T R O U B L E D C O M P A N Y R E P O R T E R Friday, February 6, 2004, Vol. 8, No. 26 Headlines 3D SYSTEMS: Settles All Disputes and Litigation with EOS GmbH AES CORP: Will Redeem 8% Senior Notes & 10% Secured Senior Notes AIR CANADA: Asks for Court Nod to Amend CCAA Lender Definition AIR CANADA: ALPA Air Canada Jazz Unit Re-Elects Pilot Officers ALASKA AIR GROUP: Reports January Passenger Traffic for Units ALLEGHENY ENERGY: Receives SEC Approval for $1.6BB Debt Issuance ALLIANCE HEALTHCARD: Miller Ray Airs Going Concern Uncertainty AMERADA HESS: Declares Quarterly Preferred Share Dividend AMERCO: Resumes Regular Quarterly Preferred Share Dividend AMERICA WEST: Reports 8.1% Increase in January 2004 Traffic AMERICA WEST: Reports Outstanding Operating Performance for Dec. AMERICAN TOWER: Closes 7.25% Sr. Debt Offering & Calls 6.25% Notes AMERICAN TOWER: S&P Assigns Junk Rating to $225MM 7.5% Sr. Notes AMNIS SYSTEMS: Inks LOI to Purchase Corridor Communications Corp. ARGOSY GAMING: S&P Rates $350 Mil. Sr. Subordinated Notes at B+ ATA HOLDINGS: S&P Revises CreditWatch Implications to Positive AURORA FOODS: Court Okays Miller Buckfire as Financial Advisor AVADO BRANDS: Files for Chapter 11 Reorganization in N.D. Texas AVADO BRANDS INC: Case Summary & 50 Largest Unsecured Creditors BEAUTYCO INC: Signs-Up Tomlins & Goins as Bankruptcy Counsel BIONOVA HOLDING: Enters Financial Restructuring Pact with Savia BOYD GAMING: Reports Improved 4th-Quarter 2003 Financial Results BROOKLYN NAVY: Fitch Cuts Sr. Debt Rating to Speculative Grade BUDGET GROUP: Claims Classification/Treatment Under Amended Plan CHINA WORLD: Losses & Capital Deficit Raise Going Concern Doubt COMMSCOPE INC: S&P Affirms Low-B Level Credit & Sub. Debt Ratings CROMPTON CORP: S&P Cuts Rating to BB on Ongoing Earnings Weakness CWMBS INC: Fitch Hacks Class B3 Notes' Rating to Junk Level DELTA AIR: Sets Annual Shareholders' Meeting for April 23, 2004 DELTA AIR: January 2004 Traffic Increases By 0.3% DII INDUSTRIES: Receives Final Nod for $350 Million DIP Facility DIRECTV: Raven Media Asks Court to Subordinate Hughes' Claims EL PASO CORP: Agrees to Sell Aruba Refinery to Valero for $465MM EL PASO CORP: Valero Confirms Purchase of Aruba Refinery & Assets ENRON CORP: EMI Wins Nod to Sell Partnership Interest to VF II EXD ACQUISITION: Case Summary & 20 Largest Unsecured Creditors FACTORY 2-U: Brings-In Hennigan Bennet as Reorganization Counsel GARDEN HOLDINGS: Case Summary & Largest Creditor GASEL TRANSPORTATION: Goff Backa Replaces Van Krevel as Auditors GENCORP INC: Will Pay Quarterly Cash Dividend on February 27, 2004 GLOBE METALLURGICAL: February 20 Fixed as Admin. Claims Bar Date GMAC COMM'L: S&P Takes Rating Actions on Series 1996-C1 Notes HARDWOOD: Nixes Proposed Amalgamation with Rogers Associate HARNISCHFEGER: Look for First-Quarter Results by February 25, 2004 HEADWATERS: S&P Ups Ratings to BB after Closing of Equity Offering HEARTLAND COMM: Case Summary & 20 Largest Unsecured Creditors HOLLINGER INC: Sets Retraction Price for Retractable Common Shares HW AVIATION LLC: Voluntary Chapter 11 Case Summary IMC GLOBAL: Board of Directors Declares Preferred Share Dividend INTERFACE INC: Completes $135 Million Debt Refinancing Transaction INTERNET CAPITAL: Will Publish Fourth-Quarter Results on Feb. 19 JACKSON PRODUCTS: Seeks Okay to Tap Gallop Johnson as Attorneys KAISER ALUMINUM: Gets Conditional Nod for Various Labor Agreements KAISER ALUMINUM: Wants Nod to Sell Stake in Alpart to Glencore KMART CORP: Objects to 45 Florida Tax Claims Totaling $1.4 Million LENNOX INT'L: Fourth-Quarter Results Reflect Significant Growth MAIL-WELL INC: Unit Completes $320-Million Senior Debt Offering MAIL-WELL: Wins Consents to Amend 8-3/4% Senior Debt Indenture MANITOWOC CO.: Red Ink Continues to Flow in Fourth-Quarter 2003 METROPOLITAN INVESTMENT: Voluntary Chapter 7 Case Summary METROPOLITAN MORTGAGE: Case Summary & 50 Unsecured Creditors MINORPLANET SYSTEMS: Commences Nasdaq Trading Under MNPLQ Symbol MIRANT CORP: Wants Court to Clear Pepco Energy Settlement Pact MOODY'S CORP: Reports Improved Year-Over-Year 4th Quarter Results MORGADO WINE: Case Summary & 20 Largest Unsecured Creditors NATIONAL CENTURY: Balks at Network Pharmaceuticals' $8.5MM Claim NEW CENTURY FINANCIAL: Annual Shareholders' Meeting Set for May 5 NORTHWESTERN: Otter Tail Wants to Acquire South Dakota-Based Ops. OWENS-ILLINOIS: S&P Downgrades Corporate Credit Rating to BB- OWENS CORNING: Plans to Divest Its Vytec Vinyl Siding Operation PAC-WEST TELECOMM: Will Publish Q4 and YE 2003 Results on Feb. 18 PC LANDING CORP: Secures Exclusivity Extension through May 31 PENN FINANCIAL: Bankruptcy Court Establishes Claims Bar Dates PERKINELMER INC: Says Products Affected by FDA Action are Safe PG&E NATIONAL: Court Clears Cash Management System Modification PLAYTEX PRODUCTS: Prices $460MM 8% Senior Secured Debt Offering POLYONE CORP: Fourth-Quarter 2003 Net Loss Tops $183 Million REPTRON ELECTRONICS: Plan of Reorganization Declared Effective RESMED INC: Fourth-Quarter 2003 Results Show Marked Improvement RIVAL TECHNOLOGIES: Brings-In Dohan & Company as New Accountants ROGERS COMMS: Reports Weaker Performance for Fourth-Quarter 2003 SLATER STEEL: Universal Stainless Submits Bid for Fort Wayne Plant SLATER STEEL: Fort Wayne Asset Auction Set for February 11, 2004 SLATER STEEL: Union and Pinnacle Want Liquidation Slowed Down STAR ACQUISITION: Appel & Lucas Serving as Bankruptcy Attorneys STONE & WEBSTER: 3rd Amended Chapter 11 Plan is Now Effective TIDEMARK PARTNERS: Case Summary & 20 Largest Unsecured Creditors UNITED COMPANIES: Fitch Takes Rating Action on Various Contracts UNITED RENTALS: Will Host 4th-Quarter Conference Call on Feb. 25 UNIVERSAL COMMS: Auditors Express Going Concern Uncertainty UNUMPROVIDENT CORP: Fourth-Quarter 2003 Results Sink into Red Ink US AIR: Enters Stipulation Settling US Bank & State Street Claim WATERLINK INC: Court Approves Asset Sale to Calgon Carbon Corp. WEIRTON STEEL: Wants Approval for Temporary Low Earnings Program WELLMAN: S&P Rates Planned $185M Sec. First-Lien Term Loan at B+ WICKES INC: Taps Sitrick & Company as Communications Consultants WILLIS GROUP: Posts Flat 4th-Quarter Results & Increased Dividend WORLDCOM: Court Approves Modified Scully Scott Engagement Terms XM SATELLITE: Will Redeem 7.75% Convertible Subordinated Notes XO COMMS: Intends to File Application to Trade Shares on Nasdaq * Harold Kaplan is New Chairman of Gardner Carton & Douglas LLP * BOOK REVIEW: The Sorcerer's Apprentice - Medical Miracles and Other Disasters ********* 3D SYSTEMS: Settles All Disputes and Litigation with EOS GmbH ------------------------------------------------------------- 3D Systems Corporation (Nasdaq:TDSC) has entered into an agreement with EOS GmbH that settles all worldwide disputes and litigation between 3D Systems and EOS GmbH. Under the terms of this settlement agreement, 3D Systems and EOS waived all claims for damages with respect to their pending disputes and litigation. In addition, both companies licensed various patents to each other. As part of this settlement, EOS is to pay 3D Systems certain royalties for its patent license, and 3D Systems expects to begin selling under its own brand certain laser sintering equipment and related products produced by EOS under an OEM supply arrangement. "We are very pleased that we have been able to conclude this settlement successfully," said Abe N. Reichental, 3D Systems' Chief Executive Officer. "The closure of this chapter enables us to concentrate our resources on developing and delivering to our customers valuable solid imaging solutions designed to improve their bottom line. Our ability to expand the range of customer solutions by adding certain EOS-produced sintering systems to our own product line enables us to deliver to our customers a broader range of value-based solutions." Founded in 1986, 3D Systems(R), the solid imaging company(SM), provides solid imaging products and systems solutions that reduce the time and cost of designing products and facilitate direct and indirect manufacturing. Its systems utilize patented proprietary technologies to create physical objects from digital input that can be used in design communication, prototyping, and as functional end-use parts. 3D Systems offers a wide range of imaging, communication rapid prototyping and on-demand manufacturing systems, including the MJM product line (InVision(TM) 3-D printer and ThermoJet(R) solid object printer), SLA(R) (stereolithography) systems, SLS(R) (selective laser sintering) systems, and Accura(R) materials (including photopolymers, metals, nylons, engineering plastics, and thermoplastics). More information on the company is available at http://www.3dsystems.com/ * * * Going Concern Uncertainty The Company's condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company incurred operating losses totaling $14.4 million and $21.4 million for the nine months ended September 26, 2003 and the year ended December 31, 2002, respectively. In addition, the Company had a working capital deficit of $4.4 million and an accumulated deficit in earnings of $35.8 million at September 26, 2003. These factors among others raise substantial doubt about the Company's ability to continue as a going concern. Management's plans include raising additional working capital through debt or equity financing. In May 2003, the Company sold approximately 2.6 million shares of its Series B Convertible Preferred Stock for aggregate consideration of $15.8 million and the Company repaid $9.6 million of the U.S. Bank term loan balance with a portion of the net proceeds. Management intends to obtain debt financing to replace the U.S. Bank financing, and in July 2003, management accepted a proposal from Congress Financial, a subsidiary of Wachovia, to provide a secured revolving credit facility of up to $20.0 million, subject to its completion of due diligence to its satisfaction and other conditions. In October 2003, Congress determined not to extend a commitment of financing to the Company. In October 2003, management accepted a proposal from Silicon Valley Bank to provide a revolving line of credit up to $12.0 million. In October 2003, Silicon Valley Bank preliminarily approved this credit facility. Any credit facility will be subject to completion by Silicon of its due diligence and other customary closing conditions. Management continues to pursue alternative financing sources. Additionally, management intends to pursue a program to improve its operating performance and to continue cost saving programs. However, there is no assurance that the Company will succeed in accomplishing any or all of these initiatives. AES CORP: Will Redeem 8% Senior