/raid1/www/Hosts/bankrupt/TCR_Public/040210.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, February 10, 2004, Vol. 8, No. 28
Headlines
ADELPHIA COMMS: Seeks Clearance to Execute Deutche Work Letter
AIR CANADA: Trinity's Potential Plan of Arrangement & Compromise
AIR CANADA: E&Y Submits Renegotiation Process Status Update
AIR CANADA: CUPE Vows to Defend Pension Rights
AIR CANADA: CAW Airs Objections to Trinity's Pension Proposal
AMERICAN AXLE: Selling $380 Million of New Senior Notes
AMERIQUEST: Fitch Rates Series 2004-R1 Class M Certificates at BB+
ANTARES PHARMA: Receives Milestone Payment from Pfizer
ARGENT SECURITIES: Fitch Assigns Low-B Rating to Class M-7 Notes
ARMOR HOLDINGS: Hosting Q4 Conference Call on February 12, 2004
ASARCO INC: Fitch Ups Junk Rating & Assigns Stable Outlook
ASBURY AUTOMOTIVE: Will Release Q4 Financial Results Tomorrow
AURORA FOODS: Gets Interim Nod for $50 Million DIP Financing
AVADO BRANDS: Court Grants Interim Approval of $60M DIP Facility
AVISTA CORP: Files General Rate Case with Idaho Regulators
AVISTA: CFO to Assume Treasury & Investor Relations Functions
AVITAR: Working Capital Deficit & Losses Spur Going Concern Doubts
BIG CITY RADIO: Board Okays Initial Liquidating Distribution
BIOVEST: Aims to Reduce Losses from Core Businesses this Year
BRIAZZ: Shoos Away PwC & Brings-In Grant as Independent Auditor
BUDGET: Committee Inks Settlement Pact with UK Administrator
CALPINE CORP: Provides 4th Quarter 2003 Pre-Earnings Update
CAREGROUP INC: S&P Affirms BB Underlying Rating on Revenue Bonds
CATOOSA CORPORATION: Case Summary & Largest Unsecured Creditors
CLEARLY CANADIAN: Taps Dundee Securities to Broker Equity Offering
COMMSCOPE INC: Plans to Release Q4 2003 Results on February 19
CWMBS INC: Fitch Takes Various Rating Actions on 8 Securitizations
DELTA AIR LINES: Closes Sale of $325MM Convertible Senior Notes
DIRECTV: Asks Court Nod to Reject Corporate Headquarters' Lease
DIXIE GROUP: S&P Affirms & Removes Low-B Ratings from Watch
DJ ORTHOPEDICS: Plans to Launch Common Stock Public Offering
DRIVEN IMAGE INC: Case Summary & 25 Largest Unsecured Creditors
EL PASO CORP: Schedules Q4 2003 Earnings Webcast for March 11
ENRON: Cabazon Power Unit Wants Okay to Disburse FPL Sale Proceeds
ENRON CORP: Proposes to Enter into Equistar Settlement Agreement
ENVOY: Files Preliminary Prospectus for Stock & Warrant Offerings
ERICO INT'L: S&P Rates Credit & Sr. Sub. Note Ratings at B+/B-
EVANS BAKERY INC: Case Summary & 20 Largest Unsecured Creditors
FACTORY 2-U: Seeks Okay to Hire Young Conaway as Attorneys
FERNANDO DELGADO: Case Summary & 20 Largest Unsecured Creditors
FIRST AMERICAN CORP: S&P Affirms BB+ Preferred Stock Rating
FLEMING: Files PACA Claim Status Report & Reconciliation
FLOWSERVE: SEC Initiates Inquiry About Financial Restatement
GENESCO INC: S&P Affirms & Revises Ratings' Outlook to Negative
GENTEK INC: Files Shelf Resale Registration Statement
GWIN INC: Ex-Auditor Doubts Ability to Continue as a Going Concern
HAYES: Sues to Recover $5.1 Preferential Transfer from Dubal
HAYES LEMMERZ: Prices Primary & Secondary Common Stock Offering
HDS ASSOCIATES: Voluntary Chapter 11 Case Summary
HFD CORPORATION: Case Summary & 20 Largest Unsecured Creditors
HOLLINGER: Board Recommends Acceptance of Press Holdings' Offers
IMCO RECYCLING: Commences Exchange Offer for Sr. Secured Notes
IMPERIAL PLASTECH: Obtains CDN$400,000 Working Capital Facility
KAISER: Asks Court Go-Signal to Cease Supplying Alumina to Unistar
KMART CORP: Asks Court to Compel John Owen to Repay $750,000 Loan
LAIDLAW: Greyhound's Compliance with Credit Facility is Uncertain
LTV CORP: Obtains Nod to Hire Wells Fargo as Disbursing Agent
MAGELLAN HEALTH: Amalgamated Gadget Discloses 9.1% Equity Stake
MARY MCCLELLAN: Voluntary Chapter 11 Case Summary
MILLENNIUM CHEM: Reports Price Increases for Vinyl Acetate Monomer
MILLENNIUM CHEMICALS: Ups 2004 Prices for Glacial Acetic Acid
MTS INC: Files for Prepack. Chapter 11 Restructuring in Delaware
MTS INCORPORATED: Case Summary & 50 Largest Unsecured Creditors
NEW CENTURY: Reports $2.5 Billion January Loan Production
N-VIRO INTL: Formalizes Terms of Equity Investment Agreement
OLD UGC: Taps Poorman-Douglas as Claims and Voting Agent
OWENS CORNING: Reports Fourth Quarter and Full Year 2003 Results
PARMALAT: Administrator Wants PwC & BDO as New Joint Liquidators
P-COM: Reports Secondary Stock Offering by Selling Stockholders
PHOENIX WATER: Case Summary & 20 Largest Unsecured Creditors
PMA CAPITAL: A.M Best Downgrades Senior Debt Ratings to BB-
PROLOGIC MANAGEMENT: Voluntary Chapter 11 Case Summary
PRUSSIA ASSOCIATES: Case Summary & 20 Largest Unsecured Creditors
RADD AVIATION LLC: Case Summary & 5 Largest Unsecured Creditors
ROYAL OLYMPIC: Greek Court Sets February 12 Deadline for Plan
SEITEL: Bankruptcy Court Okays 3rd Amended Disclosure Statement
SHAW: Lower-than-Expected 2004 Profits Spur S&P's Negative Outlook
SIERRA AUTOMOTIVE: Case Summary & 2 Largest Unsecured Creditors
SOLUTIA INC: Woos Court to Extend Lease Decision Time to May 17
STEINWAY MUSICAL: S&P Affirms & Revises Outlook on Low-B Ratings
STELCO: Wayne Fraser Says Corporate Greed Part of Co.'s Failure
TECO: Fitch Says Exit from Power Projects are Neutral Developments
TEMPLE BNAI SHALOM: Case Summary & 6 Largest Unsecured Creditors
TIMKEN COMPANY: Jerry J. Jasinowski Nominated to Board
TIMKEN COMPANY: Declares Quarterly Dividend Payable on March 2
TRANSWESTERN PUBLISHING: Low-B Ratings Get S&P's Negative Outlook
UBIQUITEL: S&P Rates $250 Million Senior Unsecured Notes at CCC
UNITED AIRLINES: Reports January Traffic Results
US AIRWAYS: Fourth Quarter Net Loss Narrows to $98 Million
US AIRWAYS: Marubeni America Claim Reduced to $4.1 Million
US LIQUIDS: Raises $12,235,000 from Various Asset Sales
VAIL RESORTS: Files Universal Shelf Registration Statements
VERTEX INTERACTIVE: Ability to Continue as Going Concern in Doubt
WEIRTON STEEL: Court Okays Houlihan Lokey's Amended Engagement
WII COMPONENTS: S&P Gives Low-B Credit & Senior Sec. Debt Ratings
WINN-DIXIE: Responds To Moody's Debt Rating Downgrade
WINSTAR: Chap. 7 Trustee Gets Nod to Tap Sklar as Special Counsel
WORLD AIRWAYS: Board Approves Revised Fleet Plan
WORLDCOM INC: Fixes Total Amounts Owed to MCI Bondholders
* Michael T. Masin Rejoins O'Melveny & Myers as Senior Partner
* Large Companies with Insolvent Balance Sheets
*********
ADELPHIA COMMS: Seeks Clearance to Execute Deutche Work Letter
--------------------------------------------------------------
The Adelphia Communications Debtors have made substantial progress
establishing the foundation for a proposed plan or plans of
reorganization. The Debtors provided all major constituencies
with confidential financial and legal analyses, including a
detailed distribution analysis, an extensive intercompany claims
analysis, a long-range business plan and a preliminary range of
valuations. The Debtors are presently engaged in negotiations and
discussions with important stakeholders with the goal of
developing a Plan that will be supported by most of the major
constituencies.
Marc Abrams, Esq., at Willkie Farr & Gallagher LLP, in New York,
points out that, as negotiations on the elements of the Plan
begin to coalesce, it is important that the Debtors maintain
flexibility and position themselves to take advantage of the most
optimum forms of plan currency and refinancing options. To this
end, alternate approaches are being explored on parallel paths.
One alternative would entail a refinancing of the Debtors'
existing secured indebtedness through an exit facility to be
structured and provided by the capital markets upon emergence.
In furtherance of that goal, the Debtors had discussions with
potential providers of exit financing. Because the facility
would be one of the largest of its kind ever syndicated -- over
$8,000,000,000 -- the Debtors must deal with a limited universe
of major financial institutions that have the means and
relationships to lead this effort. Among those institutions are
members of the Debtors' existing bank lenders and related
investment banking institutions, including Deutsche Bank
Securities Inc.
Mr. Abram relates that Deutsche Bank actively pursued the
opportunity to provide exit financing to the Debtors and
delivered a preliminary outline of potential terms and
conditions, which is non-binding and requires substantial
negotiation. To continue its efforts, Deutsche Bank requested a
work letter pursuant to which the Debtors will negotiate with
them, on a non-exclusive basis, the terms of a potential
$8,000,000,000 exit facility composed of both syndicated bank and
public debt.
The Debtors believe that continuing to work with Deutsche Bank on
a non-exclusive basis provides them with needed flexibility
regarding exit financing options. Therefore, the Debtors seek
the Court's authority to execute the Work Letter.
As a condition to engaging in the necessary diligence and
negotiations for an Exit Facility, pursuant to the Work Letter,
the Debtors will reimburse Deutsche Bank for up to $150,000 for
reasonable costs and expenses accrued since January 1, 2004
associated with, among other things, costs incurred by Deutsche
Bank's legal counsel.
The Work Letter is the first step towards negotiating and
obtaining the Exit Facility, which may serve as the proposed
means of implementing the Plan.
The Debtors' Proposed Plan Structure
Due to the intricate factual and legal nature of these cases, the
formulation of a Plan requires that the Debtors have the maximum
flexibility to address the complexities of these cases. Under
the exit structures they are considering, the Debtors expect to
satisfy prepetition claims under existing bank credit facilities
either through:
(1) a "roll up" of the facilities and the issuance of
restructured notes;
(2) cash distributions from Exit Facility proceeds; or
(3) a combination of these approaches.
To make these distributions and meet the working capital
requirements and other corporate obligations, the Debtors require
an exit facility of some magnitude, and possibly one as large and
complex as is contemplated by Deutsche Bank in the Work Letter.
Deutsche Bank and the Work Letter
To meet the funding requirements for their contemplated exit
structure, the Debtors assessed potential lenders' means and
ability to execute an exceedingly large and complex financing.
According to Mr. Abram, Deutsche Bank is one of the premier
financial and banking institutions in the world, and is well
situated to commence work on the Exit Facility. Moreover, the
Debtors believe that the best way to initiate the exit financing
discussions is with an institution that is not a member of the
current agent group and, thus, already engrossed in these cases.
Mr. Abram states that the Work Letter, which only commits the
Debtors to compensate Deutsche Bank up to $150,000 for reasonable
costs and expenses associated with, among other things, costs
incurred by Deutsche Bank's legal counsel, is one feasible path
by which the Debtors can formulate a Plan. Mr. Abrams ascertains
that the terms of the Work Letter are reasonable and should be
allowed pursuant to Section 363(b) of the Bankruptcy Code.
(Adelphia Bankruptcy News, Issue No. 50; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
AIR CANADA: Trinity's Potential Plan of Arrangement & Compromise
----------------------------------------------------------------
The Amended Trinity Investment Agreement approved by the CCAA
Court outlines the yet-to-be-drafted plan of arrangement and
compromise for the Air Canada Applicants. The Plan includes a
corporate reorganization, which will place Air Canada Enterprises
Inc. as the holding company for the assets of Air Canada and
shares of its subsidiaries after the restructuring. Trinity Time
Investments will invest CN$650,000,000 in exchange for 31.23% of
the fully diluted common equity of ACE.
Air Canada
Post-Plan Corporate Structure
Public
| Bondholders exchangeable
| __ distress preferred shares
____V____ / (exchange for ACE common
| | / shares)
_______| ACE |____|__________________________
/ |_________| | \ \
/ | | \ \
| | 100% | 100% | | 100%
Common | | | |
Shares _________v_________v__ 100% | ______v_____
| | |_______ | | |
| | Air Canada | \ | | Newco GP |
| |______________________| \ | |____________|
| | : | | |
| | : | | |
| Freeze : Freeze | Ordinary Ordinary
| Preferred : Partnership | Units Unit
| Shares : Units | (99%) (1%)
| | Interest | | |
| | bearing | | |
| | note ___v_____v_________v___
| | : | |
| | : | |
__v________v________v__ | Holdco |
| | | Partnership |
| Subcos | | |
| Zip, Destina.ca, | |_______________________|
| AC Capital II | |
|_______________________| |
|
________________________________________|_______
| | | | |
| 100% | 100% | 100% | 100% | 100%
_______v________ _____v____ ___v__ ___v___ ____v_____
| | | | | | | | | |
| Groundhandling | | Tech Ops | | Jazz | | Cargo | | Aeroplan |
|________________| |__________| |______| |_______| |__________|
The final structure of the Groundhandling and Cargo are
still being determined by Air Canada and Trinity.
Treatment of Claims
Unless otherwise compromised in a manner reasonably acceptable to
Trinity, under the Plan, post-filing claims, including DIP loans,
will be repaid in full, in cash or as otherwise provided in the
applicable agreements or in accordance with the Initial CCAA
Order. Any priority claims, including in respect of tax, wages
and benefit plans, will be paid in the manner as provided for
under the CCAA or otherwise treated in a manner reasonably
acceptable to Trinity.
Secured claims will be treated in a manner reasonably acceptable
to Trinity. Affected creditors will receive equity in full
satisfaction of their claims. Class of affected creditors and
affected claims will be reasonably satisfactory to Trinity.
Plan terms will contain declaratory relief in the nature of a
release of all remedies to challenge transfers which may fall
within the scope of bulk sales or fraudulent conveyance
legislation.
Capital Structure
Pursuant to the Plan and the Investment Agreement, there will be
outstanding Class C Variable Voting Shares, Class B Voting Common
Shares and Class A Non-Voting Common Shares of ACE:
Class C shares To be issued to Trinity providing
49% of the votes of all common
equity of Air Canada Enterprise
Class B shares Voting shares to be issued to the
Applicants' Canadian creditors
Class A shares Non-voting shares to be issued to
the Applicants' non-Canadian
creditors
Distressed Preferred Shares in Air Canada will also be issued to
Air Canada's financial creditors for tax purposes. The
Distressed Preferred Shares are convertible into Class B and
Class A of shares of ACE in accordance with the tax
restructuring.
Class A and B shares as well as the Distressed Preferred Shares
will be listed and publicly traded securities. The Class A Non-
Voting shares will have features to enable their conversion into
voting Class B shares by Canadians so as to ensure that, as far
as reasonably possible, all three classes of public securities
will have the same economic attributes.
A rights plan will be implement at the Closing of the Investment
Agreement restricting any holder from holding in excess of 10% of
the Class B Shares or 20% of the Equity Shares -- other than
Trinity or any third party holding shares with respect to the GE
Capital Exit Financing or the Deutsche Bank Rights Offering.
This will parallel the restriction on conversion of Class A
Shares into Class B Shares.
As of the Plan implementation date, contemporaneously with the
closing of the Rights Offering:
(i) affected creditors will receive equity in ACE or Air
Canada on terms consistent with the Investment
Agreement;
(ii) Trinity will hold all of the Class C Variable Voting
Common Shares and will also hold Class B Voting Common
Shares;
(iii) Class A Non-Voting Common Shares will be reserved under
a Management Incentive Plan; and
(iv) existing Air Canada shareholders will transfer their
Air Canada shares for a nominal amount of Class B
Voting Common and Class A Non-Voting Common Shares.
Plan terms will contain declaratory relief terminating or
canceling all existing pre-restructuring mechanisms to acquire
shares of Air Canada or any filed subsidiary, including under any
stock option plans, bonus plans and incentive plans.
Timing of Distributions
The applicants under the Plan will make any cash payments or
other distributions upon the terms and at the times provided for
in the Plan.
Procedures for Resolving Disputed Claims
To the extent necessary in any particular circumstance,
appropriate claims resolution mechanisms will be implemented to
value and settle claims of affected creditors for voting and
distribution purposes in accordance with the procedures approved
by the CCAA Court and acceptable to Trinity, acting reasonably.
Treatment of Executory Contracts and Unexpired Leases
To the extent not otherwise dealt with in the Plan, executory
contracts or unexpired leases will be contractually assumed, or
disclaimed, as the case may be, as may be determined by the
Applicants and as acceptable to Trinity, acting reasonably.
Plan Conditions
For the Plan to become effective, these conditions must be met:
(1) The Plan, including the Investment Agreement, will
receive approval of the affected creditors. A final
order from the CCAA Court and other relevant jurisdictions
will be made sanctioning the Plan and approving the
Investment Agreement in accordance with the CCAA and other
relevant legislation;
(2) To the extent compromises are affected otherwise than
through the voting mechanics contained in the Plan, the
compromises will be approved by the Court, and other
relevant jurisdictions and a final order will be made;
(3) All necessary statutory or regulatory approvals to the
operation of the Applicants' business as restructured
will be obtained;
(4) A final order declaring that upon implementation of the
restructuring contemplated in the Plan, no person will be
entitled to exercise termination rights or to otherwise
rely on other rights as they may have to affect or alter
their contractual relationship with Air Canada or its
subsidiaries, as the case may be, as a consequence of the
CCAA Proceedings and the implementation of the Plan
transactions becoming effective; and
(5) A final order declaring that any meetings of shareholders
or shareholder votes or third party consents in respect of
exchanges, transfers and compromises or arrangements
effected as part of the corporate reorganization
contemplated in the Plan, or transfers effected any time
before or concurrently with implementation of the Plan,
but continuing as part of the Plan, will be dispensed
with, and no counter-party to any consents will have any
right to terminate or otherwise effect any rights that
the counter-party may have to alter its contractual
arrangements with Air Canada, or its subsidiaries, as the
case may be.
Executive Officers Retained
The Applicants and Trinity also agree to retain these executive
officers as conditions of Closing:
* Robert Milton,
* Calin Rovinescu,
* Montie Brewer,
* Robert Peterson,
* Paul Brotto,
* Rob Giguere, and
* Rupert Duchesne
However, Trinity may waive the requirement that any of the
Executive Officers be retained. While the retention of other
executives is not a Closing condition, Trinity may agree before
the Closing Date that other officers should also enter into
employment agreements with Trinity. (Air Canada Bankruptcy News,
Issue No. 26; Bankruptcy Creditors' Service, Inc., 215/945-7000)
AIR CANADA: E&Y Submits Renegotiation Process Status Update
-----------------------------------------------------------
Air Canada advises that the Twenty First Report of the Monitor, an
update on the airline's restructuring under the Companies'
Creditors Arrangement Act has been completed by Ernst and
Young Inc. and is now available at http://www.aircanada.com/
The Report includes an update on the current status of the
aircraft lease renegotiation process. The Company has now
successfully renegotiated 224 aircraft leases with another 22
pending. In addition, the airline has repudiated 38 aircraft
leases and returned 35 aircraft on a consensual basis or at lease
expiration.
AIR CANADA: CUPE Vows to Defend Pension Rights
----------------------------------------------
The union representing Air Canada flight attendants has rejected a
call from the airline's new financial backers to cut pension
benefits and create a two-tier pension plan.
In a meeting with officials from Trinity Time Investments, union
and retiree representatives learned the airline's new investors
want to cut benefits by shifting the plan to a defined
contribution plan, raising the age for early retirement and
increasing premiums. Under their proposals, new hires would
receive fewer benefits.
"This is a non-starter," says Pamela Sachs, president of the Air
Canada Component of the Canadian Union of Public Employees. "We
just signed a new collective agreement last May that protects our
hard-won pension rights and we will not sell our members short."
Pointing out that Trinity has no legal status in this process, the
unions have called for a meeting with Air Canada management. "Our
deal is with the employer, not with Trinity," says Sachs. "Our
members gave up a lot over the years to secure a good pension
plan. They are our deferred wages and we won't allow anyone to
take them away from us."
Noting that workers at Stelco and other companies are facing
similar threats, CUPE National President Paul Moist is calling for
action to protect workers' pensions when companies are being
restructured.
"We need to send a clear signal to investors, some of whom are
looking to make a quick buck from companies facing bankruptcy,
that our pensions are not booty to be looted," says Moist. "Our
pensions represent the product of our sweat and tears and we will
do whatever we have to protect them."
"Air Canada management has floated the idea of a two-tier pension
plan before and our members are clear they oppose it," says Sachs.
"When the airline's new backers are making senior managers multi-
millionaires, they shouldn't be asking hard-working employees to
face a retirement of poverty."
AIR CANADA: CAW Airs Objections to Trinity's Pension Proposal
-------------------------------------------------------------
On February 5, the CAW joined other unions and retiree groups to
meet Air Canada's new investor, Trinity Time Investments.
Expecting to hear a proposal on funding the pension plan, the
participants were shocked and angry when Trinity demanded further
concessions from employees. The unions and retirees representing
pension beneficiaries were united in telling Trinity that their
proposal was unacceptable.
The CAW views Trinty's demand for concessions on the pension plan
and health care benefits as irresponsible and disruptive to the
bargaining process. Trinity is also making a mockery of the court
process under the CCAA.
The CAW Local 2002 ratified their collective agreement in June
2003. Like the other Air Canada unions, the only outstanding issue
was the funding of the pension shortfall. Justice Farley ordered
the unions and Air Canada to work out a schedule of payments to
give Air Canada relief and meet the approval of the federal
pension regulator. The unions and retirees formed a pension
beneficiaries group, and prior to the Trinity meeting, believed
that they were close to an agreement on funding with Air Canada.
"Trinity knew the terms of the pension agreement when they sought
approval to invest $650 million in Air Canada for a 31 percent
share ownership. Never once did they tell the court that the
pension agreement with the unions would have to be ripped up,"
said CAW-Canada president, Buzz Hargrove.
"This shameful attack on the collective agreements has Air Canada
management written all over it," said CAW Director of
Transportation, Gary Fane. "Milton and Rovinescu get $20 million
bonuses for themselves and then turn around and expect the
employees to take cuts in their pensions and health care benefits.
How does Air Canada management expect to build good employee
relations?"
Fane described the Trinity proposal as a scare tactic and yet
another effort to get concessions from the employees during the
CCAA process. The CAW will stand firm on the pension agreement and
expects Air Canada to resume the discussions on pension plan
funding. The CAW also expects Justice Farley, who supervised the
June 2003 negotiations, to reaffirm the terms of the discussions
with Air Canada: the defined benefit pension plans will be
maintained and the unions and Air Canada will seek relief in
funding the shortfall.
"Employees can probably expect Air Canada to engage in further
tactics to force concessions on their workers," said Sari
Sairanen, CAW Local 2002 president. "It is unfortunate that
management does not appreciate the service their employees give to
Air Canada. People should keep calm. Remember, Air Canada will
become a viable operation once again and that is precisely why
investors were fighting over the opportunity to put money into
this company."
Background
When Air Canada went into CCAA protection in April 2003, the
unions agreed to $1.1 billion in concessions in the collective
agreements. CAW members gave the company a $150 million cost
savings in job cuts and working conditions. The concessions were
difficult to accept, but the unions had Air Canada's agreement
that the defined benefit pension plan would be maintained.
In the court-supervised negotiations, the unions and Air Canada
agreed to seek relief for funding the estimated $1.3 billion
pension shortfall. The unions agreed to support Air Canada in
asking the federal regulator, OSFI, to extend the 5-year funding
period to 10 years.
The CAW went to the members to ratify the June 2003 agreement with
the understanding that the only outstanding issue was the schedule
of payments for funding the pension plan.
On October 27, after several meetings with the pension
beneficiaries group, Air Canada made a proposal which clearly
states that the defined benefit pension plans will be maintained
and outlines a payment schedule. The beneficiaries group made a
positive response October 31, and indicated some areas for further
discussion.
On February 5, Trinity proposed reducing the options for early
retirement in the Air Canada Pension Plans, introducing a defined
contribution plan for members with age and service equal to less
than 60 points, and requiring employees to pay 30 per cent of
their health care costs. New hires would pay the 30 percent
immediately; current employees would have the 30 percent co-pay
scheduled over 5 years. The Trinity proposals are entirely out of
step with the agreement and discussions to date.
AMERICAN AXLE: Selling $380 Million of New Senior Notes
-------------------------------------------------------
American Axle & Manufacturing Holdings, Inc., which is traded as
AXL on the NYSE, and its wholly-owned subsidiary, American Axle &
Manufacturing, Inc., announced that it has entered into an
agreement to sell $250 million of 5.25% Senior Notes of AAM and
$130 million of 2.00% Convertible Senior Notes of Holdings in
previously announced private offerings pursuant to Rule 144A under
the Securities Act of 1933, as amended.
In addition, the initial purchasers have the option to purchase up
to an additional $20 million of the Convertible Senior Notes.
Concurrently with the offerings, Holdings purchased approximately
$63 million of its common stock in privately negotiated
transactions.
The Senior Notes will mature on February 11, 2014. The
Convertible Senior Notes will mature on February 15, 2024 and will
be convertible under certain circumstances into the Company's
common shares at a conversion rate of 18.0421 shares per $1,000
principal amount of notes, subject to adjustment. The notes will
be redeemable at the Company's option on or after February 20,
2011 and will be subject to repurchase on February 20, 2011 and on
certain other dates. The offering is expected to close on February
11, 2004, subject to customary closing conditions.
The senior notes and the convertible senior notes have been
offered in the United States only to qualified institutional
buyers pursuant to Rule 144 under the Securities Act of 1933, as
amended. The notes have not been registered under the Securities
Act and may not be offered or sold in the United State absent an
applicable exemption from the registration requirements of the
Securities Act.
American Axle & Manufacturing is a world leader in the
manufacture, design, engineering, and validation of driveline
systems and related components and modules, chassis systems and
forged products for trucks, sport utility vehicles and passenger
cars. In addition to its 14 locations in the United States (in
Michigan, New York and Ohio), AAM also has offices and facilities
in Brazil, England, Germany, Japan, Mexico and Scotland.
* * *
As reported in Troubled Company Reporter's November 14, 2003
edition, Standard & Poor's Ratings Services raised its corporate
credit and senior secured debt ratings on American Axle &
Manufacturing Holdings Inc. to 'BBB' from 'BB+' because of the
company's strong financial performance and improved credit
statistics. At the same time, the subordinated debt rating was
raised to 'BBB-' from 'BB-'.
The outlook is stable. Total outstanding debt was $573 million at
Sept. 30, 2003.
AMERIQUEST: Fitch Rates Series 2004-R1 Class M Certificates at BB+
------------------------------------------------------------------
Ameriquest Mortgage Securities Inc. 2004-R1 $1.1 billion class A-
1A, A-1B, and A-2 certificates are rated 'AAA', $35.8 million
class M-1 certificates are rated 'AA+', $32.5 million class M-2
certificates are rated 'AA', $13.0 million class M-3 certificates
are rated 'AA-', $13.0 million class M-4 certificates are rated
'A+', $13.0 million class M-5 certificates are rated 'A', $13.0
million class M-6 certificates are rated 'A-', $13.0 million class
M-7 certificates are rated 'BBB+', $13.0 million class M-8
certificates are rated 'BBB', $13.0 million class M-9 certificates
are rated 'BBB-', $13.0 million class M-10 certificates are rated
'BB+' by Fitch Ratings.
Credit enhancement for the 'AAA' rated class A certificates
reflects the 13.25% subordination provided by classes M-1, M-2, M-
3, M-4, M-5, M-6, M-7, M-8, M-9, M-10, monthly excess interest and
initial overcollateralization of 0.50%. Credit enhancement for the
'AA+' rated class M-1 certificates reflects the 10.50%
subordination provided by classes M-2, M-3, M-4, M-5, M-6, M-7, M-
8, M-9, M-10, monthly excess interest and initial OC. Credit
enhancement for the 'AA' rated class M-2 certificates reflects the
8.00% subordination provided by classes M-3, M-4, M-5, M-6, M-7,
M-8, M-9, M-10, monthly excess interest and initial OC. Credit
enhancement for the 'AA-' rated class M-3 certificates reflects
the 7.00% subordination provided by classes M-4, M-5, M-6, M-7, M-
8, M-9, M-10, monthly excess interest and initial OC. Credit
enhancement for the 'A+' rated class M-4 certificates reflects the
6.00% subordination provided by classes M-5, M-6, M-7, M-8, M-9,
M-10, monthly excess interest and initial OC. Credit enhancement
for the 'A' rated class M-5 certificates reflects the 5.00%
subordination provided by classes M-6, M-7, M-8, M-9, M-10,
monthly excess interest and initial OC. Credit enhancement for the
'A-' rated class M-6 certificates reflects the 4.00% subordination
provided by classes M-7, M-8, M-9, M-10, monthly excess interest
and initial OC. Credit enhancement for the 'BBB+' rated class M-7
certificates reflects the 3.00% subordination provided by classes
M-8, M-9, M-10, monthly excess interest and initial OC. Credit
enhancement for the 'BBB' rated class M-8 certificates reflects
the 2.00% subordination provided by class M-9 and M-10, monthly
excess interest and initial OC. Credit enhancement for the 'BBB-'
rated class M-9 certificates reflects the 1.00% subordination
provided by class M-10, monthly excess interest and initial OC.
Credit enhancement for the 'BB+' rated class M-10 certificates
reflects monthly excess interest and initial OC. In addition, the
ratings reflect the integrity of the transaction's legal structure
as well as the capabilities of Ameriquest Mortgage Company as
Master Servicer. Deutsche Bank National Trust Company will act as
Trustee.
As of the closing date, the mortgage loans have an aggregate
balance of $1,300,000,258. The weighted average loan rate is
approximately 7.44%. The weighted average remaining term to
maturity is 348 months. The average cut-off date principal balance
of the mortgage loans is approximately $177,717. The weighted
average original loan-to-value ratio is 78.98% and the weighted
average Fair, Isaac & Co. score was 630. The properties are
primarily located in California (29.19%), Florida (8.82%), and
Massachusetts (7.64%). Approximately 40.18% of the mortgage loans
will be insured by a mortgage insurance policy issued by Mortgage
Guaranty Insurance Corporation. The policy will insure covered
loans with an LTV in excess of 80% down to an effective LTV of 60%
The mortgage loans were originated or acquired by Ameriquest
Mortgage Company. Ameriquest Mortgage Company is a specialty
finance company engaged in the business of originating, purchasing
and selling retail and wholesale subprime mortgage loans.
ANTARES PHARMA: Receives Milestone Payment from Pfizer
------------------------------------------------------
Antares Pharma, Inc. (OTC Bulletin Board: ANTR) announced that it
has received a milestone payment from Pfizer, Inc. (NYSE: PFE).
