/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/040302.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, March 2, 2004, Vol. 8, No. 43 Headlines 4441 BROADWAY REALTY: Voluntary Chapter 11 Case Summary ABITIBI-CONSOLIDATED: Will Present at CSFB Conference Tomorrow ABITIBI-CONSOLIDATED: Sells Remaining Interest in SFK Pulp Fund ADELPHIA BUSINESS: Seeks Clearance for Allegheny Settlement Pact ADELPHIA COMMS: Court Gives Go-Ahead for Dove Consulting Retention AGRICORE UNITED: Archer Daniels Agrees to Purchase 1.5M Shares AHOLD: Discloses Term Limits for Corporate Executive Board Members AINSWORTH: Obtains Required Consents to Amend Sr. Note Indentures ALCARO MOTOR SALES: Case Summary & 20 Largest Unsecured Creditors ALLIED WASTE: Fitch Gives Stable Outlook to Affirmed Low-B Ratings AMERICA WEST AIRLINES: Bear Stearns Reports 6.03% Equity Stake ANALYTICAL SURVEYS: Names Livingston Kosberg as Interim CEO ATP OIL: Amends $125 Million Senior Credit Facility AURORA: Obtains Nod to Make $17.5-Mill. Termination Fee Payment BANKUNITED: Closes $100 Million Convertible Senior Debt Offering BESS EATON: Files for Bankruptcy Protection in Rhode Island BESS EATON DONUT: Case Summary & 20 Largest Unsecured Creditors BORSIG ENERGY: Caterpillar Inc. to Acquire Turbomach S.A. CABLETEL COMMS: Selling Distribution Business To Power & Telephone CENTURY CARE: Cowgill & Holmes Serves as Bankruptcy Counsel COMM SYNERGY: Upcoming Board Meeting to Address Share Structure DELACO COMPANY: Turns to Huron Consulting for Restructuring Advice DOMAN INDUSTRIES: Wants to Stretch CCAA Stay Until April 5, 2004 DONLAR CORPORATION: Case Summary & 20 Largest Unsecured Creditors ENRON: EEPC Unit Seeks Nod for Accroven, et al., Settlement Pact EVERGREEN RESOURCES: S&P Assigns BB+ Corporate Credit Rating EXIDE TECHNOLOGIES: Files Joint Plan of Reorganization in Delaware FRESH BRANDS: Records $4.7M Q4 Net Loss & Suspends Cash Dividends FRESH FARMS: Case Summary & 20 Largest Unsecured Creditors GAP INC: S&P Revises Outlook on Low-B Level Ratings to Stable GLOBIX CORP: Completes $40 Million Senior Debt Purchase GSR MORTGAGE: Fitch Rates Series 2004-3F Class B4 Rating at BB GUILFORD MILLS: Cerberus to Acquire Company in a Cash Tender Offer HAYES: HLI Trust Sues to Recover Preferences from 38 Creditors HOLLINGER INT'L: Pays Rights Dividend to Common Stockholders HOVNANIAN: Fitch Rates $150 Million Senior Debt Issue at BB+ JARDEN CORP: Dixon Extends Exclusivity Agreement to March 12 JB POINDEXTER: Obtains S&P's Low-B Ratings for Credit & Sr. Debt JP MORGAN: Fitch Upgrades B-Level Series 1997-SPTL-C1 Note Ratings KAISER: Retirees' Panel Signs-Up FTI Consulting as Fin'l Advisor KNOX COUNTY: Gets Nod to Hire TBG Specialist as Consultants LENNOX INT'L: Reduced Debt Prompts S&P to Up Credit Rating to BB MICROCELL: Commencing CDN$100 Million Equity Rights Offering MIRANT CORP: Pushing for Approval of Compromise Pact with Insurers MOORE WALLACE: S&P Withdraws BB+ Rating After Merger Completed NATIONAL BENEVOLENT: US Trustee Names 7-Member Creditors' Panel NATIONAL CENTURY: Asks Clearance for Proposed LCS Settlement Pact NETWORK STORAGE: Case Summary & 20 Largest Unsecured Creditors NEW CONSTRUCTION: Voluntary Chapter 11 Case Summary NORTHSTAR CBO: S&P Downgrades Ratings for Class A-2 & A-3 Notes OWENS: Demands Recovery of National Settlement Program Payments PACIFIC GAS: Court Approves $310 Million Mortgage Bond Payment PAK-A-SAK: Signing-Up Leonard W. Jones as Accountants PARMALAT: Parma Court Establishes Deadlines for Filing Claims PETERRI TRANSPORT: Case Summary & 20 Largest Unsecured Creditors PETROLEUM GEO: Releasing Preliminary 2003 Results on March 16 PG&E NATIONAL: Wants to Assume & Assign Glencore Sale Agreement PLIANT: Completes Senior Debt Sale & Secures New $100MM Facility PRIDE INT'L: S&P Puts BB+ Corporate Credit Rating on Watch Neg. QWEST COMMS: Qwest Capital Closes Tender Offer for Debt Securities RELIANCE GROUP: Plan-Filing Exclusivity Extended to March 30, 2004 RESOURCE AMERICA: S&P Withdraws B Rating After Sr. Debt Redemption ROTHCHILD JEWELERS: Voluntary Chapter 11 Case Summary RURAL/METRO: Remains as Apache Junction's 911 Ambulance Provider SMITHFIELD FOODS: Denies Acquisition Talks with Swift & Co. SMTC CORP: Sets 4th Quarter Results Teleconference for March 10 SOLUTIA INC: PPG Asks Court Permission to Set Off Mutual Debts SOUTHWEST RECREATIONAL: Creditors to Convene on April 22, 2004 STOLT-NIELSEN: Sells 2 Million Shares in Stolt Offshore STOLT-NIELSEN: 2003 Year-End Net Loss Triples to $315.9 Million STOLT OFFSHORE: Sells ROV Drill Support Business for $48 Million STORAGE ENGINE: Files Voluntary Chapter 11 Petition in New Jersey STORAGE ENGINE: Case Summary & 21 Largest Unsecured Creditors UAL CORP: Bankruptcy Court Appoints Ross Silverman As Examiner UNITED AIRLINES: Asks Court to Okay ESOP Committee Stipulation US DATAWORKS: Will Present at RedChip Investor Conference Tomorrow VALHI INC: Reports Improved Fourth Quarter & FY 2003 Results VERITAS DGC: Unsecured Note Issuance Spurs S&P to Affirm Ratings WALKER ISLAND: Case Summary & 20 Largest Unsecured Creditors WARNACO GROUP: Bank of Nova Scotia Discloses 7.68% Equity Stake WELLS FARGO: Fitch Takes Rating Actions on Series 2002-1 Notes WORLDCOM INC: Inks Stipulation Resolving Capital Telecom Claim ZOOLINK COMMS: Files Notice to Reorganize Under BIA in Canada * Large Companies with Insolvent Balance Sheets ********* 4441 BROADWAY REALTY: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: 4441 Broadway Realty LLC 4441 Broadway New York, New York 10046 Bankruptcy Case No.: 04-11266 Type of Business: Real estate Chapter 11 Petition Date: February 29, 2004 Court: Southern District of New York (Manhattan) Debtor's Counsel: Joseph A. Altman, Esq. Altman & Altman 1009 East 163rd Street Bronx, NY 10459 Tel: 718-328-0422 Fax: 718-378-4898 Estimated Assets: $1 Million to $10 Million Estimated Debts: $500,000 to $1 Million The Debtor did not file a list of its 20-largest creditors. ABITIBI-CONSOLIDATED: Will Present at CSFB Conference Tomorrow -------------------------------------------------------------- Abitibi-Consolidated Inc. (NYSE: ABY, TSX: A) President and CEO John W. Weaver will make a presentation at the CSFB Global Basics Conference in New York, New York, on Wednesday, March 3, 2004 at 11:00 a.m. EST. The presentation will be webcast live and an archived copy will remain available on Abitibi-Consolidated's web site for 30 days. Interested parties are invited to listen by using the link provided on the investor relations page of Abitibi-Consolidated's web site at http://www.abitibiconsolidated.com/ Abitibi-Consolidated (Moody's, Ba1 Outstanding Debentures Rating) is a global leader in newsprint and uncoated groundwood (value-added groundwood) papers as well as a major producer of wood products, generating sales of $ 4.8 billion in 2003. With 16,000 employees, excluding Pan Asia Paper Co. Pte Ltd (PanAsia), the Company does business in more than 70 countries. Responsible for the forest management of 18 million hectares, Abitibi- Consolidated is committed to the sustainability of the natural resources in its care. The Company is also the world's largest recycler of newspapers and magazines, serving 17 metropolitan areas with more than 11,200 Paper Retriever(R) collection points and 14 recycling centers in Canada, the United States and the United Kingdom. Abitibi-Consolidated operates 27 paper mills, 21 sawmills, 4 remanufacturing facilities and 1 engineered wood facility in Canada, the U.S., the UK, South Korea, China and Thailand. ABITIBI-CONSOLIDATED: Sells Remaining Interest in SFK Pulp Fund --------------------------------------------------------------- Abitibi-Consolidated Inc. (TSX: A; NYSE: ABY) and SFK Pulp Fund (TSX: SFK.UN) closed the public offering of 14,812,500 units of SFK Pulp Fund on a bought deal basis at a price of $8.00 per unit for gross proceeds of $118.5 million, before commissions and expenses. Net proceeds of the offering were used by the Fund to purchase Abitibi-Consolidated's remaining interest in SFK Pulp General Partnership. As a result, Abitibi-Consolidated no longer has an interest in SFK Pulp General Partnership. CIBC World Markets Inc., Scotia Capital Inc., National Bank Financial Inc., RBC Dominion Securities Inc. and UBS Securities Canada Inc. acted as underwriters in the context of the offering. About SFK Pulp Fund ------------------- Through SFK Pulp General Partnership, SFK Pulp Fund operates a mill located in Saint-Felicien, Quebec, approximately 450 kilometers north of Montreal in the Lac-Saint-Jean region and employs approximately 325 people. The mill has an annual production capacity of 350,000 metric tonnes of NBSK pulp and is one of the lowest-cost producers of NBSK pulp in Canada. The mill supplies NBSK pulp to various sectors of the paper industry in Canada, the United States and in Europe for use in specialty products. About Abitibi-Consolidated Inc. ------------------------------- Abitibi-Consolidated Inc. (Moody's, Ba1 Outstanding Debentures Rating) is a global leader in newsprint and uncoated groundwood (value-added groundwood) papers as well as a major producer of wood products, generating sales of $4.8 billion in 2003. With 16,000 employees, excluding Pan Asia Paper Co. Pte Ltd. (PanAsia), the Company does business in more than 70 countries. Responsible for the forest management of 18 million hectares, Abitibi- Consolidated is committed to the sustainability of the natural resources in its care. The Company is also the world's largest recycler of newspapers and magazines, serving 17 metropolitan areas with more than 11,200 Paper Retriever(R) collection points and 14 recycling centers in Canada, the United States and the United Kingdom. Abitibi-Consolidated operates 27 paper mills, 21 sawmills, 4 remanufacturing facilities and 1 engineered wood facility in Canada, the U.S., the UK, South Korea, China and Thailand. ADELPHIA BUSINESS: Seeks Clearance for Allegheny Settlement Pact ---------------------------------------------------------------- On August 13, 1999, Adelphia Business Solutions Long Haul, L.P. and Allegheny Communications Connect, Inc., entered into a fiber optic agreement under which Allegheny licensed to Long Haul the exclusive indefeasible right of use of certain miles of fiber along a fiber optic communication system that was to be constructed by Allegheny. On November 14, 2003, the ABIZ Debtors sought the Court's authority to assume the August 13, 1999 fiber optic agreement, including addenda to the Fiber Optic Agreement, concerning additional fiber routes to be constructed by Allegheny under the terms of the Fiber Optic Agreement. There is no dispute that the Allegheny Agreement is critical to the Debtors' business or that it should be assumed. Judy G.Z. Liu, Esq., at Weil, Gotshal & Manges LLP, in New York, relates that the only issue remaining to be resolved -- and the only issue raised by Allegheny in its December 8, 2003 response to the Assumption Motion -- was the cure amount that the ABIZ Debtors owed Allegheny in connection with the assumption of the Allegheny Agreement. The ABIZ Debtors calculated the cure amount to be $11,719,689, while Allegheny contended that it should be $20,180,430. The core disagreement between the parties centered on the interpretation of the provisions in certain of the Addenda, and whether certain pricing issues were capped or open-ended. An evidentiary hearing was scheduled with the objective of obtaining a Court determination of the issues arising in this contested matter. The parties agreed to a briefing and discovery schedule. However, on a parallel track, the parties also commenced good faith negotiations in an attempt to bridge the gap between their positions. After protracted and hard fought negotiations, the parties finally agreed to resolve their dispute and entered into a Settlement Agreement. The salient terms of the Settlement Agreement are: (1) The ABIZ Debtors will assume the Allegheny Agreement; (2) The ABIZ Debtors and Allegheny agreed to a $14,500,000 cure amount. In addition to making the cure payment, the ABIZ Debtors will convey to Allegheny rights to certain fiber. The cure payment will resolve all disputes concerning interest and penalties allegedly payable to Allegheny and damages allegedly payable to the Debtors; (3) The ABIZ Debtors have the option to complete certain routes within one year after paying the cure payment that at the time may not be economically feasible to complete, or necessary to the ABIZ Debtors' business. This provides the ABIZ Debtors with the flexibility to determine if certain routes continue to fit their business model after emergence from Chapter 11; (4) Allegheny will release all other claims, including the amounts purported to be due Allegheny by Long Haul outlined in: (a) Allegheny's response to Debtors' Motion to Assume filed on December 9, 2003, totaling $20,180,430; (b) Allegheny's $29,784,328 Administrative Claim filed on November 26, 2003; and (c) Allegheny's $16,203,156 Proof of Claim filed on April 2, 2003; and (5) Allegheny will release any claims against Hanover Insurance Company under a performance bond dated July 12, 2001 issued on behalf of the ABIZ Debtors, and dismiss with prejudice an action commenced by Allegheny against Hanover in Massachusetts. Ms. Liu asserts that the terms of the Settlement Agreement are fair and equitable, and do not fall below the lowest point in the range of reasonableness. Approval of the Settlement Agreement is in the paramount interests of the Debtors' creditors. Through the Settlement Agreement, the parties avoided potentially protracted litigation concerning the highly complex disputes that have arisen concerning the parties' rights and responsibilities under the Allegheny Agreement. By assumption of the Allegheny Agreement, the Debtors maximize estate resources and enhance the likelihood of a successful reorganization. The Settlement Agreement also provides favorable business resolutions of issues concerning the Debtors' continued relationship with Allegheny following the Debtors' emergence from Chapter 11. Ms. Liu assures the Court that the Settlement Agreement is the product of good faith, arm's-length, and intense bargaining by both parties whose experienced counsel agreed to resolve the dispute in accordance with the terms of the Settlement Agreement. Furthermore, the cure amount to be paid to assume the Allegheny Agreement represents a fair settlement given the differences in the parties' positions and the complexities involved. Headquartered in Coudersport, Pennsylvania, Adelphia Business Solutions, Inc. -- http://www.adelphia-abs.com/-- is a leading provider of facilities-based integrated communications services to businesses, governmental