Notes & 10% Secured Senior Notes ---------------------------------------------------------------- The AES Corporation (NYSE: AES) called for redemption $155,049,000 aggregate principal amount of its outstanding 8% Senior Notes due 2008, which represents the entire outstanding principal amount of the 8% Senior Notes due 2008, and $34,174,000 aggregate principal amount of its outstanding 10% secured Senior Notes due 2005. The 8% Senior Notes due 2008 and the 10% secured Senior Notes due 2005 will be redeemed on March 8, 2004 at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest to the redemption date. The mandatory redemption of the 10% secured Senior Notes due 2005 is being made with a portion of AES's "Adjusted Free Cash Flow" (as defined in the indenture pursuant to which the notes were issued) for the fiscal year ended December 31, 2003 as required by the indenture and will be made on a pro rata basis. AES -- whose senior unsecured debt is rated at 'B' by Fitch -- is a leading global power company comprised of contract generation, competitive supply, large utilities and growth distribution businesses. The company's generating assets include interests in 118 facilities totaling over 45 gigawatts of capacity, in 28 countries. AES's electricity distribution network sells 89,614 gigawatt hours per year to over 11 million end-use customers. For more general information visit http://www.aes.com/ AIR CANADA: Asks for Court Nod to Amend CCAA Lender Definition -------------------------------------------------------------- The Initial CCAA Order currently defines "CCAA Lender" as "General Electric Capital Canada Inc. or GE Canada Finance Inc. together with any participation in a syndication of the CCAA Credit Facility. . . ." By this motion, the Air Canada Applicants ask Mr. Justice Farley to amend the definition of "CCAA Lender" under the Initial CCAA Order. Due to an internal corporate restructuring involving GE Canada Finance Inc., which completed at the end of January 2004, GE Canada Finance will transfer and assign its assets to another Canadian resident corporate entity, which ultimately will be wholly owned by General Electric Co. The Applicants want to add the words "or their respective successors and assigns" after "GE Canada Finance Inc." in the present definition. (Air Canada Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., 215/945-7000) AIR CANADA: ALPA Air Canada Jazz Unit Re-Elects Pilot Officers -------------------------------------------------------------- Leaders of the Air Line Pilots Association, International (ALPA) unit representing Air Canada Jazz pilots have re-elected pilot officers to serve two-year terms beginning this week. Following a vote by the representatives on the Air Canada Jazz pilots' union governing body, the Master Executive Council (MEC), Captain Nick DiCintio was re-elected to a second term as chairman, Captain Monty Allan was re-elected as vice-chairman, Captain Terry McTeer was re-elected as secretary and Captain Rod Lypchuk was re-elected treasurer. Captain DiCintio is a Montreal based pilot with 15 years of service at Air Canada Jazz. Captain Allen is based in Toronto and has 21 years of service with the airline. Captain McTeer is based in Victoria, and has 19 years of service with Jazz, and Captain Lypchuk is based in Vancouver and has 15 years of service with the carrier. "I look forward to continuing to serve the Air Canada Jazz pilots during these challenging times," said Captain DiCintio. "I thank the MEC for their continued support of not only myself, but their support for the entire slate of incumbent officers. The continuity in leadership will allow the MEC leadership to reinforce on behalf of the Jazz pilots that we endorse business oriented solutions to the ongoing Air Canada bankruptcy restructuring process," added Captain DiCintio The Air Canada Jazz pilots have been working cooperatively with Air Canada and Air Canada Jazz throughout the restructuring with a view to realigning fleet and costs to ensure Air Canada's continued success in the increasingly competitive North American market, including the ultimate objective of maximizing shareholder value and economic return for all stakeholders. The Air Canada Jazz pilots Master Executive Council is comprised of four MEC officers and 14 status representatives who act on behalf of the 1400 Air Canada Jazz pilots. ALPA, the oldest and largest pilots union in North America, represents 66,000 pilots at 43 carriers in the United States and Canada. ALPA's Web site is http://www.alpa.org/ ALASKA AIR GROUP: Reports January Passenger Traffic for Units ------------------------------------------------------------- Alaska Air Group, Inc. (NYSE: ALK) reported January passenger traffic for its subsidiaries, Alaska Airlines and Horizon Air. January traffic includes the effect of the severe winter storm that negatively impacted operations in Seattle and Portland. More than 1,500 flights, or 5.3 percent of scheduled departures for the month, were cancelled. ALASKA AIRLINES Alaska Airlines' January traffic increased 11.6 percent to 1.127 billion revenue passenger miles (RPMs) from 1.010 billion flown a year earlier. Capacity during January was 1.674 billion available seat miles (ASMs), 4.3 percent higher than the 1.605 billion in January 2003. The passenger load factor (the percentage of available seats occupied by fare paying passengers) for the month was 67.3 percent, compared to 62.9 percent in January 2003. The airline carried 1,122,200 passengers compared to 1,049,000 in January 2003. HORIZON AIR Horizon Air's January traffic increased 11.1 percent to 128.1 million RPMs from 115.3 million flown a year earlier. Capacity during January was 203.6 million ASMs, 2.9 percent lower than last year's 209.7 million. The passenger load factor for the month was 62.9 percent, compared to 55.0 percent last January. The airline carried 372,300 passengers compared to 356,200 in January 2003. Seattle-based Alaska Air Group is the parent company of Alaska Airlines and Horizon Air Industries. As previously reported, Standard & Poor's Ratings Services lowered its ratings on Alaska Air Group Inc. and subsidiary Alaska Airlines Inc., including lowering the corporate credit rating on both to 'BB-' from 'BB.' Ratings were removed from CreditWatch, where they were placed March 18, 2003. The outlook is negative. ALLEGHENY ENERGY: Receives SEC Approval for $1.6BB Debt Issuance ---------------------------------------------------------------- Allegheny Energy, Inc. (NYSE: AYE) announced that the Securities and Exchange Commission has approved the Company's request to issue up to $1.6 billion of indebtedness for it and its subsidiary, Allegheny Energy Supply Company, LLC, in order to refinance existing debt. There is no assurance that Allegheny will be able to consummate a refinancing on terms satisfactory to it. The SEC also approved the Company's request to issue certain guarantees that will allow the release of approximately $76 million currently held in escrow. These funds are expected to be used for reduction of existing debt. In addition, the SEC approved Allegheny Energy, Inc.'s request for issuance of up to $350 million in equity, although the Company has no immediate plans to do so. "This is very positive news for Allegheny Energy," said Paul J. Evanson, Chairman and CEO. "The SEC's approval will allow us to move forward with steps for improving our liquidity and strengthening our balance sheet. We appreciate the fine efforts of the SEC staff and others with respect to this prompt approval." 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'. ALLIANCE HEALTHCARD: Miller Ray Airs Going Concern Uncertainty -------------------------------------------------------------- Alliance HealthCard, Inc. specializes in creating, marketing and distributing value added healthcare savings programs, services, and products. Alliance gives individuals and families access to healthcare providers offering up to 16 major healthcare services at significantly discounted fees for a low annual fee. Alliance markets to predominantly underserved markets where individuals either have limited health benefits, or no insurance. These markets may vary widely from senior populations with Medicare (no prescription benefits), part-time employees, to pockets of the over 40 million uninsured looking for lower cost medical services and access to providers. The Company was founded in September 1998 as a limited liability company and reorganized into a Georgia corporation in February 1999. The Company is not an insurance provider, but is a provider of an innovative membership organization that receives discounts for healthcare-related products and services from networks of providers. Alliance offers its programs to consumers who are underinsured, uninsured and to individuals who participate in employer sponsored health plans that provide primary health insurance, but do not provide insurance coverage for certain healthcare-related services and products. The Company began sales of its membership cards in November 1999. The Company has financed its operations to date through the sale of its securities and a line of credit obtained in May 2000. The Company reported a net loss of $1,042,536 in 2003 compared to a net loss of $1,632,811 for the prior year. The decrease in the net loss is principally a result of the increase in revenue and gross profit increase from CVS and State Farm contracts. The Company's net working capital decreased $1,028,377 to a negative $2,289,615 during the 12 months ended September 30, 2003 from a negative $1,261,238 at September 30, 2002. The decrease in working capital was attributable to the following: (a) a decrease in cash due to the Company's net loss; (b) an increase of $370,451 in accounts payable related to the CVS contract; (c) an increase in accrued compensation due to salary deferrals for certain officers and employees; (d) an increase in deferred revenue primarily relating to annual membership payments received from members related to the CVS contract. On May 22, 2003 the Company extended its credit agreement with SunTrust Bank in Atlanta, Georgia. The agreement provided the Company with a $500,000 working capital facility secured by personal guaranties from certain officers and directors of the Company who received common stock options in exchange for their guaranties. The credit agreement matured on July 31, 2003. The principal balance of $484,272, plus accrued interest, was repaid in full on August 13, 2003. The Company secured a new working capital facility on July 10, 2003 with Branch Banking And Trust Company. The agreement provides the Company with a $650,000 working capital facility secured by personal guaranties from certain officers and directors of the Company. The credit agreement matures on July 9, 2004 and bears an interest rate of the bank's prime rate plus 0.9% per annum to be adjusted daily. The Company has $525,000 available under its credit agreement as of September 30, 2003. The new working capital facility will continue to be used to provide on-going capital to fund the implementation of new contracts and general corporate operations. The Company's future profitability, liquidity and capital requirements will depend upon numerous factors, including the success of its product offerings and competing market developments. The Company has not yet achieved, and may never achieve, profitable operations. Miller Ray & Houser, LLP, of Atlanta, Georgia, stated in their Auditors Report dated November 25, 2003: "The accompanying financial statements have been prepared assuming that the Company will continue as a going concern...