The milestone payment was made in connection with a licensing
agreement, originally established with Pharmacia in Europe, for a
product using Antares Pharma's Advanced Transdermal Delivery
(ATD(TM)) gel technology and was paid when the licensee achieved
regulatory approval for the product in Sweden. No details of the
specific product or marketing plans have been announced.
Dr. Dario Carrara, Head of European Operations for Antares Pharma,
said, "We are pleased to have further validation for our
technology as reflected in this latest regulatory approval. We
are confident that our ATD(TM) technology offers an attractive
alternative to patches for several drugs owing to the ease of
application and effectiveness of drug delivery."
About Antares Pharma
Antares Pharma develops specialty pharmaceutical products,
including needle-free and mini-needle injector systems,
transdermal gel technologies, and fast-melt oral tablet
technology. These delivery systems are designed to improve both
the efficiency of drug therapies and the patient's quality of
life. The Company currently distributes its needle-free injector
systems in more than 20 countries. In addition, Antares Pharma
conducts research and development with transdermal gel products
and currently has several products in clinical evaluation with
partners in the U.S. and Europe. The Company is also conducting
ongoing research to create new products that combine various
elements of the Company's technology portfolio. Antares Pharma
has corporate headquarters in Exton, Pennsylvania, with
manufacturing and research facilities in Minneapolis, Minnesota,
and research facilities in Basel, Switzerland.
* * *
Liquidity and Going Concern Uncertainty
In its most recent Form 10-Q filed with the Securities and
Exchange Commission, Antares Pharma reported:
"The [Company's] financial statements have been prepared on a
going-concern basis, which contemplates the realization of assets
and the satisfaction of liabilities and other commitments in the
normal course of business.
"The Company had negative working capital of $2,824,398 at
December 31, 2002 and working capital of $962,626 at September 30,
2003, respectively, and incurred net losses of $23,344,988 and
$30,032,000 for the three and nine-month periods ended September
30, 2003. In addition, the Company has had net losses and has had
negative cash flows from operating activities since inception. The
Company expects to report a net loss for the year ending
December 31, 2003, as marketing and development costs related to
bringing future generations of products to market continue and due
to approximately $23,000,000 in noncash charges related to the
restructuring of the Company's balance sheet during 2003. Long-
term capital requirements will depend on numerous factors,
including the status of collaborative arrangements, the progress
of research and development programs and the receipt of revenues
from sales of products. In July 2003 the Company raised $4,000,000
through two private placements of common stock. In September 2003
all outstanding convertible debentures and accrued interest and
all term notes and accrued interest due to the Company's largest
shareholder were converted into equity. Convertible debentures and
accrued interest of $1,693,743 was converted into 949,998 shares
of common stock and 243,749 shares of Series D Convertible
Preferred Stock. Principal of $2,300,000 and accrued interest of
$98,635 due to the Company's largest shareholder was converted
into 2,398,635 shares of common stock. Management believes that
the combination of the equity financing of $4,000,000, the
conversion of all debt to equity and projected product sales and
product development and license revenues will provide the Company
with sufficient working capital through the second quarter of
2004.
"Effective July 1, 2003, the Company's securities were delisted
from The Nasdaq SmallCap Market and began trading on the Over-the-
Counter Bulletin Board under the symbol."
ARGENT SECURITIES: Fitch Assigns Low-B Rating to Class M-7 Notes
----------------------------------------------------------------
Argent Securities Inc. 2004-W1 $1.0 billion classes AV-1, AV-2,
AV-3, AV-4 and AF certificates are rated 'AAA', $84.5 million
class M-1 certificates are rated 'AA', $71.5 million class M-2
certificates are rated 'A', $22.8 million class M-3 certificates
are rated 'A-', $19.5 million class M-4 certificates are rated
'BBB+', the $16.3 million class M-5 certificates are rated 'BBB',
$15.6 million class M-6 certificates are rated 'BBB-', and the
$17.6 million class M-7 certificates are rated 'BB+' by Fitch
Ratings.
Credit enhancement for the 'AAA' rated class A certificates
reflects the 19.05% subordination provided by classes M-1, M-2, M-
3, M-4, M-5, M-6, M-7, monthly excess interest and initial
overcollateralization of 2.25%. Credit enhancement for the 'AA'
rated class M-1 certificates reflects the 12.55% subordination
provided by classes M-2, M-3, M-4, M-5, M-6, M-7, monthly excess
interest and initial OC. Credit enhancement for the 'A' rated
class M-2 certificates reflects the 7.05% subordination provided
by classes M-3, M-4, M-5, M-6, M-7, monthly excess interest and
initial OC. Credit enhancement for the 'A-' rated class M-3
certificates reflects the 5.30% subordination provided by classes
M-4, M-5, M-6, M-7, monthly excess interest and initial OC. Credit
enhancement for the 'BBB+' rated class M-4 certificates reflects
the 3.80% subordination provided by class M-5, M-6, M-7, monthly
excess interest and initial OC. Credit enhancement for the 'BBB'
rated class M-5 certificates reflects the 2.55% subordination
provided by class M-6 and M-7, monthly excess interest and initial
OC. Credit enhancement for the 'BBB-' rated class M-6 certificates
reflects the 1.35% subordination provided by class M-7, monthly
excess interest and initial OC. Credit enhancement for the 'BB+'
rated class M-7 certificates reflects the monthly excess interest
and initial OC. In addition, the ratings reflect the integrity of
the transaction's legal structure as well as the capabilities of
Ameriquest Mortgage Company as Master Servicer. Deutsche Bank
National Trust Company will act as Trustee.
The mortgage pool consists of closed-end, first lien subprime
mortgage loans that may or may not conform to Freddie Mac and
Fannie Mae loan limits. As of the cut-off date (February 1, 2004),
the mortgage loans have an aggregate balance of $1,300,000,166.
The weighted average loan rate is approximately 7.12%. The
weighted average remaining term to maturity is 355 months. The
average cut-off date principal balance of the mortgage loans is
approximately $182,411. The weighted average original loan-to-
value ratio is 85.01% and the weighted average Fair, Isaac & Co.
(FICO) score was 620. The properties are primarily located in
California (28.57%), Florida (10.16%), and New York (9.62%).
Approximately 95.84% of the loans were originated or acquired by
Argent Mortgage Company LLC, and 4.16% of the loans originated or
acquired by Olympus Mortgage Company. Both mortgage companies are
subsidiaries of Ameriquest Mortgage Company. Ameriquest Mortgage
Company is a specialty finance company engaged in the business of
originating, purchasing and selling retail and wholesale subprime
mortgage loans. Both Argent and Olympus focus primarily on
wholesale subprime mortgage loans.
ARMOR HOLDINGS: Hosting Q4 Conference Call on February 12, 2004
---------------------------------------------------------------
Armor Holdings, Inc. (NYSE: AH), a leading manufacturer and
distributor of security products, vehicle armor systems and human
safety and survival systems serving law enforcement, military,
homeland defense and commercial markets, announced that it will
release 4th quarter and year-end earnings on Thursday, February
12, 2004, after the close of the market and will host its
regularly scheduled conference call at 4:30 pm (eastern).
There are two ways to participate in the conference call -- via
teleconference or webcast. Access the webcast by visiting the
Armor Holdings, Inc. website (http://www.armorholdings.com). You
may listen by selecting Investor Relations and clicking on the
microphone.
Via telephone, the dial-in number is 888-273-9890 for domestic
callers, or 612-332-0820 for international callers. There is no
passcode required for this call. There will be a question/answer
session at the end of the conference call, at which point only
securities analysts will be able to ask questions. However, all
callers will be able to listen to the questions and answers during
this period.
An archived copy of the call will be available via a replay at
800-475-6701 -- access code 720487 for domestic callers, or 320-
365-3844 -- access code 720487 for international callers. The
teleconference replay will be available beginning at 8:00 pm on
Thursday, February 12 and ends at 11:59 pm on Thursday, February
19.
Armor Holdings (S&P, BB Corporate Credit Rating, Stable), included
in FORBES magazine's list of "200 Best Small Companies" in 2002,
and a member of the S&P Smallcap 600 Index, is a leading
manufacturer of security products for law enforcement personnel
around the world through its Armor Holdings Products division and
is one of the world's largest and most experienced passenger
vehicle armoring manufacturers through its Mobile Security
division. Armor Holdings Products manufactures and sells a broad
range of high quality branded law enforcement equipment. Such
products include ballistic resistant vests and tactical armor,
less-lethal munitions, safety holsters, batons, anti-riot products
and a variety of crime scene related equipment, including narcotic
identification kits. Armor Holdings Mobile Security, through its
commercial business, armors a variety of vehicles, including
limousines, sedans, sport utility vehicles, and money transport
vehicles, to protect against varying degrees of ballistic and
blast threats. Through its military program, it is the prime
contractor to the U.S. Military for the supply of armoring and
blast protection for High Mobility Multi-purpose Wheeled Vehicles,
commonly known as HMMWVs.
ASARCO INC: Fitch Ups Junk Rating & Assigns Stable Outlook
----------------------------------------------------------
Fitch Ratings has upgraded the rating of Asarco Inc. to 'CCC' from
'C'. The rating applies to Asarco's notes due in 2013 and 2025.
The Rating Outlook is Stable. This rating action reflects Fitch's
belief that Asarco's credit profile is no longer one of imminent
default, as indicated by our 'C' rating. In 2003, Asarco reduced
its outstanding debt by about $600 million through the sale of its
stake Southern Peru Copper Corporation and faces no significant
maturities until 2013.
Fitch's 'CCC' rating maintains that default is a real possibility
and a company's capacity for meeting financial commitments is
solely reliant upon sustained favorable business or economic
conditions over the medium-term.
In conjunction with the debt restructuring in April 2003 of
Asarco's affiliate, Minera Mexico (formerly Grupo Minero Mexico),
Asarco sold its 54.2% stake in SPCC for $765 million to its direct
parent company, Americas Mining Corporation, a subsidiary of Grupo
Mexico S.A. de C.V. The proceeds were used to pay off $550 million
in overdue debt obligations (consisting of a $450 million bank
facility due in November 2001 and a $100 million bond due in
February 2003).
For the sale of its stake in SPCC, Asarco received $500 million in
cash, $223 million in notes payable from AMC, as well as $42
million in debt forgiveness of a loan from AMC. The $223 million
in notes consists of: 1) a $123 million obligation of AMC to pay
Asarco $8.8 million semiannually over seven years at a rate of 7%;
and 2) a $100 million obligation of AMC to pay Asarco up to $12.5
million (based on copper prices) over eight years at a rate of 8%.
The payments on this note were endorsed by Asarco to an
environmental trust fund.
Asarco now has total debt of about $440 million (consisting of
$250 million of unsecured debt due 2013-2025 and $190 million in
pollution control bonds due 2004-2033), and has no significant
maturities until a $100 million note matures in 2013.
Approximately $36 million of debt matures in 2004-2009.
Fitch's 'CCC' rating of Asarco's debt obligations reflects the
substantial uncertainly regarding the company's potential
environmental lawsuits as well as its inability to generate
significant cash flow due to its high cash cost of production.
Asarco is 100%-owned by AMC, a direct subsidiary of Grupo Mexico.
The company's mining operations in the United States consist of
three open-pit copper mines, Ray, Mission and Silver Bell in the
state of Arizona. Asarco also operates a custom smelter in Hayden,
Arizona, a refinery in Amarillo, Texas and two SX/EW plants. In
2003, Asarco produced 170,000 tons of copper and it expects output
to be about 180,000 tons in 2004, (110,000 tons from copper
contained in concentrate and 70,000 tons via the SX/EW process).
This level of production is lower than prior years in which output
was about 230,000-240,000 tons. Asarco has reduced production at
its Mission and Ray mines due to the high cost of production above
the average price of copper. In 2003, Asarco's cash cost of
production was $0.85/lb.
ASBURY AUTOMOTIVE: Will Release Q4 Financial Results Tomorrow
-------------------------------------------------------------
Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest
automotive retail and service companies in the U.S., announced
that it plans to release financial results for the fourth quarter
and full year ended December 31, 2003 prior to the market open on
Wednesday, February 11, 2004.
The Company also noted that because it is currently in
registration for a secondary offering it would not be hosting its
customary conference call to discuss financial results.
A registration statement relating to these securities has been
filed with the Securities and Exchange Commission, but has not yet
become effective. These securities have not been sold nor may
offers to buy be accepted prior to the time the registration
statement becomes effective.
Asbury Automotive Group, Inc. (S&P, BB- Corporate Credit Rating,
Stable), headquartered in Stamford, Connecticut, is one of the
largest automobile retailers in the U.S., with 2003 revenues of
$4.8 billion. Built through a combination of organic growth and a
series of strategic acquisitions, Asbury now operates through nine
geographically concentrated, individually branded "platforms."
These platforms currently operate 99 retail auto stores,
encompassing 142 franchises for the sale and servicing of 35
different brands of American, European and Asian automobiles.
Asbury believes that its product mix includes one of the highest
proportions of luxury and mid-line import brands among leading
public U.S. automotive retailers. The Company offers customers an
extensive range of automotive products and services, including new
and used vehicle sales and related financing and insurance,
vehicle maintenance and repair services, replacement parts and
service contracts.
AURORA FOODS: Gets Interim Nod for $50 Million DIP Financing
------------------------------------------------------------
On December 9, 2003, Judge Walrath authorized the Aurora Foods
Debtors, on an interim basis, to perform their obligations under
the DIP Credit Agreement and to draw up to $20,000,000 of the
$50,000,000 of loans available. The Official Committee of
Unsecured Creditors filed a limited objection and asked the Court
to deny the entry of a final order, to the extent that the final
order would grant JPMorgan Chase and the DIP Lenders a
superpriority claim in and lien on the proceeds of any Avoidance
Actions.
In a Final Order dated January 26, 2004, the Court permitted the
Debtors to obtain financing up to $50,000,000 under the DIP
Facility. The Court authorized the Debtors to grant these
security interests and liens to JPMorgan Chase for its own
benefit and the benefit of the DIP Lenders in the event of
default:
(1) Fully perfected first priority senior security interest on
cash balances and unencumbered property;
(2) Fully perfected first priority senior priming prepetition
secured Lenders' liens;
(3) Fully perfected security interests in, and liens on the
Debtors' property that are junior to the valid, perfected
and unavoidable liens; and
(4) Liens that are senior to liens avoided and preserved for
the benefit of the Debtors and their estates under Section
551 of the Bankruptcy Code or those arising postpetition.
All of the DIP Obligations will constitute allowed claims against
the Debtors with priority over any and all administrative
expenses, diminution claims, and all other present and future
claims against the Debtors, of any kind, including, all
administrative expenses of the kind specified in the Bankruptcy
Code. These allowed claims will be payable from and have
recourse to all property of the Debtors and all of its proceeds,
subject only to the payment of the Carve-Out.
To address the Committee's objection, Judge Walrath held that:
* the Loan Documents, the DIP Liens, or the Adequate
Protection Liens, the Superpriority Claims and the Section
507(b) superpriority claims will attach and have recourse to
the proceeds of Avoidance Actions as of April 1, 2004;
* upon the occurrence of an Event of Default and acceleration,
the Avoidance Actions proceeds will be set aside:
-- for the DIP Agent's benefit, in respect of the DIP
Obligations; and then
-- for the Prepetition Agent's benefit, in respect of
the Adequate Protection Obligations;
* if any portion of the DIP Obligations remains outstanding
after the collection and liquidation of, and the application
of the proceeds of non-Avoidance Action Collateral to the
DIP Obligations, the proceeds of Avoidance Actions will be
applied immediately to reduce the DIP Obligations; and
* upon the payment of the DIP Obligations in full and in cash
from any source, and if any portion of the Adequate
Protection Obligations remains outstanding after the
collection and liquidation of, and the application of the
proceeds of non-Avoidance Action Collateral to the Adequate
Protection Obligations, all Avoidance Action received will
be applied immediately to reduce the unpaid amount, if any,
of the Adequate Protection Liens and Section 507(b)
superpriority claims.
Use of Cash Collateral
Judge Walrath also authorizes the Debtors to use all Cash
Collateral of the Prepetition Secured Lenders, provided that:
(1) the Debtors' right to use Cash Collateral will terminate
automatically on the earlier of:
* the Termination Date; or
* the occurrence and continuation of a Default or an
Event of Default.
(2) if the Debtors will terminate the Commitment prior to the
Maturity Date, the Debtors will continue to comply with
the requirements of the DIP Credit Agreement; and
(3) upon any failure by the Debtors to observe any requirement
or upon the occurrence of any event that would have
constituted an Event of Default under the DIP Credit
Agreement before the termination of the Commitment,
JPMorgan Chase, on behalf of the Prepetition Secured
Lenders, will have the immediate right to terminate the
Debtors' right to use the Cash Collateral.
As adequate protection, the Debtors will provide the Prepetition
Secured Lenders with these Adequate Protection Obligations:
(1) A replacement security interest on all the Collateral
subject to and subordinate to (a) the security interests
and liens granted to JPMorgan Chase for the benefit of the
DIP Lenders and pursuant to the DIP Documents, and any
Junior liens on the Collateral granted to JPMorgan Chase;
and (b) the Carve-Out;
(2) Section 507(b) superpriority claims, which will become
junior to the DIP Lender Claims. However, the Prepetition
Secured Lenders will not receive or retain payments,
property or other amounts in respect of the Section 507(b)
Superpriority Claims until the DIP obligations are fully
paid in cash;
(3) JPMorgan Chase will receive from the Debtors:
-- cash payment of all accrued and unpaid interest on the
prepetition debt and letters of credit fees at certain
rates;
-- current cash payments for fees and expenses of the
steering committee of the Existing Lenders; and
-- accrued but unpaid interest including swap obligation;
(4) The Prepetition Secured Lenders will be permitted to
retain expert consultants and financial advisors at the
Debtors' expense, for purposes of monitoring the Debtors'
business and the Collaterals' value; and
(5) The Debtors will provide JPMorgan Chase with any
written financial information or any required periodic
reporting.
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: Court Grants Interim Approval of $60M DIP Facility
----------------------------------------------------------------
Avado Brands, Inc. (OTC Bulletin Board: AVDO), parent company of
Don Pablo's Mexican Kitchen and Hops Grillhouse & Brewery,
announced that the U.S. Bankruptcy Court for the Northern District
of Texas has approved "first-day" motions that are intended to
support the Company's employees and customers and provide other
forms of operational and financial stability during the Company's
time under the protection of Chapter 11 of the U.S. Bankruptcy
Code.
On February 4, 2004, the Company 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
also announced that it would continue to operate its restaurant
chains while it restructures.
The Bankruptcy Court gave interim approval of a $60 million
debtor-in-possession (DIP) credit facility which is to be provided
by a group of lenders led by DDJ Capital Management, LLC, as
administrative and collateral agent, for use by the Company to
fund ongoing working capital and general corporate needs, as well
as repay the Company's prepetition secured lenders. Following
completion of final documentation, the Company will have access to
$45.5 million in funds to operate its business prior to a hearing
for the final approval of the DIP financing, scheduled for March
4, 2004.
"These are important first steps in this process and provide a
smooth transition so that we can continue normal business
operations," said Avado Brands' interim chief executive officer
Kevin Leary of AlixPartners LLC.
The case has been assigned to the Honorable Chief Judge Steven A.
Felsenthal under case number 04-31555. Further information can be
obtained via the Internet at http://www.txnb.uscourts.gov.
About Avado Brands
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/.
AVISTA CORP: Files General Rate Case with Idaho Regulators
----------------------------------------------------------
Avista Corp. (NYSE: AVA) has filed a request with Idaho regulators
to increase electric prices by 11 percent above current rates and
natural gas prices by 9.2 percent. Avista's request is designed to
increase electric revenues by $18.9 million annually and natural
gas revenues by $4.8 million annually. The Idaho Public Utilities
Commission (IPUC) generally has up to seven months to review
Avista's rate case filing.
Avista has not had a general electric price increase in Idaho
since 1999, and this would be the first general natural gas price
increase in Idaho since 1990. Avista has invested $81 million in
its electric generation and transmission system, another $54
million in electric distribution, and $73 million in its natural
gas system since its last general rate increases -- a total of
more than $200 million of additional utility plant to meet the
needs of its customers.
In addition, Avista's current rates in Idaho are based on the
company's 1997 operating costs on the electric side of its
business and 1987 operating costs on the natural gas side.
Accordingly, existing rates do not reflect Avista's current costs
of providing electric and natural gas service to its customers.
Under the company's proposal, the monthly bill for a residential
electric customer with average monthly usage of 1,000 kilowatt-
hours of electricity would increase from $60.15 to $68.37, an
increase of $8.22 per month. The monthly bill for a residential
gas customer using an average of 70 therms of natural gas would
increase from $57.68 to $63.26, an increase of $5.58 per month.
Avista is proposing that the basic monthly charge for residential
electric service be increased from $4.00 to $5.00 and the natural
gas basic monthly charge be increased from $3.28 to $5.00.
On the electric side, the request will be for a 24 percent overall
change in base rates. However, Avista is requesting a reduction in
its current Power Cost Adjustment surcharge, which would reduce
the overall impact on customers to an 11 percent increase above
current rates. In 2001, the IPUC approved a 19.4 percent surcharge
that allowed Avista to begin recovering costs associated with the
record-low streamflow conditions and high market prices incurred
by the company during the energy crisis of 2000 and 2001. If the
commission approves Avista's proposal, the remaining PCA balance
would be recovered over a two-year period at a reduced rate.
"Our filing reflects the company's efforts to ensure long-term and
reliable energy supplies for our customers. To accomplish that
goal, we've made significant investments in new generating
resources and in electric and natural gas infrastructure since our
last general rate case filings," said Scott Morris, president of
Avista Utilities. "We have been quite purposeful in successfully
meeting our objective of owning or controlling electric resources
exceeding 100 percent of our retail load. Our focus has been on
controlling our own destiny and reducing reliance on potentially
volatile energy markets."
Morris also noted that the rate request represents another step in
the company's financial recovery and its ongoing efforts to
restore its investment grade credit rating, which was lowered
during the 2000-01 energy crisis.
Among the issues Avista is asking the commission to consider in
its electric and natural gas rate filings are the company's
investment in the Coyote Springs 2 generating station, operation
and maintenance costs, increased power supply costs, and increased
financing costs since the company's last electric and natural gas
general rate cases.
Avista recognizes the impact of price increases on its customers,
especially on those who have the most difficulty paying their
energy bill. Avista's ongoing commitment to customers also
includes support of Project Share, an energy assistance program.
Other customer programs include CARES, a program assisting those
who face challenges paying their bills; Comfort Level Billing, a
plan that averages annual energy bills into equal monthly
payments; and ongoing energy conservation and efficiency programs.
Avista also offers rebates for residential weatherization (wall,
floor, ceiling, ducts) and high efficiency water heaters and
furnaces. The company offers energy conservation education,
including workshops for seniors, energy use guides and home visits
by meter shop personnel to help customers reduce energy costs on a
long-term basis.
Approximately 30 percent of the company's annual retail electric
and natural gas revenues are derived from Idaho where the company
serves 109,000 electric customers and 62,000 natural gas
customers. Avista has added 8,275 electric customers and 9,040
natural gas customers in Idaho in the past five years.
For additional information regarding Avista's Idaho rate filing,
visit the Idaho Rate Information Center at
http://www.avistautilities.com.
Avista Corp. (S&P, BB+ Corporate Credit Rating, Stable) is an
energy company involved in the production, transmission and
distribution of energy as well as other energy-related businesses.
Avista Utilities is a company operating division that provides
electric and natural gas service to customers in four western
states. Avista's non-regulated subsidiaries include Avista
Advantage, Avista Labs and Avista Energy. Avista Corp.'s stock is
traded under the ticker symbol "AVA" and its Internet address is
http://www.avistacorp.com/
AVISTA: CFO to Assume Treasury & Investor Relations Functions
-------------------------------------------------------------
Avista Corp. (NYSE: AVA) announced that Senior Vice President
Malyn K. Malquist will assume responsibility for the treasury
function in addition to his role as chief financial officer.
David A. Brukardt, vice president and treasurer, will be leaving
Avista later in the quarter, after helping to assure a smooth
transition. The move combines the role of CFO and treasurer and
eliminates one executive officer position.
"Dave has been an extremely valuable member of our company during
financially challenging times," said Gary G. Ely, board chairman,
president and chief executive officer for Avista Corp. "He is
well-respected for his corporate communication and investor
relations expertise within our company and within our industry.
His contributions to our success have been substantial."
"This is the right time for me, both professionally and
personally, to make a change," Brukardt said. "I've gained a high
level of admiration and respect for the people of Avista and wish
my friends and co-workers the best. I'm leaving confident that the
leadership is in place to continue to move the company forward."
Brukardt was recruited in 1999 as vice president of investor
relations during a period of growth. He was promoted in 2001 to
vice president of investor and corporate relations and chief
communication officer as the company restructured and focused on
restoring its financial health. In 2002, he was named vice
president of corporate relations and strategic planning in a move
that consolidated several of Avista's external relations
functions. In 2003, he was elected vice president and treasurer.
Brukardt has been actively involved in the community, serving on
boards and committees at the local and state levels. He currently
serves on the Avista Foundation board of directors, is a member of
the board of trustees of the Northwest Museum of Arts and Culture,
is on the executive committee of the board of the Association of
Washington Business, and is a member of the Spokane Airport Board.
Prior to joining Avista, Brukardt served as director of investor
and corporate relations for Harnischfeger Industries, senior vice
president and co-owner of CCU, Inc., a Wisconsin-based
communication and marketing consultancy, and he held positions
with Case Corporation and Brunswick's Marine Power Group.
Avista Corp. (S&P, BB+ Corporate Credit Rating, Stable) is an
energy company involved in the production, transmission and
distribution of energy as well as other energy-related businesses.
Avista Utilities is a company operating division that provides
electric and natural gas service to customers in four western
states. Avista's non-regulated subsidiaries include Avista
Advantage, Avista Labs and Avista Energy. Avista Corp.'s stock is
traded under the ticker symbol "AVA" and its Internet address is
http://www.avistacorp.com/
AVITAR: Working Capital Deficit & Losses Spur Going Concern Doubts
------------------------------------------------------------------
Avitar, Inc., through its wholly-owned subsidiary Avitar
Technologies, Inc. develops, manufactures, markets and sells
diagnostic test products and proprietary hydrophilic polyurethane
foam disposables fabricated for medical, diagnostics, dental and
consumer use. During the fiscal year ended September 30, 2003, the
Company continued the development and marketing of innovative
point of care oral fluid drugs of abuse tests, which use the
Company's foam as the means for collecting the oral fluid sample.
Through its wholly owned subsidiary, BJR Security, Inc., the
Company provides specialized contraband detection and education
services.
On December 16, 2003, the Company sold the business and net
assets, excluding cash, of its wholly owned subsidiary, United
States Drug Testing Laboratories, Inc., which operated a certified
laboratory and provided specialized drug testing services
primarily utilizing hair and meconium as the samples.
At September 30, 2003, the Company had working capital
deficiencies of $630,741 and cash and cash equivalents of
$1,130,919. Net cash used in operating activities during Fiscal
2003 amounted to $2,452,054, resulting primarily from a net loss
of $6,462,101, an increase in USDTL net assets of $108,841 and an
increase in other assets of $78,008; partially offset by the
cumulative effect of change in accounting principle of $650,000,
loss from the disposal of discontinued operation of $895,000,
depreciation and amortization of $169,081, common stock and
warrants issued for services, placement agent fees and interest on
short-term and long-term debt of $1,474,280, a decrease in
accounts receivable of $449,558, a decrease in inventories of
$264,694, a decrease in prepaid expenses and other current assets
of $7,938, an increase in accounts payable and accrued expenses of
$93,485 and an increase in deferred revenue of $177,750. Net cash
provided by financing and investing activities during Fiscal 2003
was $3,079,769, which included proceeds from the sale of preferred
stock, common stock and warrants of $2,153,947, proceeds from the
conversion of long-term convertible notes of $955,000, proceeds
from the exercise of warrants of $128,813; offset in part by
repayment of short-term debt of $135,131; repayment of long-term
debt of $14,301 and purchases of property and equipment of $8,559.
During Fiscal 2004, the Company's cash requirements are expected
to include primarily the funding of operating losses, the payment
of outstanding accounts payable, the repayment of certain notes
payable, the funding of operating capital to grow the Company's
drugs of abuse testing products and services, and the continued
funding for the development of its ORALscreen product line. The
cash available at September 30, 2003 along with the proceeds from
the sale of USDTL and anticipated customer receipts is expected to
be sufficient to fund the operations of the Company through
February 2004. As part of the agreement covering the preferred
stock sold in September 2003, the investor agreed to purchase
additional preferred stock for $1,000,000 upon receipt of
shareholder approval. Beyond that time, the Company will require
significant additional financing from outside sources to fund its
operations. The Company plans to continue working with placement
agents and/or investment fund managers in order to raise
approximately $10 million during the remainder of Fiscal 2004 from
the sales of equity and/or debt securities. The Company plans to
use the proceeds from these financings to provide working capital
and capital equipment funding to operate the Company, to expand
the Company's business, to further develop and enhance the
ORALscreen drug screening systems and to pursue the development of
in-vitro oral fluid diagnostic testing products. However, there
can be no assurance that these financings will be achieved.
Operating revenues are expected to remain at the current levels
for the first half of Fiscal 2004 and then begin to grow as
employment begins to rise in the United States and the Company is
able to convert employers to using ORALscreen, Avitar's oral fluid
drug testing products. In order to achieve the revenue growth,
the Company will need to significantly increase its direct sales
force and implement an expanded, targeted marketing program.
ORALscreen, as an instant on-site diagnostic test, is part of the
fastest growing segment of the diagnostic test market.
Inventories are currently at appropriate levels for anticipated
sales volumes and the Company, with its production capacity and
the arrangements with its current contract manufacturing sources,
expects to be able to maintain inventories at optimal levels.
Based on current sales, expense and cash flow projections, the
Company believes that the current level of cash and cash-
equivalents on hand and most importantly, a portion of the
anticipated net proceeds from the financing mentioned above would
be sufficient to fund operations until the Company achieves
profitability. There can be no assurance that the Company will
consummate the above-mentioned financing, or that any or all of
the net proceeds sought thereby will be obtained. Furthermore, the
can be no assurance that the Company will have sufficient
resources to achieve the growth in revenue while maintaining the
cost reductions implemented in Fiscal 2003. Once the Company
achieves profitability, the longer-term cash requirements of the
Company to fund operating activities, purchase capital equipment,
expand the existing business and develop new products are expected
to be met by the anticipated cash flow from operations and
proceeds from the financings described above. However, because
there can be no assurances that sales will materialize as
forecasted, management will continue to closely monitor and
attempt to control costs at the Company and will continue to
actively seek the needed additional capital.
As a result of the Company's recurring losses from operations and
working capital deficit, the report of its independent certified
public accountants relating to the financial statements for
Fiscal 2003 contains an explanatory paragraph stating substantial
doubt about the Company's ability to continue as a going concern.
Such report states that the ultimate outcome of this matter could
not be determined as the date of such report (December 5, 2003
except for Note 17 which is as of December 16, 2003). The
Company's plans to address the situation are presented above.
However, there are no assurances that these endeavors will be
successful or sufficient.