customers, educational end users and other communications services providers throughout the United States. The Company filed for Chapter 11 protection on March March 27, 2002 (Bankr. S.D.N.Y. Case No. 02-11389). Harvey R. Miller, Esq., Judy G.Z. Liu, Esq., Weil, Gotshal & Manges LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $ 2,126,334,000 in assets and $1,654,343,000 in debts. (Adelphia Bankruptcy News, Issue No. 52; Bankruptcy Creditors' Service, Inc., 215/945-7000) ADELPHIA COMMS: Court Gives Go-Ahead for Dove Consulting Retention ------------------------------------------------------------------ Pursuant to a June 27, 2002, order authorizing the employment of ordinary course professionals, Adelphia Communications and its debtor-affiliates are authorized to pay compensation to each ordinary course professional employed for services rendered from the Petition Date through December 31, 2003 up to the lesser of: (1) $50,000 per month per Ordinary Course Professional on average during the Period; (2) $450,000 per month in the aggregate for all ordinary course professionals; or (c) $250,000 per ordinary course professional in the aggregate for the Period. By notice dated February 20, 2003, the ACOM Debtors employed Dove Consulting as an ordinary course professional to provide consulting services. Dove Consulting is a consulting firm specializing in organization design and process improvement. As of December 2003, Dove Consulting's total fees and expenses exceeded the Aggregate Cap. The Debtors also anticipate a need for Dove Consulting's services during the upcoming months. Consequently, the Debtors' sought and obtained the Court's authority to employ Dove Consulting as strategic management consultants pursuant to Sections 327(a) and 328 of the Bankruptcy Code. According to Shelley C. Chapman, Esq., at Willkie Farr & Gallagher, in New York, Dove Consulting has extensive expertise in management and operations issues affecting the cable television and telecommunications companies. Moreover, because Dove Consulting is assisting the Debtors since February 2003, the firm developed specialized knowledge of the Debtors' businesses. Dove Consulting will continue to provide management consulting services to the Debtors in the Chapter 11 cases, including, but not limited to, consulting services relating to the analysis of strategic growth options, current operating models and organization design, and the development and implementation of plans for new operating models. In consideration for its services, Dove Consulting will be compensated on an hourly basis, plus reimbursement of actual and necessary expenses incurred. Dove Consulting's current hourly rates for consultants range between $125 and $625. The Debtors disclose that Dove Consulting received $209,222 in compensation for services rendered and expenses incurred in these Chapter 11 cases to date and pursuant to the Ordinary Course Retention Orders. Additionally, Dove Consulting incurred fees and expenses totaling $59,863, for which no payment has been made. Bob Davis, Managing Director at Dove Consulting, assures the Court that the firm does not represent adverse to the Debtors and their estates. Dove Consulting is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. (Adelphia Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service, Inc., 215/945-7000) AGRICORE UNITED: Archer Daniels Agrees to Purchase 1.5M Shares -------------------------------------------------------------- Archer Daniels Midland Company (NYSE: ADM) announced that its wholly-owned subsidiary, ADM Agri-Industries Company, has agreed to purchase 1,520,000 limited voting common shares of Agricore United (S&P, BB Long-Term Corporate Credit and Senior Secured Debt Ratings, Negative Outlook) at a price of $9.63 per share on a private placement basis. The transaction is expected to close on or around March 1, 2004. Agricore United will use the proceeds from the private placement to partially finance its acquisition for cancellation of 1,527,694 limited voting common shares under its previously-announced share consolidation program. The purchase of the private placement shares will be made pursuant to the exercise of Archer Daniels Midland Company's existing pre-emptive rights. Before giving effect to the cancellation of shares under the share consolidation program, ADM Agri-Industries Company beneficially owned 9,092,547 limited voting common shares of Agricore United representing approximately 20.06% of Agricore United's outstanding limited voting common shares. Following the purchase of shares pursuant to the private placement and after giving effect to the cancellation of shares under the share consolidation program, the 1,520,000 limited voting common shares will represent approximately 3.36% of Agricore United's outstanding limited voting common shares and ADM Agri-Industries Company will beneficially own an aggregate of 10,612,547 limited voting common shares of Agricore United representing approximately 23.42% of Agricore United's outstanding limited voting common shares. Archer Daniels Midland Company has no current intention to acquire additional limited voting common shares or other securities of Agricore United except pursuant to its existing pre-emptive rights or pursuant to the conversion rights attaching to debentures of Agricore United which it owns. AHOLD: Discloses Term Limits for Corporate Executive Board Members ------------------------------------------------------------------ Ahold announced that as part of Ahold's corporate governance initiative, term limits have been established for Corporate Executive Board members. Theo de Raad will continue to lead the divestment process in South America and Thailand. Mr. de Raad will step down from the Executive Board upon his retirement at age 60 on January 7, 2005. Bill Grize will continue his duties as CEO of Ahold USA, Inc. and will supervise the organizational integration occurring across Ahold USA, and the divestiture of BI-LO/Bruno's. Mr Grize will continue to serve as a member of the Executive Board until the new organization is fully integrated, and then relinquish his role as a Board member. This will occur no later than his planned retirement in April 2006 when he reaches age 60. Ahold President & CEO Anders Moberg, CFO Hannu Ryopponen, and Chief Corporate Governance Counsel Peter Wakkie will have term limits expiring in 2008. Mr. Moberg and Mr. Ryopponen's terms are subject to renewal. Mr. Wakkie will have reached his retirement age limit at that time. Anders Moberg states: "Ahold's implementation of term limits is one element of our commitment to strengthened corporate governance. In addition, this series of changes provide for a well-planned, coordinated leadership transition." * * * As previously reported, Fitch Ratings, the international rating agency, assigned Netherlands-based food retailer Koninklijke Ahold NV a Stable Rating Outlook while removing it from Rating Watch Negative. At the same time, the agency has affirmed Ahold's Senior Unsecured rating at 'BB-' and its Short-term rating at 'B'. The Stable Outlook reflects the benefits from the shareholder approval, granted on Wednesday, for a fully underwritten EUR3billion rights issue. Ahold however continues to face financial and operational difficulties which have been reflected in the Q303 results. Ahold announced in early November its strategy for reducing debt through its EUR3bn rights issue and EUR2.5bn of asset disposals as well as improving the trading performance of its core retail and foodservice businesses. Whilst the approved rights issue addresses immediate liquidity concerns, operationally, the news is less positive with Ahold's core Dutch and US retail operations both suffering from increased competition, mainly from discounters, resulting in operating profit margin erosion. Ahold's European flagship operation, the Albert Heijn supermarket chain in the Netherlands, recently reported both declining sales and profits, as consumers turn to discount retailers. In reaction to this, Albert Heijn, has amended its pricing structure which in turn would suggest that it will be more challenging in the future to match historic operating margin levels. AINSWORTH: Obtains Required Consents to Amend Sr. Note Indentures ----------------------------------------------------------------- Ainsworth Lumber Co. Ltd. received the required consents from the holders of its existing 13.875% Senior Secured Notes due July 15, 2007, and from the holders of its existing 12-1/2% Senior Secured Notes due July 15, 2007, to amend the indentures governing the Secured Notes, which amendments will eliminate substantially all of the covenants and certain events of default, and discharge and release the related security documents. Ainsworth also announced that it has entered into a purchase agreement in connection with the Rule 144A private placement of US$210 million aggregate principal amount of its 63/4% Senior Notes due March 15, 2014. Ainsworth intends to use the net proceeds of the offering of the Senior Notes, together with cash on hand, to pay the consideration under the tender offers and consent solicitations pertaining to the Secured Notes. The purchase of Secured Notes under the tender offers is conditional on the completion of the sale of the Senior Notes. About Ainsworth Ainsworth Lumber Co. Ltd. has operated as a forest products company in Western Canada for over 50 years. The company's facilities have a total annual capacity of approximately 1.5 billion square feet - 3/8" of oriented strand board (OSB), 155 million square feet - 3/8" of specialty overlaid plywood, and 55 million board feet of lumber. In Alberta, the company's operations include an OSB plant at Grande Prairie and a one-half interest in an OSB plant at High Level. In B.C., the company's facilities include an OSB plant at 100 Mile House, a veneer plant at Lillooet, a plywood plant at Savona and finger-joined lumber plant at Abbotsford. * * * As previously reported in the Feb. 19, 2004, issue of the Troubled Company Reporter, Standard & Poor's Ratings Services raised its long-term corporate credit rating on wood products producer Ainsworth Lumber Co. Ltd. to 'B+' from 'B-' due to a strong financial performance and a strengthened balance sheet following completion of the company's proposed refinancing. At the same time, Standard & Poor's assigned its 'B+' senior unsecured debt rating to Ainsworth's proposed US$200 million notes maturing in 2014. The outlook is stable. "The upgrade stems from Ainsworth's strengthened balance sheet following strong profitability and cash generation in a year of record demand and pricing for oriented strandboard (OSB)," said Standard & Poor's credit analyst Clement Ma. Using a combination of approximately C$194 million cash and the new senior unsecured notes, Ainsworth is expected to retire its US$281.5 million in existing secured debt through a public tender offer. Following the refinancing, the company's total debt to capitalization should eventually decrease to less than 45% from approximately 67% at Dec. 31, 2003. The ratings on Ainsworth reflect the company's narrow product concentration in the production of OSB, and its mid-size market position. These risks are partially offset by the company's strong cost position stemming from its modern asset base, and its high fiber integration. ALCARO MOTOR SALES: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Alcaro Motor Sales, Inc. Dba Alcaro Motorsports P.O. Box 347 Bennington, Vermont 05201 Bankruptcy Case No.: 04-10219 Type of Business: The Debtor is an automotive dealer. Chapter 11 Petition Date: February 17, 2004 Court: District of Vermont (Rutland) Judge: Colleen A. Brown Debtor's Counsel: Raymond J. Obuchowski, Esq. Obuchowski & Emens-Butler, P.C. P.O. Box 60 Bethel, VT 05032-0060 Tel: 802-234-6244 Fax: 802-234-6245 Total Assets: $1,450,385 Total Debts: $2,007,762 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Bank of Bennington $217,226 AutoMate Inc. $43,876 Textron Financial Corporation $24,473 American Express $22,094 GE Commercial Recreation $20,192 Arctic Cat Sales Inc. $18,903 Bennington Penny Saver $15,000 North Adams Transcript $13,000 Preti, Flaherty, Beliveau, Pachios $10,876 & Haley LLC Home Depot $10,093 Auto City Inc. $5,195 Bond Auto $3,888 WZEC-FM $3,417 Screenvision $2,682 Verizon $2,619 Bell & Howell Financial $2,553 Universal Underwriters $1,802 AT T $1,535 NaPaul Publishers Inc. $1,333 Advance Commercial $1,182 ALLIED WASTE: Fitch Gives Stable Outlook to Affirmed Low-B Ratings ------------------------------------------------------------------ Fitch Ratings has affirmed Allied Waste North America's (NYSE: AW) senior secured credit facility at 'BB', senior secured notes at 'BB-', senior unsecured subordinated notes at 'B', and mandatory convertible preferred stock at 'B-'. The Rating Outlook is Stable. AW has improved its capital structure during 2003 through healthy cash flow generation, divestitures, conversion of preferred stock to common stock, and equity issuance. AW divested over $300 million in 2003, and cash proceeds boosted cash flow that was available to reduce debt. In addition, net proceeds from equity issuance (gross proceeds were $445 million) were used to bring down debt. Including repayment of $225 million and $94 million made in January 2004, total debt fell more than $950 million over the past year, despite slight declines in revenues and margins amid a difficult operating environment. Margins have been declining over the past several years due to economic conditions and rising costs in the area of insurance, labor, and maintenance. However, if volumes increase with an economic recovery and if industry pricing flexibility improves, the trend may reverse. Fitch expects commercial volumes to start building up as economic conditions improve, which should also contribute to stronger pricing. With the major consolidation and divestiture phases behind, growth will be derived organically. Further, profitability could also be impacted by improvement of its existing operations through efforts to improve pricing, productivity, accident frequency, and cost containment. Improvement in any of these areas would be additive to AW's margins. In 2004, Fitch does not anticipate any large net acquisition/divestiture activity, and free cash flow of $300-$350 million is expected to be roughly flat. Capital expenditures in 2004 are expected to meaningfully increase from 2003 to $585 million, a 19% increase, limiting free cash flow expansion and deferring the acceleration of de-leveraging. Offsetting increased capex to a degree will be a decline in interest expenses. However, Fitch expects the company to continue to generate good free cash flow and to focus on debt reduction over the medium term. The company has also improved its maturity schedule and interest costs through a number of refinancing activities. During 2003, AW refinanced a portion of its 10% senior unsecured sub notes due 2009 with $250 million of secured term loan due 2010 and with $350 million of 6.5% senior secured notes due 2010. With all other capital structure management initiatives including interest rate swaps, term loan repricing and debt reduction, total annual savings are expected to be as much as $100 million in 2004 over 2003 figures. Also, the conversion of Series A convertible preferred stock has eliminated $90 million in annual dividends that would have started in July 2004. Additionally, in January 2004, the company issued $400 million of 5.75% senior notes due 2011 and $425 million of 6.125% senior notes due 2014 to redeem $825 million of 7.875% senior notes due 2009. AW also extended its revolver maturity by three years. As a result of these refinancings, AW reduced near-to-medium term maturities to a more manageable $1 billion from over $3 billion. AW clearly demonstrated its access to capital markets with its transactions in 2003 and strong pricing of its January 2004 issuance. Fitch expects the company could take advantage of attractive market conditions to further seek refinancing opportunities, and improve its maturity and interest costs. Debt/EBITDA in 2003 was 5.2 times, EBITDA/interest coverage was 2.3x, and fixed charge coverage was 1.5x. Fitch expects leverage to be under 5.0x and interest coverage to be better than 2.5x in 2004 with ongoing pricing initiatives, operational improvements, debt reduction and refinancing activities. AMERICA WEST AIRLINES: Bear Stearns Reports 6.03% Equity Stake -------------------------------------------------------------- Bear Stearns Asset Management Inc. beneficially owns 2,088,610 shares of the common stock of American West Airlines. Bear Stearns Asset Management holds sole voting power over 2,057,058 such shares, shared voting power over 31,552 shares and sole dispositive power over the entire 2,088,610 shares. 