be able to continue to bring in additional aircraft in time for the new service in March. OZARK AIR LINES: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Ozark Air Lines, Inc. dba Great Plains Airlines 6501 E Apache Street, Suite 201 Tulsa, Oklahoma 74115 Bankruptcy Case No.: 04-10361 Type of Business: The Debtor owns an air carrier that serves Colorado Springs, Albuquerque, Tulsa, Oklahoma City and Nashville. See http://www.gpair.com/ Chapter 11 Petition Date: January 23, 2004 Court: Northern District of Oklahoma (Tulsa) Judge: Dana L. Rasure Debtor's Counsel: Sidney K. Swinson, Esq. Gable & Gotwals 1100 Oneok Plaza 100 West Fifth Street Tulsa, OK 74103-4217 Tel: 918-595-4800 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million PACIFICARE HEALTH: Names Watkins as CFO for Behavioral Subsidiary ----------------------------------------------------------------- PacifiCare Behavioral Health, the managed behavioral health care subsidiary of Cypress, Calif.-based PacifiCare Health Systems, Inc. (NYSE: PHS), recently appointed Kenneth L. Watkins as its chief financial officer. He reports to PBH President and Chief Executive Officer Jerry Vaccaro, M. D. "During our extensive search for a new CFO, Ken stood out as a hands-on, dynamic leader who can help us to continue providing quality, affordable behavioral health care plans to the marketplace," said Dr. Vaccaro. "He will be a key member of the PacifiCare Behavioral Health management team that is leading our expansion into the Eastern United States. We believe his long- term vision for growth and profitability can help us achieve our goal as the nation's leading managed behavioral health care organization." Currently, PBH contracts with more than 900 treatment facilities and 19,500 behavioral health practitioners nationwide and covers 4 million members. Previously, Watkins was CFO for Universal Care, a mixed-model HMO composed of multi-specialty staff-model medical, dental and optometry clinics and pharmacies. During his tenure he served on the board of directors and was responsible for accounting, finance, reporting, analysis, investment activities, group rate setting, contracting strategies and strategic analysis. He has also held key financial positions at PepsiCo, Inc.'s Taco Bell subsidiary and Ernst & Young. Watkins received his bachelor of science degree in Business Administration: Accounting, with Distinction, from California State University at Long Beach. PacifiCare Behavioral Health (PBH) provides mental health, chemical dependency and employee assistance services to covered members and maintains a national network of behavioral health care practitioners. All three PBH Service Centers hold three-year, Full Accreditation from the National Committee for Quality Assurance (NCQA), the most comprehensive and rigorous accrediting body for managed behavioral health care organizations. PacifiCare Behavioral Health is a wholly owned subsidiary of PacifiCare Health Systems, with clients including health plans, union trust funds, employers, school districts, and public sector agencies. More information on PacifiCare Behavioral Health can be obtained at http://www.pbhi.com/ PacifiCare Health Systems (S&P, BB+ Counterparty Credit Rating, Stable Outlook) is one of the nation's largest consumer health organizations with more than 3 million health plan members and approximately 9 million specialty plan members nationwide. PacifiCare offers individuals, employers and Medicare beneficiaries a variety of consumer-driven health care and life insurance products. Currently, more than 99 percent of PacifiCare's commercial HMO health plan members are enrolled in plans that have received Excellent Accreditation by the National Committee for Quality Assurance (NCQA). PacifiCare's specialty operations include behavioral health, dental and vision, and complete pharmacy and medical management through its wholly owned subsidiary, Prescription Solutions. More information on PacifiCare Health Systems is available at http://www.pacificare.com/ PARMALAT GROUP: Brazilian Unit Returns Tomato Plant to Unilever --------------------------------------------------------------- In November 2003, Parmalat Brasil SA Industria de Alimentos agreed to buy Industria Brasileira de Alimentos Ltda (Inbal), a tomato and pulp processing plant in the western state of Goias, Brazil, from Unilever Plc for an undisclosed sum. But due to the financial and legal woes that hit the Parmalat Group, the Brazilian unit decided to return Inbal to the Anglo-Dutch consumer goods group. Earlier this month, Parmalat Brasil sold a yogurt factory in the northeastern city of Natal to raise cash. Parmalat Brasil, which has yet to post a profit since publishing its earnings in 1998, failed to pay several of its milk suppliers in the wake of its parent company's scandal. It has since pledged to pay up by mid- January 2004. Parmalat took control of 10% of the pasteurized milk market in Brazil, 25% of the long-life milk market and 40% of the long-life carton cream market, according to its 2002 financial statement. The Company, however, admitted that there has been some turbulence, especially during the devaluation of the real in 1999 and the devaluation of the Argentine peso in 2002. The Brazilian unit posted a $28,000,000 loss in the first three quarters of 2003. Brazilian authorities are currently examining Parmalat's local operations. Ricardo Gontijo, spokesman for the regulation bureau, said that there has not been a specific request from European investigators, but local regulators are examining balance sheets and financial papers that might reveal information on the Parmalat fallout. (Parmalat Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000) PG&E NATIONAL: USGen Sues Rockingham to Recover $72MM in Assets --------------------------------------------------------------- USGen New England, Inc. operates a series of six generating facilities that comprise the Connecticut River System. Traveling south on the Connecticut River System, USGen's hydroelectric project known as the Bellows Falls Project is the fifth facility on the river, which is located in both New Hampshire and Vermont. The project consists of: -- a 643-foot long dam that spans the Connecticut River between New Hampshire and Vermont; -- a 2,804-acre reservoir 26 miles long that runs along the borders of several municipalities in both states; -- a powerhouse with three generating units with a total rated capacity of 40,800 kW; and -- associated transmission and electrical equipment. The powerhouse and a portion of the dam are located in the town of Rockingham, Vermont in the village of Bellows Falls. Most of the dam and reservoir are located in the State of New Hampshire. The Bellows Falls Project, including all of the property, land and facilities, is licensed as Project No. 1855 under the terms of a license issued by Federal Energy Regulatory Commission on August 3, 1979 pursuant to the Federal Power Act. USGen is the sole licensee under the FERC license. The Bellows Falls Project, on average, generates 226,000 MWH of electricity per year. The average annual consumption -- load -- of electricity within Rockingham is in the range of 36,000 MWH, or only 16% of the electricity generated by the project. As a result, Rockingham will, by necessity, sell 84% of the electricity generated by the project. On November 21, 2003, the Selectmen of the Town of Rockingham, pursuant to a vote taken on November 18, 2003, notified USGen of the commencement of condemnation proceedings, pursuant to, inter alia, Section 2910 of Chapter 79 of Title 30 of the Vermont Statutes, for the purpose of taking the Bellows Falls Project by eminent domain. The Condemnation Notice states that it is the intention of the Selectmen to take the Bellows Falls Project for the purpose of conducting Rockingham's municipal electric utility operations pursuant to Chapter 79. The Eminent Domain Proceeding is not before a court or neutral decision maker. Rockingham is purporting to act solely through its own select board to determine whether to proceed with the taking and to establish the purchase price. That is, the would- be buyer is claiming the right to set the purchase price unilaterally, subject only to USGen's appeal rights. According to John E. Lucian, Esq., at Blank Rome, LLP, in Baltimore, Maryland, USGen is in full compliance with all applicable permits and licenses with respect to the operation of the Bellows Falls Project. Those permits are issued almost exclusively by the federal government and the state of Vermont. In fact, the FERC license regulates extensively, and exclusively, the operation of the Bellows Falls Project, subject only to narrow grants of authority to other governing entities. In addition, Mr. Lucian informs the Court that there is no pending or threatened violation of public health, safety or welfare with respect to USGen's operation of the Bellows Falls Project, and the Condemnation Notice does not identify any basis for the Eminent Domain Proceeding. The Condemnation Notice proposes to take all of USGen's real property and all related tangible and intangible assets within Rockingham in return for a $72,046,000 payment. The sum is $18,976,100 below the value that the Vermont Superior Court established as the fair market value of the real property as of April 1, 2001, without regard to all other assets. Mr. Lucian tells Judge Mannes that permitting Rockingham to take the Bellows Falls Project by eminent domain would impact and undermine the value of the integrated hydroelectric system located along the Connecticut River. The project is an important component of USGen's Connecticut River System. The significant legal issues created by the Eminent Domain Proceeding will also create uncertainty. Potential purchasers of USGen's Connecticut River hydroelectric system would have to determine how to value that system in the face of a protracted eminent domain proceeding. Accordingly, USGen asks the Court to declare that the automatic stay imposed by Section 362(a) of the Bankruptcy Code applies to the Eminent Domain Proceeding and that Rockingham's continued prosecution of the Eminent Domain Proceeding is in violation of the automatic stay. Moreover, USGen asks the Court to enjoin Rockingham from prosecuting the Eminent Domain Proceeding. (PG&E National Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000) PHYAMERICA: Bankruptcy Court Finds Dr. Steven M. Scott in Contempt ------------------------------------------------------------------ PhyAmerica announced that on January 21, 2004, the Federal Bankruptcy Court in Baltimore, Maryland held Dr. Steven M. Scott in contempt of court due to Dr. Scott's violations of a Preliminary Injunction. The Preliminary Injunction, issued by the Court on December 19, 2003, prohibits Dr. Scott, for one year or further order from the Bankruptcy Court, from: (1) meeting with current employees and/or affiliates of PhyAmerica and from making any representations or statements concerning the former, current or future operations of PhyAmerica; (2) communicating with any party to a Provider Contract or any Provider about the operations of PhyAmerica; and (3) taking any further actions to procure, service, impair or otherwise interfere with the North Broward District contracts and the relationship between the North Broward District and PhyAmerica. The Court held that there were at least two instances where Dr. Scott had acted in violation of the Preliminary Injunction and announced that the determination of actual damages caused by these violations would occur at a hearing to be scheduled in the future. The Court also imposed a $50,000 per incident sanction for any further contempt on Dr. Scott's behalf. The Court's decision was issued after two days of hearings, during which the Court found that there was "clear and convincing evidence" of Dr. Scott's violations of the Preliminary Injunction. The Preliminary Injunction was issued by the Court in response to a Motion for Temporary Restraining Order and Preliminary and Permanent Injunction filed by the Official Committee of Unsecured Creditors and NCFE, PhyAmerica's largest creditor. In the Motion, the Committee and NCFE alleged that Dr. Scott interfered with PhyAmerica's efforts to reorganize and consummate the sale of PhyAmerica's assets to R.D. PhyAm Acquisition