BIG CITY RADIO: Board Okays Initial Liquidating Distribution
------------------------------------------------------------
Big City Radio, Inc. (formerly AMEX: YFM) announced that its board
of directors has approved an initial liquidating distribution
which will be made in accordance with Big City Radio's previously
announced plan of complete liquidation and dissolution. The
initial liquidating distribution will consist of approximately 2
million shares of Class A common stock of Entravision
Communications Corporation, which is Big City Radio's principal
remaining asset. The distribution will be made to holders of
record of Big City Radio's common stock on February 6, 2004 on a
pro rata basis, with holders of Big City Radios' Class A and Class
B common stock being treated in the same manner. Each holder of
record of Big City Radio common stock will receive approximately
one share of Entravision stock for every seven shares of Big City
Radio common stock that it holds. The Entravision stock will be
distributed on February 9, 2004.
Big City Radio filed a certificate of dissolution with the office
of the Secretary of State of the State of Delaware on December 23,
2003, and has been engaged solely in winding up its affairs since
that time.
As of the date of this release, Big City Radio cannot predict the
amount, if any, it may have available for any future distributions
to its stockholders. The timing and amount available for any
future distributions will depend on several factors, some of which
are beyond Big City Radio's control.
BIOVEST: Aims to Reduce Losses from Core Businesses this Year
-------------------------------------------------------------
Biovest International Inc. produces mammalian and insect cells,
monoclonal antibodies, recombinant and secreted proteins and other
cell culture products using its unique capability, expertise and
proprietary advancements in the cell production process known as
hollow fiber perfusion. In addition to its commercial contract
production business, for more than thirteen years the Company has
been designated by the National Institutes of Health as the
National Cell Culture Center. Biovest also manufactures
instruments and disposables used in the hollow fiber production of
cell culture products. Its hollow fiber cell culture products and
instruments are used by biopharmaceutical and biotech companies,
medical schools, universities, research facilities, hospitals and
public and private laboratories.
In collaboration with the National Cancer Institute, Biovest is
developing a therapeutic vaccine for the treatment of low-grade
Follicular Lymphoma (FL). This therapeutic vaccine is currently in
a pivotal Phase III clinical trial. In September 2001, the Company
entered into a Cooperative Research and Development Agreement with
the NCI. This agreement granted Biovest the contractual right to
receive an exclusive license to all commercial uses of this
therapeutic vaccine, which the Company anticipates will apply
worldwide and be royalty-free. FL is a form of Non-Hodgkin's
lymphoma that afflicts an estimated 300,000 patients in the United
States with an estimated 25,000 new cases diagnosed annually in
the US with another 40,000 cases diagnosed annually in Europe, and
even more worldwide. FL is a deadly cancer of the white blood
cells.
In the fiscal year ended September 30, 2003, Biovest incurred
significant negative cash flows and operating losses. Prior to the
Accentia investment agreement, the Company's ongoing negative cash
flow impacted its ability to conduct its business in a normal
manner. Management anticipates that for the fiscal year ended
September 30, 2004, Biovest will reduce, and potentially
eliminate, losses from the operation of its core businesses of
cell culture production, the National Cell Culture Center and
equipment sales. However, on a company wide basis management
expects negative cash flow to continue through and potentially
beyond fiscal year 2004, due to increasing costs associated with
the Company's ongoing CRADA activities and related research,
development and clinical trial activities. The Company anticipates
further losses in fiscal 2004, which management anticipates will
be funded by collection of Accentia promissory notes and
additional borrowings as needed from Accentia. While management is
confident that they will be able to reduce losses from the core
businesses as well as obtain needed financing to fund CRADA
activities, there can be no assurances in that regard.
Biovest has incurred significant losses and cash flow deficits in
previous years. Furthermore during fiscal year 2003 and 2002 the
Company incurred losses of $6,055,000 and $4,200,000. During
fiscal 2003 it met its cash requirements through the use of cash
on hand, the sale of capital stock, largely to Accentia, and
short-term borrowings, primarily from affiliates.
On September 30, 2003, Biovest had a deficit in working capital of
$239,000 compared to a deficit in working capital of $1,055,000 at
September 30, 2002. Following the investment by Accentia in 2003,
Biovest paid past-due payables, including deferred salaries
resulting from the work-force reduction in January 2003. During
the year ended September 30, 2003 the Company used $3,205,000 in
cash in operating activities, due primarily to accrued expenses
and obligations, cash used in operations and cash used in
research, development and CRADA activities.
During the years ended September 30, 2003 and September 30, 2002,
Biovest utilized $83,000 and $375,000 of cash for capital
expenditures. Most of the current year expenditures were used to
upgrade technology and equipment after the Accentia investment.
During fiscal year 2003 and through October 2003 the Company
received $5 million from Accentia under the Investment Agreement
as follows: (i), in June 2003 the Company received $2.5 million
which was used to pay outstanding payables, deferred compensation,
and other liabilities associated with expenses and obligations
incurred prior to the acquisition; (ii) on September 16, 2003, the
Company received $600,000 ( and agreed to a 30-day extension of
the due date of a $2.5 million promissory note due from Accentia
); and (iii) on October 17, 2003, the Company received $1.9
million. Biovest is owed an additional $15 million under the
Accentia Investment Agreement, evidenced by a promissory note,
which is payable $2.5 million on the first and second
anniversaries of the agreement and $5.0 million on the third and
fourth anniversaries of the agreement
In 2001, Biovest entered into a definitive Cooperative Research
and Development Agreement with the National Cancer Institute for
the development and ultimate commercialization of patient-
specific vaccines for the treatment of non-Hodgkin's low-grade
follicular lymphoma. This agreement commits Biovest to substantial
future cash outflows as follows: The terms of the CRADA, as
amended, include, among other things, a requirement to pay
$530,000 quarterly to NCI for expenses incurred in connection with
the ongoing Phase III clinical trials. The Company is obligated
for aggregate payments under the CRADA of $12,190,000 over the
remaining term of the agreement, $1,590,000 of which is payable
over the next twelve months and the balance in quarterly
installments through September 2009. Failure to remit payments
would likely result in a unilateral termination of the CRADA and
the Company would lose the rights to commercialize the results of
its collaborative research. Successful development of the vaccine,
if approved by the FDA, from Phase III clinical trials through
commercialization will require Biovest to fund significant
expenditures, perhaps for several years, before revenues are
realized, if ever. The CRADA expires in September 2009, but may be
unilaterally terminated by either party by giving thirty days
written notice. Certain termination costs, as defined in the
CRADA, will be the Company's responsibility if the CRADA is
terminated.
The CRADA granted Biovest the contractual right to receive an
exclusive license to all commercial uses of this therapeutic
vaccine, which the Company anticipates will apply worldwide and be
royalty-free. There can be no assurance that research under the
CRADA will be successful or, if it is successful, that the Company
will be able to negotiate a license on favorable terms. In
addition, the Company may not be able to derive any revenue from a
license for a number of years. It is currently negotiating to
bring more of the actual CRADA in-house, in which case the Company
plans to hire personnel who have worked directly on the vaccine
project, but to date have been on the payroll of the NCI. In the
event the Company is successful in doing so, its CRADA payments
will be reduced, as those expenses (such as personnel) will be
paid by Biovest directly, as opposed to the quarterly payments to
the NCI of $530,000. In the fiscal year ended
September 30, 2003, Biovest incurred significant negative cash
flow from operating losses which was increased by the payment of
promissory notes and research and development activities largely
in support of the CRADA. Prior to the Accentia investment
agreement, the Company's ongoing negative cash flow impacted its
ability to continue as a going concern.
BRIAZZ: Shoos Away PwC & Brings-In Grant as Independent Auditor
---------------------------------------------------------------
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 contained a
report issued by PwC which included an explanatory paragraph
containing 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 of
Briazz 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 accordingly
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.
BUDGET: Committee Inks Settlement Pact with UK Administrator
------------------------------------------------------------
The Committee and the UK Administrator reached a consensual
resolution of all the claims between and among the U.S. Budget
Group Inc. Debtors and BRACII, including those claims set forth in
the Joint Statement of Claims to be Litigated. The Committee and
the UK Administrator then signed an Allocation Settlement
Agreement. The Allocation Settlement Agreement provides these
basic terms:
(1) All of the North American Sale Proceeds are allocated to
the U.S. Debtors;
(2) Up to $1,000,000 of the EMEA Sale Proceeds is allocated
to the U.S. Debtors;
(3) The remainder of the EMEA Sale Proceeds, net of the
Claims Reserve Amount, is allocated to BRACII;
(4) The Claims Reserve Amount will be used to fund the BRACII
Administrative Claims Reserve;
(5) Up to the first $1,000,000 of net cash proceeds from the
Sixt litigation is allocated to BRACII, and the balance
is allocated equally between the U.S. Debtors and BRACII;
(6) Subject to certain conditions, the UK Administrator will
act as the "Seller Parties" under the EMEA APA and will
have sole responsibility for the administration of the
Avis Europe Escrow Accounts and payment of all costs and
expenses incurred in connection therewith, and, except as
otherwise provided in the Allocation Settlement Agreement,
may resolve any claims with respect to which certain of
the Avis Europe Accounts were originally established; and
(7) The parties will enter into mutual releases of all
claims, including the release of all claims against the
Committee, its members and professionals.
Cherokee Dispute
On May 6, 2003 the Debtors filed an adversary proceeding against
Cendant and Cherokee to:
(1) compel Cherokee to turn over $2,031,361 plus interest and
costs due under the ASPA; and
(2) to assume certain employment-related actions pending at
the time of the closing of the North American Sale.
Pursuant to the ASPA, Cherokee must pay the Debtors, as a fee
reimbursement, $42,000,000 minus the amount of certain specific
categories of fees the Debtors paid prior to the closing. The
Debtors paid $22,983,796 prior to closing, leaving $19,016,204
owed to the Debtors by Cherokee pursuant to the ASPA. Cherokee
subsequently paid $16,924,469 and the Debtors relinquished their
claims to $60,374, leaving a total of $2,031,361 still owed to
the Debtors. In response, Cherokee denies that any further
payments are due.
The Cherokee Adversary Complaint also seeks an order, which
provides that Cherokee must assume the defense of certain
employment-related actions that were pending against the Debtors
at the time of closing. The Debtors assert that, pursuant to the
ASPA, Cherokee assumed any actions that the Debtors were a party
to and which were disclosed in certain schedules to the ASPA.
Therefore, the Debtors assert that Cherokee assumed certain
employment-related actions, which were listed as pending or
prospective on the ASPA schedules. Cherokee maintains that the
employment-related actions are Excluded Liabilities under the
ASPA and have not been assumed by Cherokee.
In its answer to the Cherokee Adversary Complaint, Cherokee also
filed counterclaims seeking $3,600,000 as an administrative
expense from the Debtors for claims related to the ASPA and other
agreements. Cherokee alleges that it overpaid certain amounts
due under the ASPA based on additional fees owed to Cherokee,
that the Debtors failed to pay for certain services provided to
the Debtors, and that Cherokee made payments to various third
parties for liabilities and obligations of the Debtors for which
Cherokee is not responsible. Cherokee's counterclaims also seek
set-off and recoupment rights for any judgment entered for the
Debtors.
In addition to the allegations set forth in the Cherokee
Adversary Complaint, the Debtors and Cherokee also dispute which
of the two parties is responsible for various personal injury and
other actions and claims that arose prior to the consummation of
the North American Sale. The Debtors assert that Cherokee
assumed the liabilities associated with the Disputed PI Claims
pursuant to the ASPA, but Cherokee asserts that the liabilities
remained with the Debtors. Proofs of claim relating to the
Disputed PI Claims have been filed in excess of $100,000,000.
The Cherokee Dispute has not been resolved as of
January 26, 2004, but provision is made to allow the holders of
the Disputed PI Claims to vote on the Plan regardless of when the
Cherokee Dispute is resolved.
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, Conaway, Stargatt & Taylor,
LLP, represent the Debtors in their restructuring efforts. When
the Company filed for protection from their creditors, they listed
$4,047,207,133 in assets and $4,333,611,997 in liabilities.
(Budget Group Bankruptcy News, Issue No. 33; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
CALPINE CORP: Provides 4th Quarter 2003 Pre-Earnings Update
-----------------------------------------------------------
Calpine Corporation (NYSE: CPN), a leading North American power
company, is providing a pre-earnings update. These preliminary
results are unaudited. Further detail will be provided in the
company's year-end 2003 earnings conference call scheduled for
February 26, 2004.
On December 31, 2003, liquidity for the company totaled
approximately $2.3 billion. This included cash and cash
equivalents on hand of approximately $1.0 billion, the current
portion of restricted cash of approximately $0.9 billion and
approximately $0.4 billion of borrowing capacity under the
company's various credit facilities.
EBITDA, as adjusted before non-cash and other charges is expected
to be approximately $0.4 billion and $1.6 billion for the three
and twelve months ended December 31, 2003, respectively.
For the quarter ended December 31, 2003, the company is
anticipating GAAP fully diluted earnings per share of
approximately $0.30 per share, or $125 million of net income.
During the period, the company's power plants operated at a 49%
capacity factor generating over 20 million megawatt hours. Core
operating earnings are expected to be a net loss of approximately
$0.13 per share, or a $54 million net loss. On-peak spark spreads
during the quarter were below expectations primarily due to milder
weather during December. These lower spark spreads reduced
expected earnings by approximately $19 million, or $0.05 per
share.
The results for the quarter include a gain of approximately $0.38
per share due to a change in accounting principle and certain
mark-to-market activity, a gain of approximately $0.10 per share
on the sale of assets and a gain of approximately $0.09 per share
for the purchases of outstanding debt and preferred securities.
Offsetting these gains, the company recorded a loss of
approximately $0.14 per share for other charges related primarily
to equipment cost and office space write-downs and costs
associated with the termination of long-term service contracts.
Calpine has rescheduled its year-end 2003 earnings conference call
to February 26, 2004 due to conflicting schedules relating to its
recently announced intent to commence offerings to refinance its
CCFC II debt.
The conference call to discuss the financial and operating results
for the three and twelve months ended December 31, 2003 will now
take place on Thursday, February 26, 2004, at 8:30 a.m. Pacific
Standard Time. To participate via the teleconference (in listen-
only mode), dial 1-888-603-6685 at least five minutes before the
start of the call. In addition, Calpine will simulcast the
conference call live via the Internet. The web cast can be
accessed and will be available for 30 days on Calpine's Investor
Relations page at http://www.calpine.com/
Calpine Corporation (S&P, CCC+ Senior Unsecured Convertible Note
and B Second Priority Senior Secured Note Ratings, Negative
Outlook), celebrating its 20th year in power in 2004, is a
leading North American power company dedicated to providing
electric power to wholesale and industrial customers from clean,
efficient, natural gas-fired and geothermal power facilities. The
company generates power at plants it owns or leases in 21 states
in the United States, three provinces in Canada and in the United
Kingdom. Calpine is also the world's largest producer of renewable
geothermal energy, and owns or controls approximately one trillion
cubic feet equivalent of proved natural gas reserves in Canada and
the United States. The company was founded in 1984 and is publicly
traded on the New York Stock Exchange under the symbol CPN. For
more information about Calpine, visit http://www.calpine.com/
CAREGROUP INC: S&P Affirms BB Underlying Rating on Revenue Bonds
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook to
positive from negative on Massachusetts Health and Educational
Facilities Authority's $317.65 million series 1998A and B revenue
bonds issued on behalf of CareGroup Inc., Mass. In addition,
Standard & Poor's affirmed its 'BB' underlying rating (SPUR) on
the bonds.
The series 1998A and B bonds are secured by a joint and several
obligation pledge of the obligated group, which includes Beth
Israel Deaconess Medical Center, New England Baptist Hospital, Mt.
Auburn Hospital, BIDMC's Needham campus (formerly known as
Deaconess Glover Hospital), certain physician entities, and the
corporate parent, CareGroup.
The series 1998 bonds and other outstanding CareGroup bonds also
carry 'AAA' ratings based on bond insurance policies from MBIA and
AMBAC.
"The outlook revision to positive from negative reflects
CareGroup's meaningful progress on multiple fronts in recovering
from a series of financial and operating problems that peaked in
2000," said Standard & Poor's credit analyst Martin Arrick. "The
progress includes a strong first quarter for fiscal 2004, debt
reductions, sharply reduced operating losses (after excluding
discontinued operations charges and gains on sale of real estate),
improved cash flow, debt service coverage, and liquidity," he
added.
CareGroup's SPUR reflects its maintenance of a sound business
position as Boston's second largest provider and modest growth in
patient volumes in fiscal 2003 combined with solid growth in the
first quarter of the current year, reflecting improved physician
recruitment and retention, especially in key surgical services.
Additional credit factors include pruning of underperforming or
nonstrategic assets; a substantial reduction in debt and maximum
annual debt service, though a large bullet maturity remains in
2028; and an improved financial profile for the system.
Concerns include dependence on onetime items to bolster
performance in fiscal 2003, though this is tempered by a very
strong first quarter in the current fiscal year. In addition, a
growing shortfall in the state's uncompensated care pool is an
ongoing concern.
The board of directors and senior management of BIDMC have adopted
a strategic plan that sets solid financial targets, including the
goal of achieving a sustained operating margin of 4% within the
next three years with no deterioration of the balance sheet. The
plan also contemplates improved liquidity in conjunction with new
philanthropy and a goal to raise $100 million by fiscal 2008.
CareGroup's capital spending is currently constrained, especially
at BIDMC, by its limited ability to issue additional debt combined
with weak cash flow during the last few years.
In the last few years, management's ability to tightly control
capital spending has been viewed positively as has the overall
debt reduction plan. However, in the longer term, CareGroup must
continue to improve cash flow to avoid constraining capital
spending. If capital remains constrained, it will over time,
become a negative competitive issue hurting CareGroup's
recruitment ability and business position.
CATOOSA CORPORATION: Case Summary & Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: The Catoosa Corporation
dba Forest Rug Mills
2418 Cleveland Highway
Dalton, Georgia 30721
Bankruptcy Case No.: 04-40167
Type of Business: The Debtor manufactures broadloom carpets.
Chapter 11 Petition Date: January 14, 2004
Court: Northern District of Georgia (Rome)
Judge: C. Ray Mullins
Debtor's Counsel: Todd E. Hennings, Esq.
William A. Rountree, Esq.
Macey, Wilensky, Cohen, et al.
Suite 600 Marquis Two Tower
285 Peachtree Center Avenue, North East
Atlanta, GA 30303-1229
Tel: 404-584-1222
Fax: 404-681-4355
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
The Bradley Factor, Inc. Trade Debt $950,782
555 North Ocoee Street
P.O. Box 698
Cleveland, TN 37364-0698
G.M.C. Associates Carpet Vendor $229,670
Parker's Carpet, Inc. Carpet Vendor $146,590
John Hight Carpet Vendor $94,562
Castle Carpet Carpet Vendor $50,051
Bill Porter Carpet Vendor $47,502
Bill Porter Trade Debt $47,502
Richard Finley Travel Expense $31,033
Michael's Carpet Carpet Vendor $28,998
BB&T Insurance General Liability & $27,500
W/C Premiums
The Dixie Group, Inc. Previous Building $23,884
Transplace - Lowell, AR Freight $21,874
Progressive Floors, Inc. Carpet Vendor $20,473
Virtual Sales Group Corp. Carpet Vendor $19,829
Richmond Fringe Co. Product Supplies $19,603
Express Sales Carpet Vendor $18,904
Dennis Parker Carpet Vendor $9,341
Sundance Carpets Carpet Vendor $9,269
Citicapital Commercial Corp. Freight $7,600
Barrett Properties Current Building $10,000
Lease
CLEARLY CANADIAN: Taps Dundee Securities to Broker Equity Offering
------------------------------------------------------------------
CLEARLY CANADIAN BEVERAGE CORPORATION (TSX: CLV; OTCBB: CCBC)
engaged Dundee Securities Corporation with respect to an equity
offering of up to Cdn$8 million, with an over-allotment option for
an additional Cdn$1 million, and a secured bridge loan of not less
than Cdn$2 million.
Dundee Securities, a leading independent brokerage firm, has
agreed to act as the Company's selling agent in connection with a
prospectus offering of units, raising up to Cdn$9 million. Each
unit will consist of one common share of the Company and one-half
of a share purchase warrant with each whole warrant entitling its
holder to purchase one additional common share of the Company.
The issue price of the units and the exercise price of the
warrants will be set when the Company files its prospectus.
Dundee Securities will be paid a cash commission of 7.0% of the
gross proceeds raised in connection with the offering and will
receive broker warrants entitling it to purchase common shares of
the Company in an amount equal to 7.0% of the number of units
sold. Such broker warrants will be exercisable at a price per
share to be determined in accordance with the rules of the
Toronto Stock Exchange. A portion of the net proceeds of the
offering will be used to repay a bridge loan to be arranged by
Dundee Securities. The remaining net proceeds of the offering
will be used primarily for general working capital to fund the
production, marketing and distribution of the Company's beverage
products.
Dundee Securities has also agreed to use its best efforts to
arrange a bridge loan for the Company in an amount of not less
than Cdn$2 million. Dundee Securities will receive a 7.0% cash
fee for arranging the loan and will receive 250,000 broker
warrants, each of which will entitle Dundee Securities to
purchase one common share of the Company at an exercise price to
be determined in accordance with the rules of the Toronto Stock
Exchange. The net proceeds of the bridge loan will be used for
general working capital.
Each financing remains subject to regulatory approval.
"We are pleased to have engaged a prestigious national firm such
as Dundee Securities to lead our public financing. Completion of
this public financing will assist Clearly Canadian in continuing
with its business plan, including national consumer sweepstakes,
strong tactical regional sales programs designed to drive sales,
supported by a substantially improved distribution system in
North America," said Douglas L. Mason, President and C.E.O. of
Clearly Canadian Beverage Corporation.
Based in Vancouver, B.C., Clearly Canadian markets premium
alternative beverages and products, including Clearly Canadian(R)
sparkling flavored water, Clearly Canadian O+2(R) and Tre
Limone(R) which are distributed in the United States, Canada and
various other countries. Additional information on Clearly
Canadian may be obtained on the world wide web at www.clearly.ca.
At Sept. 30, 2003, Clearly Canadian's balance sheet reports a
working capital deficit of about $1.3 million.
COMMSCOPE INC: Plans to Release Q4 2003 Results on February 19
--------------------------------------------------------------
CommScope, Inc. (NYSE: CTV) plans to release its fourth quarter
2003 financial results at 4:00 p.m. on Thursday, February 19,
followed by a 5:00 p.m. ET conference call. You are invited to
listen to the conference call or live webcast with Frank Drendel,
Chairman and CEO; Brian Garrett, President and COO; and Jearld
Leonhardt, Executive Vice President and CFO.
To participate in the conference call, domestic and international
callers should dial 706-679-4510. Please plan to dial in 10-15
minutes before the start of the call to facilitate a timely
connection. The live, listen-only audio of the conference call
will also be available via the Internet at:
http://www.firstcallevents.com/service/ajwz398191823gf12.html
If you are unable to participate on the call and would like to
hear a replay, you may dial 800-633-8284. International callers
should dial 402-977-9140 for the replay. The replay ID is
21183524. The replay will be available through Tuesday, February
24. A webcast replay will also be archived for a limited period of
time following the conference call via the Internet on CommScope's
web site ( http://www.commscope.com).
CommScope (NYSE: CTV)( http://www.commscope.com) (S&P, BB
Corporate Credit & B+ Subordinated Debt Ratings, Stable) is a
world leader in the design and manufacture of 'last mile' cable
and connectivity solutions for communication networks. We are the
global leader in structured cabling systems for business
enterprise applications and the world's largest manufacturer of
coaxial cable for Hybrid Fiber Coaxial (HFC) applications. Backed
by strong research and development, CommScope combines technical
expertise and proprietary technology with global manufacturing
capability to provide customers with high-performance wired or
wireless cabling solutions from the central office to the home.
CWMBS INC: Fitch Takes Various Rating Actions on 8 Securitizations
------------------------------------------------------------------
Fitch has taken rating actions on the following CWMBS (IndyMac)
Inc.'s mortgage pass-through certificates:
CWMBS (IndyMac) mortgage pass-through certificates, series 1995-I:
-- Class B1 affirmed at 'AAA';
-- Class B2 affirmed at 'AAA';
-- Class B3 affirmed at 'A';
-- Class B4 remains at 'C'.
CWMBS (IndyMac) 1999-E (RAST 1999-A5) mortgage pass-through
certificates, series 1999-E:
-- Class A affirmed at 'AAA';
-- Class B1 affirmed at 'AAA';
-- Class B2 affirmed at 'AA';
-- Class B3 affirmed at 'BBB';
-- Class B4, rated 'BB', placed on Rating Watch Negative;
-- Class B5 downgraded to 'C' from 'CCC'.
CWMBS (IndyMac) 1999-F (RAST 1999-A6) mortgage pass-through
certificates, series 1999-F:
-- Class CB-NB affirmed at 'AAA';
-- Class B1 affirmed at 'AAA';
-- Class B2 affirmed at 'A';
-- Class B3 affirmed at 'BBB';
-- Class B4 affirmed at 'BB';
-- Class B5 remains at 'C'.
CWMBS (IndyMac) 1999-I (RAST 1999-A9) mortgage pass-through
certificates, series 1999-I:
-- Class CB-NB affirmed at 'AAA';
-- Class B1 affirmed at 'AA';
-- Class B2 affirmed at 'A';
-- Class B3 affirmed at 'BBB';
-- Class B4 downgraded to 'C' from 'CCC';
-- Class B5 downgraded to 'D' from 'C'.
CWMBS (IndyMac) 2000-A (RAST 2000-A1) mortgage pass-through
certificates, series 2000-A:
-- Class CB-NB affirmed at 'AAA';
-- Class B1 affirmed at 'AAA';
-- Class B2 affirmed at 'A';
-- Class B3 downgraded to 'BB-' from 'BBB' and removed
from Rating Watch Negative;
-- Class B4 downgraded to 'C' from 'CCC';
-- Class B5 downgraded to 'D' from 'C'.
CWMBS (IndyMac) 2000-B (RAST 2000-A2) mortgage pass-through
certificates, series 2000-B:
-- Class CB-NB affirmed at 'AAA';
-- Class B1 affirmed at 'AAA';
-- Class B2 affirmed at 'A';
-- Class B3 affirmed at 'B';
-- Class B4 remains at 'C'.
CWMBS (IndyMac) 2000-C (RAST 2000-A3) mortgage pass-through
certificates, series 2000-C:
-- Class A affirmed at 'AAA';
-- Class B1 affirmed at 'AA';
-- Class B2 affirmed at 'A';
-- Class B3 downgraded to 'BB' from 'BBB';
-- Class B4 downgraded to 'C' from 'CCC'.
CWMBS (IndyMac) 2000-G (RAST 2000-A7) mortgage pass-through
certificates, series 2000-G:
-- Class A affirmed at 'AAA';
-- Class B1 affirmed at 'AA';
-- Class B2 affirmed at 'A';
-- Class B3 downgraded to 'B' from 'BB';
-- Class B4 downgraded to 'C' from 'CC'.
These actions are taken due to the level of losses incurred and
the high delinquencies in relation to the applicable credit
support levels as of the Jan. 25, 2004 distribution. All the
mortgage loans are being serviced by IndyMac Bank with the
exception of CWMBS (IndyMac) 1999-E (RAST 1999-A5), for which PNC
Mortgage Securities Corp. is the master servicer.
DELTA AIR LINES: Closes Sale of $325MM Convertible Senior Notes
---------------------------------------------------------------
Delta Air Lines (NYSE: DAL) announced that it has completed a
private placement of $325 million aggregate principal amount of 2-
7/8 percent Convertible Senior Notes due 2024, issued to a
qualified institutional buyer pursuant to Rule 144A under the
Securities Act of 1933, as amended.
The net proceeds from the offering were made available for general
corporate purposes.
Delta has granted the initial purchaser of the notes a 30-day
option to purchase up to an additional $65 million principal
amount of the notes.
Interest on the notes will be 2-7/8 percent per $1,000 principal
amount and will be payable in cash in arrears semi-annually
through Feb. 18, 2024. Each note will be convertible into Delta
common stock at a conversion rate of 73.6106 shares per $1,000
principal amount of notes (subject to adjustment in certain
circumstances), which is equivalent to a conversion price of
approximately $13.59 per share of Delta common stock. Holders of
the notes may convert their notes only if (i) the price of Delta's
common stock reaches a specified threshold; (ii) the trading price
for the notes falls below certain thresholds; (iii) the notes have
been called for redemption; or (iv) specified corporate
transactions occur.
Delta may redeem all or some of the notes for cash at any time on
or after Feb. 21, 2009, at a redemption price equal to the
principal amount of the notes plus any accrued and unpaid interest
to the redemption date. Holders may require Delta to repurchase
the notes on Feb. 18 of 2009, 2014 and 2019, or in other specified
circumstances, at a repurchase price equal to the principal amount
due plus any accrued and unpaid interest to the repurchase date.
The notes being offered and the common stock issuable upon
conversion of the notes have not been registered under the
Securities Act, or any state securities laws, and unless so
registered, may not be offered or sold in the United States except
pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act and applicable
state securities laws.
DIRECTV: Asks Court Nod to Reject Corporate Headquarters' Lease
---------------------------------------------------------------
DirecTV Latin America, LLC's corporate headquarters is located at
2004 East Commercial Blvd. in Fort Lauderdale, Florida. The
Debtor leases its Headquarters from the California State
Teacher's Retirement System, through CB Richard Ellis.
Joel A. Waite, Esq., at Young, Conway, Stargatt & Taylor, LLP, in
Wilmington, Delaware, relates that in its current form, the
Headquarters Lease represents an unacceptable burden on the
Debtor's estate and should be rejected. Assumption of the
current Headquarters Lease would bind the estate for a five-year
term, during which period the Debtor expects to realize a
substantial cost saving when certain administrative and
operational functions can be relocated as business requires. In
reaching this conclusion, the Debtor considered the market for
alternative locations, together with the strong possibility that
some functions can be accommodated into another site presently
owned by News Corp.
Mr. Waite states that the Debtor attempted to restructure the
Headquarters Lease with the California State Teacher's Retirement
System, but the parties have failed to reach an agreement on the
terms, which would allow the Debtor the ability to terminate the
lease on reasonable terms should the anticipated relocation of
certain functions to other existing facilities occur. The Debtor
and the California State Teacher's Retirement System have to date
been unable to reach an agreement on revised terms for the
current space on terms acceptable to the Debtor.
The Debtor also determined that the Headquarters Lease has no
independent economic value to its estate, since the lease is at
current fair market rates. Mr. Waite notes that it is unlikely
that the Debtor could sublease excess space in such a manner as
to mitigate the costs to the estate.
Accordingly, the Debtor seeks the Court's authority to reject the
Headquarters Lease effective as of June 30, 2004.
Mr. Waite recalls that on December 22, 2003, General Motors
Corporation, Hughes Electronics Corporation and News Corp.
completed a series of transactions that resulted in a split-off
of Hughes from General Motors and News Corp.'s acquisition of 34%
of Hughes' outstanding common stock. Under the Plan, Hughes will
acquire the majority equity stake in the Reorganized Debtor. The
completion of the transaction is expected to generate a number of
benefits, including better utilization of existing facilities.
Mr. Waite tells Judge Walsh that additional compelling facts
support the Debtor's decision to reject the Headquarters Lease.
The Debtor was unable to decide whether to accept or reject the
Headquarters Lease while the Hughes and News Corp. transaction
was pending. The Debtor has understood for several months that
the transaction could present an opportunity for it to relocate
some of its operations to a News Corp. location, but it could not
risk rejecting the Headquarters Lease until the Hughes and News
Corp. transaction was finalized. Fortunately, the closing of the
Hughes and News Corp. transaction has substantially improved the
Debtor's prospects for obtaining improved lease terms for new
space at other locations. Subsequently, the Debtor believes that
it will be able to relocate its operations at the current
Headquarters on or before the Rejection Date to locations that
offer the requisite flexibility to accommodate changing space
requirements.