2,088,610 shares represents 6.03% of the total outstanding common stock of America West Airlines. America West Airlines is the nation's second largest low-fare airline and the only carrier formed since deregulation to achieve major airline status. America West's 13,000 employees serve nearly 55,000 customers a day in 93 destinations in the U.S., Canada, Mexico and Costa Rica. * * * As previously reported, Fitch Ratings initiated coverage of America West Airlines, Inc., a subsidiary of America West Holdings Corp., and assigned a rating of 'CCC' to the company's senior unsecured debt. The Rating Outlook for America West is Stable. ANALYTICAL SURVEYS: Names Livingston Kosberg as Interim CEO ----------------------------------------------------------- Analytical Surveys, Inc. (ASI) (Nasdaq: ANLT), a leading provider of utility-industry data collection, creation and management services for the geographic information systems (GIS) markets, announced that the Board of Directors has appointed Mr. Livingston Kosberg as interim Chief Executive Officer in addition to his responsibilities as Chairman. Mr. Kosberg brings a wealth of business experience to the role, including a successful career as Chairman and CEO of US Physical Therapy, one of the nation's premier providers of outpatient and occupational health clinics, which operate in 35 states. Mr. Kosberg is also a member of the Board of Affiliated Computer Services, a provider of a full range of IT services including business process and technology outsourcing. Mr. Kosberg is a nominee of ASI's convertible debenture holder, Tonga Partners, LP, and has been Chairman of ASI's Board since May 1, 2002. "Our challenge at ASI will be to successfully choose the best strategic path that provides the greatest return for all of our stakeholders," said Mr. Kosberg. "Our Company has weathered a technology downturn and simultaneously defended itself from a series of actions by shareholders, regulators and former business owners following the Company's 1999 financial restatements. We are now clear of these obstacles, and I look forward to the opportunities available to ASI, and to challenging the management to successfully expand within the data maintenance services sector." Mr. Kosberg replaces Norm Rokosh, who directed ASI's turnaround and restructuring efforts subsequent to the 1999 restatement. As previously reported, Mr. Rokosh, who has been commuting between San Antonio and his home in Indiana, will depart the Company at the end of February for personal and family reasons. Analytical Surveys Inc. (ASI) provides technology-enabled solutions and expert services for geospatial data management, including data capture and conversion, planning, implementation, distribution strategies and maintenance services. Through its affiliates, ASI has played a leading role in the geospatial industry for more than 40 years. The Company is dedicated to providing utilities and government with responsive, proactive solutions that maximize the value of information and technology assets. ASI is headquartered in San Antonio, Texas and maintains operations in Waukesha, Wisconsin. For more information, visit: http://www.anlt.com/ * * * As reported in Troubled Company Reporter's January 8, 2004 edition, Analytical Surveys, Inc. said that its financial statements issued on December 29, 2003, contained a going-concern qualification from its auditors relating to the Company's fiscal 2003 financial statements. The Company's independent auditor, KPMG, LLP, issued such a going-concern qualification on the financial statements of the Company for each fiscal year since the fiscal 2000 results were reported on January 17, 2001. The going-concern qualification was issued by KPMG based on the significant operating losses reported in fiscal 2003 and 2002 and a lack of external financing to fund working capital and debt requirements. Since fiscal 2000, ASI has replaced the Board of Directors and senior management team, eliminated all bank debt and recapitalized the Company with a convertible debenture, and is implementing a corporate turnaround effort designed to improve operating efficiencies, reduce and eliminate cash losses and position ASI for profitable operations. Additionally, the Company's sales and marketing team is pursuing market opportunities in both traditional digital mapping and newly launched data management initiatives. ATP OIL: Amends $125 Million Senior Credit Facility --------------------------------------------------- ATP Oil & Gas Corporation (Nasdaq: ATPG) announced amendment to its $125 million senior credit facility. As announced in its quarterly report on Form 10-Q for the period ended September 30, 2003, the company executed an amendment in November 2003 to our credit agreement that, among other things, contemplated a new $15 million Tranche to be secured by our North Sea oil and gas properties in addition to our U.S. properties. On December 3, 2003, we executed a second amendment to our credit agreement, which implemented the $15 million UK Tranche, with a maturity date of February 16, 2004, implemented a borrowing base coverage test of 150% commencing February 16, 2004, modified several of the financial covenants contained in the credit agreement and added new reporting and compliance covenants and events of default under the credit agreement. The company incurred fees of approximately $750,000 in connection with the execution of the second amendment, half of which were paid on December 3, 2003 with the remainder paid February 16, 2004. On February 23, 2004 the company finalized the conditions subsequent to the third amendment to the credit agreement which is effective as of February 16, 2004. The third amendment extended the maturity of the UK Tranche to January 31, 2005, reduced the borrowing base coverage test from 150% of the amounts outstanding under our credit facility to 125%, extended the measuring date for such test from February 16, 2004 to April 30, 2004, imposed a new borrowing base reserve of $14 million at April 30, 2004 and provided waivers for non- compliance with certain financial covenants as of December 31, 2003. In order to satisfy this additional reserve requirement, remain in compliance with its existing credit facility and meet capital expenditure needs, the company expects to require approximately $30 million in additional financing before the end of the first quarter 2004. As consideration for the execution of the third amendment, the company issued warrants which we may repurchase under certain conditions to our lenders to purchase 750,000 shares of our common stock, exercisable at a price of $6.75 per share. About ATP Oil & Gas Corporation ATP Oil & Gas is a development and production company of natural gas and oil in the Gulf of Mexico and the North Sea. The company trades publicly as ATPG on the NASDAQ National Market. AURORA: Obtains Nod to Make $17.5-Mill. Termination Fee Payment --------------------------------------------------------------- As part of its restructuring efforts, Aurora Foods entered into a stock purchase agreement in July 2003. Under the stock purchase agreement, J.W. Childs Equity Partners III, L.P. would invest $200,000,000 in exchange for 65.5% of the Debtors' equity, which would be effected through a prenegotiated Chapter 11 Reorganization Plan to commence during the second half of 2003. After entering into the stock purchase agreement, J.W. Childs engaged in discussions with J.P. Morgan Partners LLC and CDM Investor Group LLC, which, in turn, engaged in negotiations for the acquisition of Pinnacle Foods Holding Corporation from Hicks, Muse, Tate & Furst, Inc. At the same time, Aurora engaged in negotiations with the prepetition lenders and the holders of the publicly traded senior subordinated notes regarding the terms of the restructuring. The Merger On August 8, 2003, Pinnacle entered into an agreement and Merger Plan with Crunch Holding Corp. and Crunch Acquisition Corp., a wholly owned subsidiary of Crunch Holding, providing for the merger of Crunch Acquisition with and into Pinnacle after which Pinnacle would become a wholly owned subsidiary of Crunch. The Pinnacle Transaction closed on November 25, 2003. At various times from July through September 2003, Aurora, J.P. Morgan, J.W. Childs, the Lenders and the holders of the Subordinated Notes had discussions and negotiations with respect to the Original Stock Purchase Agreement and the possibility of combining Pinnacle and Aurora. In September 2003, JPMP and J.W. Childs entered into a transaction agreement pursuant to which they agreed to jointly invest in both Pinnacle and Aurora, subject to reaching a definitive agreement with Aurora. Aurora undertook discussions with J.W. Childs, JPMP, CDM and an informal committee of holders of more than 50% of the Subordinated Notes in an attempt to negotiate the terms of an amended transaction. The amended transaction was set to provide for the restructuring of Aurora and the "Pinnacle-Aurora" Merger, in connection with a consensual plan of reorganization. On October 14, 2003, the Company issued a press release announcing that it revised its previously announced financial restructuring and had entered into a letter of intent, dated October 13, 2003, with J.W. Childs, JPMP, CDM, and the Noteholders Committee. Under the LOI, the Aurora's previous agreement with J.W. Childs would be amended to provide for a comprehensive restructuring transaction in which Aurora and Sea Coast Foods, Inc., would file for bankruptcy relief and would then be combined with Pinnacle. On November 25, 2003, the Aurora entered into an Agreement and Plan of Reorganization and Merger with Crunch. Crunch was formed by J.W. Childs, JPMP, and CDM as the New Equity Investors, for the purposes of making their respective investments in Pinnacle and Aurora. The Merger Agreement contemplates the restructuring pursuant to the terms of the Plan, which was consensually agreed to by the Lenders, the New Equity Investors, and the Noteholders Committee. Under the terms of the Plan, the Merger Agreement will be approved, resulting in the payment in full of all creditors' claims against the Debtors, other than the claims arising from the Subordinated Notes. Majority of the holders of the Subordinated Notes has agreed to the treatment provided in the Plan. The Termination Fee and Expense Reimbursement Crunch and its professionals expended considerable time, money, and energy in pursuing the Merger Agreement and engaged in prolonged, multilateral, good faith, arm's-length negotiations. Subsequently, the Debtors agreed to pay a termination fee and expense reimbursement to Crunch. The Merger Agreement provided that Crunch is entitled to the Termination Fee, if, at the time of termination of the Agreement: A. Crunch is not in material breach of any of its obligations under the Agreement; and B. if the Merger Agreement is terminated by: (a) Crunch, if the Closing has not occurred by March 31, 2004, provided, that Crunch's failure to fulfill any obligation under the Merger Agreement will not have been the cause of, or will have resulted in, the failure of the Closing to occur by the date, and that Aurora enters into an Alternative Agreement in respect of a Superior Proposal within six months after the termination; (b) Crunch, if Aurora enters into an Alternative Agreement and the Alternative Agreement is approved by the Bankruptcy Court; or (c) Aurora, if the Board of Directors determines in good faith, after consulting with outside counsel and financial advisors, that entering into an Alternative Agreement with regard to a Superior Proposal is necessary to satisfy the Board of Directors' fiduciary duties under applicable law. In the event the Termination Fee becomes payable, the Merger Agreement provides that the fee must be paid: (1) upon consummation of the transaction contemplated by the Alternative Agreement; and (2) within five business days after the date of termination or the later date as the Bankruptcy Court may direct, but in no event later than the earlier of the consummation of the transaction contemplated by an Alternative Agreement and the effective date of a plan of reorganization. The Merger Agreement further provided that Crunch will be entitled to a $7,500,000 Expense Reimbursement, if it is entitled to the Termination Fee. In the event the Expense Reimbursement becomes payable as a result of the Termination Fee becoming payable, the reimbursement will be made: (1) upon the consummation of the transaction contemplated by the Alternative Agreement and the effective date of a plan of reorganization; and (2) within five business says after the date of termination or the later date as the Bankruptcy Court may direct, but in no event later than the earlier of the consummation of the transaction contemplated by an Alternative Agreement and the effective date of a plan of reorganization for Aurora. Accordingly, the Debtors sought and obtained the Court's authority to: (a) pay the Break-Up Payment upon the terms and conditions of the Merger Agreement, comprising of: (i) $10,000,000 as Termination Fee; and (ii) $7,500,000 as Expense Reimbursement, which constitutes the reasonable legal, accounting, consulting, and other out-of-pocket expenses incurred by, or on behalf of Crunch or its affiliates, in connection with any of the transactions contemplated by the Merger Agreement; and (b) determine the Break-Up Payment to constitute an administrative expense of the Debtors' estates. 