[T]he Company's significant operating losses and lack of equity raise substantial doubt about its ability to continue as a going concern." AMERADA HESS: Declares Quarterly Preferred Share Dividend --------------------------------------------------------- The Board of Directors of Amerada Hess Corporation (NYSE: AHC) declared a quarterly dividend of $0.9333 cents per share payable on the 7.00% Mandatory Convertible Preferred Stock of the Corporation on March 1, 2004 to holders of record at the close of business on February 15, 2004. Amerada Hess (S&P, BB+ Mandatory Convertible Preferred Shares Rating, Negative Outlook), headquartered in New York, is a global integrated energy company engaged in the exploration for and the production, purchase, transportation and sale of crude oil and natural gas, as well as the production and sale of refined petroleum products. AMERCO: Resumes Regular Quarterly Preferred Share Dividend ---------------------------------------------------------- On February 4, 2004, the Board of Directors of AMERCO, the holding company for U-Haul International, Inc., and other companies, declared a regular quarterly cash dividend of $0.53125 per share on the Company's Series A, 8-1/2 percent Preferred Stock (NYSE: A0+A). The dividend will be payable March 1, 2004 to holders of record on February 16, 2004. The Board anticipates the resumption of cash dividends on a quarterly basis going forward. The Company will address the deferred dividend payments subsequent to emergence from Chapter 11. For more information about AMERCO, please visit http://www.amerco.com/ AMERICA WEST: Reports 8.1% Increase in January 2004 Traffic ----------------------------------------------------------- America West Airlines (NYSE: AWA) reported traffic statistics for the month of January 2004. Revenue passenger miles (RPMs) for January 2004 were a record 1.7 billion, an increase of 8.1 percent from January 2003. Capacity for January 2004 was a record 2.5 billion available seat miles (ASMs), up 4.9 percent from January 2003. The passenger load factor for the month of January was a record 67.9 percent versus 65.9 percent in January 2003. "We are pleased to report our tenth consecutive month of record load factors in January, which is typically one of our slower months," said Scott Kirby, executive vice president, sales and marketing. "We're happy to have maintained flat unit revenues with a five percent increase in both stage length and available seat miles." The following summarizes America West's January traffic results for 2004 and 2003: Jan. 2004 Jan. 2003 % Change Revenue Passenger Miles (000) 1,676,418 1,550,805 8.1 Available Seat Miles (000) 2,467,891 2,352,492 4.9 Load Factor (percent) 67.9 65.9 2.0 pts. Enplanements 1,553,072 1,475,951 5.2 America West Airlines is the nation's second largest low-fare airline and the only carrier formed since deregulation to achieve major airline status. America West's 13,000 employees serve nearly 55,000 customers a day in 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. AMERICA WEST: Reports Outstanding Operating Performance for Dec. ---------------------------------------------------------------- America West Airlines (NYSE: AWA) ranked second among the major airlines in three out of four categories of operational performance as reported in the Department of Transportation's Air Travel Consumer Report for December 2003. The airline's on-time performance, completion factor and customer complaints were the second best among the major airlines, earning employees a fifth $50 performance bonus in seven months. The airline's customer complaints decreased by 67 percent year- over-year to just 0.36 complaints per 100,000 customers, which is the lowest number of complaints the airline has reported since 1995. "We're thrilled that our customer complaints have reached an eight-year low," said Jeff McClelland, chief operating officer. "Our 13,000 employees are focused on providing friendly and helpful service all the time and these latest statistics show that their hard work is definitely paying off. So, we're quite pleased to be making our fifth operating performance payment in the last seven months." America West's on-time performance in December 2003 was 79.4, which was well above the industry average and the airline's performance in December 2002. The airline's completion factor was 98.8 and the number of mishandled bags was just 4.12 per 1,000 passengers, which is a 20 percent year-over-year improvement. America West Airlines is the nation's second largest low-fare airline and the only carrier formed since deregulation to achieve major airline status. America West's 13,000 employees serve nearly 55,000 customers a day in 93 destinations in the U.S., Canada, Mexico and Costa Rica. 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. AMERICAN TOWER: Closes 7.25% Sr. Debt Offering & Calls 6.25% Notes ------------------------------------------------------------------ American Tower Corporation (NYSE: AMT) closed its sale of $225.0 million principal amount 7.50% senior notes due 2012 as previously announced. The Company will use the net proceeds to redeem all its outstanding $212.7 million principal amount 6.25% convertible notes due 2009. The remaining proceeds are expected to be used to repurchase a portion of its other outstanding notes. The Company also announced the call for redemption of its 6.25% convertible notes. The redemption date has been set for February 24, 2004. The redemption price is 102.083% of the principal amount of the notes, together with accrued interest to and including February 24, 2004. The 6.25% convertible notes are convertible into shares of Class A common stock at a conversion price of $24.40 per share (the closing price of the Class A common stock on February 4, 2004 was $11.19 per share). Holders of the 6.25% convertible notes will be able to convert any or all of their notes into 40.9836 shares of Class A common stock per $1,000 principal amount of the notes until close of business (5:00 p.m., Eastern Daylight Time) on February 24, 2004. As previously reported, Standard & Poor's affirmed its 'B-' corporate credit rating on the company. AMERICAN TOWER: S&P Assigns Junk Rating to $225MM 7.5% Sr. Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'CCC' rating to the $225 million 7.5% senior notes due 2012 issued under Rule 144A with registration rights by Boston, Massachussets-based wireless tower operator American Tower Corp. Simultaneously, Standard & Poor's affirmed its existing ratings on American Tower, including the 'B-' corporate credit rating. The outlook remains positive. Proceeds from the 7.5% notes will be used to refinance the company's 6.5% convertible notes due 2009, and thereby eliminate the possibility of these notes to be put to the company in late 2006. The new notes are rated two notches below the corporate credit rating due to the substantial amount of priority obligations, which include approximately $700 million of bank debt, more than $90 million of payables and accrued liabilities, and more than $800 million of notes, relative to asset value. Pro forma for the refinancing, total debt was about $3.2 billion after adjusting out about $284 million of restricted cash escrowed for reducing debt ($3.6 billion after adjusting for operating leases and the restricted cash) at Sept. 30, 2003. "The ratings reflect significant financial risk associated with American Tower's high leverage, which stemmed from its aggressive debt-financed tower acquisition activities during the 1999-2001 time frame," said Standard & Poor's credit analyst Michael Tsao. Net of restricted cash, debt to annualized EBITDA was high at 7.9x, including about $14 million of annual interest income from the company's Mexican subsidiary (8.1x after adjustment for operating leases) for the quarter ended in September 2003. American Tower incurred over $3 billion of debt during 1999-2001 to finance the acquisition and building of about 13,000 towers, based on the company's expectations that growth in wireless services would strongly bolster demand for limited tower space. However, largely in response to capital market conditions, wireless carriers scaled back their capital spending plans starting in 2001, preventing American Tower from reducing its acquisition-related debt. Somewhat mitigating American Tower's aggressive financial risk profile are several favorable characteristics of the tower leasing business, the company's modest free cash flow prospects, and management's demonstrated commitment to reduce debt. The tower leasing business has significant barriers to entry, such as real estate zoning, high customer switching costs, and long-term leasing contracts with provisions for 3%-5% annual rental rate increases. Towers are also relatively immune to technology risk because they are not dependent on the type of transmission/reception technologies used by carriers and they do not face any economically viable alternative. The leasing business enjoys strong operating leverage, as towers have mostly fixed costs relating to ground leases, taxes, and maintenance. Over time, this factor is likely to improve the consolidated EBITDA margin to greater than 60%, from about 54% in third-quarter 2003. American Tower is among the largest wireless tower operators, with about 15,000 towers, mostly in the U.S. The tower leasing business accounted for about 85% of revenues and 98% of EBITDA in third- quarter 2003. In its small network services operation, the company serves as a consultant to wireless carriers in site acquisition, network planning, radio frequency engineering, and construction. AMNIS SYSTEMS: Inks LOI to Purchase Corridor Communications Corp. ----------------------------------------------------------------- Amnis