Moreover, the nature of the Debtor's satellite communications
business makes it difficult to feasibly relocate its headquarters
before the Rejection Date. The Debtor's business consists of
heavy or complex equipment, which is currently fixed or otherwise
attached to the headquarters and cannot be easily moved in a
short period of time. The equipment is critical to the Debtor's
ongoing business operations. The Debtor is also unable to delay
its confirmation hearing or the Plan Effective Date as a result
of fixed termination dates in several key restructured
programming agreements. Mr. Waite, therefore, contends that
absent the Court's approval of the prospective Rejection Date,
the Debtor will be unable to reject the Headquarters Lease and
will be required to remain in its current headquarters for the
remainder of the lease term.
Mr. White contends that the California State Teacher's Retirement
System will not be prejudiced by the proposed Rejection Date.
The Debtor has performed and will continue to perform in a timely
manner its postpetition obligations under the Headquarters Lease
for each month it remains in possession of the property.
Furthermore, the Debtor will not occupy the headquarters location
after June 30, 2004. Additional time for the Debtor to relocate
will also ensure that all heavy equipment is removed from the
property and that the headquarters is surrendered in accordance
with the lease terms. In addition, the Debtor has been advised
that other vacant space exists in the current premises and that
the California State Teacher's Retirement System is unlikely to
obtain a replacement tenant prepared to occupy the space
currently used by the Debtor before the proposed Rejection Date.
(DirecTV Latin America Bankruptcy News, Issue No. 19; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
DIXIE GROUP: S&P Affirms & Removes Low-B Ratings from Watch
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit and 'B-' subordinated debt ratings on carpet and rug
manufacturer The Dixie Group Inc. The ratings have been removed
from CreditWatch, where they were placed Sept. 5, 2003.
The rating affirmation reflects the company's improved business
and financial profile, including its reduction in debt after
selling certain non-core assets to Shaw Industries Group Inc. on
Nov. 12, 2003. The divested assets include its factory-built
housing, needlebond, and carpet recycling businesses. Using a
significant portion of net proceeds from the transaction, the
company reduced its debt balances to approximately $60 million,
from $205 million at September 2003.
The outlook on Calhoun, Georgia-based Dixie Group is positive.
Dixie is now a much smaller company (with about $250 million in
revenues) and is primarily focused on the premium-priced
residential and commercial segments of the carpet industry through
its Masland and Fabrica divisions. These higher-end segments have
historically been less sensitive to weak economic conditions, thus
Standard & Poor's expects them to contribute more stable revenue.
Nevertheless, they have also been hurt by the weak economy, and
their sales have remained relatively flat for the past several
years.
Dixie has recently introduced its Dixie Home line of carpets,
targeted toward the moderate segment of the residential carpet
industry. Based on positive market reaction to the line, Standard
& Poor's expects Dixie Home to be a major contributor to revenue
growth in fiscal 2004. Still, the operating environment remains
challenging because of the current weak economy and expected
higher raw material and operating costs.
"The ratings on the Dixie Group reflect its difficult operating
environment, as well as weak industry fundamentals, including
market fragmentation, intense competition, and the maturity of the
market," said Standard & Poor's credit analyst Susan Ding. These
factors are partially offset by the company's niche positions in
the high-end residential and commercial carpet segments, as well
as by the company's improved financial profile now that it has
reduced debt with proceeds from the sale of its non-core
businesses.
DJ ORTHOPEDICS: Plans to Launch Common Stock Public Offering
------------------------------------------------------------
dj Orthopedics, Inc., (NYSE: DJO), announced that it plans to
publicly offer 6,000,000 shares of its common stock. It expects
that the offering will consist of 2,750,000 shares to be offered
by dj Orthopedics and 3,250,000 shares to be offered by certain of
its stockholders. The offering will be made pursuant to the
Company's effective shelf registration statement previously filed
with the Securities and Exchange Commission. dj Orthopedics
further expects that the Company and one of the selling
stockholders will grant an over allotment option to the
underwriters for the offering of up to 900,000 shares. J.P.
Morgan Securities Inc. and Lehman Brothers Inc. will act as joint
book-running managers for the proposed offering. Co-managers of
the offering are Piper Jaffray & Co., Wachovia Capital Markets,
LLC, First Albany Capital Inc. and WR Hambrecht + Co, LLC.
dj Orthopedics is a global medical device company specializing in
rehabilitation and regeneration products for the non-operative
orthopedic and spine markets. The Company's broad range of over
600 rehabilitation products, including rigid knee braces, soft
goods and pain management products, are used in the prevention of
injury, in the treatment of chronic conditions and for recovery
after surgery or injury. The Company's regeneration products
consist of bone growth stimulation devices that are used to treat
nonunion fractures and as an adjunct therapy after spinal fusion
surgery.
The Company sells its products in the United States and in more
than 30 other countries through networks of agents, distributors
and its direct sales force that market its products to orthopedic
and podiatric surgeons, spine surgeons, orthopedic and prosthetic
centers, third-party distributors, hospitals, surgery centers,
physical therapists, athletic trainers and other healthcare
professionals. For additional information on the Company, please
visit http://www.djortho.com/
* * *
As reported in the Troubled Company Reporter's October 13, 2003
edition, Standard & Poor's Ratings Services assigned its 'B+'
senior secured debt rating to dj Orthopedics Inc.'s proposed $130
million credit facility, consisting of a $105 million term loan
and a $25 million revolving credit facility maturing in 2008 and
2009, respectively. Standard & Poor's also affirmed its 'B+'
corporate credit and 'B-' subordinated debt ratings on the
company.
At the same time, Moody's Investors Service placed these ratings
of dj Orthopedics, LLC on review for possible downgrade:
- Senior implied rating of B1;
- Issuer rating of B2;
- B1 rating on the $15.5 million guaranteed senior secured
term loan due 06/30/2005;
- B1 rating on the $25 million guaranteed senior secured
revolving credit loan due 06/30/2005; and
- B3 rating on the $75 million 12.625% guaranteed senior
subordinated global notes due 06/15/2009.
Moody's cited that the review is prompted by the increase in debt
associated with the company's acquisition of the bone growth
stimulator assets of OrthoLogic Corporation. Dj Orthopedics plans
to finance the acquisition with senior bank debt.
DRIVEN IMAGE INC: Case Summary & 25 Largest Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: Driven Image Incorporated
2236 Park Place Suite B
Minden, Nevada 89423
Bankruptcy Case No.: 04-50248
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Driven Image of New England 04-50257
Type of Business: The Debtor operates car rentals.
Chapter 11 Petition Date: February 5, 2004
Court: District of Nevada (Reno)
Judge: Gregg W. Zive
Debtors' Counsel: Alan R. Smith, Esq.
505 Ridge Street
Reno, NV 89501
Tel: 775-786-4579
Estimated Assets Estimated Debts
---------------- ---------------
Driven Image Incorporated $1 M to $10 M $1 M to $10 M
Driven Image of New England $1 M to $10 M $500,000 to $1 M
A. Driven Image Incorporated's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Bank of America Auto Payment $6,145,885
300 South Fourth St, 3rd fl
Las Vegas, NV 89101
ISU Stetson Bemmer Insurance Insurance Premium $121,348
Kirkland & Ellis, LLP Attorney fees $98,084
Adriatic Insurance Co. Goods and services $54,799
DuPont Registry $33,180
Robley Christensen Wolfe Advertising $31,601
B. Hannah LLC Advertising $27,000
ezrent.com Advertising $23,000
Board of Equilization Fees $21,743
Hartle Media Ventures Advertising $17,370
KNBR Radio Advertising $17,300
Clear Channel Outdoor Advertising $16,000
FX Sports Group, Inc. Advertising $15,360
Air IQ Goods and services $15,359
Florida Sales & Use $15,167
Time Out New York Advertising $13,431
San Francisco Business Times Advertising $13,299
Crain Communications, Inc. Advertising $12,056
SBC Yellow Pages Advertising $11,361
Yellow Book USA Advertising $9,259
B. Driven Image of New England's 5 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Manhattan Marketing Ensemble Advertising $292,257
443 Park Avenue South
New York, NY 10016
New York Taxation Sales Tax $95,406
Central Parking Systems Rent in Arrears $73,920
Philadelphia Insurance Co. Insurance premium $50,000
ADT New York Security system $1,678
EL PASO CORP: Schedules Q4 2003 Earnings Webcast for March 11
-------------------------------------------------------------
El Paso Corporation (NYSE: EP) plans to release its fourth quarter
2003 earnings results before the market opens on March 11, 2004.
The company has scheduled a live webcast at 10:00 a.m. Eastern
Time that morning to discuss earnings results. The webcast may
be accessed online through our website at http://www.elpaso.comin
the Investors section. Materials related to the webcast and the
fourth quarter earnings will be available in the same section of
our website thirty minutes prior to the start of the webcast. A
limited number of telephone lines will also be available to
participants by dialing (303) 262-2190 ten minutes prior to the
start of the webcast.
A replay of the webcast will be available online through our
website in the Investors section. A telephone audio replay will
be also available through March 18, 2004, by dialing (303) 590-
3000 (access code 570020#). If you have any questions regarding
this procedure, please contact Margie Fox at (713) 420-2903.
El Paso Corporation's (S&P, B Corporate Credit Rating, Negative
Outlook) purpose is to provide natural gas and related energy
products in a safe, efficient, dependable manner. The company
owns North America's largest natural gas pipeline system and one
of North America's largest independent natural gas producers. For
more information, visit http://www.elpaso.com/
ENRON: Cabazon Power Unit Wants Okay to Disburse FPL Sale Proceeds
------------------------------------------------------------------
Through an auction, Cabazon Power Partners LLC sold its Cabazon
Project to FPL Energy Cabazon Wind LLC, which the Court approved
on December 4, 2003. Martin A. Sosland, Esq., at Weil, Gotshal &
Manges LLP, in New York, notes that the Sale Order provides that
except to certain required amounts, all proceeds Cabazon received
in connection with the contemplated transactions by the Cabazon
Asset Purchase Agreement will be retained by Cabazon and will
neither by disbursed nor used until further Court order.
Mr. Sosland recalls that Cabazon also entered into the Herling
Settlement Agreement, which the Court approved, wherein Cabazon,
inter alia, agreed to pay the Herling Parties $2,900,000 to
resolve certain disputes between them. As a condition to the
closing of the Herling Settlement Agreement, all amounts payable
to Fortis Bank S.A./N.V., UK Branch relating to a loan to Cabazon
secured by its assets will have been paid. As of December 9,
2003, the Fortis Secured Claim is about $20,000,000.
Cabazon is authorized to make the Herling Settlement Payment to
the Herling Parties. According to Mr. Sosland, Cabazon intends
to use a portion of the Sale Proceeds to make that Herling
Settlement Payment.
In light of the ambiguity between the Sale Order, which restricts
its use of the Sale Proceeds and the Herling Settlement Order,
Cabazon seeks the Court's authority to pay the Herling Settlement
Payment to the Herling Parties out of the Sale Proceeds. In
addition, since the terms of the Herling Settlement Agreement
required it to satisfy the Fortis Secured Clam prior to closing,
Cabazon asks the Court to allow its use of a portion of the Sale
Proceeds to satisfy the Fortis Secured Claim.
Mr. Sosland argues that pursuant to Sections 105 and 363 of the
Bankruptcy Code, the request should be granted because it will
facilitate the closing of the Herling Settlement Agreement and
the closing of the sale of the Cabazon Project to FPL Cabazon.
(Enron Bankruptcy News, Issue No. 97; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ENRON CORP: Proposes to Enter into Equistar Settlement Agreement
----------------------------------------------------------------
Pursuant to Section 363 of the Bankruptcy Code and Rule 9019 of
the Federal Rules of Bankruptcy Procedure, Enron Corporation and
Enron Gas Liquids, Inc., ask the Court to:
(i) approve their Settlement Agreement and Mutual Release with
Equistar Chemicals LP;
(ii) authorize EGLI to terminate certain contracts;
(iii) authorize EGLI to sell 1,584,744 gallons of natural
gasoline inventory to Equistar free and clear of all
liens, claims and encumbrances;
(iv) authorize the termination of a guarantee from Enron in
favor of Equistar; and
(v) authorize EGLI to enter into a mutual release of all
claims, obligations and liabilities under a stipulation.
Melanie Gray, Esq., at Weil, Gotshal & Manges LLP, in New York,
relates that prior to the Petition Date, EGLI and Equistar were
parties to various contracts, including:
* Purity Propane Sale/Purchase Agreement dated April 9, 1990
between Enron Gas Liquids, Inc. and Equistar Chemical, LP,
assignee of Quantum Chemical Corporation, USI Division;
* Second Amended Exchange Agreement dated February 1, 2000
between Enron Gas Liquids, Inc. and Equistar Chemicals, LP
incorporating Enron Clean Fuels Company's General Terms and
Conditions;
* Confirmation dated August 15, 2001 between Enron Gas
Liquids, Inc. and Equistar Chemicals, LP.;
* Service Agreement No. 153295-L dated September 5, 1995
between Enron Gas Liquids, Inc. and Equistar Chemicals, LP,
successor-in-interest to Lyondell Petrochemical Co.;
* Equistar Demurrage Invoice No. 9057326 dated August 20,
2001 in the amount of $495;
* Equistar Demurrage Invoice No. 9050840 dated August 22,
2001 in the amount of $1,472; and
* Equistar Demurrage Invoice No. 90050842 dated August 22,
2001 in the amount of $1,609.
In addition, Enron executed a Guaranty for the benefit of
Equistar dated April 10, 2001, limited to $7,000,000.
Pursuant to Service Agreement No. 153295-L, Equistar leased
storage capacity at EGLI's storage facility in Mont Belview,
Texas to store natural gasoline. On November 29, 2001, Equistar
withdrew all of its inventory of natural gasoline held at the
Facility plus overdraw an additional 1,584,744 gallons of natural
gasoline that belonged to EGLI.
On October 10, 2002, Equistar filed Claim No. 8018 for $258,925
for unpaid amounts under certain of the Contracts.
Ms. Gray informs Judge Gonzalez that EGLI and Equistar agreed to
enter into the Settlement Agreement to:
-- terminate the Contracts;
-- revoke the Guaranty;
-- settle the claims arising from the overdraw of the
Inventory and the Contracts;
-- transfer the Inventory to Equistar free and clear of all
liens; and
-- enter into a mutual release of claims relating to the
Contracts.
In return, Equistar will:
(i) pay EGLI $990,588; and
(ii) withdraw all of its claims filed in the Debtors' cases.
Ms. Gray explains that given the fact that EGLI has ceased
trading in natural gas liquids, the Settlement will monetize the
value of its Inventory for the estate. Moreover, all issues are
resolved without litigation, which may cost the Debtors
unnecessary expense. Ms. Gray assures the Court that the
Settlement Agreement is a product of arm's-length bargaining
between EGLI and Equistar. (Enron Bankruptcy News, Issue No. 97;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ENVOY: Files Preliminary Prospectus for Stock & Warrant Offerings
-----------------------------------------------------------------
Envoy Communications Group Inc. (TSX: ECG; NASDAQ: ECGI) of
Toronto filed with the securities regulatory authorities of
British Columbia, Alberta, Manitoba, Ontario, New Brunswick and
Prince Edward Island, a preliminary short form prospectus
qualifying the distribution in such provinces of units comprised
of common shares of Envoy and common share purchase warrants.
Envoy expects the offering to be at least CAD$10 million.
In connection with the distribution, Envoy will appoint Canaccord
Capital Corporation as its agent to offer Units for sale on a
"best efforts basis". This transaction is subject to certain
conditions including normal regulatory approvals. Closing is
anticipated to occur in late February, 2004. The proceeds will be
used to repay, subject to negotiation with certain lenders, all of
Envoy's outstanding loan indebtedness, with the balance to be used
for possible future acquisitions and for general corporate and
working capital purposes.
"We are very excited about this opportunity to continue to
strengthen our balance sheet and raise additional capital for our
M&A activity. This event is an important milestone, enabling Envoy
to eliminate its outstanding loan obligations and to realize a
significant reduction in loan interest expense in the future. This
transaction represents another major step in management's effort
to build shareholder value," said Geoffrey Genovese, CEO, Envoy
Communications.
Envoy Communications Group (NASDAQ: ECGI/TSX:ECG) is a marketing
and international consumer and retail branding company with
offices throughout North America and Europe. Combining strategy,
creativity and innovation, Envoy's interconnected network of
companies delivers business-building solutions to over 200 leading
global brands and has successfully completed assignments in more
than 40 countries around the world.
The company's September 30, 2003, balance sheet reports a working
capital deficit of about CDN$2 Million.
ERICO INT'L: S&P Rates Credit & Sr. Sub. Note Ratings at B+/B-
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to ERICO International Corp. At the same time
Standard & Poor's assigned its 'B-' rating to the company's
proposed offering of $135 million senior subordinated notes due
2012 (under Rule 144A with registration rights).
The proceeds will be used to refinance existing debt. The outlook
is positive.
Solon, Ohio-based ERICO is a leading designer, manufacturer, and
marketer of precision-engineered specialty metal products serving
global niche markets in a diverse range of electrical, industrial
and commercial construction, utility and rail applications. It
will have about $170 million in debt outstanding when the deal
closes in February.
"If the company can demonstrate that it can increase the business,
maintain financial and acquisition discipline, and generate credit
measures that surpass those factored into the current ratings on a
sustained basis, ratings could be raised, said Standard & Poor's
credit analyst John Sico.
The company's strategy for growth includes new product innovation,
continued expansion of product lines, and geographic coverage.
ERICO is also expected to increase operational efficiency and to
make selective, small, tuck-in acquisitions.
EVANS BAKERY INC: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Evans Bakery Inc.
500 West Second
P.O. Box 249
Cozad, Nebraska 69130
Bankruptcy Case No.: 04-40259
Type of Business: The Debtor is a manufacturer of quality frozen
dough products, offering a wide variety of
bread, bun and donut products in the raw
state. Evans is a regional supplier to
warehouses and distributors that supply the
supermarket and food service industry.
See http://www.evansbakery.com/
Chapter 11 Petition Date: January 26, 2004
Court: District of Nebraska (Lincoln Office)
Judge: Timothy J. Mahoney
Debtor's Counsel: P. Stephen Potter, Esq.
P.O. Box 348
822 Lake Avenue
Gothenburg, NE 69138
Tel: 308-537-7119
Fax: 308-537-7110
Total Assets: $1,521,660
Total Debts: $2,010,432
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
First National Bank 00002317 All of $845,705
addition (4.81) Evans
Addition Card #2317
Midwest Marketing & 00002317 All of $423,939
Management addition (4.81) Evans
c/o Bank of Stapleton Addition Card #2317
324 Main Street
Stapleton, NE 69163
Ruan Leasing $192,185
Internal Revenue Service Form 941 $146,134
Dawson County Treasurer 00002317 All of $44,566
Addition (4.81) Evans
Addition Card #2317
Roland Lauer taxes $38,293
Principal Insurance $24,708
Skyview Transportation, Inc. $24,205
Amana Society Bakery $23,872
Stone Container Corporation $22,934
FirstComp $20,965
Nebraska Department of $17,219
Revenue
Horizon Milling, LLC $17,207
Hale Halsell Commissions $11,860
Fleishman's Yeast $11,686
Dawson County Treasurer Personal Property $11,412
Taxes - billed to
Evans Bakery, Inc.
Affiliated Foods Midwest Commissions $10,706
Rich Products Corp $10,414
NMHG Financial Services, Forklift $10,299
Inc.
Best Brand, Inc. $9,564
FACTORY 2-U: Seeks Okay to Hire Young Conaway as Attorneys
----------------------------------------------------------
Factory 2-U Stores, Inc., seeks authority from the U.S. Bankruptcy
Court for the District of Delaware to retain and employ Young
Conaway Stargatt & Taylor, LLP as its attorneys in its chapter 11
case.
The Debtor will compensate Young Conaway at its current hourly
rates. The professionals designed to represent the Debtor in this
retention and their current hourly rates are:
Robert S. Brady, Esq. $435 per hour
M. Blake Cleary, Esq. $345 per hour
Kara S. Hammond, Esq. $200 per hour
Marnie Powell -- Paralegal $120 per hour
Young Conaway is expected to:
a) provide legal advice with respect to its powers and
duties as a debtor in possession in the continued
operation of its business and management of its
property;
b) negotiate, prepare and pursue confirmation of a plan and
approval of a disclosure statement, and all related
reorganization agreements and/or documents;
c) prepare on behalf of the Debtor necessary applications,
motions, answers, orders, reports, and other legal
papers;
d) appear in Court and to protect the interests of the
Debtor before the Court; and
e) perform all other legal services for the Debtor which
may be necessary and proper in these proceedings.
Headquartered in San Diego, California, Factory 2-U Stores, Inc.
-- http://www.factory2-u.com/-- operates a chain of off-price
retail apparel and housewares stores in 10 states, mostly in the
western and southwestern United States, selling branded casual
apparel for the family, as well as selected domestics, footwear,
and toys and household merchandise. The Company filed for chapter
11 protection on January 13, 2004 (Bankr. Del. Case No. 04-10111).
When the Debtors filed for protection from their creditors, they
listed $136,485,000 in total assets and $73,536,000 in total
debts.
FERNANDO DELGADO: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Fernando A. Delgado
aka Fernando Delgado, Inc.
2627 Pot Spring Road
Timonium, Maryland 21093
Bankruptcy Case No.: 04-11775
Chapter 11 Petition Date: January 26, 2004
Court: District of Maryland (Baltimore)
Judge: E. Stephen Derby
Debtor's Counsel: Robert B. Greenwalt, Esq.
Greenwalt & Sigler
2926 East Cold Spring Lane
Baltimore, MD 21214
Tel: 410-426-1690
Estimated Assets: $500,000 to $1 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
MBNA $60,521
Jorge & Martha Canelos $55,000
Key Bank $53,273
FFELP $21,600
Bank Card Services $18,138
Chase $16,319
Heine & Hermann, PA $13,371
First USA $12,901
Baltimore Gas & Electric $9,817
WF Finance $9,552
Discover Card $9,130
Duke University $8,318
Home Depot $8,201
Lowes $7,425
Schepf Company Builders $7,333
Fireliness LLC $7,300
Reisterstown Lumber Company $6,148
J Dingus $4,700
Cedar Brook Construction $4,500
Citibank $4,236
FIRST AMERICAN CORP: S&P Affirms BB+ Preferred Stock Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BBB' counterparty
credit and senior debt ratings and 'BB+' preferred stock ratings
on insurance holding company First American Corp. (NYSE:FAF).
In addition, Standard & Poor's also affirmed its 'A-' counterparty
credit and financial strength ratings on First American Corp.'s
main operating subsidiary First American Title Insurance Co. and
revised its outlook on all the ratings to positive from stable.
"FATICO's rating reflects its solid business position in the
domestic U.S. title insurance industry," said Standard & Poor's
credit analyst Donovan Fraser. "In addition, FAF's holding company
senior debt rating reflects FATICO's financial strength rating as
well as FAF's source of unrestricted dividend capacity from its
nontitle operations."
Standard & Poor's expects that improvements in operating
efficiencies driven by reduced overhead and the company's
investments in technology, will allow FATICO to continue to
produce a title marginA-title pretax operating income to total
title revenueA-of 9% or better in 2004. Furthermore, Standard &
Poor's expects that FAF's expense and information technology
initiatives should lead to improved title margins throughout
interest rate cycles that have historically led to significant
margin reductions in a trough environment. In addition, Standard &
Poor's expects FATICO to maintain an expense ratio of less than
90% and a ROR in excess of 6% in 2004.
As FAF's core operating subsidiary, FATICO maintained its No. 2
position with a 22.5% national market share based on 2002 direct
title writings. Standard & Poor's considers FATICO (the main title
underwriter of the group) to be strategically important to FAF. In
the past five years, it has contributed about 72% of FAF's revenue
base.
FLEMING: Files PACA Claim Status Report & Reconciliation
--------------------------------------------------------
Fleming Companies, Inc., and its debtor-affiliates submit a
supplemental report regarding their ongoing reconciliation and
payment of claims under the Perishable Agricultural Commodities
Act and the Packers and Stockyards Act.
The Debtors report that they have reconciled $55,615,924.88 of
$56,400,924.65 of PACA claims asserted, for a 99% completion
percentage. Ten claims that make up the $784,999.77 balance
remain unreconciled. Three of these claims are in the final
reconciliation stage and are being reviewed by the Debtors'
central trade payables department to verify payment disputes.
These claims will be listed as reconciled on the next PACA
Report. The remaining seven unreconciled claims are claims for
which either the Debtors have not received documentation in
support of the claims, or have only recently received that
information and are in the process of analyzing it. Of the seven
unreconciled claims, those for which the Debtors have received
supporting documentation, and those for which the documentation
is received at least 10 days before the next Supplemental PACA
Report will be listed as reconciled on the next Supplemental PACA
Report. If the documentation in support of an unreconciled claim
is not received before the next Supplemental PACA Report, the
claim will be listed as PACA Ineligible on that report.
Therefore, following the next Supplemental PACA Report, all PACA
Claims will have been reconciled.
According to Christopher J. Lhulier, Esq., at Pachulski Stang
Ziehl Young Jones & Weintraub PC in Wilmington, Delaware, the
Debtors will provide all claimants that hold a claim, or a
portion of a claim, that is listed as "PACA Ineligible" with a
detailed report setting forth the basis for that listing. The
Debtors propose that the report be discussed in a conference with
any claimant that disputes the position they have taken in the
report.
Given that they are nearing the end of the reconciliation
process, the Debtors propose that the best method to fully and
finally reconcile all remaining open claims or portions of
claims, or to narrow remaining issues, is for them and the
applicable claimant or their counsel to discuss, either in person
or telephonically, all open or unresolved issues. Conferences
may be scheduled by e-mail sent to SKotarba@kirkland.com The
Debtors promise that a conference will be arranged at the soonest
available and convenient date.
No Need to Object
Even though the PACA Order provides that a PACA claimant, which
disputes the treatment of its claim as provided in the
Supplemental PACA Report, must file an objection to the treatment
within 20 calendar days, no claimant that has requested a
conference will be affected by the objection deadline. Rather, A
PACA claimant must file an objection, if any, and unless
otherwise agreed to by the parties, within 20 calendar days of
the completion of the conference.
The Report
The PACA claims described in the Supplemental Report include:
PACA PACA
Claimant Eligible Ineligible Unreconciled
-------- -------- ---------- ------------
A&Z Produce $46,559 $3,853 0
A Duda & Sons 60,506 8,277 0
American Farms Prod. 106,493 106,493 0
Avomex Inc. 0 27,434 0
Bay Area Produce Inc. 165,906 8,382 0
Birds Eye Foods 723,225 39,935 0
Borg Produce/Pacific T. 589,717 46,793 0
C&C Produce 434,792 14,010 0
Caito Foods Service 835,616 44,559 0
Caldwell Enterprises 0 92,060 0
Capurro Marketing LLC 82,044 3,329 0
Castellini Company 15,655 7,484 0
Cavendish Farms 0 271,950 0
CH Robinson 4,743 0 22,062
Chiquita 548,326 0 0
Columbia Marketing 295,530 101,302 0
Crystal Farms Refry. 1,065,000 834,870 0
Del Monte Corp. 5,037 2,380,031 0
Del Monte Fresh Pro. 342,538 0 251,760
Del Rye Avocado 136,119 4,881 0
Dole Fresh Flowers 0 5,983 0
Dole Fresh Fruit 2,272,839 43,137 0
Dole Fresh Vegetables 664,218 34,423 0
Dole Paged Foods 0 534,052 0
Eggs Hawaii Inc. 0 178,262 0
Four Seasons 852,510 26,477 0
Fresh Express Inc. 1,192,741 0 0
Fresh Frozen Foods 79,355 40,118 0
Frio Valley Farms Inc. 218,400 33,098 0
Frontera Produce 74,720 0 0
Frozsun Foods 357,617 25,338 0
General Mills 557,812 235,445 0
General Produce 76,468 58,702 0
Gold'n Plump Farms 829,167 186,990 0
Growers Express 303,636 15,677 0
H Brooks 3,448,432 163,152 0
H P Nemenz Food 0 39,396 0
Ham Produce Co. Inc. 7,952 0 23,986
Hartley's Wholesale 71,872 40,329 0
Heinz Frozen Foods 144 1,116,147 0
JR Simplot Co. 8,952 184,892 0
Klement Sausage Co. 0 143,610 0
Larsen Farms Inc. 161,332 0 93,923
Manny Lawrence Sales 40,248 38,819 0
MarBran USA 115,629 0 18,755
Marigold Foods LLC 0 1,757,227 0
Maui Farmers Coop 0 19,162 0
McCain Foods 13,273 33,360 0
Melissa's World Variety 239,000 36,857 0
Miles Farmers' Market 0 0 187,493
Mr. Dell Foods 63,301 4,715 0
Mucci International 125,401 0 83,502
Nestle USA 8,505 2,220,923 0
NORPAC Foods 399,898 260,440 0
North Side Banana 0 26,689 0
Paramount Export 491,288 18,573 0
Pictsweet Frozen Foods 612,693 33,866 0
Potandon Produce 282,909 11,099 0
Produce Exchange 1,706,747 77,358 0
Produce Unlimited 20,080 934 0
RJ Distributing 249,177 10,730 0
Rosemont Farms 136,494 12,068 0
Sage Marketing 552,437 16,717 0
Sequoia Enterprises 0 5,926 0
Sierra Produce 454,253 24,255 0
Silver Springs Citrus 0 65,857 0
SPARBOE 56,223 167,718 20,049
Standard Fruit 768,893 0 80,742
Sugarland Dist. 169,114 13,587 0
Sunkist Growers 347,368 37,830 0
Taylor Farms 415,105 22,339 0
The Herbal Garden 5,184 85 0
The Honey House 0 7,580 0
Treasure Valley Sales 0 66,492 0
Twin City Foods 80,832 105,528 0
Wada Farms Marketing 72,796 21,584 0
Z&S Distributing 45,143 0 0
* * *
Silver Springs Citrus, Inc., objects to the proposed treatment of
its PACA claim. Kevin J. Mangan, Esq., at Monzack & Monaco PA in
Wilmington, Delaware, explains that Silver Springs submitted its
PACA claim to the Debtor by letter dated April 29, 2003.
Notwithstanding this, the Debtors list Silver Springs' claim for
$65,875 as PACA Ineligible. There is no explanation for this
listing in the Supplemental Report. Absent any explanation from
the Debtors as to the legal and factual basis for this position,
Silver Springs is precluded from forming a detailed reply.
However, Silver Springs is sure that its entire claim is PACA
eligible.
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. 24; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
FLOWSERVE: SEC Initiates Inquiry About Financial Restatement
------------------------------------------------------------
Flowserve Corp. (NYSE:FLS) Friday announced that the Securities
and Exchange Commission initiated an informal inquiry related to
the Feb. 3, 2004 announcement to restate its financial statements.
The company plans to fully cooperate with the commission's
inquiry.
Flowserve Corp. (S&P, BB- Corporate Credit Rating, Stable) is one
of the world's leading providers of industrial flow management
services. Operating in 56 countries, the company produces
engineered and industrial pumps for the process industries,
precision mechanical seals, automated and manual quarter-turn
valves, control valves and valve actuators, and provides a range
of related flow management services.
GENESCO INC: S&P Affirms & Revises Ratings' Outlook to Negative
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Genesco
Inc. to negative from stable. At the same time, Standard & Poor's
affirmed its outstanding ratings on the company, including the
'BB-' corporate credit rating.