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. Judge Walrath confirmed the Debtors' pre-packaged plan on Feb. 20, 2004. 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. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000) BANKUNITED: Closes $100 Million Convertible Senior Debt Offering ---------------------------------------------------------------- BankUnited Financial Corporation (Nasdaq: BKUNA), parent of BankUnited FSB, announced the closing of the public offering of $100 million of 3.125% convertible senior notes due 2034 to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The Company has granted the initial purchasers of the notes the option to purchase, within 13 days issuance, up to an additional $20 million aggregate principal amount of the notes. The notes have a seven (7) year non-call provision and will be convertible into the Company's Class A Common Stock at an initial conversion rate of 26.2771 shares per $1,000 principal amount of the notes (equal to an initial conversion price of approximately $38.06 per share, representing a conversion premium of 42%), under certain conditions and subject to adjustment in certain circumstances. The notes will be convertible only upon occurrence of certain specified events including, but not limited to, if, at certain times, the closing sale price of our Class A Common Stock exceeds 125% of the then current conversion price, or $47.58 per share. Upon conversion the company may deliver cash or a combination of cash and shares of its Class A Common Stock in lieu of shares of our Class A Common Stock. In addition, the notes will pay contingent interest commencing with the six-month period beginning March 1, 2011 if certain conditions are met. The closing sale price for the Company's Class A Common Stock on February 23, 2004 was $26.80 per share. BankUnited plans to use the proceeds for general corporate purposes, which may include expanding BankUnited's operations through new branches and operations centers, acquiring BankUnited's debt and equity securities, if available on favorable terms, redeeming outstanding debt, investing in loans and mortgage-backed or other securities, possible acquisitions and funding working capital needs. About BankUnited BankUnited Financial Corporation is the parent company of BankUnited FSB, the largest banking institution headquartered in Florida as measured by assets. BankUnited had assets of $7.2 billion at December 31, 2003. Offering a full array of consumer and commercial banking products and services, BankUnited operates 45 banking offices throughout Miami-Dade, Broward, Palm Beach and Collier Counties. BankUnited can be accessed on the Internet at http://www.buexpress.com/ BankUnited's Class A Common Stock trades on the Nasdaq National Market under the trading symbol BKUNA. * * * As reported in the Troubled Company Reporter's February 26, 2004 edition, Fitch Ratings has assigned a 'BB+' rating to BankUnited Financial Corporation's (BKUNA'S) $100 million of senior unsecured convertible notes due 2034. Fitch says its Rating Outlook is Stable. Ratings are based on BKUNA's improving financial performance, transition of its business model, and enhancement of its balance sheet structure. The company continues to generate positive earnings momentum while transitioning its business mix from its wholesale thrift roots to a commercial bank-like organization. The company has also taken positive steps in restructuring its balance sheet, reducing leverage and building the common stock component of its capital base. At the same time, while BKUNA has made meaningful progress in improving its diversity, revenues are still reliant on spread income from residential mortgage origination. BESS EATON: Files for Bankruptcy Protection in Rhode Island ----------------------------------------------------------- Bess Eaton has filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the District of Rhode Island. Tim Hortons (New England), Inc., a subsidiary of Wendy's International, Inc., announced a conditional agreement to acquire certain real and personal property assets of Bess Eaton Donut Flour Co., Inc. and Louis A. Gencarelli, Sr. The assets are related to up to 48 Bess Eaton coffee and donut restaurants throughout Rhode Island, Connecticut and Massachusetts. The agreement and the transaction are subject to the Bankruptcy Court proceedings, the issuance of orders by the Bankruptcy Court containing terms acceptable to Tim Hortons (New England), Inc. and various other closing conditions. Wendy's International, Inc. is one of the world's largest restaurant operating and franchising companies with 9,291 total restaurants at year end 2003 and quality brands -- Wendy's Old Fashioned Hamburgers, Tim Hortons and Baja Fresh Mexican Grill. The Company invested in two additional quality brands during 2002 -- Cafe Express and Pasta Pomodoro. More information about the Company is available at http://www.wendys-invest.com/ Tim Hortons was founded in 1964 by Tim Horton and Ron Joyce and is the largest coffee and fresh baked goods restaurant chain in Canada. There are 2,343 Tim Hortons restaurants in Canada and 184 in the U.S. More information about Tim Hortons is available at: http://www.timhortons.com/ BESS EATON DONUT: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Bess Eaton Donut Flour Company Incorporated dba Bess Eaton Coffee and Bake Shop dba Bess Eaton Coffee Shop 79 Tom Harvey Road Westerly, Rhode Island 02891 Bankruptcy Case No.: 04-10630 Type of Business: The Debtor is an operator of 48 retail coffee and bake shops in locations throughout Rhode Island, Massachusetts and Connecticut. Chapter 11 Petition Date: March 1, 2004 Court: District of Rhode Island (Providence) Judge: Arthur N. Votolato Debtor's Counsel: Allan M. Shine, Esq. Winograd Shine & Zacks 123 Dyer Street Providence, RI 02903 Tel: 401-273-8300 Total Assets: $9,700,000 Total Debts: $17,600,000 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Sara Lee Trade Debt $1,925,094 10 Empire Blvd. Moonachie, NJ 07074 Perkins Paper Trade Debt $409,249 630 John Hancock Road Taunton, MA 02780 Westerly Hospital Charitable Pledge $200,000 AMD Trade Debt $129,367 Lexington Insurance Trade Debt $126,114 KPMG, LLP Financial Services $89,600 Granry's Kitchen Trade Debt $89,171 RDW Group Trade Debt $85,407 Narragansett Electric Company Trade Debt $81,542 LRF, Inc. Trade Debt $79,766 Providence Journal Trade Debt $77,070 Wincup Holdings, Inc. Trade Debt $71,103 New England Gas Company Trade Debt $58,408 Zan Foods Trade Debt $49,801 Ross Computers Trade Debt $47,433 Waste Management of RI Trade Debt $30,687 The Day Publishing Company Trade Debt $30,222 General Mills Trade Debt $29,508 J.S.B. Industries Trade Debt $23,914 Tim Buggy Trade Debt $23,760 BORSIG ENERGY: Caterpillar Inc. to Acquire Turbomach S.A. --------------------------------------------------------- Caterpillar Inc. (NYSE: CAT) signed a definitive agreement to acquire Turbomach S.A., a Swiss packager of industrial gas turbines and related systems. The transaction is to be executed through the insolvency administrator of Borsig Energy GmbH i.I., a group company of Babcock Borsig AG, which holds the shares of Turbomach. Turbomach's power generation packages currently incorporate gas turbines manufactured by San Diego-based Solar Turbines Incorporated, a wholly owned subsidiary of Caterpillar Inc. "Turbomach has distributed Solar brand turbines and equipment to the industrial power generation market for almost 20 years," said Caterpillar Group President Rich Thompson. "This acquisition will benefit both Caterpillar and its customers by assuring the continuity of this relationship and enhancing our ability to sell and support such systems, particularly in the expanding markets of Europe, Africa and Asia." Turbomach, based in Riazzino, Switzerland, purchases Solar gas turbine engines and packages and sells them as integrated systems into the industrial power generation market, along with providing aftermarket services and support. Turbomach also develops major power projects which include site construction, balance of plant design and installation, and coordination of project financing. Bob Macier, vice president of Caterpillar Inc. responsible for Solar Turbines, stated that this acquisition would build on Solar's ability to provide complete solutions to power generation customers worldwide. "The team at Turbomach has demonstrated the entrepreneurial spirit that will be needed to meet the increasing customer demand for such solutions in these important markets," he said. Turbomach operates primary facilities in Riazzino, Switzerland, with a secondary facility in nearby Mezzovico. Additional sales and service offices are located throughout Europe, as well as in Turkey, Thailand, India and Pakistan. Dr. Helmut Schmitz, the custodian of Babcock Borsig AG and insolvency administrator of Borsig Energy GmbH, expressed satisfaction with the result. "In accepting the offer, we are confident that Caterpillar's commitment will make both the transaction and Turbomach's business a success. This will be an important additional step in concluding the insolvency process," he said. Babcock Borsig AG filed for insolvency July 5, 2002. Dr. Georg-Peter Kraenzlin, member of the board of Babcock Borsig AG and responsible for legal affairs and mergers & acquisitions, noted "this transaction will successfully maximize creditor value, while preserving the legacy of Babcock Borsig through its businesses and people." Babcock Borsig historically has been one of the world's premier engineering and manufacturing firms in the areas of power plants, incineration plants, and civil and naval ships. Caterpillar intends to purchase the shares of Turbomach S.A. and the assets of Turbomach GmbH. The entity will continue to operate as a wholly owned subsidiary of Caterpillar. The transaction is expected to close by mid- June. Financial terms of the agreement were not disclosed. About Caterpillar For more than 75 years, Caterpillar Inc. has been building the world's infrastructure and, in partnership with its worldwide dealer network, is driving positive and sustainable change on every continent. With 2003 sales and revenues of $22.76 billion, Caterpillar is a technology leader and the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. More information is available at http://www.cat.com/ About Solar Turbines Solar Turbines is a world leader in the design, manufacture and service of industrial gas turbine engines in its size range. More than 11,000 Solar gas turbine engines and turbomachinery systems are used on land and offshore in 90 nations for the production and transmission of crude oil, petroleum products and natural gas and for generating electricity and thermal energy for a wide variety of industrial applications. Solar Turbines is a wholly owned subsidiary of Caterpillar Inc. More information is available at: http://www.solarturbines.com/ CABLETEL COMMS: Selling Distribution Business To Power & Telephone ------------------------------------------------------------------ Cabletel Communications Corp. (AMEX: TTV; TSE: TTV), the leading distributor of broadband equipment to the Canadian television and telecommunications industries, agreed upon terms for the sale of the assets of its distribution business to Power & Telephone Supply Company of Canada, a subsidiary of privately-owned Power & Telephone Supply Company, an independent worldwide distributor of material for the telecommunications and cable TV industries, headquartered in Memphis, Tennessee. The sale, which will include the current inventory of the distribution business and the Cabletel name, is subject to a number of customary conditions, including completion of due diligence, the execution of definitive documentation and court approval in Ontario. Although no assurance can be given that the transaction will be consummated, the parties are seeking to complete the transaction on or before March 12, 2004. The purchase price was not disclosed. Greg Walling, President and CEO of Cabletel, stated that "We believe that the proposed sale of Cabletel's distribution business to Power & Telephone Supply Company of Canada will help to ensure the continued quality and service Cabletel's customers and vendors have come to expect. We shall continue to evaluate the strategic alternatives with respect to Stirling, the company's manufacturing business, with a view toward enhancing benefits for our stakeholders." Cabletel Communications offers a wide variety of products to the Canadian television and telecommunications industries required to construct, build, maintain and upgrade systems. The Company's engineering division offers technical advice and integration support to customers. Stirling Connectors, Cabletel's manufacturing division supplies national and international clients with proprietary products for deployment in cable, DBS and other wireless distribution systems. More information about Cabletel can be found at http://www.cabletelgroup.com/ * * * As reported in the Feb. 26, 2004, edition of the Troubled Company Reporter, the Company received confirmation from its senior secured lender, LaSalle Business Credit, a division of ABN AMRO Canada N.V., Canadian Branch, that the lender will continue to forebear from taking any immediate action against the Company under the rights and remedies afforded to it in the credit agreement and related documents, on a day-to-day basis while the Company evaluates and determines what action to take with respect to bids received for the Company and certain of its assets. The lender had previously agreed not to take any immediate action as a result of certain defaults under the Company's credit agreement with the lender until at least February 20, 2004. The continuing forebearance is subject to the satisfaction by the Company of certain conditions, which the Company believes it has