Systems Inc. (OTC Bulletin Board: AMNM), until it recently ceased operations was a provider of networked streaming video systems, entered into a letter of intent to acquire Corridor Communications Corporation. The terms of the acquisition will be disclosed once a formal agreement is reached between the companies. At this time we cannot provide any guarantee that we will be able to complete the transaction as the transaction is subject to extensive due diligence and the negotiation and finalizing of a definitive agreement. Corridor Communications is a Wireless Fidelity (WiFi) Internet Service Provider located in Salem, Oregon. "The WiFi market holds great promise for an operation with the right business model," said Scott Mac Caughern, Chairman of Amnis Systems. "By providing Corridor Communications with a public vehicle to raise the funds necessary to execute their business plan, we believe that we will be able to capitalize on potential growth in this market sector." In addition, the Company also intends to acquire Quik Internet, an Internet Service Provider also located in Salem, Oregon. The terms of the acquisition will be disclosed once a formal agreement is reached between the companies. At this time we cannot provide any guarantee that we will be able to complete the transaction as the transaction is subject to extensive due diligence and the negotiation and finalizing of a definitive agreement. "We have developed the systems and capabilities to overlay our WiFi 'hot zone' coverage with an existing service provider," said J. Michael Heil, President of Corridor Communications. "We started working in partnership with Quik Internet several months ago. Over the past several months we have had the opportunity to hone our strategy. We believe the merger with Amnis Systems will allow us to execute our business plan on a larger scale." Amnis Systems Inc., which acquired Optivision, Inc. in 2001, is engaged in the networked streaming video market. The company develops, manufactures and delivers MPEG network video products for high-quality video creation, management and distribution worldwide both directly and through leading industry partners. Based in Palo Alto, California, Amnis Systems products are used in diverse applications such as such as surveillance, distance learning, content distribution, corporate training, telemedicine, video-on-demand and high-quality video conferencing. To find out more about Amnis Systems Inc., visit its Web site at http://www.amnisinc.com/ Amnis Systems is not affiliated or related to Amnis Corporation of Seattle, Washington. At September 30, 2003, Amnis Systems' balance sheet shows a total shareholders' equity deficit of about $8 million. ARGOSY GAMING: S&P Rates $350 Mil. Sr. Subordinated Notes at B+ --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' rating to Argosy Gaming Co.'s proposed $350 million senior subordinated notes due 2014. Together with availability under the company's existing revolving credit facility, proceeds will be used to fund the planned repurchase of Argosy's outstanding 10.75% senior subordinated notes due 2009. At the same time, Standard & Poor's affirmed its existing ratings, including its 'BB' corporate credit rating. The outlook is stable. The Alton, Illinois-based casino owner and operator had total debt outstanding of approximately $870 million at Dec. 31, 2003. The ratings reflect Argosy's relatively small portfolio of casino assets, cash flow concentration in two of its assets, and the company's exposure to recent legislative actions. These factors are offset by a somewhat geographically diverse portfolio of casino assets, adequate credit measures for the rating, and expected higher free cash flow generation. "The stable outlook reflects the expectation that Argosy will maintain its good market positions and that the company's overall financial profile will remain around current levels in the near term," said Standard & Poor's credit analyst Michael Scerbo. In the intermediate term, Standard & Poor's expects Argosy to pursue growth opportunities within the sector. However, any potential transaction is expected to be financed in a manner consistent with the rating. ATA HOLDINGS: S&P Revises CreditWatch Implications to Positive -------------------------------------------------------------- Standard & Poor's Ratings Services revised the implications of its CreditWatch review on ATA Holdings Corp. and subsidiary ATA Airlines Inc. to positive from developing. The corporate credit rating on both entities is 'CCC'. The ratings were initially placed on CreditWatch March 18, 2003, and subsequently lowered to current levels July 29, 2003. At the same time, 'CC' ratings were assigned to ATA Holdings Corp.'s $163.1 million 13% senior notes due 2009 and $110.2 million of 12-1/8% senior notes due 2010, exchange offers for outstanding notes. Standard & Poor's placed the ratings on these notes on CreditWatch with positive implications. "The revised CreditWatch implication reflects the company's Jan. 30, 2004, completion of exchange offers for $260.3 million of notes due in 2004 and 2005," said Standard & Poor's credit analyst Betsy Snyder. "The successful conclusion of the exchange offers, which were voluntary for bondholders, plus other actions to defer near-term cash obligations, should alleviate somewhat ATA's liquidity problems," the analyst continued. ATA received the consent of the Air Transportation Stabilization Board pursuant to its government-guaranteed loan. In addition, ATA completed a restructuring of various aircraft operating leases, with a portion of the payments rescheduled until later in the terms of the leases. Standard & Poor's will review the effect of the debt restructuring on ATA's financial profile to resolve the CreditWatch. Ratings on ATA Holdings Corp. reflect its substantial debt and lease burden and the price-competitive nature of the markets it serves. ATA Holdings is the parent of ATA Airlines Inc., the 10th- largest scheduled air carrier in the U.S. ATA offers low fares to value-oriented passengers out of hubs located at Chicago's Midway Airport and Indianapolis. ATA is also the largest charter airline in North America, providing charter airline services primarily to U.S. and European tour operators, as well as to U.S. military and government agencies. Lower-fare, leisure carriers have been less affected than the large network carriers have by the industry downturn that began in late 2000, as passengers have sought low fares. ATA has been replacing its old aircraft with new Boeing planes, giving it one of the youngest airline fleets in the industry and aiding its operating costs. However, the company's revenues have suffered from continuing price competition, which is not expected to abate over the near term. ATA has a heavy operating lease burden due to acquisition of the new aircraft. In November 2002, ATA closed on a $168 million loan that was 90% backed by the federal government, one of only a few airlines that have been granted a loan guarantee thus far. The company's profitability has improved, with earnings of $20.4 million in 2003 (including a $37 million federal government refund) versus a loss of $169.2 million in 2002. Review of ATA's financial profile following the exchange offers and lease reschedulings could result in a modest upgrade. Standard & Poor's expects to complete its review within the next several weeks. AURORA FOODS: Court Okays Miller Buckfire as Financial Advisor -------------------------------------------------------------- The Aurora Foods Debtors obtained the Court's authority to employ Miller Buckfire Lewis Ying & Co., LLP as their financial advisor, nunc pro tunc to December 8, 2003. Judge Walrath rules that: (a) The Transaction Fee further reduced to: -- $6,100,000 in the event that the transactions contemplated by the Merger Agreement are consummated by February 9, 2004; and -- $6,000,000 as Modified Transaction Fee, in the event that the transactions contemplated by the Merger Agreement are consummated after February 9, 2004; (b) Miller Buckfire will file fee applications for interim and final allowance of compensation and reimbursement; (c) In the event that the transactions contemplated by the Merger Agreement are not consummated, and the Amendment becomes null and void, Miller Buckfire may, at its sole discretion: (1) continue to be retained on the terms and conditions in accordance with these provisions, provided that the Transaction Fee will be permanently reduced to the Modified Transaction Fee; or (2) file a modified retention application seeking to be engaged on different terms. In the event that Miller Buckfire files a Modified Retention Application, all parties-in-interest will have all permitted rights to object to the Modified Retention Application, including that the Modified Retention Application should not be approved pursuant to Section 328(a) of the Bankruptcy Code; (d) Miller Buckfire and its professionals will not be required to: (1) maintain time records for services rendered postpetition, in half-hour increments; and (2) provide or conform to any schedule of hourly rates; and (e) The indemnification provisions of the Engagement Letter are approved, with these modifications: (1) The Debtors are authorized to indemnify and will indemnify, Miller Buckfire, in accordance with the Engagement Letter, for any claim arising from, related to, or in connection with the firm's performance of the services described in the Engagement Letter; (2) Miller Buckfire will not be entitled to indemnification, contribution, or reimbursement under the Engagement Letter for services other than the financial advisory and investment banking, unless the services and the indemnification, contribution, or reimbursement are approved by the Court; (3) Notwithstanding anything to the contrary in the Engagement Letter, the Debtors will have no obligation to indemnify any person, for any claim or expense that is either: (i) judicially determined, as the determination has become final, to have arisen primarily from that person's gross negligence or willful misconduct; or (ii) settled before a judicial determination as to that person's gross negligence or willful misconduct, but determined by the Bankruptcy Court, after notice and a hearing, to be a claim or expense for which that person should not receive indemnity, contribution, or reimbursement under the terms of the Engagement Letter, as modified; and (4) If, before the earlier of (i) the entry of an order confirming a Chapter 11 Plan, the order having become a final order is no longer subject to appeal; and (ii) the entry of an order closing these Chapter 11 cases, Miller Buckfire believes that it is