The outlook revision follows Genesco's announcement that it has
signed a definitive agreement to acquire privately owned Hat
World, a specialty retailer of branded and licensed headwear, for
about $165 million. The acquisition will be largely debt funded,
with about $115 million in borrowings from a new credit facility
and about $50 million of cash on hand. The outlook change reflects
a material increase in debt leverage and the higher debt service
burden related to this acquisition. Pro forma for the transaction,
total debt to EBITDA is expected to increase to the mid 4x level,
which is weak for the current rating, from about 3.8x for the 12
months ended Nov. 1, 2003. In addition, increased capital spending
and working capital requirements are expected to diminish free
cash flow generation.
Although the acquisition of Hat World would somewhat diversify
Genesco's sources of earnings, the business risk of the combined
entity remains high due to the narrow product focus and aggressive
growth of the headwear retailing business. However, the operating
performance of Hat World has been positive and is expected to be
accretive to Genesco's earnings in fiscal 2005. In addition, Hat
World would provide additional growth opportunities to Genesco,
given that the growth rate at the company's Journeys division is
decelerating.
"The speculative-grade ratings on Genesco Inc. continue to reflect
high business risk stemming from the company's participation in
the competitive footwear retailing industry, its aggressive growth
strategy, and high debt leverage," said Standard & Poor's credit
analyst Ana Lai. "These risks are partially offset by Genesco's
good operating and financial performance in recent years."
GENTEK INC: Files Shelf Resale Registration Statement
-----------------------------------------------------
Gentek Inc. (OTC Bulletin Board: GETI) announced that it has filed
the registration statement required by the registration rights
agreement entered into by GenTek and certain former creditors who
received common stock in connection with the company's
reorganization under Chapter 11. Pursuant to the registration
rights agreement, GenTek was required to register approximately
4.2 million shares of its common stock on a shelf registration
statement.
A registration statement relating to these securities has been
filed with the Securities and Exchange Commission but has not yet
become effective. These securities may not be sold nor may offers
to buy be accepted before the time the registration statement
becomes effective absent an applicable exemption from the
registration requirements of the Securities Act of 1933, as
amended. This notice shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of
these securities in any state in which such offer, solicitation or
sale would be unlawful prior to registration or qualification
under the securities laws of any such state.
About GenTek Inc.
GenTek Inc. is a manufacturer of telecommunications products,
industrial components and performance chemicals. Additional
information about the company is available on GenTek's Web site at
http://www.gentek-global.com.
GWIN INC: Ex-Auditor Doubts Ability to Continue as a Going Concern
------------------------------------------------------------------
On January 6, 2004, Demetrius & Company, L.L.C. resigned as the
independent accountants for GWIN, Inc. Also, on January 6, 2004,
Gwin Inc. engaged Moore Stephens, P.C. as its independent
accountants for the fiscal year ending July 31, 2004.
Demetrius & Company, L.L.C.'s report on the Company's financial
statements for the year ended July 31, 2003 contained a paragraph
concerning uncertainties relating to the Company's ability to
continue as a going concern.
Gwin's Board of Directors made the decision to engage Moore
Stephens, P.C.
Gwin Inc. provides sports handicapping analysis and advice to
sports bettors worldwide through its wholly-owned subsidiary,
Global SportsEDGE, Inc. Global SportsEDGE provides professional
handicapping advice on professional football games played by the
National Football League, professional basketball games played by
the National Basketball Association, college football and
basketball games played by Division I of the National Collegiate
Athletic Association, and professional major-league baseball.
HAYES: Sues to Recover $5.1 Preferential Transfer from Dubal
------------------------------------------------------------
The HLI Creditor Trust created under Hayes Lemmerz' chapter 11
plan alleges that Dubal America, Inc., received preferential
payments totaling to $5,173,935 from the Hayes Lemmerz Debtors
within 90 days before the Petition Date -- at the time when the
Debtors were insolvent.
The Preferential Transfers were made on account of an antecedent
debt by the Debtors and represents 125 invoices billed by Dubal
America from September 2001 to January 2002.
In accordance with Sections 547 and 550 of the Bankruptcy Code,
the Trust seeks to avoid and recover the Transfers.
As a result of the Transfers, Dubal America received more than it
would have received if the Debtors' cases were cases under
Chapter 7 of the Bankruptcy Code, the Transfers had not been
made, and Dubal America received payment on its debts under the
Bankruptcy Code provisions. (Hayes Lemmerz Bankruptcy News, Issue
No. 44; Bankruptcy Creditors' Service, Inc., 215/945-7000)
HAYES LEMMERZ: Prices Primary & Secondary Common Stock Offering
---------------------------------------------------------------
Hayes Lemmerz International, Inc. (Nasdaq: HAYZ) announced that
its primary offering of approximately 6.45 million shares (plus
approximately 1.27 million additional shares to cover
underwriters' over-allotments, if any) of its common stock and a
secondary offering of 2 million shares of its common stock has
been priced at $16.25 per share. The Company will use the net
proceeds that it will receive in the offering to redeem
approximately $85 million aggregate principal amount of its
outstanding 10-1/2% Senior Notes due 2010.
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 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 website 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.
HDS ASSOCIATES: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: HDS Associates, LLC
dba Blythe House
45 West River Road
P.O. Box 585
Rumson, New Jersey 07760-0585
Bankruptcy Case No.: 04-13794
Type of Business: The Debtor provides Assisted Living services
like house keeping, laundry service, health
and wellness programs and others.
Chapter 11 Petition Date: February 5, 2004
Court: District of New Jersey (Trenton)
Judge: Raymond T. Lyons Jr.
Debtor's Counsel: Peter Broege, Esq.
Broege, Neumann, Fischer & Shaver
25 Abe Voorhees Drive
Manasquan, NJ 0873671
Tel: 732-223-8484
Estimated Assets: $10 Million to $50 Million
Estimated Debts: $10 Million to $50 Million
HFD CORPORATION: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: HFD Corporation
923 Route 35 North
Middletown, New Jersey 07748
Bankruptcy Case No.: 04-13709
Type of Business: Restaurant operator.
Chapter 11 Petition Date: February 5, 2004
Court: District of New Jersey (Trenton)
Judge: Raymond T. Lyons Jr.
Debtor's Counsel: David L. Bruck, Esq.
Greenbaum, Rowe, Smith, et al.
P.O. Box 5600
Woodbridge, NJ 07095
Tel: 732-549-5600
Fax: 732-549-1881
Total Assets: $781,894
Total Debts: $1,602,188
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Giamonco, Joe Promissory Note for $255,000
4 White Rock Terrace monies invested into
Holmdel, NJ 07733 HFD
Luigi's Investments, LLC Promissory Note for $150,000
monies invested into
HFD
US Food Service Trade debt $126,106
Ciavarella Food Trade debt $96,090
Meyer, Maurice III Equity $75,000
Friedman, Harris Promissory Note for $75,000
monies invested into
HFD
Burch, Lucius Promissory Note for $50,000
monies invested into
HFD
Maser, Rich Promissory Note for $50,000
monies invested into
HFD
Marr, Stephen Insider - Deferred $44,160
Salary Expense
Reimbursement
Acerra, Robert, Sr. Promissory Note for $28,500
monies invested into
HFD
Rice's Food Equipment and Trade debt $23,268
More Than Just Service, Inc. Trade debt $19,767
Michael C. Fresco CPA, LLP Professional Services $14,884
Sutton, Ralph Trade Debt/Rental - $12,104
Middletown, NJ
Zimero LLC Trade debt $10,602
Rental, Hazlet, New
Jersey
Shore Restaurant Supplies Trade debt $8,897
Hall's Warehouse Corp Trade debt $8,034
Kizima, Ronald Contract $6,054
Cuttler Produce Trade debt $5,609
Kreger Trucking Trade debt $5,388
HOLLINGER: Board Recommends Acceptance of Press Holdings' Offers
----------------------------------------------------------------
Hollinger Inc.'s (TSX: HLG.C; HLG.PR.B; HLG.PR.C) Board of
Directors has recommended that the offers by Press Holdings
International Limited announced on January 18, 2004, for all of
the retractable common shares and Retractable Non-Voting
Preference Shares Series III be accepted by the holders of such
shares.
The Board of Directors is making no recommendation to the holders
of the Exchangeable Non-Voting Preference Shares Series II as to
whether to accept or reject the Offers by PHIL to purchase all of
such shares.
The consideration under the Offers is payable in cash on the
basis of $8.44 per Common Share, $9.53 per Series II Preference
Share and $10.175 per Series III Preference Share. The Offers
expire at 8:00 a.m. (Eastern Standard Time) on March 3, 2004
unless extended or withdrawn.
Hollinger's Directors' Circular, which will contain these
recommendations and the detailed reasons for these
recommendations, will be mailed to all shareholders on or about
February 10, 2004. The Directors' Circular will also be available
on SEDAR (http://www.sedar.com/)and on Hollinger's website
(http://www.hollingerinc.com/).
As previously announced, the Board of Directors established a
committee of independent directors to consider the Offers. The
Independent Committee retained Westwind Partners Inc. and Blair
Franklin Capital Partners Inc. as its financial advisors to
provide the minority shareholders with fairness opinions in
respect of the Offers. The report of the Independent Committee,
and the fairness opinions of the financial advisors, were
considered today at a meeting of the Board of Directors. In their
opinions, a copy of which will be included in the Directors'
Circular, the financial advisors each concluded that the
consideration provided in the Offers is fair, from a financial
point of view, to the minority holders of Common Shares and Series
III Preference Shares. With respect to the Series II Preference
Shares, the financial advisors explained that, as of February 5,
2004, the consideration provided in the Offers for such shares
was, in their opinion, inadequate, from a financial point of view,
as of that day to minority holders of such shares. They stated
that their opinions were predicated to a significant extent on the
recent rise in the trading price of the shares of Class A common
stock of Hollinger International Inc., for which the Series II
Preference Shares are exchangeable, as well as fluctuations in the
U.S./Canada currency exchange rate. The financial advisors
cautioned that, should the trading price of the Class A common
stock of International, which closed on the trading day
immediately prior to the announcement of the Offers at US$15.52
per share and on February 4, 2004 at US$17.10 per share, decline,
the holders of Series II Preference Shares may realize greater
value by accepting the Offer for such shares.
Of the aggregate consideration being offered pursuant to the
Offers for all of the shares of every class of Hollinger,
amounting to approximately CDN$425.5 million, the aggregate
amount being offered for the Series II Preference Shares is
approximately CDN$36.0 million, of which approximately $11.7
million is being offered to the minority holders of such shares.
Hollinger's principal asset is its approximately 72.6% voting and
30.3% equity interest in Hollinger International Inc. 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 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.
IMCO RECYCLING: Commences Exchange Offer for Sr. Secured Notes
--------------------------------------------------------------
IMCO Recycling Inc. (NYSE: IMR) announced that it has commenced an
exchange offer to exchange up to $210 million principal amount of
its 10 3/8% Senior Secured Notes, Series B, due 2010, which have
been registered under the Securities Act of 1933, for a like
amount of its existing 10 3/8% Senior Secured Notes, Series A, due
2010, which had been issued on October 6, 2003 in a transaction
exempt from registration. The exchange offer is being made under
the terms and conditions contained in the company's prospectus
dated February 6, 2004. The exchange notes will be identical in
all substantial respects to the original notes being exchanged,
except that the transfer restrictions and registration rights
applicable to the original notes generally do not apply to
the exchange notes.
The exchange offer and associated withdrawal rights will expire at
5:00 p.m. (EST) on March 8, 2004, unless extended by IMCO
Recycling. Notes may be electronically tendered, as described in
the prospectus and the exchange offer materials.
Copies of the prospectus and other information relating to this
exchange offer, including transmittal materials, may be obtained
from the exchange agent, JPMorgan Chase Bank, ITS Bond Events,
2001 Bryan Street, 10th Floor, Dallas, Texas 75201, Attn: Frank
Ivins.
IMCO Recycling Inc. (S&P, B Corporate Credit Rating, Stable
Outlook) is one of the world's largest recyclers of aluminum and
zinc. The company has 22 U.S. production plants and five
international facilities located in Brazil, Germany, Mexico and
Wales. IMCO Recycling's headquarters office is in Irving, Texas.
IMPERIAL PLASTECH: Obtains CDN$400,000 Working Capital Facility
---------------------------------------------------------------
A.G. Petzetakis SA, the controlling shareholder of Imperial
PlasTech Inc., and/or Mr. George Petzetakis, directly or
indirectly, have agreed to provide a secured subordinated credit
facility in favor of the PlasTech Group, being Imperial PlasTech
and its subsidiaries, Imperial Pipe Corporation, Imperial Building
Products Corporation, Ameriplast Inc. and Imperial Building
Products (U.S.), Inc., in an amount of up to CDN$400,000. The
credit facility is to be used for short term working capital
purposes.
Principal is repayable in six equal monthly instalments,
commencing at the end of June, 2004 and ending in November, 2004.
Interest is payable at the Prime Lending Rate of Laurentian Bank
of Canada plus 6.5% per annum on daily balance outstanding,
calculated and payable monthly, due on the last business day of
each calendar month, commencing at the end of February, 2004.
The credit facility is on commercial terms that are not less
advantageous to PlasTech Group than if the credit facility were
obtained from a person or company dealing at arm's length with the
PlasTech Group.
For the purpose of this transaction, A.G. Petzetakis and George
Petzetakis are related parties of Imperial PlasTech. A.G.
Petzetakis, together with Mr. G. Petzetakis currently own 88.9% of
the issued and outstanding shares of Imperial PlasTech. A.G.
Petzetakis and Mr. G. Petzetakis' shareholdings in Imperial
PlasTech will remain unchanged after giving effect to the
transaction.
The abridged announcement of this financing is necessitated by the
immediate working capital needs of Imperial PlasTech.
About A.G. Petzetakis S.A.
Founded in 1960 and listed on the Athens Stock Exchange since
1973, Petzetakis Group (ASE:PET) is a Greek multinational company
and one of the fastest growing manufacturers of plastic pipe and
hose systems in the world. The Group operates 11 major
manufacturing facilities in 6 countries in Europe and S. Africa,
with annual sales of CN$ 300 million and an extensive distribution
network of commercial subsidiaries in Europe, Africa, North
America, the Middle East and Australia.
About the Company
The PlasTech Group is a diversified plastics manufacturer
supplying a number of markets and customers in the residential,
construction, industrial, oil and gas and telecommunications and
cable TV markets. Currently operating out of facilities in Atlanta
Georgia, Peterborough Ontario and Edmonton Alberta, the PlasTech
Group is focusing on the growth of its core businesses and
continues to assess its non-core businesses.
* * *
As previously reported, Imperial PlasTech Inc. (TSX: IPQ)
announced that Imperial PlasTech and its subsidiaries, Imperial
Pipe Corporation, Imperial Building Products Corporation,
Ameriplast Inc. and Imperial Building Products (U.S.) Inc.,
obtained a further Order under Section 304 of the Bankruptcy Code
in the United States Bankruptcy Court, Northern District of
Georgia, Atlanta Division on January 16, 2004.
The Order, among other things, recognizes, approves and implements
the Tenth Order of the Ontario Superior Court of Justice dated
December 9, 2003 and the provisions of the PlasTech Group's plan
of compromise or arrangement dated November 18, 2003, as approved
by the Canadian Court.
KAISER: Asks Court Go-Signal to Cease Supplying Alumina to Unistar
------------------------------------------------------------------
In September 2002, the Kaiser Aluminum Corporation Debtors engaged
in discussions with Unistar Holdings, Inc., relating to the supply
to Unistar, as a distributor, of 105,000 metric tons of alumina in
2003, 2004 and 2005. Unistar would resell the alumina to
Guangdong Metal Material Corporation.
In January 2003, the Debtors also concluded discussions with
Unistar relating to the supply of 1,100,000 metric tons of
alumina produced at Alumina Partners of Jamaica -- a partnership
in which Alpart Jamaica, Inc., and Kaiser Jamaica Corporation
collectively own a 65% interest. The alumina was to be delivered
at intervals beginning in 2003 and terminating at the end of
2007. Unistar would resell the alumina to China Minmetals
Nonferrous Co., Ltd.
According to Daniel J. DeFranceschi, Esq., at Richards, Layton &
Finger, PA, in Wilmington, Delaware, although there were oral and
written communications between the Debtors and Unistar regarding
the supply of alumina, no written contract was ever executed.
However, Unistar executed written contracts with China Minmetals
and Guangdong, for the supply of alumina. The Debtors signed the
two written contracts as third-party beneficiary. The Debtors
delivered alumina under the China Minmetals and Guangdong Metal
Supply Agreements in 2003.
In June 2003, the Debtors also engaged in similar discussions
with Unistar relating to the potential supply of 100,000 metric
tons of alumina in 2004 and 2005. Unistar would resell the
alumina to Yunnan Aluminum Company, Ltd. However, the Debtors
and Unistar did not execute any written contract. Unlike the
China Minmetals and Guangdong Contracts, the Debtors did not sign
the Yunnan Contract as a third party beneficiary or otherwise.
To date, no deliveries have been made with respect to the Yunnan
Contract.
As they pertain to the Debtors, China Minmetals and Guangdong
Supply Agreements provide that:
"As a third [party] beneficiary, if for any reason Seller
defaults in its obligations hereunder, [the Debtors] shall,
upon notice to Buyer, use its reasonable best commercial
efforts to cause Seller to assign it's rights and executory
obligations hereunder to [the Debtors]. Upon such
assignment [the Debtors] shall assume Seller's executory
obligations hereunder from and after the effective date of
such assignment."
Mr. DeFranceschi tells the Court that, due to recent substantial
increases in the market price for alumina, the pricing in the
Supply Agreements is now significantly below current market
prices. At present, the Debtors could sell the alumina at
substantially higher than the prices discussed with Unistar.
Consequently, the Debtors seek the Court's authority to cease
supplying alumina to Unistar in respect of Unistar's obligations
under the Contracts with China Minmetals, Guangdong and Yunnan.
Mr. DeFranceschi explains that, if the Debtors cease delivering
alumina to Unistar, they could sell the alumina at substantially
higher prices. In addition, the Debtors have contemplated the
sale of their commodities businesses, including their joint
venture interests in Alpart. The Debtors will maximize the value
of their estates and materially enhance their assets if those
assets were sold without the burden of the Supply Agreements.
The Debtors' estates would benefit either by increasing the
amount of revenue that could be generated from the sale of
alumina subject to the Unistar's Supply Agreements or by
generating higher prices for the Alpart-related assets.
Unistar/China Minmetals Contract is Invalid
The Debtors also ask the Court to invalidate the Supply
Agreements with Unistar and China Minmetals.
Under the Final Joint Venture Order dated July 23, 2002, the
Official Committee of Unsecured Creditors or the Court must
approve certain material contracts or expenditures. The Joint
Venture Order specifically requires Creditors Committee or Court
approval before the Debtors may enter into any contract "pursuant
to which the Debtor would receive in excess of $75,000,000 from
the sale to an unaffiliated third-party of goods obtained from a
Joint Venture."
Mr. DeFranceschi says that although the requisite approvals under
the Joint Venture Order have been sought and obtained in all
other circumstances, due to an oversight, the Debtors failed to
seek approval in relation to the Unistar/China Minmetals
Contract.
Mr. DeFranceschi relates that, during a review of the Debtors'
significant alumina contracts in connection with their efforts to
explore the possible sale of the joint venture interests in
Alpart, the Debtors discovered that the required authorizations
were never obtained. The Creditors Committee demanded that the
Debtors seek to have the Unistar/China Minmetals Contract -- to
the extent they constitute obligations enforceable against the
Debtors -- invalidated as having been entered into without the
authorization required under the Joint Venture Order.
Mr. DeFranceschi notes that courts have often held that
agreements entered into without necessary court approval are
ineffective and unenforceable, as evidenced in In re Roth
American, Inc., 975 F.2d 949, 954 (3rd Cir.1992). Similarly, Mr.
DeFranceschi states that courts have recognized that the failure
to obtain further approval for an agreement as required by a
prior court order renders that agreement invalid as evidenced in
In re Railway Reorganization Estate, Inc., 133 B.R. 574, 577
(Bankr.D.Del.1991).
If the Court determines that the Unistar/China Minmetals Contract
is enforceable notwithstanding the lack of authorization under
the Joint Venture Order, the Debtors reserve the right to seek:
(a) a determination that no enforceable agreement exists
between them, Unistar and China Minmetals; and
(b) to invalidate the Unistar/China Minmetals Contract on any
and all other grounds.
Mr. DeFranceschi represents that, in anticipation of any claim by
Unistar for breach of contract, the Debtors have determined that
any recovery would likely be a small fraction of the claim amount
and in all events would be significantly less than the benefit
generated by ceasing performance under the Supply Agreements.
Mr. DeFranceschi maintains that the Supply Contracts contain
confidentiality provisions. Hence, the Debtors propose to file
the Supply Agreements under seal. The Debtors ask the Court to
conduct an in camera hearing on the matter.
Headquartered in Houston, Texas, Kaiser Aluminum Corporation
operates in all principal aspects of the aluminum industry,
including mining bauxite; refining bauxite into alumina;
production of primary aluminum from alumina; and manufacturing
fabricated and semi-fabricated aluminum products. The Company
filed for chapter 11 protection on February 12, 2002 (Bankr. Del.
Case No. 02-10429). Corinne Ball, Esq., at Jones, Day, Reavis &
Pogue, represent the Debtors in their restructuring efforts. On
September 30, 2001, the Company listed $3,364,300,000 in assets
and $3,129,400,000 in debts. (Kaiser Bankruptcy News, Issue No.
38; Bankruptcy Creditors' Service, Inc., 215/945-7000)
KMART CORP: Asks Court to Compel John Owen to Repay $750,000 Loan
-----------------------------------------------------------------
The Kmart Creditor Trust is a liquidating trust organized for the
benefit of certain holders of allowed claims. On April 4, 2003,
Douglas J. Smith was designated as Trustee for the Kmart Creditor
Trust. Pursuant to the Plan and Confirmation Order, on the
Effective Date, the Debtors' estates irrevocably transferred
"Trust Claims" to the Trust, for and on behalf of the Trust
Beneficiaries, with no reversionary interest in the Debtors or
the Reorganized Debtors.
Richard Chesley, Esq., at Jones Day, in Chicago, Illinois, states
that the Kmart Creditor Trust has the right to prosecute the
Trust Claims and distribute recoveries from the Trust Claims to
the Trust Beneficiaries.
John Owen's Employment
Mr. Chesley relates that the Debtors hired John Owen on
January 11, 2001. Mr. Owen's employment terminated on March 22,
2003. As of the Termination Date, Mr. Owens was Senior Vice
President, General Merchandise Manager Hardlines of the Debtors.
The Loan Program
In the Fall of 2001, certain members of the Debtors' management
devised the Kmart Special Retention Program, under which they and
other Kmart executives would receive loans that were both in
excess of their base salaries and were intended to be forgivable
under certain circumstances. The purpose of the Loan Program was
to provide an incentive to the loan recipients to continue their
employment with the Debtors. In all, almost $24,000,000 was paid
to 24 Kmart executives, including Mr. Owen, under the Loan
Program.
Special Retention Agreement
In connection with the Loan Program, Mr. Owen entered into a
Special Retention Agreement on December 5, 2001. Pursuant to
this Agreement, the loan made to Mr. Owen would be forgiven if,
among other things, he was not fired by the Debtors "for Cause"
and remained employed with them through January 31, 2005. As
part of the Loan Program, the Debtors transferred to Mr. Owen
loan proceeds amounting to $750,000 on December 5, 2001.
Mr. Chesley explains that the Loan was made to Mr. Owen at a time
when the Debtors have been experiencing significant financial and
operational distress. About six weeks after the Transfer Date,
the Debtors sought protection under the Bankruptcy Code and filed
for Chapter 11 Bankruptcy. Within four months following the
Transfer Date, the Debtors terminated the employment of Mr. Owen
and other prepetition senior management. Pursuant to a letter
dated May 5, 2003 from the Debtors, Mr. Owen was notified that
his termination of employment was "for Cause" in accordance with
the 2001 Special Retention Agreement.
The Promissory Note
On December 5, 2001, in consideration of the Loan, Mr. Owen and
the Debtors entered into a Promissory Note memorializing the Loan
terms. The Promissory Note requires Mr. Owen to pay the
principal sum of the Loan together with all accrued interest upon
the termination of his employment. The Promissory Note also
provides that Mr. Owen must pay all reasonable costs and expenses
incurred in collecting under the Promissory Note.
Mr. Owen Must Pay the Loan
Mr. Chesley contends that Mr. Owen has failed to repay the value
of the Loan as required in accordance with the 2001 Special
Retention Agreement and the Promissory Note. In accordance with
the 2001 Special Retention Agreement and the Promissory Note, the
value of the Loan, plus interest, is immediately due and payable.
Accordingly, the Debtors ask the Court to:
(a) declare that the transfer of the Loan proceeds to Mr. Owen
was a fraudulent transfer pursuant to Section 548 of the
Bankruptcy Code;
(b) declare that the transfer of the Loan proceeds was an
avoidable fraudulent transfer pursuant to Michigan's
Fraudulent Conveyances and Contracts, Uniform Fraudulent
Transfer Act;
(c) avoid the transfer of the Loan proceeds and direct Mr.
Owen to pay to the Trust the full value of the Loan, which
is $750,000, plus interest accrued;
(d) declare that Mr. Owen is in breach of the 2001 Special
Retention Agreement and the Promissory Note; and
(e) direct Mr. Owen to pay to the Trust the full amount of its
attorney's fees and disbursements -- estimated to be not
less than $100,000 -- in connection with the collection of
the Promissory Note. (Kmart Bankruptcy News, Issue No. 68;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
LAIDLAW: Greyhound's Compliance with Credit Facility is Uncertain
----------------------------------------------------------------
In its Form 10-Q report dated January 13, 2004, Laidlaw Inc.
discloses that based on the current financial forecast for
Greyhound Lines, Inc., management is unable to predict with
reasonable assurance whether Greyhound Lines will remain in
compliance with the terms of its revolving credit facility.
According to Senior Vice-President and Chief Financial Officer,
Douglas A. Carty, management is closely monitoring this situation
and intends on requesting covenant amendments should it appear
likely such amendments will be necessary to remain in compliance
with the covenants. In addition, Mr. Carty says, Greyhound Lines
will be seeking an extension of this facility prior to its
current maturity of October 24, 2004.
As of November 30, 2003, Greyhound Lines had $15.0 million of
cash borrowings under the Greyhound Facility, issued letters of
credit of $56.8 million and had availability of $44.1 million.
Additionally, Greyhound Lines was in compliance with all
covenants.
"Although Greyhound Lines has been successful in obtaining
necessary amendments and extensions to the Greyhound Facility in
the past, there can be no assurances that they will obtain
additional modifications in the future if needed, or that the
cost of any future modifications or other changes in the terms of
the Greyhound Facility would not have a material effect on
Greyhound Lines or the Company," Mr. Carty cautions. If
unsuccessful, this may impact Greyhound Lines' ability to
continue as a going concern. If the "going concern" basis on
which Greyhound Lines' consolidated financial statements were
prepared was not appropriate for those consolidated financial
statements, then significant adjustments would need to be made to
the carrying value of the assets and liabilities, the reported
revenue and expenses and balance sheet classifications used by
Greyhound Lines. Accordingly, Mr. Carty continues, if such
changes were made to Greyhound Lines' consolidated financial
statements, significant adjustments would be required to
Laidlaw's consolidated financial statements.
Compliance by Laidlaw with the financial and other covenants in
its senior secured credit facility is generally not dependent on
the financial results or financial condition of Greyhound Lines,
as Greyhound Lines' performance has been excluded for purposes of
determining compliance with such provisions. Moreover,
consistent with the intent to exclude events solely related to
Greyhound Lines, Laidlaw's senior secured credit facility
specifies that a default by Greyhound Lines under the Greyhound
Facility or a bankruptcy filing by Greyhound Lines would not be
an event of default under the Company's senior secured credit
facility. However, it is not clear whether and under what
circumstances certain events related to Laidlaw's controlled
group liabilities under ERISA with respect to Greyhound Lines'
pension plans would lead to an event of default under the
Company's senior secured credit facility in the context of a
Greyhound Lines bankruptcy filing. "The Company currently is
working with the agents for the lenders under its senior secured
credit facility to clarify that an event of default is not to be
triggered under such controlled group provisions in the context
of a Greyhound Lines bankruptcy filing in light of the parties'
intent to exclude events solely related to Greyhound Lines," Mr.
Carty says.
Should Greyhound Lines be unable to continue as a going concern,
Laidlaw may be required to honor certain of Greyhound Lines'
lease commitments and pension obligations. Mr. Carty believes
that any required expenditures with respect to such liabilities
would not materially impact Laidlaw's financial condition. In
addition, management believes that Laidlaw will be successful in
either obtaining a clarification of its senior secured credit
facility to confirm Laidlaw's understanding that an event of
default under the facility would not be triggered in the context
of a Greyhound Lines bankruptcy filing or, if such clarification
is not obtained, refinancing the credit facility on terms that
would not have a material effect on Laidlaw's financial
condition. (Laidlaw Bankruptcy News, Issue No. 45; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
LTV CORP: Obtains Nod to Hire Wells Fargo as Disbursing Agent
-------------------------------------------------------------
At The LTV Corporation Debtors' behest, Judge Baxter appointed
Wells Fargo Minnesota, National Association, as third-party
disbursing agent with respect to certain disbursements to be made
to holders of certain administrative claims against the
consolidated estates of LTV Steel Company, Inc., and Georgia
Tubing Corporation. The Court also approved the Debtors'
Disbursing Agreement with Wells Fargo.
Need for Disbursing Agent
Pursuant to the terms of the Distribution Order, the LTV Steel
Debtors are required to use their reasonable efforts to make an
initial distribution to holders of allowed Non-Winddown Claims by
the end of 2003. Although commencing distributions by that date
has proven to be impossible, holders of Non-Winddown Claims and
the ACC have strongly encouraged the LTV Steel Debtors to commence
distributions as soon as practicable.
The Disbursing Agreement
The Disbursing Agreement sets forth the rights and obligations of
Wells Fargo and LTV Steel with respect to the distributions to be
made in the LTV Steel Debtors' Chapter 11 cases. The Disbursing
Agreement includes provisions describing various aspects of the
parties' relationship, including:
* The ability of Wells Fargo to invest the LTV Steel
Debtors' cash that it holds into interest-bearing
accounts at the direction of LTV Steel;
* The information to be provided to Wells Fargo to
permit it to complete distributions and the timing
of the provision of information and cash to permit
it to complete the distributions;
* The manner in which the distributions of cash will
be made to the claimants, including detailed
descriptions of the mechanisms to be utilized to
effect the distributions;
* The manner in which Wells Fargo will treat
undeliverable and unclaimed distributions;
* The manner by which Wells Fargo and the LTV Steel
Debtors will handle various tax-related aspects of
the distribution process, including the solicitation
of necessary tax information from the holders of
allowed claims, the preparation of tax reporting
documents and the payment of amounts that have been
withheld from distributions pursuant to applicable
law to the applicable taxing authorities;
* The rights of Wells Fargo to indemnification from
LTV Steel; and
* The manner in which Wells Fargo will be paid.
All of these provisions are consistent with the provisions of the
Bankruptcy Code and with customary terms for disbursing agents.
The Court also approves the means by which fees, expenses and
costs incurred by Wells Fargo under the Disbursing Agreement and
any amendments or additions to that Agreement will be paid.
Pursuant to the terms of the Disbursing Agreement, the Wells Fargo
Fees will be payable in cash in full from the LTV Steel Debtors'
consolidated estate as a Winddown Expense, including any amounts
that may be payable to Wells Fargo for indemnification under the
Disbursing Agreement. The Wells Fargo Fees will be paid on a
monthly basis on the submission of invoices by Wells Fargo,
without further Court order.