satisfied. No assurance can be given that lender will continue to forebear from taking any action in the future. CENTURY CARE: Cowgill & Holmes Serves as Bankruptcy Counsel ----------------------------------------------------------- Century Care of America, Inc., sought and obtained approval from the U.S. Bankruptcy Court for the Western District of Texas, Austin Division, to employ Cowgill & Holmes, PLLC as its bankruptcy counsel. J. Craig Cowgill, Esq., will lead the team in this engagement billing $350 per hour for his services. Cowgill & Holmes will: a) give the Debtor legal advice with respect to the bankruptcy proceeding; b) prepare on behalf of the Debtor as a Debtor in Possession necessary applications, answers, orders, reports and other legal papers; c) perform all other legal services for the Debtor as a Debtor in Possession which may be necessary in the bankruptcy proceeding; Other Cowgill & Holmes professionals charge these hourly billing rates: Position Billing Rate -------- ------------ Associate Attorney $200 per hour Legal Assistant\Law Clerk $75 per hour Headquartered in Marble Falls, Texas, Century Care of America, Inc., a provider of healthcare services, filed for chapter 11 protection on February 11, 2004 (Bankr. W.D. Tex. Case No. 04-10801). J. Craig Cowgill, Esq., at Cowgill & Holmes, PLLC represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $51,471,523 in total assets and $21,052,563 in total debts. COMM SYNERGY: Upcoming Board Meeting to Address Share Structure --------------------------------------------------------------- Communication Synergy Technology Inc. (ComSynTech) (Pink Sheets:CSYT), a business solutions company, will hold a meeting of its Board of Directors at the beginning of Q2. The meeting has been called to address the issue of the total shares outstanding and options for reducing the number of shares to allow the Company to achieve a fair and reasonable valuation. Seth Borg, CEO of ComSynTech commented, "The current share structure of the Company is being examined and options for reducing the outstanding shares are being considered." He added, "Our highest priority is creating shareholder value, any strategy for restructuring the outstanding shares of the Company will be focused on that priority." About ComSynTech Communication Synergy Technologies Inc. (ComSynTech) develops and markets document creation, management and preservation systems for medicine, industry, finance and government. The products developed by ComSynTech provide efficiency, flexibility and improved quality by automating the creation, capture, management, distribution, archiving, preservation and retrieval of voice and word documents across multiple markets. ComSynTech products and development platforms integrate with and complement existing technologies, accelerating time-to- implementation. DELACO COMPANY: Turns to Huron Consulting for Restructuring Advice ------------------------------------------------------------------ The Delaco Company wants the U.S. Bankruptcy Court for the Southern District of New York to give it authority to retain Huron Consulting Group LLC as its restructuring consultants. Huron Consulting is a firm specializing in providing turnaround, crisis management and restructuring services for public and private companies, lenders, equity holders and impartial constituents. Based on Huron Consulting's extensive experience in turnaround and crisis management, particularly with respect to companies exploring or commencing in and out of court restructuring transactions, the Debtor determined that it is in its best interests and the best interests of its estate and creditors to employ the firm as its restructuring consultants. James M. Lukenda, a Corporate Advisory Services Managing Director at Huron Consulting, was formerly a partner in Arthur Andersen LLP's New York firm. Mr. Lukenda has provided assistance to clients with troubled debt restructurings, mergers, acquisitions and dispositions; litigation and claims analysis, fraud investigations, and other financial consulting and bankruptcy assignments. Mr. Lukenda will be available on a full-time basis and will be focused on all aspects of the Debtor's operational issues. Mr. Lukenda will act under the direction, control and guidance of the Board of Directors of Delaco. Mr. Lukenda, as Chief restructuring Officer, along with the team, will: a) assist with the performance of pre-chapter 11 filing preparation for purposes of surfacing necessary information to complete required documents for the chapter 11 filing; b) assist the counsel with the preparation of necessary information in support of first-day motions for a chapter 11 filing; c) assist with the preparation of creditor lists, the statement of financial affairs and schedules of assets and liabilities; d) support in preparing financial and informational filings for the bankruptcy or other courts; e) assist in the maintaining listings of creditors and claims, reconciling such items and resolving related disputes; f) assist with insurance claims settlements and action to support marshalling of insurance recoveries and other assets; and g) support the development of the plan of reorganization and related disclosure statement. Huron Consulting will bill the Debtors on an hourly basis at the rates of: Title Hourly Rate ----- ----------- Managing Director $600 per hour Director $450 per hour Manager $350 per hour Associate $275 per hour Analyst $175 per hour In addition to the hourly compensation, the Debtor will pay one or more success fees or bonuses upon receipt of a statement requesting payment of and certifying entitlement to such success fees or bonuses as: * $75,000 payable upon the completion of documents necessary for the Debtor to file for chapter 11 bankruptcy protection; * $75,000 payable upon the confirmation of a plan or reorganization. Headquartered in New York, New York, The Delaco Company is a leading over-the-counter pharmaceutical drug company whose major products have included SlimFast and Dexatrim. The Company filed for chapter 11 protection on February 12, 2004 (Bankr. S.D.N.Y. Case No. 04-10899). Laura Engelhardt, Esq., at Skadden, Arps, Slate, Meagher & Flom represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed both estimated debts and assets of more than $100 million. DOMAN INDUSTRIES: Wants to Stretch CCAA Stay Until April 5, 2004 ---------------------------------------------------------------- Doman Industries Limited submitted an application to the Court seeking an extension of its stay of proceedings under the Companies' Creditors Arrangement Act to April 5, 2004. As announced on February 26, 2004, the extension would permit the Company to continue its efforts to finalize a restructuring plan based upon a term sheet submitted to the Court by certain unsecured noteholders and to allow time for the International Forest Products Limited proposal to be further developed. The application will be heard on Tuesday, March 2, 2004. A copy of the term sheet submitted by the unsecured noteholder group to Court is available on the Company's Web site -- http://www.domans.com/ -- and on Sedar -- http://www.sedar.com/ -- under the Company's name. A copy of the term sheet submitted by Interfor is also available on the Company's Web site. The Company also announces that its counsel received a letter from Bennett Jones LLP, counsel to certain unsecured noteholders, in which Bennett Jones states that "significantly more than 50% of the holders of Doman unsecured bonds, and likely as much as two- thirds in value of the total" have now reviewed the terms of the Interfor proposal and find it "wholly unacceptable and would be opposed (including by way of negative vote pursuant to a CCAA Plan of Arrangement)". Also, although the Company is continuing its efforts to identify an independent restructuring plan for Port Alice, the Company has been advised by the same unsecured noteholder group that in any restructuring plan, the Port Alice Mill will be shut down. In the event that occurs, further application to Court will need to be made to amend the claims process order issued on February 21, 2003, to include claims for Port Alice. The unsecured noteholder group have also advised that they will not support any restructuring plan that provides value to existing shareholders. Notwithstanding the foregoing communication from the unsecured noteholder group, the Company intends to continue discussions with both the unsecured noteholder group and Interfor with a view to developing a consensual restructuring plan for presentation to Doman's unsecured creditors. Market conditions continue to improve for lumber and pulp products produced by the Company. Doman is an integrated Canadian forest products company and the second largest coastal woodland operator in British Columbia. Principal activities include timber harvesting, reforestation, sawmilling logs into lumber and wood chips, value-added remanufacturing and producing dissolving sulphite pulp and NBSK pulp. All the Company's operations, employees and corporate facilities are located in the coastal region of British Columbia and its products are sold in 30 countries worldwide. DONLAR CORPORATION: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Donlar Corporation 6502 South Archer Road Summit Argo, Illinois 60501 Bankruptcy Case No.: 04-07455 Type of Business: The Debtor is a manufacturer of biodegradable specialty chemicals for the industrial, agricultural and consumer markets. See http://www.donlar.com/ Chapter 11 Petition Date: February 26, 2004 Court: Northern District of Illinois (Chicago) Judge: Susan Pierson Sonderby Debtor's Counsel: Scott R. Clar, Esq. Dannen Crane Heyman & Simon 135 South Lasalle Suite 1540 Chicago, IL 60603 Tel: 312-641-6777 Total Assets: $10,880,022 Total Debts: $27,371,432 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Duane Morris & Heckscher $364,899 One Liberty Place Philadelphia, PA 19103-7396 Bowne of Chicago $94,119 Grant Thornton $84,594 Hoyer Odfjell $79,400 DSM Chemicals $59,524 HRH of Illinois $38,464 Illinois Institute of Technology $18,000 Illinois Power $12,914 Blue Cross Blue Shield $12,542 Olson & Hierl $11,963 American Stock Transfer & Trust $8,642 BOC Gases $7,612 QCI $5,010 DFDS $4,954 City of Peru $4,732 Automated Data Processing $4,000 Lanier Worldwide $3,000 Seeler Industries $2,209 NCFST $2,000 Fisher Scientific $1,811 ENRON: EEPC Unit Seeks Nod for Accroven, et al., Settlement Pact ---------------------------------------------------------------- Pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure, Enron Equipment Procurement Company asks the Court to: (a) approve a Settlement Agreement and Mutual Release it entered into with Enron Power Construction Company, Enron Equipment Installation Company, Accroven SRL, Tecnoconsult Constructor Barcelona, S.A., Moinfra S.A., Tecnoconsult Constructores, S.A. and Consorcio Tecnoconsult Constructores - Enron; and (b) authorize its entry into a mutual release of all claims, obligations and liabilities relating to the construction of various gas processing plants and other related facilities in Venezuela, referred to as the ACCRO III and IV projects. Melanie Gray, Esq., at Weil, Gotshal & Manges LLP, in New York, relates that on September 1, 1998, EPC, through its affiliates, EEPC, EPCC, Enron Power Services B.V. and EEIC -- the EPC Parties -- entered into a Lump Sum Turnkey Construction Contract with Accroven. Pursuant to the Turnkey Contract, EPC was to construct the Projects located in Venezuela for Accroven. Pursuant to a Consolidation Agreement, by and among the EPC Parties and Accroven, dated as of September 1, 1998, the EPC Parties, including EEPC, became jointly and severally liable for supplying the labor and materials for the construction of the Projects. EPCC contracted with Accroven to serve as the contractor for EPC to construct the Projects. EEIC and Tecnoconsult formed Consorcio Tecron as a joint venture to perform some of the subcontract work for the Projects. Tecnoconsult and its affiliate, Moinfra, entered into several agreements with Consorcio Tecron to provide certain services as subcontractors of Consorcio Tecron in connection with the Projects. As a result of providing those services, they assert that the Enron Parties owe Tecnoconsult $1,382,968 and Moinfra $397,933. On February 28, 2002, Ms. Gray reports that Moinfra assigned its $397,933 account receivable to Tecnoconsult. On April 2, 2002, Consorcio Tecron assigned its right in an account receivable amounting to $2,021,474 to Tecnoconsult Constructores, which subsequently further assigned the account receivable to Tecnoconsult. Currently, Tecnoconsult asserts that it is owed $3,802,375 in connection with the Projects. Tecnoconsult alleges that Accroven is responsible for the amounts owed under Venezuelan law based on a novation theory. The Projects were completed on July 9, 2001, by Accroven at its own expense in accordance with the service agreements between Accroven and PDVSA, dated August 7, 1998. Accroven and EPCC, as the primary contractor for the Projects, were in disagreement as to certain construction items not yet completed. On June 12, 2003, Accroven, EPCC, EEPC, and EEIC, entered into a Release, Indemnity and Settlement Agreement pursuant to which Accroven agreed to directly pay certain of EPCC's subcontractors, with the exception of Tecnoconsult and its affiliates as no settlement had been reached at that time with Tecnoconsult. Tecnoconsult filed two judicial complaints against Accroven in Venezuela. The first lawsuit, for $1,780,901, was filed in May 2002, and is pending before the Tenth Court of the First Instance for Civil Mercantile and Traffic Matters of the Judicial Circumscription of the Caracas Metropolitan Area. The second suit, for $2,021,474, was filed in July 2003, and is pending before the Eleventh Court of the First Instance for Civil, Mercantile and Traffic Matters of the Judicial Circumscription of the Caracas Metropolitan Area. According to Ms. Gray, the EPC Parties, Accroven, Tecnoconsult, Moinfra, Tecnoconsult Constructores and Consorcio Tecron wish to amicably resolve the issues among them and enter into the Settlement Agreement. Pursuant to the Settlement Agreement, Accroven will pay Tecnoconsult $2,720,000. Tecnoconsult will take necessary actions to terminate the May Lawsuit and the July Lawsuit contemporaneous with the execution of the Settlement Agreement. The EPC Parties, Accroven, Tecnoconsult, Moinfra, Tecnoconsult Constructores, and Consorcio Tecron have also agreed to release one another as of the date of the execution of the Settlement Agreement as: * Tecnoconsult, Tecnoconsult Constructores, and Moinfra, will release EEPC, EPCC, EEIC, and Accroven with regard