entitled to the payment of any amounts by the Debtors on account of the Debtors' indemnification, contribution, and reimbursement obligations under the Engagement Letter, as modified, including without limitation the advance of defense costs, Miller Buckfire must file an application before the Court. The Debtors may not pay any of the amounts before the entry of an order approving the payment. * * * Miller Buckfire provides strategic and financial advisory services in large-scale corporate restructuring transactions. The firm's professionals possess extensive experience in providing financial advisory and investment banking services to financially distressed companies, and to creditors, equity constituencies, and government agencies in reorganization proceedings and complex financial restructuring, both in and out of court. Miller Buckfire likewise has significant experience in marketing and selling companies that are experiencing financial distress. Scope of Services Miller Buckfire will continue to render financial advisory and investment banking services contemplated by an engagement letter between the Debtors and Miller Buckfire, dated as of April 2, 2003, and amended on December 2, 2003, throughout the course of the Debtors' Chapter 11 cases. Among the specific tasks are: A. Case Administration The Debtors expect Miller Buckfire to play a significant role in the administration of their Chapter 11 cases. Miller Buckfire will assist the Debtors in complying with certain administrative obligations arising out of the Chapter 11 filing, including preparing management for any organizational meeting of creditors and reviewing regulatory and other filings that may be required to be made. In addition, Miller Buckfire will assist the Debtors in seeking relief on various matters and in preparing for hearings. The hearings will include the Debtors' disclosure statement hearing and confirmation hearing as well as a hearing on the Debtors' request for approval of the DIP Credit Facility and the hearing on the breakup payment contemplated by the Merger Agreement. To the extent necessary, Miller Buckfire will provide litigation support and testimony in connection with these hearings and other matters. Miller Buckfire will also participate in meetings and discussions with the Debtors and their professionals and other parties-in- interest regarding the status of the Chapter 11 cases. B. Creditor Contacts Miller Buckfire will continue to participate in discussions with the prepetition bank group and the Official Committee of Unsecured Creditors, as well as their legal and financial advisors who are in constant contact with Miller Buckfire regarding due diligence and other matters. Subsequent to the Petition Date, the discussions will likely focus on: (a) the status of these Chapter 11 cases; (b) the Debtors' request for relief on various matters, including obtaining debtor-in-possession financing and making critical vendor payments; (c) the performance of the Debtors relative to their 2003 operating plan; (d) the Debtors' strategic business plan for 2004 and beyond; and (e) the Debtors' liquidity position and financing needs. In addition, Miller Buckfire will work with the Debtors to keep: -- the prepetition bank group, the lenders under the debtor- in-possession credit facility, and the Committee and their legal and financial advisors apprised of the Debtors' operational performance as well as their ability to stabilize operations subsequent to the filing of these Chapter 11 cases; and -- the major parties-in-interest informed about the Debtors' progress in consummating the transaction contemplated by the Merger Agreement by March 31, 2004. C. Merger Agreement The Debtors expect Miller Buckfire to: -- take an active role in assisting them to consummate the transaction contemplated by the Merger Agreement; -- work with the Debtors in ensuring that the conditions precedent to the merger transaction are fulfilled, including the condition regarding the Debtors' EBITDA performance for 2003; -- assist in reviewing and analyzing what adjustments are required to be made to the consideration being paid to the holders of the Notes under the terms of the Merger Agreement. The adjustments relate to the Debtors' working capital and net debt position as of the closing date for the merger transaction and to the election of cash or equity by the holders of the Notes in the merger transaction; -- assist the Debtors in their transition planning and in determining how to retain and motivate their workforce pending the closing of the transaction contemplated by the Merger Agreement; -- work with the Debtors to respond to any information requests from J.P. Morgan Partners LLC, J.W. Childs Equity Partners III, L.P., and CDM Investor Group LLC or other parties-in-interest in connection with the merger transaction; and -- continue to play a key role in helping the Debtors resolve business issues that may potentially develop with respect to the Merger Agreement. D. Evaluation of Alternative Proposals If requested, Miller Buckfire will: -- assist the Debtors' board of directors in fulfilling their fiduciary duties by reviewing and evaluating from a financial standpoint any Alternative Proposal, as defined in the Merger Agreement, received by the Debtors; -- advise the board of directors regarding their strategic alternatives, including performing an extensive analysis of the valuation and other underlying fundamentals contained in the Alternative Proposal; -- advise the board of directors with respect to the strategic implications of any Alternative Proposal; and -- coordinate with the party submitting the Alternative Proposal, if required, to negotiate a definitive agreement and reach a successful closing. E. Contingency Planning Miller Buckfire will also: -- continue monitoring the financial results of the Debtors and advise senior management and the board of directors with respect to the development of a contingency plan in the event the transaction contemplated by the Merger Agreement is abandoned or terminated; and -- provide assistance in soliciting alternative proposals from third parties, in the event that the merger transaction is terminated or abandoned. Specifically, Miller Buckfire would be needed to: (1) identify and contact potential strategic and financial buyers; (2) assist in drafting and distributing an information memorandum describing the Debtors' business; (3) evaluate and negotiate proposals received by the Debtors; (4) facilitate any due diligence investigation of the Debtors by potential strategic and financial buyers; and (5) prepare senior management for meetings with the potential buyers. If the transaction contemplated by the Merger Agreement is terminated or abandoned, the Debtors would also require Miller Buckfire's assistance in structuring a transaction that has the support of the prepetition bank group. The prepetition bank group has amended its prepetition credit agreement to support the transaction contemplated by the Merger Agreement if: -- the prepetition credit facility is paid in full by March 31, 2004; and -- the prepetition lenders receive $15,000,000 in certain fees under the prepetition credit agreement. The Financial Advisory and Investment Banking Services that Miller Buckfire will provide to the Debtors are necessary to enable the Debtors to maximize the value of their estates and to reorganize successfully. Miller Buckfire will coordinate with the Debtors and the Debtors' other retained professionals to ensure that the Financial Advisory and Investment Banking Services do not duplicate the services rendered by other professionals. 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. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) AVADO BRANDS: Files for Chapter 11 Reorganization in N.D. Texas --------------------------------------------------------------- Avado Brands, Inc. (OTC Bulletin Board: AVDO.PK), parent company of Don Pablo's Mexican Kitchen and Hops Grillhouse & Brewery, filed voluntary petitions in the U.S. Bankruptcy Court for the Northern District of Texas for relief under Chapter 11 of the U.S. Bankruptcy Code. The Company will continue to operate its restaurants while it restructures. The Company has filed various first-day motions with the Bankruptcy Court intended to allow the continued operation of its business. In addition, the Company has arranged and sought Bankruptcy Court approval for a $60 million debtor-in-possession credit facility to be provided by a group of lenders led by DDJ Capital Management, LLC. With this facility, the Company will have sufficient liquidity to operate its business. "This is an important step for Avado Brands, and is part of a process that will result in a stronger company," said Avado Brands' interim chief executive officer Kevin Leary of AlixPartners LLC. "Our goals are simple: to reduce Avado Brands' debt burden and put the company in a position to invest in its business and grow. The management team is confident in the future of Avado Brands and its Don Pablo's and Hops restaurants, and we appreciate the continued support of our customers, dedicated employees and business partners." Prior to Wednesday's filing, the Company had successfully negotiated forbearance agreements with its secured lenders and holders of Avado's 9-3/4% Senior Notes due 2006. The Company will continue to negotiate with these and other creditors to develop a long-term financial restructuring plan. The case number for Avado's filing with the U.S. Bankruptcy Court for the Northern District of Texas is 04-31555, and further information will be available online at http://www.txnb.uscourts.gov/ Avado Brands owns and operates two proprietary brands comprised of 106 Don Pablo's Mexican Kitchens and 62 Hops Grillhouse & Breweries. Additional information about Avado Brand is available at http://www.avado.com/ AVADO BRANDS INC: Case Summary & 50 Largest Unsecured Creditors --------------------------------------------------------------- Lead Debtor: Avado Brands, Inc. Hancock at Washington Madison, Georgia 30650 Bankruptcy Case No.: 04-31555 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Don Pablo's of Texas, L.P. 04-31554 Canyon Cafe of Texas, LP 04-31556 HNEF Area Manager II, Ltd. 04-31557 Hops of Altamonte Springs, Ltd. 04-31558 Hops of Atlanta, Ltd. 04-31559 Hops of Atlanta II, Ltd. 04-31560 Hops of Bowling Green, Ltd. 04-31561 Hops of Boynton Beach, Ltd. 04-31562 Hops of Bradenton, Ltd. 04-31563 Hops of Cherry Creek, Ltd. 04-31564 Hops of Colorado Springs, Ltd. 04-31565 Hops of Connecticut, Ltd. 04-31566 Hops of Coral Springs, Ltd. 04-31567 Hops of Florida Mall, Ltd. 04-31568 Hops of Greater Detroit, Ltd. 04-31569 Hops of Greater