The payment of the Wells Fargo Fees as a Winddown Expense is
appropriate. The services to be performed by Wells Fargo are
necessary to advance the winddown of the LTV Steel Debtors'
consolidated estate. Furthermore, Wells Fargo has advised the LTV
Steel Debtors that it is unwilling to perform services under the
Disbursing Agreement unless it is compensated in cash in full
under the terms and conditions of the Disbursing Agreement. The
LTV Steel Debtors assert that the payment of the Wells Fargo Fees
is a textbook example of a Winddown Expense.
Not a Professional Person
In light of the services to be performed by Wells Fargo, it is not
a "professional person" within the meaning of Section 327 of the
Bankruptcy Code. Wells Fargo will perform an administrative
function under the close supervision and subject to the approval
of the LTV Steel Debtors. Because Wells Fargo is not a
professional person under this standard, it not required to seek
compensation pursuant to Section 330. Instead, payment of the
Wells Fargo Fees on a monthly basis on the submission of invoices
to the LTV Steel Debtors is appropriate.
Wells Fargo's Fees
Acceptance Fee (one-time charge) $5,000.00
Custody Charges
Annual Safekeeping Charge 30.00
Transaction Charges 25.00
Reconciliation of Security Disbursements 100.00/mth
IRS Form 1099 4.50/form
Disbursements to Allowed Administrative Claims 1.95/ck
Check stop payments 25.00/ck
Extraordinary Administrative Fees 175.00/hr
T.I.N., W-9 or W-8 Solicitations 2.50/ea
Headquartered in Cleveland, Ohio, The LTV Corporation is a
manufacturer with interests in steel and steel-related businesses,
employing some 17,650 workers and operating 53 plants in Europe
and the Americas. The Company filed for chapter 11 protection on
December 29, 2000 (Bankr. N.D. Ohio, Case No. 00-43866). Richard
M. Cieri, Esq., and David G. Heiman, Esq., at Jones, Day, Reavis &
Pogue, represent the Debtors in their restructuring efforts. On
August 31, 2001, the Company listed $4,853,100,000 in assets and
$4,823,200,000 in liabilities. (LTV Bankruptcy News, Issue No. 60;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
MAGELLAN HEALTH: Amalgamated Gadget Discloses 9.1% Equity Stake
---------------------------------------------------------------
Amalgamated Gadget, L.P., beneficially owns 2,459,431 shares of
the common stock of Magellan Health Services, Inc., representing
9.1% of the outstanding common stock of the Company. Amalgamated
Gadget holds sole voting and dispositive powers over the stock.
The shares were acquired by Amalgamated Gadget, L.P. for, and on
behalf of, R2 Investments, LDC pursuant to an Investment
Management Agreement. Pursuant to such Agreement, Amalgamated has
sole voting and dispositive power over such shares and R2 has no
beneficial ownership of such shares. Such shares will be issued
to Amalgamated for and on behalf of R2 in connection with the
consummation of Magellan Health Services' Third Amended Joint Plan
of Reorganization, dated August 18, 2003, which was confirmed by
the United States Bankruptcy Court for the Southern District of
New York in In re Magellan Health Services, Inc. (Case No. 03-
40515(PCB)) and consummated on January 5, 2004. In connection
with the consummation of the Plan, Amalgamated, for and on behalf
of R2, is entitled to receive (a) 459,620 shares (after giving
effect to a prior sale) in satisfaction of claims related to R2's
ownership of $14 million principal amount of Magellan Health
Services' 9% Senior Subordinated Notes due 2008 and (b) 1,999,811
shares purchased in an equity offering conducted by Magellan
Health Services.
Magellan Health Services is headquartered in Columbia, Maryland,
and is the leading behavioral managed healthcare organization in
the United States. Its customers include health plans,
corporations and government agencies. The Company filed for
chapter 11 protection on March 11, 2003, and confirmed its Third
Amended Plan on October 8, 2003. Under the Third Amended Plan,
nearly $600 million of debt will drop from the Company's balance
sheet and Onex Corporation will invest more than $100 million in
new equity.
MARY MCCLELLAN: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Mary McClellan Hospital, Inc.
One Myrtle Avenue
Cambridge, New York 12816
Bankruptcy Case No.: 04-10657
Type of Business: The Debtor provides health care services.
Chapter 11 Petition Date: February 6, 2004
Court: Northern District of New York (Albany)
Judge: Robert E. Littlefield Jr.
Debtor's Counsel: Christian H. Dribusch, Esq.
Patroon Building
5 Clinton Square
Albany, NY 12207
Tel: 518-436-1662
Total Assets: $2,459,877
Total Debts: $7,907,344
The Debtor did not file a list of it's 20-largest creditors
MILLENNIUM CHEM: Reports Price Increases for Vinyl Acetate Monomer
------------------------------------------------------------------
Millennium Chemicals (NYSE:MCH) announced the following price
increases for vinyl acetate monomer (VAM)
Effective immediately or as contracts allow:
Central & South America: US $40/metric ton
Asia, Africa & the Middle East: US $50/metric ton
Europe (T2 material): Euro 20/metric ton
Effective February 15th, 2004 or as contracts allow:
US & Canada: US $0.02/lb
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.
MILLENNIUM CHEMICALS: Ups 2004 Prices for Glacial Acetic Acid
-------------------------------------------------------------
Millennium Chemicals (NYSE:MCH) announced the following price
increases for glacial acetic acid (GAA) effective March 1, 2004:
Effective March 1st or as contracts allow:
Central & South America: U.S. $50/metric ton
Asia, Africa & the Middle East: U.S. $50/metric ton
Europe (T2 material): Euro 40/metric ton
Effective March 1st or as contracts allow:
U.S. & Canada: U.S. $0.02/lb
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.
MTS INC: Files for Prepack. Chapter 11 Restructuring in Delaware
----------------------------------------------------------------
MTS Incorporated (Tower), one of the largest specialty retailers
of music and video in the U.S. which owns and operates 93 Tower
Record stores, filed Monday a pre-packaged plan of reorganization
and voluntary petitions for reorganization under Chapter 11 of the
Bankruptcy Code as the concluding step in its debt restructuring
as initiated in May 2003.
"Court approval of the pre-packaged plan will reduce existing debt
by $80 million, effectively eliminating the financial risks that
have faced Tower for the past three years," said Tower Chief
Executive Officer E. Allen Rodriguez. "Our issues are financial,
not operational. We have already received the votes necessary to
confirm the plan from our only impaired classes, the bondholders
and shareholders, and we expect the pre-packaged reorganization to
be concluded quickly."
Mr. Rodriguez explained that to achieve plan confirmation while
operating in Chapter 11, the plan must be accepted by holders of
at least two-thirds in dollar amount and more than half in number
of claims. The bond restructuring plan has already been accepted
by holders of more than 97 percent of total amount of its
subordinated bonds and 100 percent of its shareholders, which far
exceeds the minimum support required to confirm a plan of
reorganization. No other creditor classes are impaired and
therefore no other creditor classes are required to vote on the
plan of the reorganization.
The Company expects to achieve plan confirmation and successfully
complete the reorganization within 45-60 days.
Secures New Financing
Demonstrating its support of the Company's operational and
financial accomplishments, Tower's existing lender group, led by
CIT Group/Business Credit has agreed to amend and improve the
Company's existing financing to provide interim financing (debtor-
in-possession) of up to $100 million. These funds will be used for
ordinary working capital purposes and to maintain normal business
operations during the Company's brief course in these proceedings.
In addition, the Company also announced that it has obtained a
commitment from CIT Group/Business Credit to further amend its
existing credit facility to provide up to $100 million term and
revolving loan facility upon confirmation of the pre-packaged
plan.
Business as Usual
Mr. Rodriguez said that neither Tower's employees nor customers of
its 93 stores and website, Tower.com , will notice any difference
in operations as a result of the filing. During the financial
reorganization process, employees will continue to be paid as
usual and the Company intends to honor policies regarding gift
certificates, refunds and other customer programs. While the plan
already provides full payment to vendors for any pre-petition
obligations owed, the Company is also requesting authority from
the Bankruptcy Court to pay all pre-petition obligations to its
regular trade vendors in the ordinary course of business.
Under the terms of the plan of reorganization, the Company's
existing senior debt of approximately $110 million would be
converted to $30 million of new senior notes and 85 percent of
equity ownership of the Company. Existing equity holders would
retain the remaining 15 percent equity.
"[Mon]day's action will not only provide the greatest recovery for
our bondholders, but it will also create a capital structure that
will enable Tower to maintain its premier position in the retail
entertainment industry," stated Mr. Rodriguez. "We could not have
achieved these positive results on a fast-track basis without the
extraordinary support of our banks, music and video vendors and
employees," Mr. Rodriguez concluded.
The Company filed its voluntary petitions and plan of
reorganization in the U.S. Bankruptcy Court in the District of
Delaware in Wilmington.
MTS INCORPORATED: Case Summary & 50 Largest Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: M T S, Incorporated
2500 Del Monte Street
West Sacramento, California 95691
Bankruptcy Case No.: 04-10394
Debtors affiliate filing separate chapter 11 petitions:
Entity Case No.
------ --------
Tower Records, Incorporated 04-10393
Three A's Holdings, L.L.C. 04-10395
8775 Sunset, Inc. 04-10396
Columbus & Bay, Inc. 04-10397
Jeremy's Holdings, LLC 04-10398
R.T. Records, Incorporated 04-10400
Tower Direct LLC 04-10403
33rd Street Records, Incorporated 04-10404
T.R. Services, Incorporated 04-10405
Ireland TR, Incorporated 04-10406
Pipernick Corp. 04-10407
TR Argentina, Incorporated 04-10408
TR Israel, Incorporated 04-10409
TR Mexico, Incorporated 04-10410
Tower Graphics, Incorporated 04-10411
Type of Business: The Debtor, owner of Tower Records, is one of
the largest specialty retailers of music in
the US, with nearly 100 company-owned music,
book, and video stores. It also runs WOW!
stores (a joint venture with electronics
retailer Good Guys) and its franchise
agreements encompass over seven countries.
See http://www.towerrecords.com/
Chapter 11 Petition Date: February 9, 2004
Court: District of Delaware
Judge: Peter J. Walsh
Debtors' Counsels: Mark D. Collins, Esq.
Michael Joseph Merchant, Esq.
Richards Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, DE 19899
Tel: 302-6517531
Fax: 302-651-7701
Estimated Assets Estimated Debts
---------------- ---------------
M T S, Incorporated More than $100 M More than $100 M
Tower Records, Incorporated $0 to $50,000 $0 to $50,000
Three A's Holdings, L.L.C. $10 M to $50 M $50 M to $100 M
8775 Sunset, Inc. $1 M to $10 M $1 M to $10 M
Columbus & Bay, Inc. $500,000 to $1 M $500,000 to $1 M
Jeremy's Holdings, LLC $1 M to $10 M $1 M to $10 M
R.T. Records, Incorporated $500,000 to $1 M $100,000-$500,000
Tower Direct LLC $1 M to $10 M $1 M to $10 M
33rd Street Records, $100,000-$500,000 $100,000-$500,000
Incorporated
T.R. Services, Incorporated $100,000-$500,000 $1 M to $10 M
Ireland TR, Incorporated $50,000-$100,000 $50,000-100,000
Pipernick Corp. $10 M to $50 M $1 M to $10 M
TR Argentina, Incorporated $0 to $50,000 $0 to $50,000
TR Israel, Incorporated $0 to $50,000 $0 to $50,000
TR Mexico, Incorporated $0 to $50,000 $0 to $50,000
Tower Graphics, $0 to $50,000 $0 to $50,000
Incorporated
Debtor's 50 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
US Bank Indenture Trustee $110,000,000
Corporate Trust Services For $110 Million
P.O. Box 778 Bond Obligation
Boston, MA 02102-0778
Universal Music & Video AP Vendor $15,619,970
9999 E. 121st St.
Fishers, IN 46038
Wea Distribution AP Vendor $13,696,313
3400 West Olive Ave. 6th Fl
Burbank, CA 91505
Sony Music Entertainment AP Vendor $7,134,391
2100 Colorado Ave, 3rd Fl
Santa Monica, CA 90404
BMG Distribution AP Vendor $7,095,714
8750 Wilshire Blvd.
Beverly Hills, CA 90211
WHV/Warner Home Video Credit AP Vendor $3,311,394
3601 W. Olive Blvd Suite 800
Burbank, CA 91505
EMI Music Distribution AP Vendor $2,774,306
501 Flynn Road
Camarillo, CA 93012
Ventura Distribution, Inc. AP Vendor $1,773,633
770 Lawrence Dr.
Thousand Oaks, CA 91320
Navarre Corporation AP Vendor $1,655,594
7400 49th Avenue North
New Hope, MN 55428
Image Entertainment, Inc. AP Vendor $1,471,729
9333 Oso Avenue
Chatsworth, CA 91311
Sony Red C/O Mellon Bank AP Vendor $1,456,763
2100 Colorado Ave, 3rd Fl
Santa Monica, CA 90404
International Periodical AP Vendor $1,039,842
27500 Riverview Center Blvd
Suite 400
Bonita Springs, FL 34134
Paramount Home Video AP Vendor $1,027,589
5555 Melrose Avenue
Los Angeles, CA 90038
MGM Home Entertainment AP Vendor $791,218
3450 Broadway, E-5260
Santa Monica, CA 90404-3061
Columbia Tristar Home Video AP Vendor $693,325
10202 W. Washington Blvd.
SSP Ste 2404
Culver City, CA 90232
Eagles Recording Co II AP Vendor $639,276
21650 Oxnard St., Ste 1925
Woodland Hills CA 91367-2000
Harmonia Mundi USA AP Vendor $606,705
1117 Chestnut Street
Burbank, CA 91506
Respond2 Entertainment LLC AP Vendor $570,188
207 NW Park Ave
Portland, OR 97209
AEC One Stop Group Inc. AP Vendor $550,308
4250 Coral Ridge Dr.
Coral Springs, FL 33065
Video Products Distr. AP Vendor $533,540
150 Parkshore Drive
Folsom, CA 95630
Koch Entertainment AP Vendor $434,999
22 Harbor Park Dr.
Port Washington, NY 11050
Music Video Distributors AP Vendor $398,643
P.O. Box 280
Oaks, PA 19456
Innovative Distribution AP Vendor $398,608
Network
4250 Coral Ridge Dr.
Coral Springs, FL 33065
Maxell Corp. of America AP Vendor $387,526
22-08 Route 208
Fairlawn, NJ 07410
Caroline Records AP Vendor $372,555
501 Flynn Road
camarillo, CA 93012
Select-O-Hits Inc. AP Vendor $355,266
1981 Fletcher Creek Dr.
Memphis, TN 38133
City Hall Records AP Vendor $345,899
101 Glacier Point Rd. Ste C
San Rafael, CA 94901
Telarc International Corp. AP Vendor $341,246
23307 Commerce Park Rd
Cleveland, OH 44122
Koen Book Distributors AP Vendor $337,917
10 Twosome Dr.
P.O. Box 600
Moorestown, NJ 08057
Electro Source, LLC AP Vendor $299,116
1840 E. 27th St.
Vernon, CA 90058
Naxos of America, Inc. AP Vendor $266,425
416 Mary Lindsay Polk Dr.
Suite 509
Franklin, TN 37067
Hal Leonard Publ. Corp. AP Vendor $265,672
960 East Mark Street
Winona, MN 55987
Tee Vee Toons Inc. AP Vendor $254,699
23 East 4th Street
New York, NY 10003
Fantasy, Inc. AP Vendor $235,236
Delta Entertainment Corp. AP Vendor $225,600
Model Distributors AP Vendor $224,891
Los Angeles Times AP Vendor-Operational $212,948
Diamond Comics Inc. AP Vendor $200,352
Pro Line Printing Inc. AP Vendor-Operational $200,205
Musicrama, Inc. AP Vendor $193,401
Fedex AP Vendor-Operational $193,145
Gotham Distributing Corp. AP Vendor $191,748
Big Daddy Music Distribution AP Vendor $189,067
Inc.
MPI Home Video AP Vendor $183,543
Funky Enterprises, Inc. AP Vendor $182,086
Jocelyn Enriquez AP Vendor $170,204
New York Times Co. AP Vendor-Operational $168,668
New World Music Inc. AP Vendor $149,224
Lions Gate/Vidmark AP Vendor $145,815
Entertainment
JTJ Empire Records AP Vendor $141,042
NEW CENTURY: Reports $2.5 Billion January Loan Production
---------------------------------------------------------
New Century Financial Corporation (Nasdaq: NCEN) announced that it
originated over $2.5 billion of loans in January 2004. The
January 2004 production level represented a 67% increase over
January 2003 fundings of $1.5 billion.
Loan Production Results
New Century's loan production volume for January 2004 compared
with the same period in 2003 is shown below:
$'s in billions 2004 2003
Funding Funding % Increase in
$ Vol. Days $ Vol. Days Volume
January $2.5 20 $1.5 21 67%
Fiscal Year $2.5 20 $1.5 21 67%
"Recognizing the seasonal nature of loan production following the
holidays, we are pleased with our production results for January,"
said Robert K. Cole, Chairman and Chief Executive Officer. "Loan
submission volume remains steady keeping us on track to achieve
our targeted production goals for 2004," added Cole.
New Century Financial Corporation (Nasdaq: NCEN) (S&P, BB- Long-
Term Counterparty Credit and B+ Convertible Senior Notes Ratings)
is one of the nation's largest specialty mortgage companies,
providing first and second mortgage products to borrowers
nationwide through its operating subsidiaries. New Century is
committed to serving the communities in which it operates with
fair and responsible lending practices. To find out more about
New Century, visit http://www.ncen.com/
N-VIRO INTL: Formalizes Terms of Equity Investment Agreement
------------------------------------------------------------
N-Viro International Corp. (OTC Bulletin Board: NVIC) announced
the formalization of the terms of an equity investment agreement.
Under terms of the funding contract, the Company will receive the
sum of $750,000.
"N-Viro can now implement its plans for improving the balance
sheet, escalating business promotion and development as well as
expanding its research and development activities," said Phil
Levin, Chairman of the Board of Directors. "N-Viro is poised to
exploit proprietary technology which has been in the pipeline for
some time. Our plan includes expanding our market-reach and the
creation of additional strategic alliances."
With the new capital, the Company is also better poised to attract
new, talented personnel. The Company has begun its search for a
new CEO, because the current CEO, Dr. Terry Logan, plans to become
chief technical officer when his present contract expires in June
of this year. "I am excited about the opportunity to devote my
time exclusively to technological developments and closing sales,"
said Dr. Logan. "While I enjoy the administrative aspect of my
current position, I am eager to make this transition. I am also
excited about new technology testing which we have recently
completed. We expect to be able to release actual results soon,
once they are completely analyzed."
N-Viro International Corporation develops and licenses its
technology to municipalities and private companies. N-Viro's
patented processes use lime and/or mineral-rich combustion by-
products to treat, pasteurize, immobilize and convert wastewater
sludge and other bio-organic wastes into biomineral agricultural
and soil-enrichment products with real market value. More
information about N-Viro International can be obtained by
contacting the office, on the Internet at http://www.nviro.comor
by e-mail inquiry to info@nviro.com .
* * *
As reported in the Troubled Company Reporter's January 12, 2004
edition, The Company recorded a net loss of $811,000 for the nine
months ended September 30, 2003 compared to net income of $57,000
for the same period ended in 2002, an increase in the loss of
approximately $868,000.
The Company had a working capital deficit of $1,467,000 at
September 30, 2003, compared to a working capital deficit of
$847,000 at December 31, 2002, a decrease in working capital of
$620,000. Current assets at September 30, 2003 included cash and
investments of $32,000, which is a decrease of $373,000 from
December 31, 2002. This decrease in cash and investments was the
result of the Company closing on an $845,000 credit facility with
a local bank, and redeeming its $400,000 certificate of deposit in
the transaction to pay off current debt. The decrease in working
capital was principally due to the Credit Facility obtained which
assisted in refinancing existing short-term debt to long-term, but
offset by the operating loss for the nine month period.
OLD UGC: Taps Poorman-Douglas as Claims and Voting Agent
--------------------------------------------------------
Old UGC, Inc., seeks permission from the U.S. Bankruptcy Court for
the Southern District of New York to employ Poorman-Douglas
Corporation as its Official Claims, Noticing and Voting Agent.
The Debtor expects Poorman-Douglas to:
a. notify all potential creditors of the filing of the
bankruptcy petitions and of the setting of the first
meeting of creditors pursuant to section 341(c) of the
Bankruptcy Code, under the proper provisions of the
Bankruptcy Code and the Bankruptcy Rules;
b. maintain an official copy of the Debtor's schedules of
assets and liabilities and statements of financial
affairs, listing the Debtor's known creditors and the
amounts owed thereto;
c. notify all potential creditors of the existence and
amount of their respective claims as evidenced by the
Debtor's books and records and as set forth in the
Schedules;
d. furnish a form for the filing of a proof of claim, after
such notice and form are approved by this Court;
e. file with the Clerk a copy of any notice served by
Poorman-Douglas, a list of persons to whom it was
mailed, and the date the notice was mailed, within 10
days of service;
f. docket all claims received, maintaining the official
claims register for the Debtor on behalf of the Clerk,
and providing the Clerk with a certified duplicate
unofficial Claims Register on a monthly basis, unless
otherwise directed;
g. specify in the Claims Register the following information
for each claim docketed:
(i) the claim number assigned,
(ii) the date received,
(iii) the name and address of the claimant and agent, if
applicable, who filed the claim, and
(iv) the classification of the claim (e.g., secured,
unsecured, priority, etc.;
h. relocate, by messenger, all of the actual proofs of
claim filed to Poorman-Douglas, not less than weekly;
i. record all transfers of claims and providing any notices
of such transfers required by Bankruptcy Rule 3001;
j. make changes in the Claims Register pursuant to an order
of this Court;
k. upon completion of the docketing process for all claims
received to date by the Clerk's office, turning over to
the Clerk copies of the Claims Register for the Clerk's
review;
l. maintain the official mailing list for the Debtor of all
entities that have filed a proof of claim, which list
shall be available upon request by a party-in-interest
or the Clerk;
m. assist with, among other things, the solicitation and
the tabulation of votes and the distribution as required
in furtherance of confirmation of a plan of
reorganization;
n. 30 days prior to the close of this case, submitting an
Order dismissing Poorman-Douglas and terminating the
services of Poorman-Douglas upon completion of its
duties and responsibilities and upon the closing of this
case; and
o. at the close of the case, box and transport all original
documents in proper format, as provided by the Clerk's
office, to the Federal Records Center.
Poorman-Douglas' consulting and claims docketing hourly rates are:
Client Services Manager $150 - $225 per hour
Technical Support (Pragramming) $125 per hour
Case Manager/Notice Coordinator $105 per hour
Associate Case Manager $75 per hour
Claims Processors $55 per hour
Data Entry and Document Custody $55 per hour
Clerical Support $35 per hour
Headquartered in Denver, Colorado, Old UGC, Inc.--
http://www.UnitedGlobalcom.com-- is one of the largest broadband
communications providers outside the United States and provides
full range of video, voice, high-speed Internet, telephone and
programming services. The Company filed for chapter 11 protection
on January 12, 2004 (Bankr. S.D.N.Y. Case No. 04-10156). David A.
Levine, Esq., at Cooley Godward, LLP and Jay R. Indyke, Esq., at
Kronish Lieb Weiner & Hellman, LLP represent the Debtors in their
restructuring efforts. When the Company filed for protection from
their creditors, they listed $846,050,022 in total assets and
$1,371,351,612 in total debts.
OWENS CORNING: Reports Fourth Quarter and Full Year 2003 Results
----------------------------------------------------------------
Owens Corning (OTC: OWENQ) today reported financial results for
the fourth quarter ended December 31, 2003, as well as results for
the full year 2003.
For the fourth quarter of 2003, the company had net sales of
$1.275 billion, compared to net sales of $1.174 billion for the
same period in the prior year. Owens Corning reported income from
operations of $112 million for the quarter, including a credit of
$10 million for restructuring and other charges, $10 million of
Chapter 11-related charges, and $1 million in asbestos-related
insurance recoveries. For the fourth quarter of 2002, Owens
Corning reported a loss from operations of $44 million, including
charges of $113 million for restructuring and other charges and
$11 million of Chapter 11-related charges. For the fourth quarter
2003, the company had net income of $43 million, compared to a net
loss of $39 million for the fourth quarter of 2002.
Owens Corning ended 2003 with a cash balance of $1.005 billion
compared to $875 million at year end 2002.
For the full year 2003, the company had net sales of $4.996
billion, compared to $4.872 billion for the full year 2002. Owens
Corning reported income from operations of $267 million, including
charges of $34 million for restructuring and other charges and $85
million of Chapter 11-related charges, partially offset by $5
million in asbestos-related insurance recoveries. For the year,
the company had net income of $115 million.
For 2002, the company reported a loss from operations of $2.313
billion, including charges of $2.356 billion for asbestos-related
liabilities, $166 million for restructuring and other charges, and
$96 million of Chapter 11-related charges, partially offset by $5
million in asbestos-related insurance recoveries. Owens Corning
had a net loss of $2.809 billion for 2002, including a non-cash
charge of $491 million ($441 million net of tax) as the result of
the adoption of Statement of Financial Accounting Standards No.
142, relating to the accounting for goodwill and other
intangibles.
"We were very pleased with our operational performance for the
quarter and for the year," said Dave Brown, Owens Corning's chief
executive officer. "Although higher energy and raw material costs
were significant for 2003, those costs were offset by a
combination of increased volume in our building materials
businesses, improved manufacturing productivity and aggressive
control over our SG&A expenses."
Owens Corning is a world leader in building materials systems and
composites systems. Additional information is available on Owens
Corning's Web site at www.owenscorning.com or by calling the
company's toll-free General Information line: 1-800-GET PINK.
On October 5, 2000, Owens Corning and 17 United States
subsidiaries filed voluntary petitions for relief under Chapter 11
of the U. S. Bankruptcy Code in the U. S. Bankruptcy Court for the
District of Delaware. The Debtors are currently operating their
businesses as debtors-in-possession in accordance with provisions
of the Bankruptcy Code. The Chapter 11 cases of the Debtors are
being jointly administered under Case No. 00-3837 (JKF). The
Chapter 11 cases do not include other U. S. subsidiaries of Owens
Corning or any of its foreign subsidiaries. The Debtors filed for
relief under Chapter 11 to address the growing demands on Owens
Corning's cash flow resulting from the substantial costs of
asbestos personal injury liability.
On October 24, 2003, the Debtors, together with the Official
Committee of Asbestos Claimants and the Legal Representative for
future asbestos personal injury claimants, filed an amended Joint
Plan of Reorganization in the U. S. Bankruptcy Court for the
District of Delaware. The Plan is subject to confirmation by the
Bankruptcy Court. As filed, the Plan provides for partial payment
of all creditors' claims, in the form of distributions of new
common stock and notes of the reorganized company, and cash.
Additional distributions from potential insurance and other third-
party claims may also be paid to creditors, but it is expected
that all classes of creditors will be impaired. Therefore, the
Plan also provides that the existing common stock of Owens Corning
will be cancelled, and that current shareholders will receive no
distribution or other consideration in exchange for their shares.
It is impossible to predict at this time the terms and provisions
of any plan of reorganization that may ultimately be confirmed or
the treatment of creditors thereunder.
PARMALAT: Administrator Wants PwC & BDO as New Joint Liquidators
----------------------------------------------------------------
Enrico Bondi, in his role as the Parmalat SpA Extraordinary
Administrator, objects to the appointment of Gordon I. MacRae and
James Cleaver as joint provisional liquidators for Parmalat
Capital Finance Limited. Mr. Bondi, through Parmalat's Cayman
Islands counsel, Turner & Roulstone, asks the Grand Court of the
Cayman Islands to replace Messrs. MacRae and Mr. Cleaver with:
(1) Russell Smith of PricewaterhouseCoopers, PO Box 219GT,
Strathvale House, 90 North Church Street, George Town,
Grand Cayman, Cayman Islands; and
(2) Glen Trenouth of BDO Cayman.
Mr. Bondi explains that PwC is fully involved in the worldwide
investigation of the Parmalat Group and, therefore, has a global
understanding of all of Parmalat Group's affairs. Mr. Bondi
points out that it will be far more efficient, timely, and cost-
effective for PwC to undertake the provisional liquidation of
Parmalat Capital than for Ernst & Young Ltd. to do so.
BDO will step in where there are decisions or parts of the
process where an apparent conflict for PwC could arise.
"PwC and I will be conducting investigations of the Company's
affairs as part of our overall review of the Group's activities,
and accordingly for Ernst & Young to repeat this work, without
access to the full resources and information that PwC and I have
as a result of our roles, would simply involve duplication and
additional cost," Mr. Bondi tells the Cayman Court.
Mr. Bondi contends that Messrs. MacRae and Cleaver, Ernst & Young
directors in the Cayman Islands, are affiliated with a minority
group of Parmalat creditors or noteholders represented by Ernst &
Young in the United States. Ernst & Young, therefore, does not
and could not represent the interests of majority of Parmalat
creditors, including the creditors of Parmalat Capital Finance
Limited. Based on unaudited financial statements as of September
30, 2003, four Parmalat subsidiaries -- Parmalat Finance
Corporation BV, Parmalat Participacoes do Brasil, Parmalat
Netherland BV and Olex SA -- alone make up more than 85% of the
creditors of Parmalat Capital.
Mr. Bondi further notes that Ernst & Young has been uncooperative
with PwC. Accordingly, it is unlikely that PwC in tandem with
Ernst & Young will be efficient. (Parmalat Bankruptcy News, Issue
No. 5; Bankruptcy Creditors' Service, Inc., 215/945-7000)
P-COM: Reports Secondary Stock Offering by Selling Stockholders
---------------------------------------------------------------
P-Com, Inc. (OTC Bulletin Board: PCOM), a worldwide provider of
wireless telecom products and services, announced that its
registration statement on Form S-1 was declared effective by the
Securities and Exchange Commission on February 6, 2004. The
registration statement registers the resale of 608,532,358 shares
of P-Com common stock, par value $.0001 per share, to be offered
from time to time by the selling stockholders named in the
prospectus that forms a part of the effective registration
statement. Of the 608,532,358 registered shares:
-- 177,055,243 are shares of P-Com's common stock that are
currently outstanding and may in the future be sold from time to
time by certain selling stockholders;
-- 11,457,487 are shares that may in the future be issued to
certain selling stockholders upon conversion of P-Com's
outstanding Series B Convertible Preferred Stock;
-- 206,257,028 are shares that may in the future be issued to
certain selling stockholders upon conversion of P-Com's
outstanding Series C Convertible Preferred Stock;
-- 13,333,333 are shares that may in the future be issued to
certain selling stockholders upon conversion of P-Com's
outstanding Series D Convertible Preferred Stock; and
-- 200,429,267 are shares that may in the future be issued to
certain selling stockholders upon the exercise of certain warrants
to purchase shares of P-Com's common stock.
P-Com will not receive any of the proceeds from the sale of the
shares of common stock by the selling stockholders. P-Com may
receive proceeds from the exercise of warrants held by the selling
stockholders if they opt to pay the exercise price in cash rather
than executing a cashless exercise.