Corporation ("RDA") previously approved by the Court. PhyAmerica anticipates that the closing of the sale to RDA will be completed by the end of January. PILLOWTEX CORP: Court Approves KPMG's Engagement as Accountants --------------------------------------------------------------- Pillowtex Corporation and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court to employ and retain the firm of KPMG LLP, as their accountants and financial advisors during the Chapter 11 cases and all related matters, effective as of the Petition Date. These are services that KPMG will provide to the Debtors: A. Accounting and Auditing Services (1) audits of the financial statements of the Debtors as may be required from time to time, and advice and assistance in the preparation and filing of financial statements and disclosure documents required by the Securities and Exchange Commission including Forms 10-K as required by applicable law or as requested by the Debtors in accordance with the April 2, 2003 engagement letter; (2) audits of any benefit plans as may be required by the Department of Labor or the Employee Retirement Income Security Act, as amended in accordance with the October 1, 2002 engagement letter; (3) review of the unaudited quarterly financial statements of the Debtors as required by applicable law or as requested by the Debtors in accordance with the April 2, 2003 engagement letter; and (4) assistance in the preparation and filing of the Debtors' registration statements required by the Securities and Exchange Commission in relation to debt and equity offerings in accordance with the April 2, 2003 engagement letter; B. Tax Advisory Services (1) review of and assistance in the preparation of the filing of the Debtors' federal tax return and work papers in accordance with the May 27, 2002 engagement letter and any other tax return as requested by the Debtors; (2) advice and assistance regarding tax planning issues, including calculating net operating loss carry forwards and the tax consequences of any proposed plans of reorganization, and assistance in the preparation of any Internal Revenue Service ruling requests regarding the future tax consequences of alternative reorganization structures; (3) assistance regarding existing and future Internal Revenue Service, state and local tax examinations; (4) assistance regarding real and personal property tax matters, including review of real and personal property tax return, tax research, negotiation of values with appraisal authorities, preparation and presentation of appeals to local taxing jurisdiction and assistance in litigation of property tax appeals; and (5) assistance regarding federal, state and local payroll and unemployment tax matters including inquiries and examinations relating to the North Carolina SUI restructuring initiatives in accordance with the November 6, 2002 engagement letter; C. Financial Advisory Services (1) 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 any monthly operating reports and Schedules of Assets and Liabilities or Statements of Financial Affairs and Executory Contracts; (2) assistance in various analyses of creditor claims; (3) assistance with preference or other avoidance actions; (4) advice and assistance, as requested, with the continuing operation of the Debtors' business in order to consummate the proposed transaction with SB Capital, to maintain and preserve the assets of the Debtors' estates, and to maximize distribution to creditors; (5) advice and assistance in the preparation of financial information and documents necessary for confirmation of the Chapter 11 cases including information contained in the disclosure statement; (6) attendance at meetings of the Debtors' management and counsel focused on the coordination of resources related to the continued operation of the Debtors' business in order to consummate the proposed transaction with SB Capital, to maintain and preserve the assets of the Debtors' estates, and to maximize distributions to creditors; (7) advice and assistance to the Debtors in the identification of and, to the extent requested, consultation related to the implementation of internal cost reduction plans; (8) advice and assistance in the review or development of labor and employee compensation arrangements; and (9) analysis of assumption and rejection issues regarding executory contracts and leases. The Debtors have agreed to pay KPMG fixed fees for these audit services: (i) $72,000 for audit services related to each review of the Debtors' consolidated financial statements for the quarters ending March 29, June 28 and September 27, 2003; and (ii) $15,500 for the 2002 audit of some of the Debtors' defined benefit plans and health and welfare plans. To note, the fees for the examination of financial statements for year ended December 31, 2003 will be determined at the appropriate time, subject to approval of the Court and the Audit Committee of the Debtors' Board of Directors. The Debtors have agreed to compensate KPMG for Hourly Fee services performed postpetition in accordance with the indicated hourly rate of each KPMG professional providing services under the proposed engagement: Professional Rate ------------ ------------ Partners $400 - 600 Managing Directors/Directors 380-510 Senior Managers/Managers 320-420 Senior Associates 230-330 Associates 120-240 Paraprofessionals 90-120 (Pillowtex Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service, Inc., 215/945-7000) POTLATCH CORP: Fourth-Quarter 2003 Results Enter Positive Zone -------------------------------------------------------------- Potlatch Corporation (NYSE:PCH) reported earnings for both the fourth quarter and the year 2003, compared to losses in 2002, due to significantly higher earnings for the company's Wood Products segment and improved results for its Pulp and Paperboard segment. Lower fourth quarter 2003 earnings for the Consumer Products and Resource segments partially offset the positive Wood Products and Pulp and Paperboard results. A $9.0 million pre-tax charge related to the elimination of over 100 salaried positions adversely affected 2002 fourth quarter results. A portion of that charge was reversed in the fourth quarter of 2003. For the fourth quarter of 2003, the company reported earnings from continuing operations of $33.1 million or $1.15 per diluted common share, compared to a loss from continuing operations of $19.1 million or $.67 per diluted common share for the same period in 2002. Including discontinued operations, the company reported net earnings of $31.5 million or $1.10 per diluted common share versus a net loss of $34.5 million or $1.20 per diluted common share for the fourth quarter of 2002. An additional $2.7 million pre-tax charge related to a contractual obligation for the Brainerd facility was recorded in discontinued operations in the fourth quarter of 2003. The charge should represent the final costs incurred for the company's printing papers operations. The fourth quarter of 2002 included a $21.2 million pre-tax charge for adjustments to disposal costs related to discontinued operations. Net sales were $403.5 million for the fourth quarter of 2003, a substantial increase over the $312.1 million recorded in the fourth quarter of 2002. The company reported earnings totaling $53.2 million or $1.85 per diluted common share from continuing operations for the year ended December 31, 2003, compared to a loss from continuing operations for 2002 of $50.9 million or $1.79 per diluted common share. Net earnings for 2003, including discontinued operations, totaled $50.7 million or $1.77 per diluted common share, compared to a net loss of $234.4 million or $8.23 per diluted common share in 2002. Net sales for 2003 were $1.51 billion, compared with $1.29 billion in 2002. The Resource segment reported operating income of $17.3 million for the fourth quarter of 2003 versus income of $20.3 million in the fourth quarter of 2002. Lower log sales prices and higher costs for purchased logs in Idaho were partially offset by increased income from land sales in Arkansas, Idaho and Minnesota. Segment results for the fourth quarter of 2002 include income from the sale of surplus land and associated water rights and irrigation equipment at the Boardman, Oregon, hybrid poplar plantation. Operating income for the Wood Products segment was $55.0 million in the fourth quarter of 2003, a significant improvement compared to the $17.6 million loss recorded in the fourth quarter of 2002. "The favorable comparison was primarily due to significantly higher oriented strand board selling prices and increased shipments for the fourth quarter of 2003 versus the fourth quarter of 2002," stated L. Pendleton Siegel, Potlatch chairman and chief executive officer. "Increased shipments as well as higher prices for all other panel and lumber products also contributed to the improved income for the segment," Siegel added. The Pulp and Paperboard segment reported a fourth quarter operating loss of $1.3 million, a notable improvement over 2002's fourth quarter loss of $9.9 million. "Productivity improvements at the Lewiston, Idaho, pulp and paperboard facility have decreased per-ton production costs and are primarily responsible for the favorable comparison," Siegel stated. Increased shipments and higher sales prices for pulp also positively affected the results, but were partially offset by lower paperboard sales prices. The Consumer Products segment reported an operating loss of $0.7 million, down from income of $7.6 million earned in the fourth quarter of 2002. "Continued competitive markets resulted in an approximate 5 percent decline in sales prices for consumer tissue products compared to the fourth quarter of 2002," Siegel said. A slight increase in fourth quarter product shipments was more than offset by the lower sales prices and slightly higher production costs. Potlatch (Fitch, BB+ Senior Unsecured and BB Senior Subordinated Ratings, Negative) is a diversified forest products company with timberlands in Arkansas, Idaho and Minnesota. READER'S DIGEST: Board Okays Sale & Leaseback of NY Headquarters ---------------------------------------------------------------- The Reader's Digest Association, Inc. (NYSE: RDA) Board of Directors approved a proposal by the company's management to pursue the sale and partial leaseback of its corporate headquarters in Chappaqua, New York. Under the plan, the company intends to offer the facility for sale as part of a leaseback arrangement with a term of at least 20 years. The space retained by the company would be designed to accommodate its current headquarters workforce of about 800 employees. The company plans to retain Cushman & Wakefield to market the facility. The company expects that a sale would result in a significant cash transaction, a one-time gain and an ongoing reduction in maintenance and other operating costs beginning in Fiscal 2005. "This approach is the best for Reader's Digest, its shareholders and its employees," said Thomas O. Ryder, Chairman and Chief Executive Officer. "It will enable us to 'monetize' an underutilized asset, in the process strengthening the company's financial condition and improving shareholder value. For our employees, it means continuing to be based at our historic headquarters, which have been home to Reader's Digest for 65 years. For Westchester, it means we can continue our role as a leading county employer and corporate citizen." Under the plan, the company would sell the property and retain through lease the office space and other facilities it requires. The company currently requires less than half of its available office space, although it pays to maintain the entire facility. The campus has 690,000 square feet of usable space on 114 acres. Over the past few years, the company determined that the facility was far larger than its needs. Management proposed the plan after considering at length other options including subletting the excess space, or selling the facility and moving to a new location. A sale and partial leaseback approach was deemed to provide the best financial return in today's market and is the least disruptive to the operations. The headquarters was built in 1939 by Reader's Digest founders DeWitt and Lila Wallace. The headquarters is actually in Chappaqua, although it retained the mailing address of