Orlando II, Ltd. 04-31570 Hops of Idaho, Ltd. 04-31571 Hops of Indiana, Ltd. 04-31572 Hops of Lakeland, Ltd. 04-31573 Type of Business: The Debtor is a restaurant brand group that grows innovative consumer-oriented dining concepts into national and international brands. See http://www.avado.com/ Chapter 11 Petition Date: February 4, 2004 Court: Northern District of Texas (Dallas) Judge: Steven A. Felsenthal Debtors' Counsels: Deborah D. Williamson, Esq. Thomas Rice, Esq. Cox & Smith Incorporated 112 East Pecan Street, Suite 1800 San Antonio, TX 78205 Tel: 210-554-5500 Total Assets: $228,032,000 Total Debts: $263,497,000 Debtor's 50 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Suntrust - as 9 3/4 % Senior Notes $105,318,000 Indenture Trustee Due 2006 Jack Ellerin 25 Park Place P.O. Box 105036 Atlanta, GA 30303 Suntrust - as 11 3/4% Senior $47,625,000 Indenture Trustee Subordinated Notes Jack Ellerin Due 2009 25 Park Place P.O. Box 105036 Atlanta, GA 30303 Wachovia Bank - as Trustee $3.50 Term $3,179,500 Paul Henderson Convertible 999 Penchtree Plaza Securities, Series A Atlanta, GA 30309 COI Trade Debt $1,419,390 c/o Fleet Bank P.O. Box 538135 Atlanta, GA 30353-8135 Westwayne, Inc. Trade Debt $794,192 Lisa Cuscaden 401 East Jackson St-Ste 3600 Tampa, FL 33602 Dallas Basketball Ltd. Trade Debt $177,267 Walt Disney Parks & Resorts Trade Debt $162,067 Briargrove Tollway Ltd. Trade Debt $131,083 Sedgwick Claims Mgmt Service Professional fees $107,174 AFCO Trade Debt $104,509 Palace Resorts, Inc. Trade Debt $95,000 Curtis 1000, Inc. Trade Debt $86,697 Beltram Foodservice Group Trade Debt $80,455 Cushman and Wakefield, Inc. Trade Debt $78,053 Sirna & Sons Produce Trade Debt $71,092 Piazza Produce Trade Debt $66,303 Unifirst Corporation Trade Debt $60,693 Benchmarc Meetings & Trade Debt $60,650 Incentives, Inc. Brothers Produce, Inc. Trade Debt $57,164 J.D. Edwards & Company Trade Debt $50,888 Brains on Fire Trade Debt $50,335 Dunedin Fish Co. Trade Debt $48,733 The Invironmentalists Trade Debt $48,505 Dunbar Armored Trade Debt $47,946 Floyd, Isgur, Rios & Professional Fees $47,890 Wahrlich, PC J. Ambrogi Food Distribution Trade Debt $46,663 Inc. Ecolab Trade Debt $43,131 Minnesota Vikings Trade Debt $42,514 Bix Produce Co. Trade Debt $40,386 Venture Construction Co. Trade Debt $39,379 Service Management Group Trade Debt $37,179 Pelican Aire Trade Debt $37,106 The Graphic Cow Trade Debt $35,438 Dimension Construction Trade Debt $34,719 SRE, Inc. Trade Debt $33,724 Joe Lasita & Sons, Inc. Trade Debt $33,684 Trimark Foodcraft Trade Debt $31,196 Weyand Food Distributors, Trade Debt $29,611 Inc. Abacus Business Computers Trade Debt $26,477 Tensaw Land & Timber, Inc. Trade Debt $25,900 Equiptech Trade Debt $25,705 Johnson Brothers - St. Paul Trade Debt $25,196 What They Think Research, Trade Debt $24,500 LLC The Boelter Co., Inc. Trade Debt $24,172 Weyland East Trade Debt $23,695 First Data Corp. Trade Debt $23,229 Tarantino Foods, LLC Trade Debt $23,131 Quality Refrigeration, Inc. Trade Debt $23,060 Servicecheck, Inc. Trade Debt $22,131 BEAUTYCO INC: Signs-Up Tomlins & Goins as Bankruptcy Counsel ------------------------------------------------------------ Beautyco, Inc., asks the U.S. Bankruptcy Court for the Northern District of Oklahoma for permission to employ Tomlins & Goins, a Professional Corporation, as its attorneys in its chapter 11 restructuring. The Debtor reports that the Tomlins & Goins' professionals who will be working on this case, and their hourly rates, are: Neal Tomlins $235 per hour Ronald E. Goins $235 per hour Janna Nichols (Legal Assistant) $70 per hour Tomlins & Goins has licensed attorneys who: i) are well-qualified in bankruptcy matters; ii) do not hold or represent an interest adverse to the estate; iii) are disinterested persons; iv) have not served as examiners in this case; and v) do not, in connection with this case, represent a creditor. Consequently, the Debtor submits that Tomlins & Goins is the best professional to represent it in this case. Headquartered in Oklahoma City, Oklahoma, Beautyco, Inc. -- http://www.beautyco.com/-- one of the leading retailers of professional beauty supplies in the United States, filed for chapter 11 protection on December 31, 2003 (Bankr. N.D. Okla. Case No. 03-07621). Neal Tomlins, Esq., and Ronald E. Goins, Esq., at Tomlins & Goins represent the Debtor in their restructuring efforts. When the Company filed for protection from their creditors, it listed: Total Assets Total Debts ------------ ----------- Beautyco, Inc. $3,309,400 $8,703,200 Beautyco Investments, Ltd. $5,250,000 $50,000 BIONOVA HOLDING: Enters Financial Restructuring Pact with Savia --------------------------------------------------------------- Bionova Holding Corporation (Pink Sheets: BVAH) entered into an "Agreement in Principle" with Savia, S.A. de C.V. dated as of February 2, 2004 that provides for a financial restructuring of the company. In conjunction with this financial restructuring Bionova Holding will become a private company through a merger in which public stockholders will be paid $0.09 per share for each share they hold of the Company's common stock. Bionova Holding's management stated there were two principal reasons for undertaking the restructuring at this time. First, Bionova Holding's debt with Savia, which amounted to $79.8 million, became due and payable to Savia on December 31, 2003. As a consequence, the Company currently is in default on this debt obligation, as well as certain other debt obligations. Second, as the Company has continued to sustain operating losses and its cash position has continued to deteriorate, it will not be able to afford the high, and ever-increasing costs of remaining a public company. The financial restructuring of the Company generally involves four transactions, as follows. First, the Company will issue 26,959,097 shares of the Company's common stock to its parent company, Savia, in satisfaction of part of the principal amount of the debt the Company owes to Savia. Second, Savia will then consolidate these new shares with the indirect equity interest held in the Company by its wholly-owned subsidiary, Ag-Biotech Capital LLC (18,076,839 shares) in a new subsidiary, Newco. Newco's holding of 45,035,936 shares will then represent 90.1% of all authorized shares of the Company. Third, Savia will forgive the balance of the $79.8 million of its debt with Bionova Holding. And finally, immediately after the Debt Forgiveness, Newco will effect a short-form merger with the Company. In the Merger public stockholders will be paid $0.09 per share for each share of the Company's common stock they hold. Though the Company's cash resources are severely limited and the Company is not able to repay its debt to Savia, Savia has agreed in principle to these transactions and to the cash payment to the stockholders in the Merger. The Company's unaffiliated stockholders will not have any right to vote on the Merger, but will have the right to dissent from the Merger and exercise their statutory right to appraisal in accordance with Delaware law. Bionova Holding's Board of Directors unanimously approved the Exchange and determined not to oppose the Merger. The Board engaged the services of AgriCapital Securities Inc., an investment banker with significant experience in the agriculture business, to act as a financial advisor to the Board to advise and assist the Board as the Board considered the desirability of, and developed a general strategy for, effecting the Exchange, the Debt Forgiveness and the Merger taking into consideration the best interests of the unaffiliated minority stockholders of the Company. AgriCapital rendered an opinion to the Board that (i) the $0.09 per share Merger consideration to be paid to the Company's stockholders (other than Savia and its affiliates), is fair, from a financial point of view, to such stockholders and (ii) the issuance of shares of the Company's common stock in connection with the Exchange is fair, from a financial point of view, to the Company. Savia and the Company filed Wednesday a Transaction Statement on Schedule 13E-3 with the Securities and Exchange Commission and hope to complete the transactions prior to the end of the first quarter of 2004. However, due to potential delays associated with complying with applicable legal requirements, and because the closing is subject to conditions to closing, the exact date of the closing, or whether the transactions will close at all, cannot be predicted with certainty. The conditions to the closing of the transactions include the approval by the Board of Directors of Savia of the Exchange, the Debt Forgiveness and the Merger; the passing of 20 days from the date of the mailing of the Schedule 13E-3 Statement to shareholders of the Company; the negotiation and execution of a definitive Exchange Agreement mutually acceptable to the Company and Savia; the absence of any law or order or other event which would prevent the Exchange, the Debt Forgiveness or the Merger; there not having occurred any event that, in Savia's good faith judgment, resulted in an actual or threatened material adverse change in the business or condition of the Company since the date of the Agreement in Principle; the absence of any threatened or pending litigation or other legal action relating to the Exchange, the Debt Forgiveness or the Merger; AgriCapital's fairness opinion not being withdrawn prior to the consummation of the Exchange, the Debt Forgiveness and the Merger; not more than 10% of the unaffiliated stockholders elect to exercise their statutory dissenters' rights in connection with and prior to the effectiveness of, the Merger; and neither the Company nor Savia incurring significant expenses associated with the Exchange, the Debt Forgiveness or the Merger, other than approximately $650,000 of professional fees and other expenses that the Company contemplates will be incurred by the filing parties in connection with the preparation and dissemination of the Schedule 13E-3 Statement and the closing of the Exchange, the Debt Forgiveness and the Merger in an efficient and prompt manner. Upon the closing of the transactions, Bionova Holding will become a privately-held company. Accordingly, upon closing, the registration of the Company's stock under the Securities Exchange Act of 1934 will terminate, Bionova Holding's reporting obligations under that Act will terminate, and there will no longer be a public market for Bionova Holding's shares. Bionova Holding Corporation is a leading fresh produce grower and distributor. Its premium Master's Touch(R) and FreshWorld Farms(R) brands are widely distributed in the NAFTA market. Bionova Holding Corporation is