to any obligation or matter related to the construction of the Projects; * EEPC, EPCC, EEIC, and Accroven will release Tecnoconsult, Tecnoconsult Constructores, and Moinfra with regard to any obligation or matter related to the construction of the Projects; * Tecnoconsult Constructores and EEIC, acting in their capacities as partners of Consorcio Tecron, and Consorcio Tecron will release EEPC, EPCC, and Accroven with regard to any obligation or matter related to the construction of the Projects; * EEPC, EPCC, and Accroven will release Tecnoconsult Constructores and EEIC, acting in their capacities as partners of Consorcio Tecron, and Consorcio Tecron, with regard to any obligation or matter related to the construction of the Projects; * Tecnoconsult Constructores and EEIC mutually release each other with regard to any obligation or matter related to the construction of the Projects; and * Accroven, on the one hand, and EEPC, EPCC, and EEIC, on the other, mutually release each other with regard to any obligation or matter related to the construction of the Projects. Given that EEPC has no source of funds to pay the outstanding amounts to Tecnoconsult, Ms. Gray contends that it is EEPC's best interest to enter into the Settlement Agreement and obtain releases of its obligations, if any. Ms. Gray assures the Court that the Settlement Agreement is a result of arm's-length bargaining among the parties. (Enron Bankruptcy News, Issue No. 100; Bankruptcy Creditors' Service, Inc., 215/945-7000) EVERGREEN RESOURCES: S&P Assigns BB+ Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB+' corporate credit rating to natural gas production company Evergreen Resources Inc. Standard & Poor's also assigned its 'BBB+' rating and its recovery rating of '1+' to Evergreen's existing $200 million senior secured credit facility maturing in July 2005. The 'BBB+' rating is three notches higher than the corporate credit rating and the '1+' recovery rating indicates the highest expectation of full recovery of principal in the event of a default. Standard & Poor's also assigned its 'BB' rating to Evergreen's existing $100 million 4.75% senior unsecured convertible notes maturing in 2021 and its 'BB-' rating to Evergreen's proposed $200 million senior subordinated notes maturing in 2012. The outlook on Evergreen is stable. Colorado-based Evergreen will have $300 million of total debt pro forma for the subordinated notes offering. "The ratings on Evergreen reflect a below-average business profile, largely due to the cyclical and capital-intensive nature of the petroleum industry, and a moderate financial profile," noted Standard & Poor's credit analyst Scott Beicke. Although Evergreen has a strong production history, a competitive cost structure, and a financial profile consistent with an investment-grade rating, it has an overwhelming reliance on the Raton Basin in southern Colorado, and heavily depends on coal-bed methane (CBM) production. Although the Raton Basin has performed well for Evergreen to date, CBM in general is marked by environmental issues and sustainability uncertainties. Evergreen is a relatively small, natural gas exploration and production company focused on North American CBM opportunities. The stable outlook reflects expectations that Evergreen will continue to generate healthy production from the Raton Basin and prudently manage its financial profile. The outlook could be revised to positive, if excess cash flow is successfully deployed to reduce asset concentration risk. The establishment of a second core area, along with sustained operational success in the Raton Basin, could lead to a higher rating. Furthermore, procuring a credit facility free from borrowing base constraints would bode well for Evergreen's credit quality. However, if Evergreen begins to experience significant operational disappointments, particularly in the Raton Basin, the company's ratings could be lowered. EXIDE TECHNOLOGIES: Files Joint Plan of Reorganization in Delaware ------------------------------------------------------------------ Exide Technologies (OTCBB: EXDTQ), a global leader in stored electrical energy solutions, has filed a Joint Plan of Reorganization and Disclosure Statement with the Official Committee of Unsecured Creditors in the U.S. Bankruptcy Court for the District of Delaware. Under the proposed Plan, which is subject to creditor approval and confirmation by the Bankruptcy Court, the Company's pre-petition lenders will receive 90% of Exide's newly issued common stock. The Company's unsecured creditors as a class will receive 10% of the newly issued common stock and warrants which, if exercised, would increase their stake to approximately 28% of the newly issued common stock. Upon the effectiveness of the Plan, Exide would emerge from Chapter 11 as a publicly-traded company. Existing common stock will be cancelled and no distribution will be given to current shareholders. Upon consummation of the Plan, Exide's debt will be approximately $540 million, representing a decrease of almost $1.3 billion. As previously announced, the Company has arranged exit financing with Deutsche Bank AG New York Branch. Craig Muhlhauser, Chairman, President and Chief Executive Officer of Exide Technologies, said, "This Plan is the result of a great deal of hard work and negotiation with the Committee and our bank lenders, and I want to thank everyone for their determination to do what is best for Exide. This is an exciting milestone for Exide, and I am more confident than ever that upon approval of this Plan and emergence from Chapter 11, Exide will be an even more formidable global competitor with a reputation for making our customers successful." Copies of the Company's Plan of Reorganization can be accessed at http://www.bmccorp.net/exide/ Additionally, Exide has established a toll-free number to answer questions regarding the Company's Plan of Reorganization. The toll-free number is 1-800-821-EXIDE (3943) or 212-515-1962. About Exide Technologies Exide Technologies, with operations in 89 countries and fiscal 2003 net sales of approximately $2.35 billion, is one of the world's largest producers and recyclers of lead-acid batteries. The Company's three global business groups - transportation, motive power and network power -- provide a comprehensive range of stored electrical energy products and services for industrial and transportation applications. Transportation markets include original-equipment and aftermarket automotive, heavy-duty truck, agricultural and marine applications, and new technologies for hybrid vehicles and 42-volt automotive applications. Industrial markets include network power applications such as telecommunications systems, fuel-cell load leveling, electric utilities, railroads, photovoltaic (solar-power related) and uninterruptible power supply (UPS), and motive-power applications including lift trucks, mining and other commercial vehicles. Further information about Exide and its financial results are available at http://www.exide.com/ FRESH BRANDS: Records $4.7M Q4 Net Loss & Suspends Cash Dividends ----------------------------------------------------------------- Fresh Brands, Inc. (Nasdaq:FRSH) announced after-tax charges of up to $10.5 million, or up to $2.11 per share, approximately half of which are expected to represent non-cash related charges. Approximately $6.9 million, or $1.39 per share, of these charges were recorded in the fourth quarter of 2003. Up to $3.6 million, or up to $0.72 per share, all of which are related to the closure of supermarkets, are expected to be recorded in 2004 as and when the company takes the final steps to close these supermarkets. It is expected that the majority of these charges will be recorded in the first half of 2004. The company also announced its results of operations for 2003 and its fourth quarter. Largely as a result of the charges, in the fourth quarter of 2003, the company recorded a net loss of $4.7 million, or $0.96 per share, compared to 2002 fourth quarter net earnings of $2.8 million, or $0.54 per diluted share. The company's net loss for 2003 was $0.5 million, or $0.09 per share, compared to 2002 net earnings of $8.0 million, or $1.54 per diluted share. The company's sales in the fourth quarter of 2003 increased $19.3 million, or 13.2%, to $165.5 million, compared to 2002 fourth quarter sales. Sales for 2003 increased $38.9 million, or 6.3%, to $658.0 million, compared to 2002 sales. Comparable store sales for the company's owned and franchised supermarkets increased 11.9% during the fourth quarter of 2003 and 3.6% during 2003, compared to the same periods of 2002. However, both 2003 and the fourth quarter of fiscal 2003 had one more week than 2002 and the fourth quarter of fiscal 2002. Excluding the effects of the extra week, comparable store sales would have increased 3.2% in the fourth quarter of 2003 and 1.6% during 2003, compared to the same periods of 2002. Net retail sales for the fourth quarter of 2003 increased $16.4 million, or 23.3%, to $86.9 million, compared to net retail sales in the fourth quarter of 2002. For 2003, net retail sales increased $25.7 million, or 8.4%, to $330.9 million, compared to net retail sales in 2002. Net wholesale sales for the fourth quarter of 2003 increased $2.9 million, or 3.8%, to $78.6 million, compared to net wholesale sales in the fourth quarter of 2002. For 2003, net wholesale sales increased $13.2 million, or 4.2%, to $327.1 million, compared to net wholesale sales in 2002. The after-tax charges consist of: -- up to $5.8 million due to the impairment of assets and other related closing costs of certain of our supermarkets, the majority of which are related to five underperforming corporate supermarkets and one underperforming franchised supermarket, all of which we will close in 2004; -- $2 million related to potentially uncollectible franchisee receivables; -- $1.4 million related to the write-off of the entire value of certain financial reporting and accounting software that was purchased in connection with the company's business systems project in 2000, but which the company will not use; -- $0.6 million associated with a potential underfunding assessment of the UFCW Unions and Employers Health Plan, which provides benefits to some of the company's union employees; -- an increase of $0.2 million in the company's reserves for our self-funded health insurance plan due to higher than anticipated claims; and -- $0.5 million of professional fees associated primarily with these charges, consulting services and the company's executive officer searches. "Last year was a challenging year for our company," said Walter G. Winding, III, Fresh Brands' independent chairman of the board. "Faced with our second consecutive year of disappointing financial results and our prior management's inability to execute our strategic plan, our board made several difficult but important decisions, including terminating our chief financial officer and vice president - retail operations and agreeing to end our relationship with our chief executive officer. In each case, I am confident that we made the right decision. Since John Dahly has returned as our chief financial officer and Louis Stinebaugh was hired as our executive vice president - operations, our employees and our franchisees have been reinvigorated. While we have a great deal of work ahead of us, the changes in our management team will help our employees and franchisees, who have always been a strength of our business, do what they do best - operate top-notch grocery wholesale and retail operations that will reward our long- term shareholders with excellent performance." "The charges relate primarily to operational issues that needed to be resolved for us to be able to improve our financial performance and condition going forward," said John H. Dahly, Fresh Brands' chief financial officer. "With these difficult but necessary decisions behind us, we will be better able to focus our efforts on placing a greater emphasis on improving the results of our current operations through a new focus on our in-store value proposition, emphasizing growth in our wholesale business and reducing our debt. This was our successful strategy for many years prior to 2000. I strongly believe that refocusing on successful implementation of these goals will further reinvigorate our franchise system, help us better compete in our markets and allow us to once again generate consistent, reliable cash flows and earnings, which we believe will ultimately result in significant benefits to our shareholders in the coming years." Suspension of Cash Dividend The company also announced that its board of directors suspended indefinitely its quarterly cash dividends. "Our board fully recognizes the importance of rewarding our shareholders with a consistent cash dividend," said Winding. "However, in light of the significant charges, our recent financial performance and our current financial condition, our board decided it would be in the best long-term interests of our shareholders to suspend indefinitely our cash dividend. We will use the approximately $1.8 million of cash saved annually to help further reduce our debt and enhance our ability to fund potential wholesale growth opportunities as they may arise. Additionally, based on discussions with our existing and potential new bank lenders, we believe that suspending our cash dividend will facilitate our ability to enter into a new loan agreement providing more favorable terms to the company. The board strongly believes that our plans to reduce our debt and focus our resources on our wholesale operations will result in long-term benefits to the company and our shareholders." Preliminary Terms of Potential New Credit Facility Fresh Brands also announced that it had recently received a preliminary term sheet for a potential new, secured three-year, $40 million revolving credit facility with two area banks. The potential new credit facility is intended to replace the company's current unsecured $35 million revolving credit facility that expires on April 30, 2004 and is intended to provide the company with sufficient liquidity to fund all of its currently expected operational and capital needs for 2004. Based on the company's current debt and expected cash flow, the interest rates to be initially paid under the new credit facility will be 175 to 200 basis points higher than LIBOR. "We are encouraged by the proposed preliminary term sheet," said Dahly. "Our banks have, of course, provided us with this proposed term sheet with a full understanding of the charges that we announced today. We believe that their desire to be our business partner shows that they are confident in our management team and that we will successfully