Pleasantville, where it was based earlier. The facility expanded along with the company and for many years housed most of its operations and staff. Today, the headquarters staff is smaller, and the company is configured differently. It is more geographically diverse, with offices in many parts of the world to support what developed into a global business. In addition to a staff of 800 in Pleasantville, the company also has almost 2,000 employees in other parts of the United States, including unit headquarters in Iowa, Wisconsin and Minnesota, and nearly 2,000 employees based in many countries around the world. Business units at the Pleasantville facility include: U.S. Magazines, including Reader's Digest, the world's largest-selling magazine; U.S. Books and Home Entertainment; QSP school fundraising; RD Young Families; Trade Publishing, Financial Services, as well as Global Operations and Global Information Technology, corporate staff and other operations. The Reader's Digest Association, Inc. (S&P, BB Corporate Credit Rating, Negative Outlook) is a global publisher and direct marketer of products that inform, enrich, entertain and inspire people of all ages and all cultures around the world. Worldwide revenues were $2.5 billion for the fiscal year ended June 30, 2003. Global headquarters are located at Pleasantville, New York. RELIANCE: Robert Steinberg Wants OK to Settle Whalley Litigation ---------------------------------------------------------------- In 1996, Christopher Whalley was terminated from his position as a flight attendant on a corporate jet owned by Reliance Insurance Company. Mr. Whalley filed a lawsuit, arguing that his dismissal violated the Americans with Disabilities Act, the Employee Retirement Income Security Act, the New York Human Rights Law, the New York City Human Rights Law, and the New Jersey Law Against Discrimination. At the time, Robert Steinberg was an officer of RIC and RGH and was named in Mr. Whalley's suit. Mr. Whalley filed his initial complaint before the United States District Court for the Southern District of New York as Civil Action No. 97-CIV-4018 in 1997. The litigation spawned other lawsuits, namely Whalley v. Reliance Group Holdings, Inc., Reliance Insurance Company, Robert Steinberg, and Plan Administrator of Reliance Employee Benefit Plan, pending before the U.S. Court of Appeals for the Second Circuit as Docket No. 01-7085, and John Doe v. Reliance Group Holdings, Inc., Reliance Insurance Company, and Robert Steinberg, pending before the Supreme Court of the State of New York, County of New York as Index No. 104402/01. On December 29, 2000, the New York Southern District Court granted Mr. Steinberg's Motion for Summary Judgment on all of Mr. Whalley's federal law causes of action, but declined to exercise pendant jurisdiction over his state law claims. Mr. Whalley appealed the summary disposition of his federal claims to the U.S. Court of Appeals for the Second Circuit. He also filed a complaint before the Supreme Court for the State of New York reasserting his state law claims. When the Debtors filed for bankruptcy protection, the Second Circuit stayed the Federal Appeal. The State Action was also stayed. In July 2002, the claims against Mr. Steinberg were severed from the stayed claims against RGH and RIC and litigation activity resumed against Mr. Steinberg. Deborah M. Norcross, Esq., at Mason, Griffin & Pierson, in Princeton, New Jersey, tells Judge Gonzalez that Mr. Steinberg is an Assured under the Insurance Policies underwritten by: * Syndicate 1212 at Lloyd's London as Lead Underwriter, * Gulf Insurance, Inc., * International Underwriting Association of London, * CNA Reinsurance Company Limited, * Zurich Specialties London, Limited, * Zurich Reinsurance (London) Limited, * X.L. Europe Reinsurance, * Federal Insurance Company, * London Insurance and Reinsurance Market Association, * Executive Risk Indemnity, Inc., and * Liberty Mutual Insurance Company. Any Settlement in the Whalley Litigations is covered by the Policies. Ms. Norcross explains that the Policies are assets of RGH and RIC. Accordingly, the Underwriters of the Policies require the approval of the Bankruptcy Court, the Commonwealth Court of Pennsylvania, and the Pennsylvania Insurance Commissioner before any proceeds under the Policies may be disbursed. Mr. Whalley seeks recovery of lost wages and benefits from November 1996 to the present, compensatory and punitive damages, and attorneys' fees and costs. After many lengthy discussions between the counsel for Mr. Steinberg and the counsel for Mr. Whalley, the Parties reached an agreement to settle the litigation for $40,000, inclusive of costs and attorneys' fees. Mr. Whalley's lowest prior settlement demand was $150,000. As required by the Underwriters, Mr. Whalley will execute general releases in favor of Mr. Steinberg and the corporate defendants named in the litigation. Ms. Norcross tells Judge Gonzalez that the Settlement is within the Underwriters' authority. The Liquidator does not object to the Settlement. Balancing the potential cost and possible recovery of continuing the litigation with Mr. Whalley against the limited sum of the Settlement, Ms. Norcross says that the Settlement is necessary. Mr. Whalley's total potential recovery could exceed $1,000,000, plus the cost of defense, which likely would exceed $150,000. By this motion, Mr. Steinberg asks Judge Gonzalez to: (1) approve the Settlement; (2) authorize the Underwriters to pay the Settlement Amount; (3) authorize the Underwriters to pay Mr. Steinberg's past and future counsel's fees and disbursements attendant to the Whalley Litigations. (Reliance Bankruptcy News, Issue No. 45; Bankruptcy Creditors' Service, Inc., 215/945-7000) RELIANT RESOURCES: Will Not Exercise Texas Genco Purchase Option ---------------------------------------------------------------- Reliant Resources, Inc. (NYSE: RRI) did not exercise its option to acquire CenterPoint Energy, Inc.'s interest in Texas Genco Holdings, Inc. The option expired on January 24, 2004. Reliant Resources, Inc., based in Houston, Texas, provides electricity and energy services to retail and wholesale customers in the U.S., marketing those services under the Reliant Energy brand name. The company provides a complete suite of energy products and services to more than 1.8 million electricity customers in Texas, ranging from residences and small businesses to large commercial, industrial and institutional customers. Reliant also serves large commercial and industrial clients in the PJM (Pennsylvania, New Jersey, Maryland) Interconnection. The company has approximately 20,000 megawatts of power generation capacity in operation, under construction or under contract in the U.S. For more information, visit http://www.reliantresources.com/ As reported in Troubled Company Reporter's January 5, 2004 edition, Fitch Ratings anticipated no immediate change in Reliant Resources, Inc.'s credit ratings or Rating Outlook based on the announcement that RRI has prepaid a portion of its outstanding debt, terminated a $300 million senior priority credit facility, and reached an agreement with its bank group to allow the potential acquisition of select generating assets in Texas. RRI's ratings are as follows: -- Senior secured debt 'B+'; -- Senior unsecured debt 'B'; -- Convertible senior subordinated notes 'B-'; -- Rating Outlook Stable. RELIZON CO: S&P Assigns BB- Credit & $294M Credit Facility Ratings ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB-' rating to Relizon Co.'s proposed $294 million senior secured credit facility. Proceeds will be used to refinance existing bank indebtedness and for fees and expenses. At the same time, Standard & Poor's assigned its recovery rating of '3' to the proposed bank facility, indicating that Standard & Poor's expects that lenders can expect meaningful (50%-80%) recovery of principal in the event of a default. Also, Standard & Poor's assigned its 'BB-' corporate credit rating to Relizon. The outlook is stable. Pro forma debt outstanding is expected to approximate $250 million. Dayton, Ohio-headquartered Relizon is a market leader in the business communications-outsourcing sector. "Ratings reflect Relizon's concentration in the document solutions industry, competitive market conditions in the overall print sector, the mature forms industry, and high debt levels," said Standard & Poor's credit analyst Michael Scerbo. These factors are tempered by Relizon's niche position in the fragmented document management industry, expanded presence in the business communications industry, experienced management team, significant recurring revenue stream derived from long-term contracts, and management's historically conservative financial policy. In August 2000, Relizon was acquired by The Carlyle Group for $375 million from The Reynolds and Reynolds Co. The company currently operates two primary segments: Document Solutions and Marketing and Billing Solutions. The Document Solutions segment, which accounts for a significant portion of revenues and EBITDA, benefits from a diversified customer base and a substantial recurring revenue and cash flow stream, as long-term contracts account for more than 70% of document management and solutions sales and renewal rates are over 90%. The marketing and billing solutions segment, which was significantly enhanced with the acquisition of Epsilon, a leading marketing solutions provider, is dependent on marketing budgets and is more susceptible to weak economic conditions. Still, this segment has diversified the company's revenue base and created numerous cross-selling opportunities with Relizon's existing client base, as overlap is minimal. Relizon is expected to continue funding its operations in a conservative manner. In addition, stability at the current rating level incorporates a balanced approach to funding any potential acquisitions. Future rating changes and/or outlook revisions are dependent on management's adherence to its relatively conservative financial profile. SAFETY-KLEEN: Court OKs Stipulation Settling Ball Corp.'s Claim --------------------------------------------------------------- Ball Corporation filed a proof of claim asserting an administrative expense claim for $50,000,000, against Safety-Kleen Corp.'s estates, with respect to the El Monte Operable Unit of the San Gabriel Valley Superfund Site. The Reorganized Safety-Kleen Debtors and Ball Corp. agree to resolve their disputes with respect to the Claim. The salient terms of the agreement are: (1) The Ball Corp. Claim is deemed withdrawn; (2) If the District Court for the Central District of California does not approve the El Monte Consent Decree, then Ball Corp. may re-file the Claim no later than 30 days after that denial; and (3) All of the Debtors' rights to object to the re-filed Claim are preserved. However, the Debtors will not object to the re-filed Claim on the basis that it was filed after the Administrative Claims Bar Date. Judge Walsh approves the stipulation. (Safety-Kleen Bankruptcy News, Issue No. 72; Bankruptcy Creditors' Service, Inc., 215/945- 7000) SIGHT RESOURCE: Terminates Client-Auditor Relationship with KPMG ---------------------------------------------------------------- On December 15, 2003, KPMG LLP informed Sight Resource Corporation that the client auditor relationship between the Company and KPMG would cease upon completion of the audit of the Company's financial statements as of, and for, the year ended December 28, 2002, and the issuance of their report thereon. The audit reports of KPMG LLP on the consolidated financial statements of the Company for the years ended December 29, 2001 and December 30, 2000, did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles, except as follows: KPMG LLP's report on the consolidated financial statements of the Company as of, and for, the years ended December 29, 2001 and December 30, 2000, contained a separate paragraph stating "the Company's recurring losses and its ability to pay its outstanding debt raise substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty." The Company's 2002 year end financial statements have not been completed. In the course of the Company's work on those statements, and in the course of work by KPMG in their audit of those statements, it was determined that: - The statements