P-Com, Inc. -- whose September 30, 2003 balance sheet shows a
total shareholders' equity deficit of about $20 million --
develops, manufactures, and markets point-to-point, spread
spectrum and point-to-multipoint, wireless access systems to the
worldwide telecommunications market. P-Com broadband wireless
access systems are designed to satisfy the high-speed, integrated
network requirements of Internet access associated with Business
to Business and E-Commerce business processes. Cellular and
personal communications service providers utilize P-Com point-to-
point systems to provide backhaul between base stations and mobile
switching centers. Government, utility, and business entities use
P-Com systems in public and private network applications. For more
information visit http://www.p-com.com/
PHOENIX WATER: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Phoenix Water & Sewer, Inc.
770 East Church Street
Jasper, Georgia 30143
Bankruptcy Case No.: 04-20227
Type of Business: The Debtor is a contractor that maintains
water and sewer improvements.
Chapter 11 Petition Date: February 1, 2004
Court: Northern District of Georgia (Gainesville)
Judge: Robert Brizendine
Debtor's Counsel: Harmon T Smith, Jr.
Law Office of Harmon T. Smith, Jr.
P.O. Box 1276
Gainesville, GA 30503
Tel: 770-536-1313
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Yancey Brothers $949,675
Drawer CS 198757
Atlanta, GA 30384-8757
US Pipe & Foundry $286,828
PO Box 10406
Birmingham, AL 35202
Metrac $78,174
IRS $73,338
Premier Util. & Services $65,160
National Water Works $62,905
TEC Tractor & Equip. Co $46,010
Controlled Blasting Inc. $42,318
J & B Tool $34,385
Pickens County Tax Commissioner $19,739
W.S.Pharr & Co $18,411
Contech Construction Products, Inc. $16,777
Parks Truck Center, Inc. $16,308
Lawson Chevrolet $12,511
Foley Products Company $11,825
Jones Oil Dist. Inc. $10,702
Jasper Tire Co. $10,346
Thomas Concrete Of GA $9,975
Julia Jorns, CPA $9,375
Byrd Electric Service $7,000
PMA CAPITAL: A.M Best Downgrades Senior Debt Ratings to BB-
-----------------------------------------------------------
A.M. Best Co. has downgraded the senior debt ratings to "bb-" from
"bb" of PMA Capital Corporation (NASDAQ: PMACA) (Philadelphia,
Pennsylvania).
A.M. Best has also downgraded the indicative debt ratings for
securities issued under PMACA's $250 million universal shelf
registration. The current financial strength ratings of B++ (Very
Good) of PMA Capital Insurance Company (Philadelphia,
Pennsylvania) and PMA Insurance Group (Blue Bell, PA) are
unaffected. All of the ratings remain under review with negative
implications pending A.M. Best's full review of the operation and
conclusion of the structure of the group going forward.
This rating action follows PMACA's recent announcement that it has
voluntarily entered into an agreement with the Pennsylvania
Insurance Department, which allows for increased regulatory
oversight as the group runs off its reinsurance operation, PMACIC
(formerly known as PMA Re). PMACIC has agreed to request the
Pennsylvania Insurance Department's prior approval for a number of
actions, largely related to financial transactions involving
PMACIC.
The senior debt rating reflects the group's holding company
issues, including increased financial leverage and reduced future
earnings, as well as its current organizational structure, which
limits holding company cash flow. In light of the agreement with
the Pennsylvania Insurance Department, dividends from the PMA
Insurance Group under its current structure are not permitted to
flow through to the holding company as there is no current
dividend capacity at PMACIC, which owns the pool members. However,
the holding company has revised its capital structure during the
last several quarters to replace bank debt with longer-term
instruments, consequently reducing near-term principal repayment
requirements and eliminating negative covenants. In addition,
PMACA has suspended its common stock dividend and maintains
sufficient cash at the holding company to meet its near-term
needs.
The current financial strength rating of PMACIC reflects its
weakened stand-alone capital position following three major
reserve charges in recent years and the uncertainty of its capital
structure and financial condition as the company winds down its
reinsurance operation. Should the capitalization of PMACIC be
weakened through any potential restructuring of the group, the
financial strength rating could be downgraded into the vulnerable
rating category.
The current financial strength rating of PMA Insurance Group
reflects the increased pressure placed on the operation to service
holding company obligations as the only ongoing business segment,
as well as any issues that may arise from the run-off of the
reinsurance and excess and surplus lines operations. PMA Insurance
Group has produced a stable operating performance and has
maintained a strong capital position on a stand-alone basis.
However, as PMA Insurance Group's pool members are currently
subsidiaries of PMACIC, whose stand-alone capitalization has been
greatly weakened by the recent reserve charges, the pool members
are directly exposed to supporting PMACA. While one option to
address this issue is to restructure the group, there will still
be indirect pressure on PMA Insurance Group to service any ongoing
financial obligations of the group.
The following debt ratings have been downgraded:
PMA Capital Corporation
-- to "bb-" from "bb" on the $86.25 million 4.25% senior
unsecured convertible debentures, due 2022
-- to "bb-" from "bb" on the $57.5 million 8.5% senior
unsecured note, due 2018
The following indicative debt ratings for securities issued under
the $250 million universal shelf registration have been
downgraded:
PMA Capital Corporation
-- to "bb-" from "bb" on senior unsecured
-- to "b+" from "bb-" on subordinated
-- to "b" from "b+" on preferred stock
PMA Capital Trust I and II
-- to "b" from b+" on preferred securities
PROLOGIC MANAGEMENT: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Lead Debtor: Prologic Management Systems Inc.
110 South Church Street No. 3362
Tucson, Arizona 85701
Bankruptcy Case No.: 04-00394
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Basis Inc. 04-00395
Type of Business: The Debtor provides a full range of hardware
and commercial software solutions, with a
focus on a UNIX-based products, as well as
Microsoft NT. The products and services
provided by the Company include system
integration, software development, proprietary
software products and related services.
See http://www.prologic.com
Chapter 11 Petition Date: February 2, 2004
Court: District of Arizona (Tucson)
Judge: Eileen W. Hollowell
Debtors' Counsel: Clifford B. Altfeld, Esq.
Leonard Felker Altfeld et al.
250 North Meyer Avenue
Tucson, AZ 85701-1090
Tel: 520-622-7733
Fax: 520-622-7967
Total Assets: $2,502,265
Total Debts: $14,306,386
The Debtor did not file a list of it's 20-largest creditors
PRUSSIA ASSOCIATES: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Prussia Associates, a Pennsylvania Limited Partnership
251 DeKalb Pike
King of Prussia, Pennsylvania 19406
Bankruptcy Case No.: 04-11042
Type of Business: The Debtor offers outstanding facilities and
the highest levels of service. The hotel has
all the amenities of an urban hotel in a
suburban park-like setting. An extensive
multi-million dollar renovation project has
updated public areas and all guest rooms.
Chapter 11 Petition Date: January 26, 2004
Court: Eastern District of Pennsylvania (Philadelphia)
Judge: Stephen Raslavich
Debtor's Counsels: Lawrence G. McCMichael, Esq.
Martin J. Weis, Esq.
Dilworth Paxon LLP
3200 Mellon Bank Center
1735 Market Street
Philadelphia, PA 19103
Tel: 215-575-7000
Estimated Assets: $10 Million to $50 Million
Estimated Debts: $10 Million to $50 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
US Foodservice Trade debt $239,293
Hilton Inn, Inc. Trade debt $70,595
Eastern Exterior Wall System Trade debt $69,123
MCI Telecommunications Trade debt $41,850
Edward Dan & Co. Trade debt $20,532
PECO Trade debt $18,269
Guest Supply Trade debt $15,629
Bedway Produce Co. Trade debt $15,066
Butera Beausang Cohen and Trade debt $13,601
Brennan
KVL Audio Trade debt $13,391
Suburban Cable TV Trade debt $11,816
USLEC Trade debt $11,658
Alloy Silverstein Shapiro Trade debt $10,812
MAC Trade debt $10,595
PAC Industries Trade debt $9,072
Clean Rental Services Trade debt $8,212
Hospitality Information Trade debt $7,778
Publishers
JP Mascaro & Sons Trade debt $7,483
Douglass Industries, Inc. Trade debt $7,352
Philadelphia Suburban Water Trade debt $7,228
RADD AVIATION LLC: Case Summary & 5 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Radd Aviation LLC
P.O. Box 1925
Tubac, AZ 85646
Bankruptcy Case No.: 04-00273
Chapter 11 Petition Date: January 23, 2004
Court: District of Arizona (Tucson)
Judge: James M. Marlar
Debtor's Counsel: Michael W. Baldwin, Esq.
Law Offices of Michael W. Baldwin PLC
177 North Church Suite 913
Tucson, AZ 85701-1120
Tel: 520-792-3600
Fax: 520-792-8616
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 5 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
National Bank of Commerce Rockwell $900,000
7770 Polar Avenue, Ste 202 International twin
Germantown, TN 38138 commander 690B
airplane, serial
#11505 registered
as N36SW
Alcar Co. dba Allan Eide 1973 Turbo Commander $345,300
1300 S. Washington 690, Serial #11071,
Grand Folks, ND 58201 Registered as N9175N
Global Aircraft Sales, Inc. Possible Claim of $1
Ownership to N36SW,
But no consideration
given and did not pay
off secured creditor.
Subject to
Global/Morris Possible Claim of $1
Ownership to N36SW,
But no consideration
given and did not pay
off secured creditor.
Subject to
Pollock-Morris Family L.P. Possible Claim of $1
Ownership to N36SW,
But no consideration
given and did not pay
off secured creditor.
Subject to
ROYAL OLYMPIC: Greek Court Sets February 12 Deadline for Plan
-------------------------------------------------------------
Royal Olympic Cruise Lines (Nasdaq: ROCLF) announced that the
Greek court administering the section 45 proceeding regarding its
subsidiaries has allowed the company an extension until Thursday,
February 12, 2004, to reach agreement on a plan of restructuring
with the holders of at least 51% of outstanding obligations. The
company is in negotiations with its major creditor, Fortis Bank,
which itself holds more than 51% of the total obligations.
In addition the company announced that it has put all
administrative staff in Greece on unpaid leave pending the outcome
of the court ruling and discussions with financial institutions
and various creditors.
SEITEL: Bankruptcy Court Okays 3rd Amended Disclosure Statement
---------------------------------------------------------------
Seitel, Inc. (OTC Bulletin Board: SEIEQ; Toronto: OSL) announced
that it has received Bankruptcy Court approval of its Third
Amended Disclosure Statement filed in connection with Seitel's
previously announced plan of reorganization.
In connection with approval of the Disclosure Statement, the
Bankruptcy Court also established February 4, 2004 as the voting
record date for holders of claims and equity interests in the
Debtors. The Disclosure Statement, including the Plan and ballots
for voting on the Plan are expected to be mailed to record holders
not later than February 12, 2004. The voting period for the Plan
ends at 5:00 PM on March 9, 2004. The Bankruptcy Court has set a
hearing for March 18, 2004, at 1:30 PM prevailing eastern time to
consider confirmation of the Plan.
The Plan, which is supported by a standby funding commitment from
Mellon HBV Alternative Strategies LLC and is subject to various
conditions to effectiveness, would result in payment of 100% of
creditors' claims in cash, together with all post-petition
interest. Each of Seitel's equity holders, as of a warrant record
date that will be five days prior to the effective date of the
Plan, would have the right to receive an equivalent number of
shares of reorganized Seitel's common stock plus warrants
entitling each holder thereof to purchase such number of shares of
reorganized Seitel common stock as required to retain its
percentage equity ownership in Seitel (subject to adjustment and
dilution as set forth below). The warrants will have an exercise
price of 60 cents per share, subject to adjustment for certain
recapitalization events. The aggregate exercise price of the
warrants would be $75 million. The Company intends that the
warrants will be freely transferable and exercisable for 30 days
following the effective date of the Plan. Each equity holder who
does not exercise its warrants will, as a result, suffer up to
approximately 83% dilution in its percentage equity ownership of
reorganized Seitel, not including the additional warrants to be
issued to Mellon as described below.
Subject to the Plan becoming effective, HBV (together with other
investors to whom HBV may assign an interest) has committed to
purchase up to $75 million of reorganized Seitel's common stock in
the event such stock is not purchased by Seitel's shareholders
through the exercise of warrants. As compensation for its standby
commitment, HBV will be issued additional warrants to acquire up
to 10% of the fully diluted shares of common stock of reorganized
Seitel. HBV's additional warrants will have an exercise price of
72 cents per share, subject to adjustment for certain
recapitalization events, and will expire on the seventh
anniversary of their issuance.
The funding of payments for claims under Plan is to be provided
from a portion of Seitel's existing cash balances, the sale of new
common stock pursuant to the warrants to be issued to shareholders
as of the Warrant Record Date and not less than $180 million in
proceeds of a high yield debt placement. The Company also
anticipates entering into a new revolving credit facility to
supplement its working capital needs following the effective date
of the Plan and is engaged in preliminary discussions with certain
lending sources.
The foregoing is only a brief summary of the Plan and holders of
Claims and Equity Interests entitled to vote are urged to read the
Disclosure Statement and its exhibits, including the Plan
carefully and in their entirety. Any conflicts between the Plan
and this summary will be determined solely by reference to the
Plan. There can be no assurance that the Plan will be confirmed by
the Bankruptcy Court or will become effective or the timing
thereof.
Seitel markets its proprietary seismic information/technology to
more than 400 petroleum companies, licensing data from its library
and creating new seismic surveys under multi-client projects.
SHAW: Lower-than-Expected 2004 Profits Spur S&P's Negative Outlook
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit rating and its other ratings on The Shaw Group Inc. At the
same time, Standard & Poor's revised the outlook on the company to
negative from stable.
At Nov. 30, 2003, the Baton Rouge, Louisiana-based provider of
engineering and construction services had total debt (including
the present value of operating leases) of $515 million.
"The outlook revision reflects the fact that profitability and
cash flow generation for fiscal 2004 ending August will be weaker
than previously anticipated, because of continuing challenges on a
few problem projects, reduced expectations of asset divestitures,
and weakness in the higher margin pipe manufacturing operation,"
said Standard & Poor's credit analyst Heather Henyon.
As a result, it is unlikely that Shaw will be able to meet
Standard & Poor's expectations of total debt to EBITDA of 2.5-3x
and EBITDA to interest coverage in the 3x area in 2004. However, a
growing backlog of more steady environmental and infrastructure
projects may enable the company to achieve an acceptable credit
profile in the intermediate term.
Shaw Group is a leading global provider of engineering and
construction services mainly to the power, process, and
environmental and infrastructure sectors. The company also has a
modest-size manufacturing and distribution unit, which is the
leading fabricator of piping systems. Demand for new power plant
construction was limited in 2003 and is expected to remain soft
throughout 2004.
The chemicals markets remain depressed, and high raw material
prices will likely keep the sector's profitability and capital
expenditures at relatively low levels in the near term. The
commercial environmental and construction market also faces heavy
pricing pressures, although demand from the federal government
remains solid. Key growth drivers for Shaw beyond 2004 will be
Clean Air legislation projects, Defense Department outsourcing,
Homeland Security spending, and continued focus on obtaining
operations and maintenance projects.
SIERRA AUTOMOTIVE: Case Summary & 2 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Sierra Automotive Centre, LLC
1291 Galleria Drive, Suite 100
Henderson, Nevada 89014
Bankruptcy Case No.: 04-11217
Type of Business: Real Estate Development
Chapter 11 Petition Date: February 6, 2004
Court: District of Nevada (Las Vegas)
Judge: Lloyd King
Debtor's Counsel: David J. Winterton, Esq.
David J. Winterton & Assoc., Ltd.
211 North Buffalo #A
Las Vegas, NV 89145
Tel: 702-363-0317
Total Assets: $2,000,000
Total Debts: $2,070,000
Debtor's 2 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
John Nogaim $1,000,000
8408 Dry Cliff Circle
Las Vegas, NV 89134
Lloyd E. Manning $200,000
SOLUTIA INC: Woos Court to Extend Lease Decision Time to May 17
---------------------------------------------------------------
Solutia, Inc., and its debtor-affiliates are party to numerous,
unexpired, non-residential real property leases. The Debtors use
these Unexpired Leases in connection with their business
operations throughout the United States. Many of the Debtors'
offices, from which they conduct all aspects of their business
operations, are subject to the Unexpired Leases. The Unexpired
Leases, taken as a whole, are thus valuable assets to the Debtors'
estates and are integral to the continued operation of their
businesses.
Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher LLP, in New
York, relates that under Section 365(d)(4) of the Bankruptcy
Code, the Debtors must decide whether to assume or reject certain
Unexpired Leases on or before February 16, 2004, which is 60 days
after the Petition Date. However, Mr. Reilly informs the Court
that, since the Petition Date, the Debtors have been in the
process of reviewing and analyzing their business operations.
While the Debtors anticipate making decisions on whether to
assume or reject certain Unexpired Leases in the near future,
they will be unable to make informed decisions relating to all
the Unexpired Leases within the current deadline.
Accordingly, the Debtors ask the Court to extend the Lease
Decision Deadline by 90 days, through and including May 17, 2004,
without prejudice to their ability to request further extension
of the time period.
Mr. Reilly explains that, because of the wide geographical spread
of the leased properties, the Debtors must conduct time-consuming
research in numerous markets to determine whether each Unexpired
Lease is advantageous compared to available space. Presently,
the Debtors have made no final determinations regarding their
intentions to assume or reject the Unexpired Leases. During the
initial stages of their Chapter 11 cases, the Debtors and their
professional advisors have been primarily focused on day-to-day
operations, obtaining approval of the Debtors' first-day
applications and dealing with numerous business and
administrative emergencies. As the Debtors are still in the
process of reviewing and analyzing whether each Lease is
appropriately priced for its market -- a key factor in
determining whether to assume or reject each Lease. Additional
time is necessary to ensure that their decisions regarding the
Unexpired Leases will be supported by sound business judgment.
Moreover, Mr. Reilly states that the Debtors are in the process
of evaluating business operations at each location related to an
Unexpired Lease as part of the development of a reorganization
plan. The analysis is necessary to determine which of the leased
properties will be useful to the Debtors' operations on a going-
forward basis. Given the significant number of leased properties
and the complexity of the organizational structure of the
Debtors' businesses, the amount of information required to make
an informed decision is vast. At this early stage in the
Debtors' Chapter 11 cases, it is difficult to assess the
significance of each of the Unexpired Lease in their operations.
Mr. Reilly maintains that the extension will allow the Debtors to
determine in an orderly manner whether to assume or reject the
Unexpired Leases in the context of their evaluation of their
business operations and the development of a reorganization plan.
Mr. Reilly insists that the Debtors should not be compelled to
decide on an Unexpired Lease before a complete analysis of the
Lease has been performed. The premature assumption or rejection
of a Lease may result in the Debtors incurring a substantial
administrative claim or rejecting a valuable lease. Rather, the
Debtors should address the process in a rational and practical
manner. Mr. Reilly assures the Court that the Debtors do not
intend to delay determination and will move as quickly as
practical to evaluate the Unexpired Leases and file an
appropriate request in Court.
According to Mr. Reilly, the lessors under the Unexpired Lease
would not be prejudiced by the proposed extension because:
(a) the Debtors have performed and will continue to perform in
a timely manner their postpetition obligations under the
Unexpired Leases; and
(b) any lessor may request the Court to fix an earlier date by
which the Debtors must assume or reject their lease.
(Solutia Bankruptcy News, Issue No. 7; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
STEINWAY MUSICAL: S&P Affirms & Revises Outlook on Low-B Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
Steinway Musical Instruments Inc. to negative from stable.
At the same time, Standard & Poor's affirmed its 'BB-' corporate
credit rating, and its 'B+' senior unsecured debt rating for the
company.
At Sept. 27, 2003, $196.8 million in total debt was outstanding.
"The outlook revision follows Steinway's recent announcement that
it has purchased 14% of its outstanding common stock, and as
payment for the shares, issued $29 million of 8.75% senior notes
due 2011 under its existing indenture," said credit analyst Martin
S. Kounitz. This unexpected increase in debt, along with the
associated higher cash interest costs and the company's lower
profitability in recent periods, will result in credit measures
below Standard & Poor's expectations.
The ratings on Waltham, Massachusetts-based Steinway are based on
the company's below-average financial profile, narrow product
offering, and the discretionary nature of spending on musical
instruments. These factors are somewhat mitigated by Steinway's
well-established market position in both the concert hall and
institutional markets for musical instruments; its widely
recognized brand names, including Conn, Selmer, and Steinway; and
its geographic diversification in the U.S., Europe, and Asia.
During 2003, profitability declined compared with previous years
due to a strike at two of the company's band instrument
manufacturing plants, lower production levels of pianos, and
underabsorption of overhead.
STELCO: Wayne Fraser Says Corporate Greed Part of Co.'s Failure
---------------------------------------------------------------
Wayne Fraser, the United Steelworkers' Ontario/Atlantic Director,
says the revelations of huge pensions to Stelco senior management
is part of the kind of corporate behavior the union has criticized
for years.
"The greed of Stelco's senior managers and Board of Directors,
combined with Stelco's approach to labour relations, is right out
of the 19th Century," Fraser said. "Charles Dickens would have a
field day writing about this place."
"They quietly protect senior bosses' pensions with a trust and
guarantee that unnamed executives will get severance payments of
up to three times their annual pay if Stelco gets bought out. Then
they loudly announce that they need cuts in pay and benefits from
workers."
"It is wrong, and it is just another reason that Stelco's
credibility deficit with our members is bigger than its financial
woes."
Fraser said Stelco is far from alone in this sort of corporate
greed, "but Stelco stands out because of its insistence that the
pay and pensions of our members are the problem. The real problem,
as I've said all along, is Stelco management's bad decisions. It
was Stelco that made the strategic and operational decisions that
got it into trouble, not its employees, not the union, and not the
retirees."
"Our union has always said that Stelco's attempt to terrify
employees and pensioners into submission is not only morally
disgraceful, it is a recipe for failure. These revelations about
senior bosses protecting themselves make that even more true."
Stelco Inc. initiated a Court-supervised restructuring in order to
restore its financial health and competitive position in the North
American steel industry.
TECO: Fitch Says Exit from Power Projects are Neutral Developments
------------------------------------------------------------------
Fitch Ratings views the decision by TECO Energy (TECO, senior
unsecured debt rated 'BB+', Rating Outlook Negative by Fitch) to
exit from the Union and Gila River power projects as neutral
credit developments. TECO plans to transfer the two plants to the
bank lending group that provided the non-recourse project
financing. The decision will require TECO to reflect a write-down
of its equity investment of approximately $780 million after tax
in year-end 2003 financial results.
Despite the non-cash charge, TECO expects to be in compliance with
the 65% maximum debt to total capital covenant in its $350 million
bank revolving credit facility. The debt ratio at Dec. 31, 2003,
as defined, is expected to be 62%. To provide back-up liquidity in
the event that TECO is not able to continue to maintain this
requirement, the company has arranged a $200 million standby
credit facility secured by the capital stock of TECO Transport
that could be activated.
The current ratings and Outlook assume that TECO will not provide
additional support to the projects and that the limited remaining
headroom under the financial covenant requirement to absorb
additional non-cash write-downs will be sufficient to avoid
execution of the secured credit facility. Longer term ratings
stabilization and improvement will depend on recovery in the value
of remaining merchant assets and the ability to reduce
consolidated leverage. Going forward, additional liquidity and
debt reduction may be achieved through other potential asset
sales.
TECO's ratings reflect the company's weak financial profile due
primarily to significant debt relative to expected cash flow
generation of remaining businesses. Favorably, TECO has made some
progress in completing smaller asset sales over the last several
months including the sale of the propane business and in
stabilizing the consolidated liquidity position. At the same time,
TECO has no significant debt maturities until 2007. TECO's ratings
also consider the contribution of regulated utility subsidiary
Tampa Electric, which benefits from a growing and diverse service
territory and a favorable regulatory environment. Despite higher
capital expenditures in recent years and the return of capital to
the parent, financial measures at Tampa Electric are expected to
remain strong.
TECO Energy is a holding company headquartered in Tampa, Florida.
Its principal businesses are a regulated electric and natural gas
local distribution company subsidiary, unregulated generation,
marine transport, and synthetic fuel facilities. Tampa Electric
provides retail electric service to over 600,000 customers in west
central Florida and through its Peoples Gas division distributes
and markets natural gas to approximately 281,000 customers
throughout the state.
TEMPLE BNAI SHALOM: Case Summary & 6 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Temple Bnai Shalom of Great Neck
Post Office Box 495
Great Neck, New York 11022
Bankruptcy Case No.: 04-80707
Chapter 11 Petition Date: February 5, 2004
Court: Eastern District of New York (Central Islip)
Judge: Stan Bernstein
Debtor's Counsel: Carlos J. Cuevas, Esq.
1250 Central Park Avenue
Yonkers, NY 10704-1906
Tel: 914-964-7060
Total Assets: $3,501,450
Total Debts: $1,158,669
Debtor's 6 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Alan Guthartz Operating loans and Unknown
14 Bond Street funding retainer for
Great Neck, NY 11021 debtor's counsel
Florence Risman Asserts claim to Unknown
Debtor's property
based on defective
tax lien foreclosure
proceeding
Incorporated Village of Taxes Contingent Unknown
Great Neck Estates
Rabbi Meyer Leifer Compensation $1,100
Rosenfeld & Maidenbaum Attorneys fees Unknown
Steven Sewell, P.C. Attorneys' fees Unknown
TIMKEN COMPANY: Jerry J. Jasinowski Nominated to Board
------------------------------------------------------
At a regular meeting of The Timken Company's board of directors,
Jerry J. Jasinowski, president of the National Association of
Manufacturers, was nominated for membership on the board and will
stand for election at the annual shareholders' meeting on April
20. Two members announced their retirements.
Mr. Jasinowski has been president of the National Association of
Manufacturers (NAM), the largest industry trade group in the
country, since 1990. "Jerry's leadership has brought NAM to the
forefront on political, economic and manufacturing trends," said
W.R. Timken, Jr., chairman. "We welcome his leadership and insight
to our board."
Stanley C. Gault, 78, and Martin D. (Skip) Walker, 71, will retire
from the board effective April 20. Mr. Gault is retired chairman
and chief executive officer of The Goodyear Tire and Rubber
Company, and Rubbermaid, Inc. Mr. Walker is principal of MORWAL
Investments in Westlake, Ohio and the retired chairman and chief
executive officer of the M.A. Hanna Company.
"Stan and Skip have been with our board through a time of
tremendous change, as the company grew, became more global and in
2003 nearly doubled in size," said Mr. Timken. "We will miss their
guidance and experience."
Mr. Jasinowski, a one-time factory worker, joined the U.S. Air
Force as an intelligence officer. He went on to become assistant
professor of economics at the U.S. Air Force Academy. In the early
1970s, he managed research and legislative affairs for the Joint
Economic Committee of Congress. In 1976, he served as director of
the Carter Administration's economic transition team for the
departments of Treasury, Commerce, Labor, the Council of Economic
Advisors and the Federal Reserve. He later was appointed assistant
secretary for policy at the U.S. Department of Commerce.
Mr. Jasinowski, 65, earned his bachelor's degree in economics from
Indiana University, his master's degree in economics from Columbia
University and is a graduate of the Harvard Business School's
Advanced Management Program. The Timken Company (NYSE: TKR)
http://www.timken.com) is a leading global manufacturer of highly
engineered bearings and alloy steels and a provider of related
products and services with operations in 29 countries. The company
recorded 2003 sales of $3.8 billion and employed approximately
26,000 at year-end.
The Timken Company (NYSE: TKR)(Moody's, Ba1 Senior Unsecured Debt,
Senior Implied and Senior Unsecured Issuer Ratings) --
http://www.timken.com/-- is a leading global manufacturer of
highly engineered bearings and alloy steels and a provider of
related products and services with operations in 29 countries. The
company recorded 2003 sales of $3.8 billion and employed
approximately 26,000 at year-end.
TIMKEN COMPANY: Declares Quarterly Dividend Payable on March 2
--------------------------------------------------------------
The board of directors of The Timken Company declared a quarterly
cash dividend of 13 cents per share. The dividend is payable on
March 2, 2004 to shareholders of record as of February 20, 2004.
It will be the 327th consecutive dividend paid on the common stock
of the company.
The Timken Company (NYSE: TKR)(Moody's, Ba1 Senior Unsecured Debt,
Senior Implied and Senior Unsecured Issuer Ratings) --
http://www.timken.com/-- is a leading global manufacturer of
highly engineered bearings and alloy steels and a provider of
related products and services with operations in 29 countries. The
company recorded 2003 sales of $3.8 billion and employed
approximately 26,000 at year-end.
TRANSWESTERN PUBLISHING: Low-B Ratings Get S&P's Negative Outlook
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
TransWestern Publishing Co. LLC to negative from stable. In
addition, Standard & Poor's affirmed its 'BB-' corporate credit
and senior secured debt and 'B' subordinated debt ratings on the
company. Headquartered in San Diego, California, TransWestern has
about $400 million of debt outstanding.
"The outlook change reflects a planned dividend to equity
investors of about $200 million, resulting in a meaningful
deterioration in the overall financial profile," said Standard &
Poor's credit analyst Donald Wong. Pro forma debt to EBITDA is in
the 7x area. The ratings on TransWestern reflect the company's
substantial pro forma debt levels due to the planned dividend, its
initial capitalization, and subsequent growth through
acquisitions. With revenues of about $300 million, TransWestern is
the nation's second largest independent telephone directory
publisher with about 330 community-oriented directories in 25
states. The company also faces competitive business conditions
against the incumbent telephone directories. In addition, results
during 2003 were hurt by delays in the publication of a
significant number of directories.
These factors are tempered by TransWestern's historically stable
revenue and cash flow throughout the advertising revenue cycle,
geographic diversity, a large and diversified customer base of
small- to medium-size businesses, and favorable growth prospects.
Cash flow benefits from operating cash flow margins in the mid- to
high-20% range, high renewal and account retention rates,
significant levels of advance payments by customers, and minimal
capital expenditures. The company's business position was enhanced
with the acquisition of WorldPages, Inc. in 2001 for about $216
million. WorldPages provided TransWestern with a strong presence
in the Northwest and Southwest.
TransWestern's pro forma financial profile is not indicative of
the 'BB-' corporate credit rating. However, it is expected to get
there in coming years. The debt to EBITDA measure is expected to
decline sharply in 2004 as a result of the combination of lower
debt and higher EBITDA levels. In addition, the company is
expected to use most, if not all, of its free operating cash flow
for debt reduction in the intermediate term.
UBIQUITEL: S&P Rates $250 Million Senior Unsecured Notes at CCC
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC' rating to
UbiquiTel Operating Co.'s $250 million senior unsecured notes due
2011, issued under Rule 144A with registration rights. UbiquiTel
Operating Co. is a subsidiary of UbiquiTel Inc., a Sprint PCS
affiliate.
Simultaneously, Standard & Poor's revised the rating on UbiquiTel
Operating Co.'s existing senior unsecured debt to 'CCC' from 'CC'
due to the lower amount of priority obligations in the company's
capital structure as a result of this transaction. The 'CCC' bank
loan rating on UbiquiTel Operating Co. was withdrawn as a result
of this transaction.
All other outstanding ratings on UbiquiTel and the operating
company, including the 'CCC' corporate credit rating, were
affirmed. The outlook was revised to positive from developing.
Proceeds of the note issue will be used to repay the bank debt and
redeem the 14% series B senior discount notes. As of Dec. 31,
2003, pro forma for this transaction, UbiquiTel Inc.'s total debt
outstanding was about $416 million (including about $41 million
for future cash interest associated with the 14% senior discount
notes due 2010 in accordance with SFAS No. 15). Conshohocken,
Pennsylavania-based UbiquiTel Inc. is a Sprint PCS affiliate
providing wireless communications services to markets in the
Western and Midwestern U.S., covering 10 million population
equivalents (pops).