put our recent financial results behind us." The preliminary term sheet is subject to standard terms, contingencies and conditions. The potential new credit agreement, which the company hopes to finalize and execute in mid-March, is expected to contain certain additional affirmative and negative covenant obligations, including financial covenants and covenants that restrict the company's ability to repurchase its shares and pay cash dividends to its shareholders. There can be no assurances that a credit agreement will be entered into by such date, on the terms described above or at all. If the potential new credit agreement is not finalized by the mid-March deadline to file the company's SEC Form 10-K annual report, then the company may likely need to delay filing its Form 10-K pending finalization of its new credit agreement. Discussion of Charges and Financial Results "The charges are the result of several factors," explained Dahly. "First, due to the difficult economy and intense competition in many of our markets and our prior management's failure to timely respond to such competition, several of our corporate and franchised supermarkets have experienced ongoing and unabating financial performance problems. As a result, early in 2004, we decided to close five underperforming corporate supermarkets and one underperforming franchised supermarket, the financial performance of which we do not believe we could turn around without significant additional cost and management distraction. Although these closures will decrease our annualized sales by approximately $36 million, our resulting annualized net earnings should improve by approximately $2 million. The relative impact of these closures on our reported revenues and net earnings in 2004 will depend upon the actual timing of the closures." "Second, we further increased our reserve for potentially uncollectible franchisee receivables due to the continued ongoing underperformance of certain of our franchised supermarkets," said Dahly. "However, under Louis Stinebaugh's guidance and leadership, we have devised, and are in the process of implementing, aggressive turn-around plans for these supermarkets that we believe will be successful. As a result, other than the store closings announced today, we do not currently anticipate closing any stores in 2004." "Third, as part of our efforts to reduce our capital expenditures and other costs, we carefully reviewed all aspects of our $20 million business information systems project to ensure that each and every expenditure for this project maximizes the return on our investment," said Dahly. "Unfortunately, we believe that a substantial investment in the services phase of this project was made for financial reporting and accounting software that we will not use because we believe that there likely are less costly alternatives that provide more effective management and operational solutions for our business. As a result, we recorded an impairment charge equal to the amount we invested in this software." "Finally, two of our charges relate to health care benefits that we provide to our employees. First, within the last year, several major corporate members of the UFCW Unions and Employers Health Plan, which provides benefits to our Wisconsin retail supermarket employees, have withdrawn from the plan. This has caused substantially less income for the plan. We believe that there may be additional withdrawals from the plan within the next several months, which would significantly impact the viability of the plan thus triggering an underfunding or withdrawal assessment," said Dahly. "Additionally, our self-insured medical plan, which covers our office and warehouse employees, has incurred a recent substantial increase in claims. This has led us to conclude that our current reserves for our annual health costs must be increased." The increases in sales during the fourth quarter of 2003 were primarily due to: -- increased sales due to the opening of two new market corporate and franchised supermarkets, the replacement of five existing supermarkets with new, larger and more competitive supermarkets and the remodeling and expansion of three corporate and franchised supermarkets; -- the fact that the fourth quarter of 2003 had 13 weeks, whereas the fourth quarter of 2002 had only 12 weeks; and -- the closure of competitive stores in seven of our markets in 2003. The increase in the company's sales as a result of these factors was partially offset by: -- increasingly intense competition in several of our markets, including the opening of four new supermarkets, six new supercenters and several new value oriented food and general merchandise stores in our markets in 2003; -- recent trends in customers' purchasing habits, including an increasing number of customers limiting their purchases to deeply discounted items and by "trading down" their purchases by purchasing lower priced items, including our own ValuTimer and Everything is $1.00 line of value oriented products; and -- the closure of one corporate and one franchised supermarket in 2003. During the fourth quarter of 2003, the company repurchased approximately 94,000 shares of its common stock at an aggregate price of $1.2 million, solely to promote liquidity to shareholders in its retirement savings plan. As of January 4, 2004, the company will no longer provide such liquidity support to the retirement and savings plan. In 2003, the company repurchased a total of approximately 192,000 shares at an aggregate price of $2.7 million. As of the end of 2003, only approximately $1.1 million of the company's board-authorized $30.0 million stock repurchase program remained available for additional stock repurchases. Due to anticipated credit facility restrictions, the recent results of the company's operations and its focus on reducing its debt, the company does not currently anticipate making significant additional repurchases under its stock repurchase plan during 2004. Fresh Brands, Inc. is a supermarket retailer and grocery wholesaler through corporate-owned retail, franchised and independent supermarkets. The corporate-owned and franchised retail supermarkets currently operate under the Piggly Wigglyr and Dick'sr Supermarkets brands. Fresh Brands currently has 73 franchised supermarkets, 29 corporate-owned supermarkets and two corporate-owned convenience stores, all of which are served by two distribution centers and a centralized bakery/deli production facility. Supermarkets are located throughout Wisconsin and northern Illinois. For more information, please visit the company's corporate web site at http://www.fresh-brands.com/ or its consumer sites -- http://www.shopthepig.com/ and http://www.dickssupermarkets.com/ FRESH FARMS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Fresh Farms Market, Inc. 2333 Nott Street Niskayuna, NY 12309-4302 Bankruptcy Case No.: 04-11185 Chapter 11 Petition Date: February 27, 2004 Court: Northern District of New York (Albany) Debtor's Counsel: Richard L. Weisz, Esq. Three City Square, Third Floor Albany, New York 12207 Tel: 518-465-2333 Total Assets: Undetermined Total Debts: $1,438,110 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Scott Venture Rent $110,096 Coca-Cola Company $18,030 Accent Industries $28,200 Randy's Refrigeration $27,000 Crystel Clear Cleaning $26,000 Crescent Creamery Inc. $15,552 Quandt's Food Service $15,158 Scott Venture Payment on Fixtures $11,538 Casa Imports, Inc. $11,493 USA Food Service $11,017 Pepsi Cola $10,646 Hanley Sign Company $8,900 George Weston Bakeries $7,802 Morlock News c/o Hamilton $5,802 Morgan Linen Service $5,713 Decrescente $4,862 Frito-Lay Inc. $4,610 Walter G. Hiney Inc. $3,677 Pioneer Photo Albums, Inc. $2,959 Northern Distributing Co. $2,929 GAP INC: S&P Revises Outlook on Low-B Level Ratings to Stable ------------------------------------------------------------- Standard & Poor's Rating Services revised its outlook on specialty apparel store operator The Gap Inc. to stable from negative. The outlook change reflects the substantial improvement in operating performance that the company has made over the past two years and its cash-rich balance sheet. Ratings on the company, including the 'BB+' corporate credit rating, were affirmed. "The ratings on San Francisco, California-based The Gap reflect management's challenge to improve the business fundamentals of its three brands in an industry that will continue to experience intense competition," said Standard & Poor's credit analyst Diane Shand. "These factors are offset, in part, by the company's strong business position in casual apparel, geographic diversity, and strong cash flow." Management's initiatives to improve product quality and assortment, store execution, and inventory management, as well as the rationalization of its store base, have resulted in significantly improved operating performance. Gap's operating margin rose to 22.0% in 2003, up from a low of 14% in 2000. Standard & Poor's believes that the company has the opportunity to further improve operating performance over the next few years through greater sales of merchandise at full price and cost leverage. Nevertheless, intense competition and the inherent fashion risk of the industry may make progress uneven. GLOBIX CORP: Completes $40 Million Senior Debt Purchase ------------------------------------------------------- Globix Corporation (OTCBB:GBXX), a leading provider of managed Internet applications and infrastructure services, had received the tender of $97,956,711 in principal amount of its 11% Senior Notes due 2008. Under the terms of the offer, Globix will purchase $40,274,000 of the tendered, outstanding Notes for cash at par plus accrued interest. This offer is being funded with a portion of the net proceeds from the sale of its property located at 415 Greenwich Street in New York, New York which closed on January 22, 2004. In that the value of tendered bonds exceeded the offer to purchase, the purchase will be conducted on a pro-rata basis. Replacement notes will be issued to tendering noteholders for the balance of their unpurchased notes, where necessary. The offer expired at 10:00 a.m., New York City time, on February 25, 2004. Payment for tendered Notes will be made in same-day funds on March 3, 2004. "With the sale of Greenwich Street and now the nearly 40% reduction in our long-term debt, we can turn all of our energies back to accelerating and sustaining the Company's growth, while continuing to streamline its operations," said Pete Stevenson, Globix's CEO. About Globix Globix -- http://www.globix.com-- is a leading provider of managed Internet applications and infrastructure services for enterprises. Globix delivers and supports mission-critical applications and services via its secure Data Centers, high- performance global Tier 1 IP backbone, and content delivery network. Through Aptegrity, its managed services group, Globix provides remote management of custom and off-the-shelf web-based applications on any server, anywhere, at any time. By managing such complex e-commerce, database, content management and customer relationship management software for its clients, Globix helps them to protect Internet revenue streams, reduce technology operating costs and operating risk, and improve user satisfaction. Globix's clients are companies which use the Internet as a way to provide business benefits and sustain a competitive advantage in their markets. Our clients include operating divisions of Fortune 100 companies as well as mid-sized enterprises in a number of vertical markets including health care, media and publishing, technology and financial services. Globix and its subsidiaries have operations in New York, London, Santa Clara and Atlanta. * * * In its latest Form 10-Q filed with the Securities and Exchange Commission, Globix Corporation reports: Liquidity and Capital Resources "As of December 31, 2003 the Company had cash and cash equivalents of approximately $9.4 million compared to approximately $24.5 million on September 30, 2003. The decrease of approximately $15.1 million is mainly attributable to operating activities, investing activities and financing activities. Since December 31, 2003, the Company has completed the sale of its Property for approximately $48.5 million in net proceeds, of which approximately $44 million is expected to be used to purchase a portion of our 11% Senior Notes and the remainder is expected to be used for working capital. Operating activities: "Net cash used in operating activities during the three month period ended December 31, 2003 was approximately $3 million. This was attributable mainly to the net loss of $23.3 million and a non-cash gain on debt discharge of $1.7 million resulting from the repurchase of portion of our 11% Senior Notes, offset by non-cash depreciation and amortization expenses of $3.4 million and a non- cash impairment charge of $17.3 million resulting from a write- down of the Property to its fair market value less cost for sale. Changes in assets and liabilities resulted in an increase to operating cash-flow of approximately $1.1 million. Investing activities: "Net cash used in investing activities during the three month period ended December 31, 2003 was $6.3 million. Approximately $2.3 million was used for the acquisition of Aptegrity, $3.6 million, net resulted from changes in our investments and securities and $438 thousand was used for capital expenditures. Financing activities: "Net cash used in financing activities during the three month period ended December 31, 2003 was $6.3 million. Approximately $5.6 million of the cash used in financing activities was attributed to the repurchase of a portion of our 11% Senior Notes in the open market. The remaining $0.7 million were used for payment and settlement of certain contractual obligations. "We historically have experienced negative cash flows from operations and have incurred net losses. Our ability to generate positive cash flows from operations and achieve profitability is dependent upon our ability to grow our revenue and achieve further operating efficiencies while reducing our outstanding indebtedness and other fixed obligations. We are dependent upon our cash on hand and cash generated from operations to support our capital requirements. Our management believes that we are positioned to maintain sufficient cash flows from operations to meet our operating, capital and debt service requirements for at least the next 12 months. There can be no assurance, however, that we will be successful in executing our business plan, achieving profitability, or in attracting new customers or maintaining our existing customer base. Moreover, we have continued to experience significant decreases in revenue and low levels of new customer additions in the period following our restructuring. In the future, we may make acquisitions or repurchase indebtedness of our company which, in turn, may adversely affect our liquidity." GSR MORTGAGE: Fitch Rates Series 2004-3F Class B4 Rating at BB -------------------------------------------------------------- Fitch rates GSR Mortgage Loan Trust Series 2004-3F $491.8 million residential mortgage pass-through certificates, classes IA-1, IIA-1 through IIA-12, IIIA-1 through IIIA-8, A-P, and A-X certificates 'AAA'. In addition, class B1 ($4.6 million) is rated 'AA', class B2 ($2.8 million) is rated 'A', class B3 ($1.8 million) is rated 'BBB', and the privately offered class B4 ($1.3 million) is rated 'BB'. The 'AAA' rating on the senior certificates reflects the 3.00% subordination provided by the 1.50% class B1, the 0.55% class B2, the 0.35% class B3 and the 0.60% privately offered classes B4, B5 and B6 certificates. Classes B1, B2, B3, B4, are rated 'AA', 'A', 'BBB', and 'BB' based on their respective subordination only. Classes B5 and B6 are not rated by Fitch. The ratings also reflect the quality of the underlying collateral, the capabilities of National City Mortgage Co.