majority owned by Mexico's Savia, S.A. de C.V. BOYD GAMING: Reports Improved 4th-Quarter 2003 Financial Results ---------------------------------------------------------------- Boyd Gaming Corporation (NYSE: BYD) reported its financial results for the fourth quarter 2003. The Company reported adjusted earnings(1) of $.19 per share in the fourth quarter versus adjusted earnings of $.24 per share reported in the fourth quarter 2002. Adjusted earnings in the fourth quarter 2002 exclude preopening expenses of $.03 per share, loss on assets held for sale of $.04 per share and loss on early retirement of debt of $.11 per share. There were no adjustments for the fourth quarter 2003. Per share amounts are reported on a diluted basis. The principal reason for the decline in adjusted earnings per share in the fourth quarter 2003 versus the fourth quarter 2002 was increased gaming taxes in Illinois, Indiana, and Nevada. This decline was partially offset by an earnings contribution from Borgata of $.03 per share. Revenues for the fourth quarter were $308 million versus $306 million reported in the fourth quarter 2002. Total property EBITDA in the quarter was $79.3 million versus $72.2 million in the fourth quarter 2002. Included in this year's results is the Company's 50% share of Borgata's EBITDA. The Company's fourth quarter 2003 EBITDA, which includes corporate expense, was $75.1 million, up from $65.6 million in the comparable quarter in 2002. Net income in the fourth quarter was $12.3 million, or $.19 per share, versus $3.9 million, or $.06 per share, reported in the fourth quarter 2002. Borgata The Company reported results for Borgata, the Company's joint venture property in Atlantic City, which opened on July 3, 2003. Borgata reported $176 million of gross revenue and $142 million of net revenue in the quarter. Gaming revenue in the quarter was $122 million, the second highest gaming win in the Atlantic City market, behind only the much larger Bally's Park Place. Borgata's EBITDA in the quarter was $33.9 million, for an EBITDA margin of 23.9%, an improvement of $3.4 million from third quarter EBITDA of $30.5 million with an EBITDA margin of 20.4%. William S. Boyd, Chairman and Chief Executive Officer of Boyd Gaming, commented, "Many of the revenue trends experienced during Borgata's opening quarter continued and even strengthened in the fourth quarter while our operating expenses have decreased as we fine-tune our operations. We continue to achieve significant market share premiums in table games, slots and poker. Our non- gaming revenue increased in the fourth quarter over the seasonally stronger third quarter as our percentage of non-gaming revenue to gross revenue grew from 26% in the third quarter to 30% in the fourth quarter. Our goal was to offer more than just gaming, and we are already achieving that goal in our opening months." Table game win was $48.6 million in the quarter, placing Borgata number one in the Atlantic City market in table games. The property reported table game win per unit per day of $4,350 in the fourth quarter. Bob Boughner, Borgata's Chief Executive Officer, commented on these results, "Our table game results represented a 70% premium to fair share, which is computed by comparing the percentage of table game win in Atlantic City that we earned versus our percentage share of table games in the market. The 70% premium was a remarkable 43 percentage points above the number two property in the market. We are attracting players who did not visit Atlantic City before the opening of Borgata, achieving one of our goals to expand the Atlantic City gaming market." Slot win was $73.7 million in the fourth quarter, representing $222 win per unit per day. Bob Boughner continued, "Our slot results represent a 9% premium to fair share, one of five properties to have a fair share premium in the quarter. Reflecting aggressive promotional spending by competitors in this area, Borgata ranked fifth in slot win per unit per day in the fourth quarter. We believe that if the cost of coin-to-customer promotional give-aways were netted out of the slot win computation, our rank would be a few places higher." Hotel occupancy for the quarter was 90%. This compares to 80% occupancy in the third quarter. The average daily room rate for the fourth quarter was $126. Bob Boughner added, "We continue to improve how we utilize our hotel rooms. Weekend business continues to remain strong even after the summer season has ended. With our growing customer database and strong demand by the meeting and convention sector, good weekday business in the hotel is building nicely." Wholly-owned Properties The Company's nine wholly-owned operating units reported total property EBITDA in the fourth quarter of $62.4 million versus $72.2 million reported in the comparable quarter of 2002. After corporate expense, fourth quarter EBITDA for these units was $58.1 million as compared to $65.6 million reported in the fourth quarter 2002. The principal cause of the EBITDA decline was higher gaming taxes in three states which affected EBITDA by $6.5 million in the fourth quarter. In Illinois, higher tax rates enacted in July 2003 impacted EBITDA by $3.4 million in the quarter, accounting for most of the quarterly EBITDA decline at Par-A-Dice. In Indiana, Blue Chip's EBITDA in the quarter was reduced by $2.4 million due to higher gaming taxes enacted in 2002. In the Company's Nevada operations, higher taxes enacted in 2003 reduced EBITDA by $0.7 million in the quarter. Highlighting the performance at two operating units, Sam's Town Las Vegas reported an increase in fourth quarter revenue of 5.7%. Sam's Town reported EBITDA of $8.7 million, the property's second highest quarterly EBITDA in nearly six years. In addition, the Company's Downtown Las Vegas properties reported EBITDA of $11.7 million for the fourth quarter, the unit's highest quarterly EBITDA of the year. The Downtown group's fourth quarter EBITDA decline of 17.2% from the same period in the prior year resulted partly from increased operating costs in the Company's Hawaiian air charter operations and partly from negative comparisons to the very strong record fourth quarter results of 2002. Full Year Results of Operations The Company reported revenue of $1.25 billion for the full year 2003, up from $1.23 billion in 2002. The increase was principally the result of a full period of dockside operations at Blue Chip, which commenced in August 2002, and a full period of slot operations at Delta Downs, where slot operations commenced in February 2002. Partially offsetting this revenue increase was a 5.1% decline in 2003 revenue at Par-A-Dice as compared to 2002 due mainly to increased competition from the property's outer-markets. The Company's EBITDA (before a one-time Indiana retroactive gaming tax charge in the second quarter 2003 of $3.5 million) for the full year was $280 million, including its 50% share of Borgata's EBITDA, versus $274 million reported for 2002. On a same-store basis, EBITDA (before the retroactive tax) was $248 million in 2003 versus $274 million in 2002. One of the primary causes of the decline in EBITDA was the higher taxes enacted in Illinois, Indiana and Nevada, the combination of which accounted for approximately $24 million in increased expenses during 2003 as compared to 2002. Stardust's EBITDA declined 37% during 2003 due mainly to an increase in marketing and promotional costs as a response to the competitive environment on the Las Vegas Strip. Increased air charter and jet fuel costs in the Company's Hawaiian air charter operations were the primary causes for a decline in the Downtown properties' 2003 EBITDA. Partially offsetting these EBITDA declines were a $7.3 million increase in Delta Downs' EBITDA due to a full period of slot operations and higher operating margins and an 11.0% increase in EBITDA at Sam's Town Las Vegas. The $34.4 million EBITDA for the year is the highest annual EBITDA ever for Sam's Town Las Vegas. Adjusted earnings for 2003 were $.83 per share as compared to $1.06 per share for 2002. Net income for 2003 was $40.9 million, or $.62 per share, versus $40.0 million, or $.61 per share, reported last year. Prior year net income includes a charge for the cumulative effect of a change in the accounting for goodwill, which amounted to $.12 per share. Financial Statistics The Company provided the following additional information for the fourth quarter ended December 31, 2003: * December 31 debt balance: $1.101 billion * Debt increase in quarter: $27.6 million * December 31 cash: $88.2 million * Dividends paid in the quarter: $4.9 million * Shares repurchased in fourth quarter: None * Capital spending in fourth quarter: $43 million, $33 million of which related to normal maintenance items and $10 million of which related to expansion work at Delta Downs and Blue Chip * Cash contributed in the fourth quarter to the joint venture that owns Borgata: $17 million Headquartered in Las Vegas, Boyd Gaming Corporation (NYSE: BYD) is a leading diversified owner and operator of 13 gaming entertainment properties located in Nevada, New Jersey, Mississippi, Illinois, Indiana and Louisiana. Boyd Gaming recently opened Borgata Hotel, Casino and Spa at Renaissance Pointe (AOL keyword: borgata or http://www.theborgata.com/), a $1.1 billion entertainment destination hotel in Atlantic City, through a joint venture with MGM MIRAGE. The Company also is awaiting regulatory approval of its acquisition of Harrah's Shreveport, which is expected in the second quarter 2004. Additional news and information on Boyd Gaming can be found at http://www.boydgaming.com/ Fitch currently rates senior secured debt 'BB+', senior unsecured 'BB-', and subordinated debt 'B+'. Ratings reflect BYD's geographically diverse asset base, solid operating performance, free cash flow generation, and focused balance sheet management. While the Borgata is a non-recourse entity, Boyd's 50% stake in the property further enhances the company's risk profile by providing asset support, and the potential for future dividend payments. Concerns include limited same store growth potential due to competitive market conditions in a number of markets and significant vulnerability to gaming tax increases. The Outlook is Stable. BROOKLYN NAVY: Fitch Cuts Sr. Debt Rating to Speculative Grade -------------------------------------------------------------- Fitch Ratings has downgraded Brooklyn Navy Yard Cogeneration Partners senior debt to 'BB' from 'BBB-'. Several factors have had a negative effect on project cash flow as debt service coverage ratios have averaged 1.1 times over the last two years. Fitch expects that there will be a partial recovery in 2004, and that all