could not be completed, and an audit of the statements could not be completed, until certain entries and accounts upon which the statements are based are substantiated, reconciled or corrected, as applicable, and until completion of the investigation into matters discussed below. - The Company's internal controls over financial reporting appear to be inadequate and should be strengthened. In connection with KPMG's uncompleted audit of the Company's 2002 consolidated financial statements, KPMG informed the Company that certain material weaknesses exist in the Company's internal controls over financial reporting, including lack of timely performance and supervisory review of account reconciliations; lack of adequate documentation for various journal entries; and lack of sufficient management knowledge of the accounting systems. In March 2003, based on the material weaknesses reported above and concerns raised by an employee of the Company, KPMG told management and the audit committee of the Board of Directors that there was a question whether KPMG could rely on representations of the Chief Financial Officer serving at that time (but who is no longer serving as Chief Financial Officer). Subsequently, the Company began looking for a new Chief Financial Officer and a new Chief Financial Officer was hired in September 2003. In October 2003, KPMG informed the Company that it had made a determination that it could no longer rely on the representations of this former Chief Financial Officer. In March 2003, KPMG recommended that the Company conduct an investigation to determine whether the above-referenced accounting entries were accurate or inaccurate and, if inaccurate, the cause of the inaccuracy (that is, whether the inaccuracy was caused by system error or deficiency, error in judgment, negligence, intentional action or other cause). Legal counsel for the Company retained another accounting firm, Clark, Schaefer, Hackett & Co. ("CSH") to conduct this investigation. Also, because of the discovery of errors and deficiencies in connection with the preparation of the Company's 2002 year-end financial statements, the Company initiated a review of its 2002 quarterly financial statements. CSH presented the results of its investigation to the audit committee of the Board of Directors in September 2003. The reports presented by CSH stated that CSH had found no direct evidence of fraudulent entries, defalcations, or deliberate, intentional misstatements. The reports also stated there were significant problems with the Company's accounting system, the controls around the accounting system and management's understanding of the reports which could be generated by the system. The reports also presented CSH's recommendations regarding adjustments to the quarterly financial statements. As a result, as previously announced, the Company's previously reported financial results for the first three quarters of fiscal 2002 will be restated. This restatement is a result of the review and correction of certain entries and completion of related account reconciliations. A portion of the restatement includes the correction of the Company's revenue recognition policy, the effect of which is to reduce revenue related to sales recorded for merchandise that has not yet been delivered to customers. The Company has not yet reported results of operations for the fourth quarter of fiscal 2002 or for the full fiscal year ended December 28, 2002. The Company currently estimates that it will report for fiscal 2002 a net loss attributable to common shareholders in the range of $6.7 million to $7.5 million inclusive of asset impairment charges estimated in the range of $2.7 million to $3.3 million. The estimated range of the fiscal 2002 net loss is the same as previously reported by the Company in May 2003 and repeated earlier in December 2003. KPMG read the reports of CSH and KPMG was provided with work papers supporting CSH's investigations. In November 2003, KPMG informed the audit committee of the Company that they suggested that further additional procedures for the investigation be considered. They also suggested that the audit committee engage counsel to assist in the further investigation. In December 2003, the Board of Directors of the Company authorized its legal counsel to proceed to determine what further investigation was needed and to conduct and/or supervise such further investigation. The Company has not yet made a determination whether consolidated financial statements for 2001 need restatement. This issue is still under consideration. SOLUTIA: Committee Wants to Implement Screening Wall Procedures --------------------------------------------------------------- Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, relates that the term "Screening Wall" refers to a procedure established by an institution to isolate its trading activities from its activities as a Creditors Committee member. Among other things, a Screening Wall includes: -- the employment of different personnel to perform certain functions; -- the physical separation of the office and file space; -- the procedures for locking committee related files; -- the separate telephone and facsimile lines for certain functions; and -- the special procedures for the delivery and posting of telephone messages. According to Mr. Dizengoff, the Procedures prevent a committee member's trading personnel from use or misuse of non-public information obtained by the committee member's personnel engaged in committee-related activities and also preclude committee personnel from receiving inappropriate information regarding trading in Securities in advance of the trades. By this motion, the Official Committee of Unsecured Creditors, appointed in the Solutia Inc. Debtors' bankruptcy proceedings, asks the Court to: (a) approve the Screening Wall Procedures; and (b) determine that the Committee members, who are engaged in the securities trading for others or for their own accounts as a regular part of their business, but not their affiliates, will not violate their fiduciary duties as Committee members by trading in the Debtors' securities during the pendency of the Debtors' Chapter 11 cases, provided that any Securities Trading Committee Member carrying out the trade established, effectively implements, and adheres to the information blocking policies and procedures that are approved by the Office of the United States Trustee. Mr. Dizengoff explains that although the Committee members owe fiduciary duties to the creditors, the Securities Trading Committee Members may also have fiduciary duties to maximize returns to their clients through trading securities. Thus, if a Securities Trading Committee Member is barred from trading the Debtors' Securities during the pendency of the bankruptcy cases because of its duties to other creditors, it may risk the loss of a beneficial investment opportunity for itself or its clients and may breach its fiduciary duty to its clients. Alternatively, if a Securities Trading Committee Member resigns from the Committee, its interests may be compromised by virtue of taking a less active role in the reorganization process. Securities Trading Committee Members should not be forced to choose between serving on the Committee and risking the loss of beneficial investment opportunities or foregoing service on the Committee and possibly compromising its responsibilities by taking a less active role in the reorganization process. Any Committee member wishing to trade in the Debtors' Securities will file with the Bankruptcy Court a Screening Wall Declaration by each individual performing Committee-related activities. The Declaration will state that the individual will comply with the Screening Wall Procedures. According to Mr. Dizengoff, the Committee expressly reserves its right to seek an alternative form of order allowing Committee members to trade in the Securities of the Debtors since it may be impracticable or impossible for certain of the Committee members to comply with the procedures outlined. The Committee's counsel has consulted with the Office of the United States Trustee and the U.S. Trustee's Office has indicated that it consents to the Committee's request. (Solutia Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945- 7000) SPECIAL VALUE: Fitch Ups Class IV Sr. Sec. Notes' Rating to BB+ --------------------------------------------------------------- Fitch Ratings upgrades four classes of Special Value Absolute Return Fund, L.L.C. These rating actions are effective immediately. -- $440,000,000 Class I Senior Credit Facility upgraded to 'AA+' from 'AA'; -- $60,000,000 Class II Mezzanine Senior Secured Notes upgraded to 'A+' from 'A'; -- $58,000,000 Class III Mezzanine Senior Secured Notes upgraded to 'BBB+' from 'BBB'; -- $15,000,000 Class IV Mezzanine Senior Secured Notes upgraded to 'BB+' from 'BB'. Special Value Absolute Return Fund, L.L.C. is a market value collateral debt obligation that closed in June 2002. The fund is managed by Tennenbaum Capital Partners, LLC, a Los Angeles-based investment manager with approximately $1.7 billion in assets under management and a focus on fixed-income investing. Additionally, David L. Babson, an indirect subsidiary of Massachusetts Mutual Life Insurance Company, acts as a co-manager alongside TCP with respect to the selection and management of investments. At inception, the investment manager targeted a portfolio of 40% high-yield bonds and loans, 30% distressed debt securities, 20% mezzanine investments, 10% equity securities. . Given the current economic environment, TCP has defensively positioned the portfolio. At the January 2, 2004, valuation date, the fund's portfolio was comprised of approximately 68% high-yield bonds and loans, 15% distressed debt securities, 9% mezzanine investments and 8% equity securities. SVAR is performing well, as illustrated by the fund's consistently strong over-collateralization cushion. At the January 2, 2004 determination date, the discounted collateral value covered the senior credit facility by 602% relative to a test level of 100%. The magnitude of cushion is comparable for the mezzanine OC tests. At the January 2, 2004, determination date the discounted collateral value covered the class II, III, and IV notes by 260%, 156%, and 144%, respectively, relative to test levels of 100%. The strong OC coverage of the rated liabilities can be attributed to the investment manager's stable investment philosophy and sound investment decisions, coupled with significant gains realized on a portion of the portfolio investments. Based on the strong performance of the portfolio and significant over-collateralization cushion, as well as the experience and consistent management style of the investment manager, Fitch has upgraded the rated liabilities of Special Value Absolute Return Fund, L.L.C. SPECTRUM SCIENCES: Executes Licensing Pact with German Gov't ------------------------------------------------------------ Spectrum Sciences & Software Holdings Corp. (OTC Bulletin Board: SPSC), highly focused on Homeland Security through the provision of full service, quality solutions to complex and diverse government initiatives, announced the execution of a SafeRange licensing agreement for its Engineering and Information Technology division. The site license agreement is with the German Air Force. "As the United States and our allies continue to ramp up in the war against terrorism, we anticipate significant growth in our Engineering and Technology Division," stated Don Garrison, chief operating officer of Spectrum. "We believe that contracts with major foreign governments validate the quality and scope of our services. We have successfully increased the market for our SafeRange Software products through licensing to allied nations, and continue to see sales bolstered by world events and the post- 9/11 environment. The Engineering and Technology Division is well- positioned to take advantage of these opportunities and fully expects to make additional sales to allied nations in the near future as we continue to aggressively execute our strategic vision." The SafeRange Program Spectrum's SafeRange Program provides a unique planning tool for military training, allowing analysts to critically manage military information using satellite imagery through the generation of Weapon