The outlook revision reflects potential debt leverage improvement
over the next year resulting from increased cash flow and improved
liquidity as a result of the new note deal. The amendment to the
Sprint PCS management agreement, which reduces back-office
expenses and extends the reciprocal roaming and reseller rates of
$.058 per minute through 2006, in addition to Qwest Communications
International Inc.'s reseller agreement with Sprint PCS, should
bolster roaming and reseller revenue.
"The ratings reflect UbiquiTel's high debt leverage, weak cash
flow, and high churn rate," said Standard & Poor's credit analyst
Rosemarie Kalinowski. "This is attributable to slower industry
growth, increased competition and previous high bad debt expense
related to Clear Pay customers." The churn rate, although
declining, was still high at 3.2% in 2003 due to increased
competition. Cost per gross add continues to be high in the $450
area due to lower gross additions, an increase in handset
subsidies, and retention costs. EBITDA turned minimally positive
in the first quarter of 2003 and was a positive $27 million for
the full year, reflecting increased subscribers and cost-reduction
measures. In 2003, debt to EBITDA was in the 15x area and is not
expected to decline below 6x until at least 2005.
On the positive side, revenue growth demonstrated some improvement
in 2003, increasing almost 25%, attributable to increased
subscribers, higher average revenue per unit of $58, and increased
demand for PCS Vision. The subscriber base grew by about 30% in
2003 to a total of 327,700. However, net customer additions were
10% lower than in 2002, reflecting the reduction in subprime
subscribers without deposit and increased competition. The quality
of the subscriber base has improved, with prime subscribers
comprising about 73% of the base, while subprime customers without
deposits comprise about 10% of the base.
UNITED AIRLINES: Reports January Traffic Results
------------------------------------------------
United Airlines (OTC Bulletin Board: UALAQ) reported its traffic
results for January 2004. United reported a passenger load factor
of 72.1 percent, up 1.2 points over January 2003. Total scheduled
revenue passenger miles (RPMs) decreased in January 2004 by 1
percent on a capacity decrease of 2.7 percent vs. the same period
in 2003.
United and United Express operate more than 3,400 flights a day on
a route network that spans the globe. News releases and other
information about United may be found at the company's Web site at
http://www.united.com/
US AIRWAYS: Fourth Quarter Net Loss Narrows to $98 Million
----------------------------------------------------------
US Airways Group, Inc. (Nasdaq: UAIR) reported a fourth quarter
2003 net loss of $98 million compared to a net loss of $794
million for the fourth quarter 2002, which is a $696 million
improvement.
The fourth quarter pretax loss of $99 million compares to a pretax
loss of $848 million for the fourth quarter of 2002, an
improvement of $749 million. Results for both periods include
unusual items, described in Note 5 below, including the sale of
the company's equity investment in Hotwire in the fourth quarter
of 2003, and a number of items related to the company's bankruptcy
in the fourth quarter of 2002. Excluding these unusual items,
pretax loss for the fourth quarter of 2003 of $129 million
improved by $223 million from a $352 million pretax loss in the
fourth quarter of 2002.
"Throughout the year, we made progress in reducing our losses, but
regrettably, we are behind in our plan for achieving sustained
profitability," said US Airways President and Chief Executive
Officer David N. Siegel. "We continue to face the cost and revenue
challenges confronting the other legacy carriers. Absent special
items, none of these carriers reported a full-year profit, which
highlights the fundamental change low-cost carriers are having on
the industry overall."
Siegel said that US Airways' strong share of industry bookings and
improved load factor are good indicators that its customers
continue to support the airline, but the company's profitability
and successful response to low-cost competition are critical to
maintaining its loyal customer base. Going forward, the company
needs to achieve a cost structure that matches the carriers that
have demonstrated consistent profitability. "As we seek to
implement changes that the marketplace demands, we first must
adapt our business model and reduce costs in a way that will
enable us to become profitable in this new competitive
environment."
The fourth quarter 2003 US Airways system passenger revenue per
available seat mile (PRASM) was 10.83 cents, up 7.4 percent
compared to the fourth quarter of 2002. Domestically, system PRASM
grew 3.6 percent. System statistics encompass mainline, wholly
owned airline subsidiaries of US Airways Group, Inc., as well as
capacity purchases from third parties operating regional jets as
US Airways Express. For US Airways mainline operations only, the
PRASM of 9.77 cents was up 7.1 percent. Fourth quarter 2003
passenger transportation revenues included a $34.2 million
favorable adjustment related to the air traffic liability account.
System available seat miles were up 2.3 percent, while mainline
ASMs increased 0.6 percent during the fourth quarter. Revenue
passenger miles increased 8.2 percent for the full US Airways
system, while mainline RPMs increased 7.0 percent. The mainline
passenger load factor of 72.7 percent was 4.4 percentage points
higher than the same period last year and system load factor was
up 3.9 percentage points to 71.2 percent. For the quarter, US
Airways Inc.'s mainline operations carried 10.4 million
passengers, an increase of 0.3 percent compared to the same period
of 2002, while system passengers of 13.5 million were up 2.2
percent. The fourth quarter 2003 yield for mainline operations of
13.43 cents was up 0.6 percent from the same period in 2002, while
system yield was up 1.7 percent to 15.22 cents.
US Airways Senior Vice President of Marketing and Planning B. Ben
Baldanza said that customer expectations are changing more rapidly
than previously anticipated, and the demand for lower fares is
limiting revenue opportunities. "Meeting and exceeding customer
expectations is the key to long-term success in all industries and
we are continuing to transform our business in a way that
addresses this challenge. Our actions have resulted in improved
revenue performance relative to other legacy airlines," said
Baldanza. "As fares continue to drop, it also becomes essential
for us to lower our costs related to selling tickets."
The mainline cost per available seat mile (CASM), excluding fuel
and unusual items, of 10.22 cents for the quarter, declined 7.2
percent versus the same period in 2002 (for a reconciliation, see
Note 3 to the Selected Airline Operating and Financial
Statistics). The fourth quarter of 2003 included $9 million of
non-cash, stock-based compensation related to stock grants given
to employees of US Airways' organized labor groups during the
restructuring process. Also during that process, the company
substantially restructured its aircraft obligations. As a result
of these two items, taking aircraft ownership into account and
excluding the stock-based compensation expense, CASM improved 9.2
percent for the quarter.
The cost of aviation fuel per gallon, including taxes, for the
fourth quarter, was 87.74 cents (82.54 cents excluding taxes), up
4.9 percent from the same period in 2002. US Airways' fuel
position is 20 percent hedged for the first quarter of 2004, 30
percent hedged for all of 2004, and 5 percent hedged for 2005.
US Airways Group ended the quarter with total restricted and
unrestricted cash of approximately $1.84 billion, including $1.29
billion in unrestricted cash, cash equivalents and short-term
investments.
"We have maintained modestly positive cash flow and strong
liquidity since emerging from Chapter 11 last year; however, we
still face great challenges from a cost perspective," said Neal S.
Cohen, US Airways executive vice president of finance and chief
financial officer. "The carriers that have consistently reported
profits have established a new benchmark with cost levels at least
25 percent lower than ours."
Cohen said that the company continues to work to reduce its costs
and that all elements in the company's cost structure are being
examined. "Everything is on the table, from distribution costs, to
labor costs, to how we schedule our airline," said Cohen. "In the
fourth quarter, for example, our labor expense for mainline
operations accounted for 42 percent of total revenue, compared to
an average of 33 percent for the low-cost carriers."
Cohen added that the company has strict loan covenants with the
Air Transportation Stabilization Board (ATSB) that will need to be
met. "We are taking the necessary actions to remain in compliance
with the terms of the loan and currently are in discussions with
the ATSB."
Given the significant changes in the industry, as has been
previously reported, US Airways has engaged investment banking
advisors in an exploratory process to identify and value its
assets, and that includes identifying potential buyers, but no
decision has been made to sell any of those assets.
Fourth Quarter Highlights:
* Launched long-term strategic alliance and codeshare
agreements with Lufthansa Airlines and Spanair, including
reciprocal frequent flyer benefits. US Airways will begin
formally participating in the Star Alliance in the second
quarter of 2004. Through the Star Alliance network, US
Airways' customers will enjoy benefits of 14 of the world's
finest airlines, and will have access to 700 airports in
128 countries, including each Star carrier's airport
lounges; coordinated timetables to make connections
smoother; priority reservations, standby, boarding and
baggage handling for Star Alliance Gold members and First
and Business Class travelers; and the ability to earn and
redeem frequent flyer miles or points on any member
airline.
* Increased the breadth of the United Airlines marketing
partnership to a combined 4,227 segments serving 114 US
Airways destinations and 113 United destinations.
* Improved the ease of making flight connections at the
Philadelphia hub by adding new international gates, while
increasing regional jet departures at Philadelphia by
approximately 56 percent in the fourth quarter 2003 versus
the fourth quarter 2002.
* Reported the best on-time performance for a fourth quarter
since 1991, besting other carriers with similar networks.
* Expanded international departures in the last 12 months by
20 percent versus 2002, by further growing the Caribbean
and Latin America network with three new destinations. US
Airways began Mexico City service in late October; San
Jose, Costa Rica, in November; and La Romana, Dominican
Republic, in December. Additionally, US Airways began
seasonal weekend roundtrip service to Vail, Colorado, on
Dec. 20, 2003, which will operate through April 4, 2004.
US Airways also will begin nonstop service between
Philadelphia and Glasgow, Scotland, in May 2004.
* Enhanced the functionality of usairways.com to improve
customer usability and lower distribution costs. The
company issued a record level of boarding passes through
usairways.com in the fourth quarter.
* Listed US Airways Group's Class A common stock on the
NASDAQ National Market under the symbol UAIR.
Siegel said that the company and its employees have accomplished
much in an extremely difficult environment, but that more work
still must be done. "As part of our regular course of business, we
are meeting with the company's labor leadership today to go over
these results and discuss next steps. It is important that we work
together to implement the necessary changes. Consumers are driving
tremendous changes in the industry and as difficult as it is, we
must adapt and do it quickly," said Siegel.
US AIRWAYS: Marubeni America Claim Reduced to $4.1 Million
----------------------------------------------------------
Wilmington Trust Company, as Indenture and Security Trustee,
filed Claim No. 4011 for $13,068,396, which included secured and
unsecured claim amounts relating to an aircraft bearing Tail No.
N426US, against US Airways Group Inc. and its debtor-affiliates.
On November 4, 2002, Wilmington Trust also filed Claim No. 4077,
which also includes amounts relating to Tail No. N426US that are
duplicative of the amount in Claim No. 4011. The underlying debt
relating to Tail No. N426US is held by Marubeni America
Corporation.
In a stipulation, the Reorganized Debtors and Wilmington Trust
agree that Claim No. 4011 is partially reduced and allowed as a
general unsecured Class USAI-7 claim for $4,148,219. All
remaining claims Wilmington Trust asserted with respect to Tail
No. N426US are disallowed. (US Airways Bankruptcy News, Issue No.
46; Bankruptcy Creditors' Service, Inc., 215/945-7000)
US LIQUIDS: Raises $12,235,000 from Various Asset Sales
-------------------------------------------------------
U S Liquids Inc. (OTC Pink Sheets: USLQ) a provider of waste
management services, announced that it has completed the
previously announced sale of (i) substantially all of the assets
of its USL Detroit, USL Florida and USL First Source businesses,
and (ii) substantially all of the assets of its Waste Research
business other than a waste processing facility in Macon, Georgia,
to EQ - The Environmental Quality Company.
Gross proceeds from the sale, which are subject to a post-closing
working capital adjustment, were $12.235 million. $1.0 million of
the proceeds will be paid to the United States of America in full
and complete satisfaction of all amounts still owing by USL
Detroit under the terms of its settlement of the investigation of
its Detroit facility that was commenced by the EPA and the FBI in
August 1999. The remaining proceeds will be used to pay
transaction expenses and reduce debt outstanding under the
Company's credit facility.
EQ - The Environmental Quality Company is a Michigan-based
environmental services organization that offers a comprehensive
range of high quality services to industrial and municipal
customers throughout North America. The organization has
approximately 500 employees and generates approximately $150
million in annual revenue from 30 locations in the United States
and Argentina.
VAIL RESORTS: Files Universal Shelf Registration Statements
-----------------------------------------------------------
Vail Resorts, Inc. (NYSE: MTN) announced that it has filed a
universal shelf registration statement with the Securities and
Exchange Commission in connection with the potential offer and
sale, from time to time, of up to $100 million of its common
stock, preferred stock and debt securities. These securities,
which may be offered in one or more offerings and in any
combination, will in each case be offered pursuant to a separate
prospectus supplement that will describe the specific types,
amounts, price and other terms of the offered securities.
The Company's board of directors has not currently authorized the
issuance of any new securities. The Company is filing the
registration statement so that the Company has the flexibility to
raise capital if and when favorable economic or business
conditions dictate. The sale of any securities under the shelf
registration statement would require the approval of the Company's
board of directors.
Additionally, the Company announced that it has filed a separate
shelf registration statement covering the sale by Apollo Ski
Partners, L.P. from time to time of up to 1.5 million shares of
Vail Resorts, Inc. common stock owned by Apollo. Apollo currently
holds 7,439,542 shares of class A common stock of the Company or
21.1% of the Company's outstanding common stock.
The registration statements relating to these securities have been
filed with the Securities and Exchange Commission, but have not
yet become effective. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration
becomes effective.
Vail Resorts, Inc. is the premier mountain resort operator in
North America. The Company's subsidiaries operate the mountain
resorts of Vail, Beaver Creek, Breckenridge and Keystone in
Colorado, Heavenly Resort in California and Nevada and the Grand
Teton Lodge Company in Jackson Hole, Wyoming. In addition, the
Company's RockResorts luxury resort hotel company operates 10
resort hotels throughout the United States. The Vail Resorts
corporate Web site is http://www.vailresorts.com/and the consumer
Web sites are http://www.snow.com/ and
http://www.rockresorts.com/
Vail Resorts, Inc. (S&P, BB- Corporate Credit Rating, Negative) is
a publicly held company traded on the New York Stock Exchange
(NYSE: MTN).
VERTEX INTERACTIVE: Ability to Continue as Going Concern in Doubt
-----------------------------------------------------------------
Vertex Interactive, Inc., is a global provider of supply chain
management technologies, including enterprise software systems and
applications, that enable its customers to manage their orders,
inventory and warehouse needs, consultative services, and software
and hardware service and maintenance. The Company serves its
clients through three general product and service lines: (1)
enterprise solutions; (2) point solutions; and (3) service and
maintenance for its products and services, including service and
maintenance of software and hardware the Company resells for third
parties.
Based upon Vertex' substantial working capital deficiency of
approximately $30,520,000 at June 30, 2003, its historic rate of
cash consumption, the uncertainty of liquidity-related
initiatives, and the reasonable possibility of on-going negative
impacts on its operations from the overall economic environment
for a further unknown period of time, there is substantial doubt
as to the Company's ability to continue as a going concern.
The successful implementation of its business plan has required,
and will require on a going forward basis, substantial funds to
finance (i) continuing operations, (ii) further development of its
enterprise software technologies, (iii) settlement of existing
liabilities including past due payroll obligations to its
employees, officers and directors, and (iv) possible selective
acquisitions to achieve the scale management believes will be
necessary to remain competitive in the global SCM industry. There
can be no assurance that the Company will be successful in raising
the necessary funds.
WEIRTON STEEL: Court Okays Houlihan Lokey's Amended Engagement
--------------------------------------------------------------
Weirton Steel Corporation sought and obtained Court approval for
the terms and conditions of the Houlihan Lokey Amended Agreement,
including but not limited to the mutual release.
As previously reported, the U.S. Bankruptcy Court for the Northern
District of Virginia authorized Weirton Steel Corporation
to employ Houlihan Lokey Howard & Zukin Capital as its Investment
Banker on July 16, 2003. Houlihan Lokey's services include:
(a) the assessment of the Debtor's financial restructuring or
other strategic alternatives; and
(b) (1) the Restructuring Transaction -- a possible financial
restructuring transaction of the Debtor;
(2) the Sale Transaction -- a possible merger or other
transaction involving the sale of all or substantially
all of the business assets or equity interests of the
Debtor in one or more transactions; and
(3) the Financing Transaction -- a possible private
placement of equity and debt securities.
The Debtor and Houlihan Lokey have jointly determined to modify
the Engagement Letter in order to eliminate the Restructuring
Transaction and Financing Transaction portions of Houlihan
Lokey's retention.
As set forth in the Amended Agreement dated November 25, 2003,
Houlihan Lokey will serve as the Debtor's financial advisor only
in connection with a Sale Transaction:
(a) Houlihan Lokey will no longer advise the Debtor in
connection with any Restructuring Transaction or Financing
Transaction; and
(b) The Debtor will not be obligated to pay, and Houlihan
Lokey will not be entitled to receive, a Restructuring
Transaction Fee or Financing Transaction Fee, each as
defined in the Engagement Letter, whether pursuant to
Sections 2(b)(i), 2(b)(ii), 2(c) of the Engagement Letter,
or otherwise.
In addition, the Debtor will pay, and Houlihan Lokey will accept,
a final payment of Advisory Fees in the month of November pro
rata through November 6, 2003, as billed and submitted in normal
course pursuant to the Engagement Letter. Except for the Final
Advisory Fee Payment, no additional Advisory Fees will be due and
payable under Section 2(a) of the Engagement Letter.
The Debtor will timely pay Houlihan Lokey's invoice for its
billed but unreimbursed out-of-pocket expenses in the normal
course pursuant to the Engagement Letter. The Debtor will
reimburse Houlihan Lokey for all additional expenses in
accordance with the Engagement Letter.
Section 5(b)(iii) of the Engagement Letter, and the calculation
of Houlihan Lokey's Sale Transaction Fee, will be modified as:
"Upon the consummation of a Sale Transaction, the Company
shall pay Houlihan Lokey of the Sale Transaction Fee (as
calculated in accordance with Section 5 b)(iii) of the
Agreement); provided that the Company agrees to pay to
Houlihan Lokey the Sale Transaction Fee due to it under this
paragraph 5 (without any further compromise or discount), then
Houlihan Lokey shall agree to reduce said Sale Transaction Fee
by 65% of the last three months of Advisory Fees or $292,500."
The Debtor and Houlihan Lokey also executed a mutual release.
The mutual release proposes a general release by the Debtor of
Houlihan Lokey and by Houlihan Lokey of the Debtor for any and
all claims arising under the Engagement Letter for the period
through November 25, 2003, except for matters relating to
Houlihan Lokey's continued engagement in accordance with the
Amended Agreement. (Weirton Bankruptcy News, Issue No. 19;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
WII COMPONENTS: S&P Gives Low-B Credit & Senior Sec. Debt Ratings
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to St. Cloud, Minnesota-based WII Components Inc., a
holding company for cabinet component manufacturing subsidiaries.
At the same time, Standard & Poor's assigned its 'B-' senior
unsecured debt rating to WII's $130 million senior unsecured notes
due 2012 to be issued under Rule 144A with registration rights.
The outlook is stable.
The notes are rated one notch below the corporate credit rating to
reflect their structural subordination to lease obligations and
expected borrowings over time under the company's senior secured
bank credit facility. The notes will be guaranteed by all WII
subsidiaries, and proceeds will be used to refinance existing debt
and pay an approximately $49 million dividend to shareholders. WII
has no significant assets other than its investment in
subsidiaries and no significant liabilities other than the
proposed debt.
"The ratings reflect the consolidated entity's very aggressive
financial policies; highly leveraged capital structure; modest
sales base and thin cash flow protection measures; competition
with its customers; and product, manufacturing site, and customer
concentration," said Standard & Poor's credit analyst Dominick
D'Ascoli. "These factors overshadow the company's strengths, which
include a good position in the kitchen and bathroom cabinet
component market and respectable operating margins in the mid-
teens percentage area."
With annual sales of about $175 million, WII is the second-largest
U.S. manufacturer of solid and engineered wood components for
kitchen and bathroom cabinets. Founded in 1945, the company
produces solid hardwood cabinet doors and door components, face
frames, and drawer fronts; rigid thermofoil cabinet doors; veneer-
raised panels; and a variety of laminated and profile-wrapped
components including crown moldings, door jambs and stops, and
window parts. Manufacturing facilities are located near hardwood
supplies in Minnesota, North Dakota, Oregon, and Kentucky.
Acquisitions in 1998 and 2002 expanded WII's product lines and
manufacturing capacity, and broadened the geographic markets it
served. WII is expected to continue growing via moderate-sized,
bolt-on acquisitions, and the company is currently in discussions
that may lead to the acquisition of a cabinet door manufacturer.
If the transaction is completed, WII intends to finance up to half
of the approximately $18 million purchase price with borrowings
under its revolving credit facility and the remainder with an
equity contribution. Since April 2003, WII has been owned 94% by
private equity investment firm Behrman Capital III L.P.
WINN-DIXIE: Responds To Moody's Debt Rating Downgrade
-----------------------------------------------------
Winn-Dixie Stores, Inc. (NYSE: WIN) responded to Moody's lowering
of the Company's senior implied rating to Ba3 from Ba1 and placing
the ratings on negative outlook.
In addition to reporting second quarter 2004 earnings last week,
the Company announced new strategic initiatives designed to grow
sales, reduce expenses, enhance operating results and enable long-
term profitability. These initiatives include an expense
reduction plan that will allow the Company to achieve $100 million
in annual expense savings and a market analysis and asset
rationalization review that will identify core markets targeted
for future growth and investment and non-core markets to be
evaluated for sale or closure.
Last quarter, the Company announced the renewal of a three-year
$300 million revolving credit facility and currently has no
borrowings outstanding under that facility. When the core market
analysis and asset rationalization review are complete, the
Company may revise its financing strategy to provide for any
increased capital needs that may be required.
Winn-Dixie Stores, Inc. (NYSE: WIN) is one of the largest food
retailers in the nation and ranks 149 on the FORTUNE 500 (R) list.
Founded in 1925, the company is headquartered in Jacksonville, FL
and operates 1,078 stores in 12 states and the Bahama Islands.
Frank Lazaran serves as President and Chief Executive Officer. For
more information, visit http://www.winn-dixie.com.
WINSTAR: Chap. 7 Trustee Gets Nod to Tap Sklar as Special Counsel
-----------------------------------------------------------------
Christine C. Shubert, Winstar Communications' Chapter 7 Trustee,
sought and obtained the Court's authority to employ Sklar & Paul
PC as special counsel to assist her in specific tasks of
collecting judgments in the Debtors' Chapter 7 cases.
Sklar will be paid a contingency fee based on one-third of
collected judgments, plus reimbursement of all costs.
Andrew Sklar, Esq., assured the Court that the firm does not hold
or represent any interest materially adverse to the Debtors'
estates or any class of creditors. The firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code. (Winstar Bankruptcy News, Issue No. 52; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
WORLD AIRWAYS: Board Approves Revised Fleet Plan
------------------------------------------------
World Airways, Inc. (Nasdaq: WLDA) announced that its Board of
Directors has approved a revised fleet plan as part of its five-
year strategic plan. World Airways operated a fleet of 18 wide-
body aircraft at the end of 2003 comprised of 11 MD-11 and 7 DC-
10-30 aircraft.
The first phase of the revised fleet plan calls for the
introduction of two Boeing 767-300ER passenger aircraft, which
were originally approved by the Board of Directors in August 2003.
The Company plans to add these two Boeing 767 aircraft to the
fleet by the fourth quarter of 2004, and will replace two DC-10-30
passenger aircraft that come off lease later this year. Coupled
with the return of two of its most expensive DC-10-30 cargo
aircraft this month, the total fleet size at the end of 2004 is
projected to be 16 aircraft.
The current plan for 2005 is to increase the fleet to 17 aircraft
with the net growth being realized through the addition of a third
and fourth 767- 300ER, the scheduled return of two MD-11 and one
DC-10-30 passenger aircraft and the addition of two freighter
aircraft. The Company plans to evaluate the feasibility of adding
the 747-400SF freighter to its operating certificate in order to
meet its freighter requirements.
As the operating leases for three of World's MD-11 freighter
aircraft expire in 2006, the Company anticipates that it will be
able to either renegotiate significantly lower lease rates on
these aircraft, or secure replacement units at lower lease rates.
The plan anticipates measured fleet growth through the period
2006-2008 with additional aircraft of the same type, as market
demand dictates and economically feasible lease rates allow.
Hollis Harris, chairman and CEO, stated "The new fleet plan is
confirmation of our success in positioning World Airways for
measured growth with a wider array of service offerings for our
customers. Both the 767-300ER on the passenger side and the 747-
400SF on the cargo side will allow us to effectively compete for
more commercial clients to augment our strong military business."
Utilizing a well-maintained fleet of international range, widebody
aircraft, World Airways has an enviable record of safety,
reliability and customer service spanning more than 55 years. The
Company is a U.S. certificated air carrier providing customized
transportation services for major international passenger and
cargo carriers, the United States military and international
leisure tour operators. Recognized for its modern aircraft,
flexibility and ability to provide superior service, World Airways
meets the needs of businesses and governments around the globe.
For more information, visit the Company's Web site at
http://www.worldairways.com/
At September 30, 2003, the company's balance sheet is upside down
by $13.7 million.
WORLDCOM INC: Fixes Total Amounts Owed to MCI Bondholders
---------------------------------------------------------
Law Debenture Trust Company of New York is the successor
indenture trustee to these MCI Bonds:
(a) 6.950% Senior Notes due 2006 in the original principal
amount of $300,000,000, CUSIP No. 552673AV7, issued
pursuant to an indenture dated February 17, 1995, as
supplemented, between MCI Communications Corporation, as
issuer, and Citibank, N.A., as trustee;
(b) 6.500% Senior Notes due 2010 in the original principal
amount of $500,000,000, CUSIP No. 552673AW5, issued
pursuant to the 1995 Indenture;
(c) 7.125% Debentures due 2027 in the original principal
amount of $500,000,000, CUSIP No. 552673AU9, issued
pursuant to the 1995 Indenture;
(d) 7.750% Senior Debentures due 2024 in the original
principal amount of $240,000,000, CUSIP No. 552673AQ8
issued pursuant to a certain indenture dated October 15,
1989, as supplemented, between MCI, as issuer, and
Citibank, as trustee;
(e) 8.250% Senior Debentures due 2023 in the original
principal amount of $200,000,000, CUSIP No. 552673AP0,
issued pursuant to the 1989 Indenture;
(f) 7.750% Senior Debentures due 2025 in the original
principal amount of $450,000,000, CUSIP No. 552673AM7,
issued pursuant to the 1989 Indenture; and
(g) 7.500% Senior Notes due 2004 in the original principal
amount of $400,000,000, issued pursuant to the 1989
Indenture.
Law Debenture filed Claim Nos. 19140, 19141, 19146, 19142, 19143,
19144, and 19145, in its capacity as the duly appointed,
qualified and acting trustee with respect to the MCI Bonds, and
on behalf of the holders of the bonds.
In this regard, the Worldcom Debtors and Law Debenture stipulate
and agree that:
(a) Each of the claims for principal and interest due and
owing as of the Petition Date in respect of the MCI Bonds
are allowed in these amounts:
Claim Amount Bonds
----- ------ -----
19140 $309,035,000 6.950% Senior Notes
19141 508,666,667 6.500% Senior Notes
19142 246,510,000 7.750% Senior Debentures
19143 208,295,833 8.250% Senior Debentures
19144 461,431,250 7.750% Senior Debentures
19145 412,583,333 7.500% Senior Notes
19146 503,562,500 7.125% Debentures
(b) Nothing will be deemed to affect in any way, any other
claims asserted, or to be asserted by Law Debenture;
(c) The Debtors reserve their rights to object to any
Remaining Claims on any grounds at a later date; and
(d) The beneficiaries of the Law Debenture Claims will receive
distributions pursuant to the terms of the Debtors'
confirmed Plan or further Court order. (Worldcom Bankruptcy
News, Issue No. 47; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
* Michael T. Masin Rejoins O'Melveny & Myers as Senior Partner
--------------------------------------------------------------
O'Melveny & Myers LLP announced that Michael T. Masin, one of Wall
Street's most experienced executives, has rejoined the firm as
Senior Partner in the New York office where his practice will
focus on representing large corporations and major businesses.
Masin returns after an eleven year absence from the law firm, most
recently serving as Vice Chairman and Chief Operating Officer at
Citigroup. In that role, Masin oversaw all Citigroup functions
other than the operating units. In addition, he served as the
Chairman of the Business Practices Committee which was tasked with
assuring that the company embraced the industry's highest
standards. He also was a Director of Citicorp Inc. and Chairman of
the Board of Directors of the Citigroup Foundation. Masin also
served on the Board of Directors of Citigroup and, in 2002, as
head of the Board's compensation and governance committee.
Prior to his tenure at Citigroup, Masin held senior positions with
GTE Corporation, serving as Vice Chairman and President-
International. After GTE's merger with Bell Atlantic, he became
Vice Chairman and President of the combined company, Verizon
Communications.
Masin began his legal career at O'Melveny & Myers in 1967, working
in the firm's Century City, Los Angeles, Washington, DC and New
York offices. In 1989, Masin co-headed the firm's International
Practice and in 1991, he became head of the New York office. In
1993, Masin resigned from the partnership to take the Vice
Chairman's position at GTE.
"Mike is a recognized leader in the New York and international
financial and business communities, and the insights and
experience he brings to our firm will be sought after by our
clients as they look for new opportunities in the global economy,"
said Arthur B. Culvahouse, Jr., Chairman of O'Melveny & Myers.
Culvahouse continued, "Mike's rejoining the firm is just one more
example of O'Melveny & Myers' commitment and continuing strategy
to build a more dominant international transactions-based practice
in the key financial markets around the world."
Michael T. Masin said, "O'Melveny & Myers is one of the great
global law firms and I look forward to helping the firm even
better serve its many clients."
About the Firm
O'Melveny & Myers LLP is a values-driven law firm guided by the
principles of excellence, leadership and citizenship. With the
breadth, depth and foresight to serve clients competing in a
global economy, our attorneys devise innovative approaches to
resolve problems and achieve business goals. Established in 1885,
the firm maintains 13 offices around the world, with more than 900
attorneys. O'Melveny & Myers' capabilities span virtually every
area of legal practice, including Corporate Finance; Private
Equity; Mergers and Acquisitions; Capital Markets; Entertainment
and Media; Intellectual Property and Technology; Labor and
Employment; Litigation; Project Development and Real Estate;
Restructuring and Insolvency; Securities; Tax; Trade and
International Law; and White Collar and Regulatory Defense. To
learn more about O'Melveny & Myers LLP, visit http://www.omm.com/
* 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
AK Steel Holdings AKS (53) 5,025 579
Alaris Medical AMI (32) 586 173
Amazon.com AMZN (1,036) 2,162 568
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
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
Deluxe Corp DLX (298) 563 (309)
D&B Corp DNB (19) 1,528 (104)
Education Lending Group EDLG (26) 1,481 N.A.
Eyetech Pharma EYET (78) 76 62
First Potomac FPO (1) 126 N.A.
WR Grace & Co. GRA (222) 2,688 587
Graftech International GTI (351) 859 108
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
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.
Nuvelo Inc. NUVO (4) 27 21
Northwest Airlines NWAC (1,483) 13,289 (762)
ON Semiconductor ONNN (498) 1,144 201
Petco Animal PETC (11) 555 113
Primus Telecomm PRTL (168) 724 65
Per-Se Tech Inc. PSTI (21) 171 (1)
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 (619) 1,020 728
Silicon Graphics SGI (165) 650 1
Sigmatel Inc. SGTL (4) 18 (1)
St. John Knits Int'l SJKI (65) 234 69
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)
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
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For copies of court documents filed in the District of Delaware,
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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
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*** End of Transmission ***