operational issues should be resolved in a few years. However, Fitch believes BNY's margins in the long term could face downward pressure due to the upward shift in the long term price for natural gas, the primary fuel consumed by the project. The rating action applies to the taxable debt issued by BNY and the tax-exempt debt issued by the New York City Industrial Development Agency on behalf of BNY. BNY owns a nominal 286 MW cogeneration facility that delivers its output primarily to Consolidated Edison of New York under a long- term energy services agreement. Under the ESA, ConEd purchases essentially the entire output of the facility in the form of electricity and steam. Electrical deliveries are proportionately greater in the summer and steam deliveries are proportionately greater in the winter. BNY's senior debt obligations are payable in April and October. BNY's seasonal profitability is correlated to the market price of natural gas. The prices that ConEd pays for delivered steam and electricity are indexed to the NYMEX natural gas price, which is also the basis for BNY's fuel purchases. However, only 35% of the electricity price is indexed to NYMEX; the remaining 65% is indexed to inflation. Steam sales are generally profitable to BNY regardless of natural gas prices, but are more profitable when prices are higher. In contrast, electricity sales are profitable for BNY when natural gas prices are lower but can be a drain on cash flow when natural gas prices are higher. The draining effect is a result of an inconsistency between the 35/65 weighting and BNY's cost structure when natural gas prices are high. For example, over the first nine months of 2003, fuel commodity costs represented 80% of BNY's operating expenses. Fitch estimates that BNY's fuel costs were roughly $11 million greater than the corresponding revenues from delivering steam and electricity. Under the ESA, BNY also receives capacity payments, which are adjusted downward if summer, winter, or annual availability targets are not achieved. As expected, BNY did not achieve the annual targets in 2001 and 2002 as a result of planned overhauls in the fall of each year. However, due to a variety of unplanned forced outages, BNY did not achieve the winter or summer targets in 2002 and 2003. The corresponding reduction in capacity payments was $3.4 million in 2001, $4.6 million in 2002, and roughly $250,000 in 2003. The project has also experienced tube leaks in both steam generators that are not scheduled for permanent repair until the next gas turbine overhaul. Until the permanent repairs are implemented the project's ability to produce steam, and therefore the project's available capacity, will be limited. Although the reduction is not severe, it does increase the probability that future availability targets will not be achieved. More importantly, the project will not be able to sell the same quantities of steam and electricity as before. Since the summer of 2001, DSCRs for each six-month period prior to a debt service payment ranged between 1.4x and 0.8x, with an average of 1.1x. During the same six-month periods, Henry Hub natural gas prices ranged between $2.50 per MMBtu to $5.30 per MMBtu, with an average of $4.00 per MMBtu. Had the reduction in capacity payments not occurred, the coverage ratios would have ranged between 1.5x and 0.8x, with an average of 1.3x. Due to the requirements of its bond indenture, BNY has been restricted from making distributions to its partners or paying subordinate obligations since late 2001. Trapped cash allowed BNY to reduce the outstanding balance of a working capital facility, which was drawn by $5 million in 2001. The facility was fully repaid in the spring of 2003. Other events that could affect BNY's future liquidity are a $7.3 million tax charge currently under appeal by BNY and the remaining $13.2 million settlement payment with the facility's construction contractor. Edison Mission Energy, one of BNY's partners, has indemnified BNY's obligation for the contractor settlement payment. BUDGET GROUP: Claims Classification/Treatment Under Amended Plan ---------------------------------------------------------------- Edmon L. Morton, Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington, Delaware, informs the Court that the Budget Group Debtors' classification and treatment of claims and interests is revised under the First Amended Plan to reflect: U.S. Debtor Group A. Administrative Claims The Debtors estimate that the total amount of Administrative Claims is $11,412,000. B. Priority Tax Claims The Debtor estimate that the total amount of Priority Tax Claims is $11,840,000. C. Class 1A: Priority Non-Tax Claims Class 1A is unimpaired and deemed to accept the Plan. However, the Debtors believe that there is no Priority Non- Tax Claims to be asserted against the U.S. Debtor Group. D. Class 2A: Miscellaneous Secured Claims The U.S. Debtor Group Miscellaneous Secured Claims are Secured Claims against the U.S. Debtor Group that are not Cherokee Assumed Liability Claims. This Class is unimpaired and deemed to accept the Plan. The Debtors estimate that the total amount of Class 2A Claims is $81,000. E. Class 3A: Cherokee Assumed Liability Claims Cherokee Assumed Liability Claims are claims that have been assumed by Cherokee pursuant to the terms of the ASPA or the North American Sale Order. From Cherokee, this Class will receive: (i) the amount to which the Holder of the Cherokee Assumed Liability Claim is entitled under applicable non-bankruptcy law; or (ii) other amount Cherokee and the Holder of the Cherokee Assumed Liability Claim agree. This Class is impaired and allowed to vote on the Plan. F. Class 4A: General Unsecured Claims This Class is impaired and allowed to vote on the Plan. The Debtors estimate that the total amount of Class 4A Claims is $444,594,000. This class will receive an amount of Cash equal to: (i) each Holder's Initial Pro Rata Share of the Initial U.S. Debtor Group Unsecured Claim Available Amount; plus (ii) each Holder's Pro Rata share of the Final U.S. Debtor Group Unsecured Claim Distribution Amount; plus (iii) if the Holder is the Holder of an Allowed Senior Notes Claim or the Holder of the Allowed Rosenthal Note Claim, the amount, which the Holder is entitled to receive under Sections 3.3(c) and (d) of the Plan. The estimated percentage recovery: -- for Holders of Class 4A Claims other than Holders of Allowed Senior Notes Claims and the Holder of the Allowed Rosenthal Note Claim is 8.17%; and -- for Holders of Allowed Senior Notes Claims and the Holder of the Allowed Rosenthal Note Claim is 15.47%. G. Class 5A: Convertible Subordinated Notes Claims This Class is impaired and allowed to vote on the Plan. The Debtors estimate that Class 5A Claims will reach $45,770,000. Class 5A Claimants are expected to recover 0.85% of their Claims. If Class 4A, Class 5A and Class 6A accept the Plan, each Holder, other than the Convertible Subordinated Notes Indenture Trustee, will receive an amount of Cash equal to each Holder's Pro Rata share of the Class 5A Retention Amount. In addition, if Class 4A, Class 5A and Class 6A accept the Plan, the Convertible Subordinated Notes Indenture Trustee will receive the Convertible Subordinated Notes Indenture Trustee Fee Amount. H. Class 6A: High Tides Claims U.S. Debtor Group High Tides Claims are Claims of the Holders of the High Tides and the High Tides Indenture Trustee under the High Tides Indenture. If Class 4A, Class 5A and Class 6A accept the Plan, each Holder, other than the High Tides Indenture Trustee, will receive an amount of Cash equal to each Holder's Pro Rata share of the Class 6A Retention Amount. In addition, if Class 4A, Class 5A and Class 6A accept the Plan, the High Tides Indenture Trustee will receive the High Tides Indenture Trustee Fee Amount. This Class is impaired and allowed to vote on the Plan. The Debtors estimate that the total amount of Class 6A Claims is $341,739,000. Class 6A Claimants are expected to recover 0.32% of their Claims. I. Class 7A: Intercompany Claims The U.S. Debtor Group Intercompany Claims consist of: (i) any accounts reflecting intercompany book entries by one member of the U.S. Debtor Group with respect to any other member of the U.S. Debtor Group; and (ii) any Claims that are not reflected in the book entries and are held by a member of the U.S. Debtor Group against any other member of the U.S. Debtor Group. The U.S. Debtor Group Intercompany Claims will be eliminated and the Holders of the Claims will receive no recovery. This Class is impaired and allowed to vote on the Plan. Class 5 Claimants are not expected to receive any distributions. J. Class 8A: Equity Interests and Subordinated Claims U.S. Debtor Group Equity Interests and U.S. Debtor Group Subordinated Claims are: (i) the Old Common Stock and the Interests of the BGI Subsidiary Debtors, together with any other rights to acquire or receive any Old Common Stock or other ownership interests in BGI, and any contracts, subscriptions, commitments or agreements pursuant to which the non-debtor party was or could have been entitled to receive shares, securities or other ownership interests in BGI; and (ii) Claims against the U.S. Debtor Group, which are subordinated pursuant to Sections 510(b) or (c) of the Bankruptcy Code. The U.S. Debtor Group Equity Interests will be canceled and the Holders of U.S. Debtor Group Equity Interests and U.S. Debtor Group Subordinated Claims will receive no recovery. BRACII A. Administrative Claims The Debtors estimate that the total amount of Administrative Claims is $2,750,000. B. BRACII Priority Tax Claims The Debtors estimate that the total amount of BRACII Priority Tax Claims is $250,000. C. Class 1B: Priority Non-Tax Claims The Debtors believe that there is no Priority Non-Tax Claim that will be asserted against BRACII. D. Class 2B: Preferential Claims The Debtors believe that there is no Preferential Claim that will be asserted against BRACII. E. Class 3B: Miscellaneous Secured Claims The Debtors believe that there is no Miscellaneous Secured Claim that will be asserted against BRACII. F. Class 4B: General Unsecured Claims The Debtors estimate that the total amount of General Unsecured Claims is $47,000,000. This Class is impaired and allowed to vote on the Plan. Headquartered in Daytona Beach, Florida, Budget Group, Inc., operates under the Budget Rent a Car and Ryder names -- is the world's third largest car and truck rental company. The Company filed for chapter 11 protection on July 29, 2002 (Bankr. Del. Case No. 02-12152). Lawrence J. Nyhan, Esq., and James F. Conlan, Esq., at Sidley Austin Brown & Wood and Robert S. Brady, Esq., and Edward J. Kosmowski, Esq., at Young, Conaw