Safety Footprint areas. In addition, airspace managers can visualize airspace data information to affect the design, development, display and other parameters in the measurement and storage of complex airspace displays and database information. Spectrum Sciences & Software Holdings Corp. is highly focused on Homeland Security through the provision of full service, quality solutions to complex and diverse government initiatives. Spectrum is dedicated to providing innovative, dependable and cost- effective products and services to a broad range of government customers and is headquartered in Fort Walton Beach, Florida. Founded in 1982, the company currently has over 130 employees. Primary markets include engineering services, operation, maintenance, information technology and manufacturing. Spectrum provides and maintains Software Model Development and Safety Footprint Development to the United States Air Force, the United States Army, the United States Navy and many of our allied nations. Spectrum also operates and manages the largest air-to- ground bombing range in the United States, located in Gila Bend, Arizona. The Information Technology Division provides a full range of IT services, including web site development and hosting, software development and GIS services. The company's manufacturing division is ISO 9001/2000-qualified and provides a broad array of services for both commercial and Department of Defense customers. The company has, or has had, contracts with the United States Air Force, including the Air Combat Command (ACC), the Air Force Reserve Command (AFRC); the Air Force Special Operations Command (AFSOC); the Air National Guard (ANG); the Department of Navy, including United States Navy (USN); United States Marine Corps (USMC); the Royal Australian Air Force (RAAF); the Royal Air Force (RAF) and the German Air Force (GAF). To find out more about Spectrum, visit http://www.specsci.com/ At September 30, 2003, Spectrum Sciences' balance sheet shows a working capital deficit of about $3 million, and a total shareholders' equity deficit of about $1 million. SUMMITVILLE TILES: Turns to Aurora Management for Financial Advice ------------------------------------------------------------------ Summitville Tiles, Inc., seeks permission from the U.S. Bankruptcy Court for the Northern District of Ohio, Eastern Division, to hire Aurora Management Partners, Inc., as its Financial Advisor. In this engagement, Aurora Management will: a. advise the Debtor on the amount, and probably sources, of net operating income that the Debtor can reasonably expect to have available in the future for the payment of its obligations under any confirmed plan of reorganization; b. advise the Debtor on various amortization and debt service proposals whereby the Debtor can repay its creditors under the terms of any confirmed plan of reorganization; c. advise the Debtor as to possible alternative sources of debt or equity funding to be used to finance all, or a portion, of any confirmed plan of reorganization; d. advise the Debtor on various alternatives for the structure and ownership of the reorganized Debtor, as well as the possible lax and investment advantages inherent in various ownership structures; e. provide the Debtor with a valuation of its business as a going concern, in order to assist the Debtor in evaluation whether, and under what circumstances, it might be appropriate for the Debtor to sell its business operations to a third-party as part of a plan of reorganization; and f. perform other analyses, and to provide other advice, in connection with the Debtor's financial affairs and the structure and funding of any proposed plan of reorganization. Aurora Management will be paid monthly on these terms: a. David M. Baker, CPA, Principal and a Senior Consultant based in Hickory, North Carolina, at a rate of $200 per hour; b. Charles A. Soule, CTP, Principal and a Senior Consultant based in Atlanta, Georgia, at a rate of $250 per hour; c. Richard C. Kennedy, Consultant based in Chattanooga, Tennessee, at a rate of $175 per hour; d. Travel time from base of operation to Debtor's location will be included at one-half rate; and e. A $25,000 retainer. 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. TELESYSTEM: Extends Sale Pacts for Holders of Less Than 100 Shares ------------------------------------------------------------------ Telesystem International Wireless Inc. announced that the Sale and Purchase Arrangements for Holders of less than 100 Shares, which were scheduled to expire on January 26, 2004, will be extended until 5:00 p.m. EST on March 31, 2004. The programs enable registered and beneficial shareholders of TIW who own 99 or fewer common shares of record as of December 8, 2003, to sell or purchase shares without incurring any brokerage commission. TIW has retained Computershare Trust Company of Canada to manage the programs and handle share transactions and payment. Shareholders who wish to benefit from the advantages offered under these programs must complete, or give instructions to their brokers to complete, the documentation provided in December 2003 by TIW and forward such documentation to Computershare, as instructed. Questions should be directed to Computershare at: Toll free (Canada and US): 1-800-564-6253 International: 1-514-982-7800 Hours of Operation: 8:30 a.m. - 8:00 p.m. EST TIW (S&P, B- Long-Term Corporate Credit Rating, Stable Outlook) is a leading cellular operator in Central and Eastern Europe with almost 4.2 million managed subscribers. TIW is the market leader in Romania through MobiFon S.A. and is active in the Czech Republic through Cesky Mobil a.s. The Company's shares are listed on the Toronto Stock Exchange ("TIW") and NASDAQ ("TIWI"). TIME WARNER TELECOM: Pitches Winning Bid for EBS Fiber Assets ------------------------------------------------------------- Time Warner Telecom (Nasdaq: TWTC), a leading provider of managed voice and data networking solutions for businesses in Oregon and 21 other states, announced the successful bid for fiber assets of Enron Broadband Services in the Portland area. Time Warner Telecom won the competitive auction on Jan. 14, 2004, with the sale closing on Jan. 22, 2004. "This purchase enables us to serve even more Portland customers, many of whom have asked us to expand our network to their offices and buildings in the greater Portland metro area, in particular the Lloyd Center Business District," said Jon Nicholson, vice president and general manager for Time Warner Telecom in Portland. "We'll be able to deliver these new customers highly reliable, integrated voice, data and dedicated Internet services as well as providing the reach, speed, and reliability of our 4,200 route- mile, high-capacity Western Regional Network from Portland north to Seattle and Spokane and south and East to California, Arizona, and Idaho. The asset purchase extends the Time Warner Telecom local fiber network to 158 route miles in Portland to serve local customers in the near Eastside and Lloyd Center business districts as well as Beaverton, Hillsboro, Tigard, and Vancouver, Wash. In addition, the acquisition will allow the Company to manage its metro network more efficiently. Time Warner Telecom Inc. (S&P, B Corporate Credit Rating, Negative), headquartered in Littleton, Colo., delivers "last-mile" broadband data, dedicated Internet access and voice services for businesses in 44 U.S. metropolitan areas. Time Warner Telecom Inc., one of the country's premier competitive telecom carriers, delivers fast, powerful and flexible facilities-based metro and regional optical networks to large and medium customers. Visit http://www.twtelecom.com/for more information. TOWN SPORTS INT'L: Launches Senior Discount Debt Offering --------------------------------------------------------- Town Sports International Holdings, Inc., plans to offer senior discount notes in a private placement. Net proceeds from the offering will be used to redeem preferred stock and to pay a shareholder dividend. The senior discount notes will rank senior to the Company's future subordinated debt and pari passu to the Company's future senior debt. The senior discount notes will be effectively subordinated to the Company's future secured debt and will be structurally subordinated to all of the indebtedness of Town Sports International, Inc. and its subsidiaries. The offering will be a private placement under Rule 144A of the Securities Act of 1933 and will be made only to qualified institutional buyers and to certain persons in offshore transactions in reliance on Regulation S under the Securities Act of 1933. The senior discount notes will not be registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. Town Sports International's September 30, 2003 balance sheet shows a working capital deficit of about $4 million, and a total shareholders' equity deficit of about $33 million. TRITON AVIATION: S&P Keeps Low-B & Junk Note Ratings on Watch Neg. ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on Triton Aviation Finance's $720 million floating- and fixed-rate class A-1 and A-2 notes on CreditWatch with negative implications. The notes are backed by lease rentals generated by a portfolio of 51 aircraft. At the same time, the ratings on the class B and C notes remain on CreditWatch, where they were placed July 23, 2003. The CreditWatch placement is due to continued asset quality challenges, including a further severe value deterioration, as indicated by the most recent appraisals; increased aircraft-on- ground levels; and a large scheduled remarketing obligation during 2004. Standard & Poor's believes these factors will negatively impact portfolio revenues for the foreseeable future, resulting in reduced debt service capacity for all classes of notes. Payments of interest to the class C noteholders are expected to be deferred on next month's interest payment date; therefore, the CreditWatch review will focus on the class A and B notes. Standard & Poor's expects to resolve the CreditWatch placement on all classes of notes following the February 2004 interest payment date. RATINGS PLACED ON CREDITWATCH NEGATIVE Triton Aviation Finance Class Rating To From A-1 A-/Watch Neg A-/Negative A-2 A+/Watch Neg A+/Negative RATINGS REMAINING ON CREDITWATCH NEGATIVE Triton Aviation Finance Class Rating B-1 BB/Watch Neg B-2 BB/Watch Neg C-1 CC/Watch Neg C-2 CC/Watch Neg TYCO INT'L: Declares Regular Quarterly Dividend Payable on May 3 ---------------------------------------------------------------- The Board of Directors of Tyco International Ltd. (NYSE: TYC, BSX: TYC) declared a regular quarterly cash dividend of one and one quarter cents per common share. The dividend is payable May 3, 2004 to shareholders of record April 1, 2004. Tyco International Ltd. (Fitch, BB+ Senior Unsecured Debt and B Commercial Paper Ratings, Stable Outlook) is a diversified manufacturing and service company. Tyco is the world's leading provider of both electronic security services and fire protection services; the worlds' leading supplier of passive electronic components and a leading provider of undersea fiber optic networks and services; a world leader in the medical products industry; and the world's leading manufacturer of industrial valves and controls. Tyco also holds a strong leadership position in plastics and adhesives. Tyco operates in more than 100 countries and had fiscal 2003 revenues from continuing operations of approximately $37 billion. UAP HOLDING: S&P Assigns B- $82.5M Senior Discount Notes Rating --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to UAP Holding Corp., the parent company of crop protection and agriculture distributor United Agri Products Inc. (UAP; B+/Stable/--). At the same time, Standard & Poor's assigned its 'B-' rating to UAP Holding's $82.5 million senior discount notes due 2012. These notes will have no credit impact on the ratings of operating company United Agri Products, which have been affirmed. These include a 'B+' corporate credit rating, a 'BB-' senior secured credit facility rating, and a 'B' senior unsecured notes rating. UAP Holding and United Agri Products have the same corporate credit rating, as Standard & Poor's analyzes them on a consolidated basis. Proceeds from UAP Holding's senior discount notes will be used to pay a dividend to the holders of UAP's common stock. They will also be used to redeem a portion of UAP's outstanding series A redeemable preferred stock and to pay fees and expenses associated with this offering. UAP Holding's senior discount notes are rated two notches below the corporate credit rating, reflecting their deeply subordinated position to the large amount of debt at UAP, the operating company. The outlook on the Greeley, Colo.-based UAP Holding is stable. "The ratings reflect UAP's high debt levels following its leveraged spin-off from ConAgra Foods Inc. (BBB+/Stable/A-2) completed Nov. 24, 2003, and also reflect UAP's participation in a highly variable and competitive farm supply industry," said Standard & Poor's credit analyst Ronald Neysmith. "Somewhat mitigating these factors are the company's national distribution channels and defendable market share." Growth trends for the chemical and fertilizer sectors are expected to be flat for the next couple of years as higher volumes are offset by pricing declines, a result of patent roll-offs. The fertilizer line, meanwhile, has been partially pressured by natural gas pricing. Seed products, however, are expected to perform better as the company bundles seeds with complementary chemicals and as genetically modified crops become more accepted. UAP's business is seasonal and based on planting, growing, and harvesting cycles. Typically, more than half of its sales occur during the second calendar quarter of each year, during the spring planting season. As a result of this seasonality, the company experiences significant fluctuations in revenues, income, and working capital levels from quarter to quarter. Weather, farmer income, world agriculture production, and government policies in relation to agriculture are also important variables that can affect results. Thus, during the past couple of years, UAP has experienced volatile earnings performance. UNIQUE BROADBAND: Nov. 30 Working Capital Deficit Tops C$1 Mill. ---------------------------------------------------------------- Unique Broadband Systems, Inc. (TSX Venture: UBS) reported its results for the second quarter of fiscal 2004, which ended November 30, 2003. (All amounts are expressed in Canadian dollars unless specified otherwise). The net loss for the quarter was $7.4 million, or $0.07 per common share, compared with a net loss of $4.2 million, or $0.04 per common share in the prior year. The change was primarily attributable to one-time charges of $6.3 million resulting from the divestiture of the Company's engineering and manufacturing business. Approximately $1.5 million of these one-time charges were cash with the remainder being non cash charges. The Company has reclassified its operations relating to this business as "Discontinued Operations" for all reporting periods in the consolidated financial statements ended November 30, 2003. At November 30, 2003, the Company's balance sheet shows that its total current liabilities exceeded its total current assets by about $1 million, while total shareholders' equity shrank to about $15 million, from about $23 million six months ago. Effective November 30, 2003, the Company received regulatory approvals from the CRTC to permit the exercise of its fully funded option to purchase 6,207,427 shares of Look Communications Inc. (TSX Venture: LOK), conditional on changes to the Company's capital structure. The shareholders approved the necessary changes at the recent Annual and Special Meeting of Shareholders and, on December 30, 2003, UBS exercised its option and now holds the controlling interest in Look. As a result, the Company commenced consolidating the operations of Look on November 30, 2003. The operating results for Look from June 1, 2003 to November 30, 2003 were accounted for using the equity method. Look delivers a full range of communications services, including high-speed and dial-up Internet access, web applications, digital television distribution and superior customer service to both the business and residential markets across Canada. Look provides Internet access services to more than 1,300 businesses and leads the Canadian web hosting market with the product Look EasyHosting(TM) -- http://www.easyhosting.com/-- servicing more than 11,000 businesses. Look is also one of Canada's top domain name providers having registered more than 200,000 domain names since 2000. The Company offers all high-speed business customers the option to purchase their value added services such as email, web hosting, FTP, E-commerce, virus scanning and more at a 15% discount off their unbundled rates providing a complete business internet solution to the Canadian SME marketplace. Subsequent to its quarter-end, Look announced it was providing the next generation broadband service to small and medium sized businesses (SMEs) in seven areas of the Greater Toronto Area. The new offerings, which include cost-effective symmetrical and "broadband on demand" services, have already been launched in Vaughan/Concord, where numerous SMEs are already benefiting from significantly increased upload speeds. Service in the remaining areas is scheduled to be launched throughout 2004. During the quarter, UBS sold to Look the equipment necessary to deploy the high-speed broadband network. Consideration received for the sale is a secured promissory note, payable on the earlier of 15 days after Look completes a public financing in the amount of at least $1.5 million, or December 31, 2004. Look has the right to prepay the note at any time. The Company can now focus its full resources on Look to maximize its value for its customers, employees and shareholders. UBS is a publicly listed Canadian company that has investments in broadband assets, licensed spectrum and a 51% equity investment in Look Communications Inc. (TSX Venture: LOK). With its licensed spectrum through its affiliate, Look Communications, UBS is a Canadian digital television broadcaster and broadband wireless service provider. The Company's web sites may be found at http://www.uniquebroadband.com/and http://www.look.ca/ UNITED AIRLINES: OurHouse Asks Court to Disqualify Kirkland ----------------------------------------------------------- Steven M. Hartmann, Esq., at Freeborn & Peters, informs the Court that Kirkland & Ellis represented OurHouse in a litany of legal matters, including negotiations with United Loyalty Services, Inc. Kirkland reviewed agreements and drafted an operating agreement between OurHouse and ULS. Subsequently, OurHouse filed a lawsuit against ULS before the Circuit Court of Cook County, Illinois. The Suit is directly related to the agreements that Kirkland reviewed and drafted. Kirkland advised OurHouse on assessing the Claim it brought against one of the United Airlines Debtors. Now, Kirkland seeks to prevent its former client from pursuing its claim, as well as passing commentary on the merits of a transaction they negotiated on behalf of OurHouse. As a result, OurHouse asks Judge Wedoff to reconsider the Order approving Kirkland's employment. In the alternative, OurHouse asks the Court to: (a) disqualify Kirkland from representing the Debtors in any matter involving OurHouse in these cases; and (b) striking all pleadings adverse to OurHouse filed by Kirkland in these cases. Mr. Hartmann asserts that Kirkland failed to disclose the conflicts of interest it has with OurHouse. The Court should reconsider Kirkland's employment because the law firm is not "disinterested" as required by Section 327(a) of the Bankruptcy Code. Additionally, Kirkland's previous representation of OurHouse in matters related to the Debtors' proceedings should disqualify Kirkland as being in derogation of Rule 83.51.9 of the Professional Rules of Conduct. Kirkland must be disqualified from representing the Debtors in these cases. (United Airlines Bankruptcy News, Issue No. 37; Bankruptcy Creditors' Service, Inc., 215/945-7000) UNITED RENTALS: Prices Senior Notes & Senior Sub. Notes Offers -------------------------------------------------------------- United Rentals, Inc. (NYSE: URI) priced its offerings of $1 billion of senior notes and $375 million of senior subordinated notes. The senior notes will bear interest at 6-1/2% and be due in 2012, and the senior subordinated notes will bear interest at 7% and be due in 2014. The company expects to use the proceeds from these offerings to refinance existing debt as previously announced. The anticipated closing dates are January 28, 2004, for the senior subordinated notes, and February 17, 2004, for the senior notes. The company expects that, concurrently with the senior notes closing, it will replace its existing senior secured credit facility with a new senior secured credit facility as previously announced. The senior notes closing, but not the senior subordinated notes closing, is conditioned on: (i) the company obtaining the new credit facility and (ii) at least $516 million aggregate principal amount of outstanding 10-3/4% Senior Notes due 2008 being tendered to the company pursuant to the company's previously announced tender offer. United Rentals, Inc. (S&P, BB Corporate Credit Rating) is the largest equipment rental company in North America, with an integrated network of more than 750 locations in 47 states, seven Canadian provinces and Mexico. The company serves 1.8 million customers, including construction and industrial companies, manufacturers, utilities, municipalities, homeowners and others. The company offers for rent over 600 different types of equipment with a total original cost of approximately $3.6 billion. UNITEDGLOBALCOM INC: Extends Rights Offering Until February 12 -------------------------------------------------------------- UnitedGlobalCom, Inc. (Nasdaq: UCOMA, UCOMR), extended the expiration time for its previously announced rights offering to 5:00 p.m., New York City time, on Thursday, February 12, 2004, unless terminated or further extended by UGC. As a result of the extension of the expiration time, the deadline for holders of Class A rights to have an order to the subscription agent for the subscription agent to sell Class A rights on their behalf has been extended to 11:00 a.m., New York City time, on February 5, 2004, the fifth business day before the expiration time. The last date that the subscription agent will attempt to sell Class A rights on behalf of holders that make such an order has been extended to 5:00 p.m., New York City time, on Monday, February 9, 2004, the third business day before the expiration time. Foreign holders will now have until 11:00 a.m., New York City time, on February 5, 2004 to notify and provide acceptable instructions to the subscription agent regarding the transfer or exercise of rights. The close of business on January 21, 2004 was the record date for the issuance of the rights to UGC's stockholders. Based on the number of shares outstanding at the record date, UGC distributed: -- 82,950,198 Class A rights to holders of UGC Class A common stock, which number may be increased to account for rounding, -- 2,295,445 Class B subscription rights to the holder of UGC Class B common stock, and -- 84,874,594 Class C subscription rights to holders of UGC Class C common stock. Each whole Class A right will entitle each holder of record to purchase one share of Class A common stock, each whole Class B right will entitle each holder of record to purchase one share of Class B common stock and each whole Class C right will entitle each holder of record to purchase one share of Class C common stock, each at a subscription price of $6.00 per share. In addition, each rightsholder who exercises all of its rights will be entitled to subscribe, at the same per share subscription price, for up to that number of shares of common stock that are not purchased by other holders of the same class of rights. The Class A subscription rights are traded on the Nasdaq National Market under the symbol "UCOMR." UGC is the largest international broadband communications provider of video, voice, and high-speed Internet services with operations in 15 countries. Based on UGC's operating statistics at September 30, 2003, the company's networks pass 12.6 million homes and serve over 9 million RGUs, including 7.4 million video subscribers, 717,900 voice subscribers and 868,000 high-speed Internet access subscribers. Visit http://www.unitedglobal.com/ for further information about the company. USA INSPIRED: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: USA Inspired Designs, Inc. dba Designspirations 110 Allie Bean Drive Livingston, Texas 77351 Tel: 936-327-7502 Bankruptcy Case No.: 04-90060 Type of Business: The Debtor is a company of creative designs, inspirational merchandising and introduces gift, decor and seasonal items. See http://designspirations.com/ Chapter 11 Petition Date: January 24, 2004 Court: Eastern District of Texas (Lufkin) Debtor's Counsel: Garry A. Offerman, Esq. Offerman & King, L.L.P. 6420 Wellington Place Beaumont, TX 77706 Tel: 409-860-9000 Fax: 409-860-9199 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Eagleton Direct Exports, Ltd. $100,000 Greating Marine $95,000 Dept. of the Treasury $75,896 Honest Shenzhen $64,026 Delmar International $28,223 Farmer Logistics $27,500 Robert F. Barnes $25,000 Yanzhou Huini Imports $22,744 Huangzhou Xinlong Artificial $21,475 Sum Burst Truck Lines, Inc. $21,000 Wong Tat Hong/Goldson $20,225 Hangzhou Cofna I/E Co. $19,032 Chaozhou Development Zone $17,824 Dezhou Ruiqing Gifts $15,466 Chouzhou Dev. Zone $12,336 Central Freight $10,041 Landstar $9,350 AGAM Group, Ltd. $8,000 Fedex Freight East $7,000 Crown Lifts $6,786 WEIGHT WATCHERS: Will Publish Q4 and FY 2003 Results on Feb. 24 --------------------------------------------------------------- Weight Watchers International Inc. (NYSE: WTW) will release its results for the fourth-quarter and full-year 2003 after the NYSE close on Tuesday, February 24, 2003. The Company has scheduled a conference call on February 24th at 5:00 p.m. ET. During the conference call, Linda Huett, president and chief executive officer, and Ann Sardini, chief financial officer, will discuss fourth-quarter and full-year results and answer questions from the investment community. Live audio of the conference call will be simultaneously webcast over the Internet on the Company's corporate Web site at http://www.weightwatchersinternational.com/ A replay of the webcast will be available on this site for 30 days. Weight Watchers International, Inc. (S&P, BB Corporate Credit and Senior Secured Debt Ratings, Stable Outlook) is the world's leading provider of weight loss services, operating in 30 countries through a network of company-owned and franchise operations. Weight Watchers holds over 44,000 weekly meetings where members receive group support and education about healthy eating patterns, behavior modification and physical activity. In addition, Weight Watchers offers a wide range of products, publications and programs for those interested in weight loss and weight control. WELLSFORD REAL: Will Make $46MM Asset Reduction re Whitehall JV --------------------------------------------------------------- Wellsford Real Properties, Inc. (AMEX: "WRP") expects to record non-cash reductions aggregating approximately $46 million (or $7.13 per common share) to the carrying amount of certain of its assets in the fourth quarter of 2003. Based on the September 30, 2003 financial statements, after the effect of the aforementioned reductions WRP's net book value would be reduced to $20.57 per share. The adjustments relate to an impairment charge taken by Wellsford/Whitehall Group L.L.C., a joint venture between WRP and the Whitehall Funds, affiliates of The Goldman Sachs Group, Inc. Another Goldman Sachs affiliate manages the Venture. The Venture, in which WRP has a 32.59% equity interest, recorded an impairment charge of $113 million relating to certain assets in its portfolio. It currently owns and operates 2.7 million SF of office buildings situated predominantly in suburban Boston and New Jersey markets. Currently these buildings are approximately 62% leased and are subject to several first lien mortgages totaling approximately $202 million (or $75 per SF). The final amount of the impairment charge is subject to the completion of the annual audit. Prior to the recording of the fourth quarter impairment charge, the net real estate assets of the Venture as of September 30, 2003 were $357.3 million and members' equity was $181.2 million. This impairment provision represents an approximate reduction of 32% in the Venture's net real estate assets and a reduction of 62% in members' equity (to $68 million). The magnitude of the impairment charge is the result of several factors including a continued deterioration of and outlook for the suburban office submarkets where the Venture's properties are situated. Specifically, these include decreasing market rents, slower absorption trends and greater tenant concession costs. The Venture anticipates that average new rents for its properties could decrease in 2004 from those existing in early 2003 in excess of 15%. With regard to six of the Boston properties, which collateralize $65 million of non-recourse securitized debt, the Venture has requested a dialogue with the special servicer to discuss various forms of debt relief. There can be no assurance of the outcome of these discussions. Approximately 68% (or $77 million) of the Venture's impairment reserve relates to these Boston properties. The reductions in the carrying amount of WRP's assets include its $37 million share of the Venture charge, and as a result of the charge, an aggregate of $9 million in charges attributable to the balance of the unamortized basis difference of WRP's investment in the Venture and to certain deferred income tax assets. After the reductions, WRP's investment in the Venture is approximately $15 million. WRP will continue to evaluate whether further reductions to the carrying amount of its investment are appropriate. In addition, the adjustments are subject to year-end audit procedures by WRP's independent auditors. These charges will cause WRP's consolidated net worth to fall below a minimum covenant requirement contained in a credit enhancement agreement supporting $12.7 million of outstanding bonds with respect to its Palomino Park project. WRP and Whitehall continue to analyze the various alternatives available to them including the need for additional capital in the Venture and their respective "buy-sell" rights. At the end of 2003, WRP held $82 million in cash and short term government securities to respond to various opportunities or requirements as they present themselves, including the repayment of the $12.7 million Palomino Park Bonds. Wellsford Real Properties, Inc. is a real estate merchant banking firm organized in 1997 and headquartered in New York City which acquires, develops, finances and operates real estate properties and organizes and invests in private and public real estate companies. WEYERHAEUSER CO.: Reports Slight Decline in Fourth-Quarter Results ------------------------------------------------------------------ Weyerhaeuser Company (NYSE: WY) reported fourth quarter net earnings of $92 million, or 41 cents per share, on net sales of $5.1 billion. This compares with $126 million, or 57 cents per share, on net sales of $4.7 billion for the fourth quarter of 2002. Fourth quarter 2003 earnings include the following after-tax items: -- A charge of $29 million, or 14 cents per share, for closure of facilities. -- A charge of $17 million, or 8 cents per share, for integration and restructuring activities. -- A charge of $5 million, or 2 cents per share, associated with the settlement of litigation. -- A gain of $40 million, or 18 cents per share, on the sale of timberlands in Tennessee and the Carolinas. Fourth quarter 2002 earnings include the following after-tax items: -- Gains of $95 million, or 42 cents per share, on the sale of timberlands in Washington state net of costs associated with the closure of related Wood Products and Timberlands operations, a reduction in depreciation resulting from an adjustment to the preliminary purchase price allocation for the Willamette acquisition and the benefit from insurance proceeds covering a business disruption. -- Charges of $57 million, or 26 cents per share, for the termination of the former MacMillan Bloedel pension plan for U.S. employees, acquisition and integration of Willamette Industries and the closure of other facilities. Net sales in 2003 were $19.9 billion compared with $18.5 billion in 2002. For the full year 2003, Weyerhaeuser reported net earnings of $277 million, or $1.25 per share, compared with $241 million, or $1.09 per share for the full year 2002. Significant 2003 accomplishments: -- Reduced Weyerhaeuser Company debt, excluding Real Estate and Related Assets, by approximately $1.1 billion to $11.6 billion. Total company debt, which includes Real Estate and Related Assets, was reduced by approximately $1.1 billion to $12.5 billion at year-end. Weyerhaeuser continues to make excellent progress toward achieving its target financial ratios. -- Captured $300 million in synergies from the Willamette acquisition in half the projected time. -- Sold approximately 444,000 acres of non-strategic timberlands. -- Reduced capital spending, excluding Real Estate and Related Assets, to approximately $626 million, a 35 percent decrease from $960 million the prior year. -- Continued to rationalize the company's manufacturing system by closing 12 facilities. In addition, Weyerhaeuser significantly improved the productivity of its remaining manufacturing operations. "Thanks to the hard work of our employees, during 2003 we successfully completed the integration of Willamette, captured the synergies and continued to reduce debt despite very challenging economic conditions," said Steven R. Rogel, chairman, president and chief executive officer. "Continuing consolidation and a changing customer base are driving significant changes within the forest products industry. These changes underscore the importance of the strategies we pursued in 2003 to aggressively reduce costs, increase productivity, and maintain strong relationships with our customers and suppliers. We're pleased with the progress we made this year, but we recognize that we must constantly improve if we are going to successfully respond to these market challenges. "In 2004, we plan to become even more efficient and to continue working closely with customers to meet their needs," Rogel said. "This will mean developing the most productive manufacturing system in the industry. We'll also continue reducing debt and maximizing our return on assets to position Weyerhaeuser to compete successfully in our evolving industry." Excluding the pre-tax gain of $61 million in the fourth quarter on the sale of non-strategic timberlands in Tennessee and the Carolinas, fourth quarter earnings were down slightly from third quarter. Stronger log prices and improved export markets in the West were offset by lower seasonal fee harvest and lower domestic sales volumes. Log prices in the South remained flat, but lower seasonal fee harvest caused a reduction in earnings. First quarter earnings are expected to be higher than the fourth quarter -- adjusted for the sale of non-strategic timberlands in the fourth quarter -- due to higher domestic log sales volumes and prices in the West, and higher planned fee harvest in the South. The net reduction in earnings from the third quarter was due primarily due to volatile prices for wood products. Prices increased for oriented strand board and plywood before declining sharply late in the quarter. Declines in Western lumber prices, lower volumes and higher raw material costs reduced lumber results. Higher OSB prices negatively affected margins for engineered wood products. The late quarter decline in structural panel prices negatively affected earnings in the company's building products distribution centers. Wood Products recognized pre-tax charges of $13 million in the fourth quarter compared with $31 million in the third quarter for the closure of facilities. The segment also incurred $22 million in countervailing and anti-dumping duties and related costs on Canadian softwood lumber the company sold into the United States in the fourth quarter. This compares to $25 million in the third quarter. For the year, Weyerhaeuser incurred $97 million in countervailing and anti- dumping duties. First quarter results are expected to be lower than fourth quarter due primarily to price decreases in lumber and structural panels. The company expects the Canadian softwood lumber issue to continue to affect earnings. A weak paper market combined with pre-tax charges of $30 million associated with the closure of the paper machine at Longview, Wash., resulted in significantly lower earnings compared with the prior quarter. Paper prices were slightly lower during the quarter. To balance supply to demand, the paper business took 96,000 tons of market-related downtime during the quarter. Pulp earnings were steady as higher pulp prices were mostly offset by higher manufacturing costs. First quarter losses are expected to narrow from fourth quarter due to increased demand for fine paper and improving softwood pulp prices. Excluding pre-tax charges of $40 million in the third quarter associated with the closure of facilities and settlement of litigation, fourth quarter earnings were down $50 million from third quarter. Prices for boxes and containerboard declined through the quarter. Packaging volumes declined seasonally, but were higher than levels a year ago. Manufacturing costs rose modestly during the quarter. The mills took 71,000 tons of market-related downtime to adjust production to the seasonal decline in shipments. Earnings in the first quarter are expected to be down slightly due primarily to higher raw material costs for old corrugated containers. This is expected to be partially offset by anticipated containerboard price increases late in the quarter. Volumes should improve seasonally and year-over-year. Increases in operating rates are expected to result in lower manufacturing costs. A continued strong housing market, low interest rates and a quarterly record for closings produced increased earnings from the prior quarter. Continued strong markets are expected to produce first quarter earnings that are comparable to fourth quarter. The company currently has a backlog of approximately six months of homes sold, but not closed. Weyerhaeuser Company (Fitch, BB+ Senior Unsecured Long-Term Ratings, Stable Outlook), one of the world's largest integrated forest products companies, was incorporated in 1900. In 2002, sales were $29.1 billion ($18.5 billion US). It has offices or operations in 18 countries, with customers worldwide. Weyerhaeuser is principally engaged in the growing and harvesting of timber; the manufacture, distribution and sale of forest products; and real estate construction, development and related activities. Weyerhaeuser Company Limited, a wholly owned subsidiary, has Exchangeable Shares listed on the Toronto Stock Exchange under the symbol WYL. Additional information about Weyerhaeuser's businesses, products and practices is available at http://www.weyerhaeuser.com/ WORLDCOM INC: Election Form Expiry Date Extended Until Tomorrow --------------------------------------------------------------- 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 was extended to 4:15 p.m. (Eastern Time) tomorrow. 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 Monday, January 26, 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 points of presence (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/ XO COMMS: Raises $197 Million in Common Stock Rights Offering ------------------------------------------------------------- XO Communications, Inc. (OTCBB:XOCM.OB), one of the nation's leading providers of broadband telecommunications services, issued all of the 39.7 million shares of new common stock from its highly successful rights offering that closed on January 6, 2004. XO's $200 million rights offering of 40 million shares of common stock yielded approximately $197.6 million in proceeds. All proceeds were used to reduce the company's outstanding debt from $536.5 million to $338.9 million. "We are very pleased with the tremendous success of the rights offering," said Carl Grivner, chief executive officer of XO Communications. "The strong support shown by investors has generated proceeds that have allowed us to reduce our debt to an even lower level." The rights offering commenced on October 16, 2003 in accordance with the Company's Chapter 11 plan of reorganization and concluded on January 6, 2004. XO Communications is a leading broadband telecommunications services provider offering a complete set of telecommunications services, including: local and long distance voice, Internet access, Virtual Private Networking (VPN), Ethernet, Wavelength, Web Hosting and Integrated voice and data services. XO has assembled an unrivaled set of facilities-based broadband networks and Tier One Internet peering relationships in the United States. XO currently offers facilities-based broadband telecommunications services within and between more than 70 markets throughout the United States. ZIM CORPORATION: Liquidity Issues Raise Going Concern Uncertainty ----------------------------------------------------------------- ZIM Corporation's financial statements have been prepared on a going concern basis which assumes that the Corporation will realize the carrying value of its assets and satisfy its obligations as they become due in the normal course of operations. As of November 30, 2003, the Corporation had negative working capital of $3,317,408, had incurred a loss of $912,996 for the six months then ended and had incurred losses during the last five years. In addition, the Corporation generated negative cash flows from operations of $970,240 for the six months ended November 30, 2003 and generated negative cash flows from operations during the last five years. The Corporation's management team has focused the direction of the Corporation from a mature database and application development technology player to a provider of interactive mobile messaging. To establish the interactive mobile messaging, the Corporation needs substantial funds for marketing and business development. All of the factors above raise substantial doubt about the Corporation's ability to continue as a going concern. Management's plans to address these issues include continuing to raise capital through the placement of equity, obtaining additional advances from related parties and, if necessary, renegotiating the repayment terms of accounts payable and accrued liabilities. The Corporation's ability to continue as a going concern is subject to management's ability to successfully implement the above plans. Failure to implement these plans could have a material adverse effect on the Corporation's position and/or results of operations and may necessitate a reduction in operating activities. In the longer term, the Corporation has to generate the level of sales which would result in cash self sufficiency and it may need to continue to raise capital by selling additional equity or by obtaining credit facilities. The Corporation's future capital requirements will depend on many factors, including, but not limited to, the market acceptance of its software, the level of its promotional activities and advertising required to support its software. No assurance can be given that any such additional funding will be available or that, if available, it can be obtained on terms favorable to the Corporation. Historically, ZIM has received cash advances from an officer of the Corporation who is a significant shareholder and a holding Corporation that is owned by the spouse of the significant shareholder. To date, ZIM has received $4,400,000 CDN or $3,387,120 US. For the six-month period ended November 30, 2003, ZIM received $1,200,000 CDN or $894,000 US. For the three-month period ended November 30, 2003, ZIM received $800,000 CDN or $634,207 US. The amounts bear interest at 5% per annum and are due on demand. ZIM expects to obtain further financing through the sale of its securities to investors as well as the exercising of options from option holders. ZIM has not received any commitments from any third parties to provide additional financing. As a result of some of the items noted above, and conditions which existed as of May 31, 2003, the Independent Auditors' Report for the year ended May 31, 2003 indicated that there was substantial doubt regarding the ability of the Company to continue as a going concern. * Pillsbury Winthrop's Manhattan Office Moves to 1540 Broadway -------------------------------------------------------------- Effective Jan. 19, 2004, Pillsbury Winthrop, LLP, partners Richard L. Epling, Esq., Leo T. Crowley, Esq., Karen B. Dine, Esq., Daniel A. Lowenthal, III, Esq., and F. Joseph Owens, Jr.; associates Margot P. Erlich, Esq., Erica Edman, Esq., Harry E. Garner, Esq., Caryn D. Lasky, Esq., Amanda Mallan and Josh May, Esq.; and Charles H. Vejvoda, Esq., of counsel; relocated their offices to: Pillsbury Winthrop, LLP 1540 Broadway New York, NY 10036 Telephone (212) 858-1000 Fax (212) 858-1500 http://www.pillsburywinthrop.com/ The Pillsbury Winthrop Insolvency and Creditors' Rights group represents financial institutions, secured and unsecured creditors, indenture trustees and bondholders, landlords, creditors' committees, equipment lessors, shareholders, partners, purchasers, vendors, agents and participants in all aspects of redocumenting, restructuring, litigating, foreclosing and otherwise protecting and enforcing their rights, remedies and security interests in problem loan or other troubled financial situations. The Firm also has offices located in Los Angeles, San Francisco, San Diego, Sacramento, Silicon Valley and Orange County. * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------- -------- Alliance Imaging AIQ (39) 683 43 Akamai Technologies AKAM (168) 230 60 Alaris Medical AMI (32) 586 173 Amazon.com AMZN (1,353) 1,990 550 Aphton Corp APHT (11) 16 (5) Arbitron Inc. ARB (100) 156 (2) Alliance Resource ARLP (46) 288 (16) Atari Inc. ATAR (97) 232 (92) Actuant Corp ATU (7) 361 31 Avon Products AVP (91) 3,327 73 Saul Centers Inc. BFS (13) 389 N.A. Blount International BLT (369) 428 91 Cincinnati Bell CBB (2,104) 1,467 (327) Cubist Pharmaceuticals CBST (7) 221 131 Cedara Software CDE (2) 20 (12) Choice Hotels CHH (114) 314 (37) Compass Minerals CMP (90) 644 101 Columbia Laboratories COB (8) 13 5 Caraco Pharm Labs CPD (20) 20 (2) Centennial Comm CYCL (579) 1,447 (98) Diagnostic Imag DIAM 0 20 (3) Echostar Comm DISH (1,206) 6,210 1,674 D&B Corp DNB (19) 1,528 (104) Education Lending Group EDLG (26) 1,481 N.A. First Potomac FPO (1) 126 N.A. WR Grace & Co. GRA (222) 2,688 587 Graftech International GTI (351) 859 108 Hexcel Corp HXL (127) 708 (531) Integrated Alarm IASG (11) 46 (8) Imax Corporation IMAX (104) 243 31 Imclone Systems IMCL (186) 484 139 Inkine Pharm INKP (6) 14 5 Gartner Inc. IT (29) 827 1 Journal Register JRC (4) 702 (20) KCS Energy KCS (30) 268 (16) Kos Pharmaceuticals KOSP (75) 69 (55) Lodgenet Entertainment LNET (101) 298 (5) Lucent Technologies LU (3,371) 15,747 2,818 Level 3 Comm Inc. LVLT (240) 8,963 581 Memberworks Inc. MBRS (21) 281 (100) Moody's Corp. MCO (327) 631 (190) McDermott International MDR (417) 1,278 154 McMoRan Exploration MMR (31) 72 5 Maguire Properti MPG (159) 622 N.A. Microstrategy MSTR (34) 80 (7) Nuvelo Inc. NUVO (4) 27 21 Northwest Airlines NWAC (1,483) 13,289 (762) ON Semiconductor ONNN (525) 1,243 195 Petco Animal PETC (11) 555 113 Primus Telecomm PRTL (168) 724 65 Per-Se Tech Inc. PSTI (39) 209 32 Qwest Communications Q (2,830) 29,345 (475) Quality Distribution QLTY (126) 387 19 Rite Aid Corp RAD (93) 6,133 1,676 Ribapharm Inc RNA (363) 199 92 Sepracor Inc SEPR (392) 727 413 Sigmatel Inc. SGTL (4) 18 (1) St. John Knits Int'l SJKI (76) 236 86 I-Stat Corporation STAT 0 64 33 Syntroleum Corp. SYNM (1) 47 14 Town and Country Trust TCT (2) 504 N.A. Tenneco Automotive TEN (75) 2,504 (50) Thermadyne Holdings THMD (665) 297 139 TiVo Inc. TIVO (25) 82 1 Triton PCS Holdings TPC (60) 1,618 173 Tessera Technologies TSRA (74) 24 20 UnitedGlobalCom UCOMA (3,040) 5,931 (6,287) United Defense I UDI (30) 1,454 (27) Ultimate Software ULTI (7) 31 (10) UST Inc. UST (59) 1,613 895 Universal Technical UTI (36) 84 29 Valassis Comm. VCI (33) 386 80 Valence Tech VLNC (17) 36 4 Ventas Inc. VTR (54) 895 N.A. Warnaco Group WRNC (1,856) 948 471 Western Wireless WWCA (464) 2,399 (120) Xoma Ltd. XOMA (11) 72 30 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L. Metzler, Bernadette C. de Roda, Donnabel C. Salcedo, Ronald P. Villavelez and Peter A. Chapman, Editors. Copyright 2004. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $675 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***