(rated 'RPS3+' by Fitch), Countrywide Home Loans Inc.(rated 'RPS1' by Fitch), Washington Mutual Bank, FA (rated 'RPS2' by Fitch), and Fifth Third Mortgage Company as servicers, Chase Manhattan Mortgage Corporation (rated 'RMS1-' by Fitch) as master serivcer, and Fitch's confidence in the integrity of the legal and financial structure of the transaction. The mortgage loans are divided into three separate mortgage Loan Groups. Each Loan Group's Senior Certificates will receive interest and/or principal from its respective mortgage loan group. In certain very limited circumstances relating to a pool experiencing either rapid prepayments or disproportionately high realized losses, principal and interest collected from the other pools may be applied to pay principal or interest, or both, to the senior certificates of the pool experiencing such conditions. The subordinate certificates will be cross-collateralized and will receive interest and/or principal from available funds collected in the aggregate from all mortgage pools. As of the cut-off date February 1, 2004 the mortgage pool consists of 30 year fixed-rate mortgage loans with an approximate balance of $507,011,817. The mortgage loans were originated by National City Mortgage Co. (6.27%), Washington Mutual Bank FA(27.60%), Countrywide Home Loans Inc. (30.97%), and Fifth Third Mortgage Company (35.16%). The mortgage pool has an average unpaid principal balance of $508,537 and a weighted average credit score of 730. The pool has approximately 60.1% and 7.5%, with credit scores above or equal to 720 and below 660, respectively. The weighted average loan to value ratio at origination was 68.90%. The three states with the highest loan concentrations are: California (46.6%), Ohio (11.9%) and Michigan (7.0%). None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. For additional information on Fitch's rating criteria regarding predatory lending legislation, please see the press release issued May 1, 2003 entitled 'Fitch Revises Rating Criteria in Wake of Predatory Lending Legislation'. Goldman Sachs Mortgage Company deposited the loans in the trust, which issued the certificates, representing undivided and beneficial ownership in the trust. For federal income tax purposes, the trustee will cause multiple REMIC elections to be made for the trust. JPMorgan Chase Bank will serve as the master servicer/securities administrator and Wachovia Bank N.A will serve as the trustee. GUILFORD MILLS: Cerberus to Acquire Company in a Cash Tender Offer ------------------------------------------------------------------ Guilford Mills, Inc. (OTC Bulletin Board: GMIL) has entered into a definitive agreement for an affiliate of Cerberus Capital Management, an investment firm based in New York, to acquire Guilford Mills in a cash tender offer. The terms of the agreement provide that Cerberus will commence a tender offer to pay $19.00 per share in cash to all holders of shares outstanding for a total equity value of $107 million. The tender offer, which is not subject to a financing condition, is expected to commence within the next five business days and will remain open for at least twenty business days following the commencement of the offer. The Board of Directors of Guilford Mills has approved the transaction. Consummation of the tender offer is conditioned upon matters customary in similar transactions. The parties expect the tender offer to be completed in the second calendar quarter of 2004. Following the completion of the tender offer, an affiliate of Cerberus will merge with and into Guilford Mills, with any shares not tendered to Cerberus being converted into the right to receive $19.00 per share in cash. Stockholders holding, in the aggregate, approximately 48% of the outstanding shares of Guilford Mills have agreed, subject to certain conditions, to tender their shares to Cerberus in the tender offer. Goldman Sachs & Co. acted as exclusive financial advisor to Guilford Mills, and Rothschild Inc. acted as exclusive financial advisor to Cerberus. Weil, Gotshal & Manges LLP served as outside counsel to Guilford Mills, and Schulte Roth & Zabel LLP served as outside counsel to Cerberus. The proposed transaction comes less than eighteen months after Guilford Mills' emergence from bankruptcy. Cerberus stated it was very excited to be able to acquire a global industry leader in automotive fabrics. Cerberus is looking forward to working with the current management team to create opportunities for future growth. "I'm very excited to see Guilford placed in the hands of people who share our vision for building this company," said John A. Emrich, the Company's President and Chief Executive Officer. "They believe in this company and our operations, and they fully support our plans for growth." Emrich said, "It took exceptional effort from many people to get us to this point. Much credit goes to our current stockholders, who demonstrated their confidence in our team and our direction, our customers, our suppliers, and our 2,600 associates, who performed incredibly well in a very challenging business environment." Guilford Mills is a global designer and manufacturer of engineered fabrics for automotive, technical and apparel applications, serving a diversified customer base. Cerberus Capital Management, L.P. and its affiliated entities manage funds and accounts with capital in excess of $12 billion. The tender offer for the outstanding shares of Guilford Mills has not yet commenced. HAYES: HLI Trust Sues to Recover Preferences from 38 Creditors -------------------------------------------------------------- Within 90 days before the Petition Date, one or more of the Hayes Lemmerz Debtors made one or more transfers by check, wire transfer, or their equivalent, to these creditors: Creditor Amount -------- ------ Atlas Technologies, Inc. $310,603 Applied Industrial Technologies, Inc. 363,580 AMG Technologies, Inc. 551,832 Anchor Sales and Service Co., Inc. 71,701 Asahi Tec Corporation 54,841 B.N.R. Machine Shop, Inc. 173,588 Bauer Sheet Metal & Fabricating, Inc. 139,390 Beaver Valley Heat Treating, Inc. 84,487 Berg Tool, Inc. 94,015 Boeve Oil Company 58,081 Borden Chemical, Inc. 32,328 Borneman Industrial Supply Corp. 71,850 Brillion Iron Works, Inc. 281,020 C.E.D., Inc. 55,402 Cadillac Fabrication, Inc. 57,809 Cambelt International Corp. 104,659 Camden Casting Center, Inc. 239,538 Certicoat Corp. 144,079 Chem Arrow Corp. 51,459 Coenergy Trading Company 428,738 Commercial Alloys Corp. 429,736 Concord Precision, Inc. 57,031 Cooper Engineered Products 625,025 Craft-Tech Enterprises, Inc. 58,860 Cummins Lumber Mill, Inc. 53,093 Debal Industrial Contractors, Inc. 176,875 Export Corporation 286,386 Grand Aire, Inc. 75,772 Gold Coast Refractory Service 77,309 General Bearing Corporation 122,964 Huron Hydraulics, Inc. 61,448 Industrial Powder Coatings, Inc. 110,016 Material Handling Supply, Inc 69,164 Petrolink USA, Inc. 52,158 Rapid Industries, Inc. 57,028 Robertson Instrument Company, Inc. 57,250 Special Electric Company, Inc. 100,208 The Crown Group, Inc. 55,945 At the time of the Transfers, these creditors had a right to payment on account of an obligation owed to them by one of the Debtors. Linda Richenderfer, Esq., at Saul Ewing LLP, in Wilmington, Delaware, however, points out that the Debtors were insolvent during this period. The Transfers enabled the creditors to receive more on account of their debt than they would receive if: (a) the Debtors' cases were cases under Chapter 7 of the Bankruptcy Code; (b) the Transfers had not been made; and (c) the creditors received payment of the debts to the extent provided by the Bankruptcy Code provisions. Ms. Richenderfer argues that the Transfers are avoidable pursuant to Section 547(b) of the Bankruptcy Code. Thus, the HLI Creditor Trust asks the Court to declare that the Transfers are avoidable. Moreover, the Trust wants the Court to direct the creditors to immediately pay the Debtors' estates the preferential amounts, and award the Trust pre-judgment and post- judgment interests, plus litigation cost. Export Responds David M. Fournier, Esq., at Pepper Hamilton LLP, in Wilmington, Delaware, relates that before the Petition Date, Export Corporation was a warehouseman to the Debtors, providing services for a number of years. Export stored a large quantity of the Debtors' products and had an integrated just-in-time system for delivery of the product to the Debtors' customers. The Debtors' quality and delivery ratings with their customers were directly related to and dependent on Export's performance. Any delays in delivery or performance by Export would negatively impact the Debtors' quality and delivery ratings with their customers. The Debtors' ability to secure postpetition work with their customers was likewise dependent on Export's uninterrupted services. Mr. Fournier points out that in a "Necessity of Payment" request filed by the Debtors, which the Court approved on December 6, 2001, the Debtors sought "to pay certain warehousing charges relating to warehouses supporting their distribution systems." The Debtors also describe the disgorgement of prepetition payments under specifically detailed circumstances: "The Debtors request that any payment made to a third party on account of the prepetition claims discussed herein be subject to disgorgement in the event that such third party does not continue to provide services to the Debtors during the pendency of these chapter 11 cases on the same terms as existed prior to the Petition Date." Mr. Fournier relates that the third-party warehousemen that accepted payments pursuant to the December 6th Order agreed "to the uninterrupted provision of services on credit terms that existed immediately before the Petition Date." No party objected to, or appealed the entry of the December 6th Order. Export, in particular, continued to provide services to the Debtors postpetition, on the good faith belief and understanding that the Debtors' request was intended to ensure that the critical warehousemen would be fully paid of all prepetition amounts owed. Mr. Fournier points out that Export was never notified that it would be subjected to disgorgement of payments made during the preference period -- payments which, but for their payment before the Petition Date, would have been paid under the December 6th Order -- despite its agreement to provide postpetition services to the Debtors on prepetition terms. If Export knew that it would be subject to preferential claims for the same period of time for which it was receiving payments under the December 6th Order, it would not have agreed to provide postpetition services, Mr. Fournier says. Mr. Fournier argues that a court may dismiss a complaint for failure to state a claim only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations. In the Debtors' case, the Court already determined that Export was a critical warehouseman entitled to receive full payment of all prepetition amounts in exchange for its agreement to service the Debtors postpetition on the same prepetition terms. The Debtors paid Export, and Export continued to provide services as required pursuant to the December 6th Order. Consequently, Export was entitled to full payment of all amounts that were due for prepetition services, whether they were outstanding on the Petition Date or not. "The HLI Creditors Trust is bound by the statements of the Debtors in the Necessity of Payment request. The Trust is also barred by the doctrine of judicial estoppel from denying that Export was a critical warehouseman," Mr. Fournier says. The postpetition payment of the prepetition obligations owed to warehousemen like Export was essential to the Debtors' ongoing business operations and restructuring efforts. Export received a "critical warehouseman" payment from the Debtors in satisfaction of its prepetition claims. A hypothetical Chapter 7 trustee would also have had to treat Export as a critical warehouseman and satisfy the prepetition obligations of Export, if, for no other reason, than to assure an orderly liquidation of the Debtors' assets, Mr. Fournier maintains. Since the Trust's complaint does not satisfy Section 547(b)(5)(A) of the Bankruptcy Code, Export asks the Court to dismiss the complaint in its entirety. (Hayes Lemmerz Bankruptcy News, Issue No. 45; Bankruptcy Creditors' Service, Inc., 215/945-7000) HOLLINGER INT'L: Pays Rights Dividend to Common Stockholders ------------------------------------------------------------ Hollinger International Inc. (NYSE: HLR) said that, following the announcement of the Delaware Chancery Court's approval of the Company's shareholders rights plan, the Company paid a dividend consisting of rights issued under the plan to all holders of record of Hollinger International common stock as of Feb 5, 2004. Details of the Shareholder Rights Plan: As previously announced in the release issued by the Company on January 26, 2004, in connection with the rights plan, the Corporate Review Committee declared a dividend of one preferred share purchase right for each share of Class A Common Stock and Class B Common Stock held of record at the close of business on February 5, 2004. Each Right, if and when exercisable, entitles its holder to purchase from the Company one one-thousandth of a share of a new series of preferred stock at an exercise price of $50. The Rights will separate from the Class A Common Stock and Class B Common Stock and become exercisable only if a person or group beneficially acquires, directly or indirectly, 20% or more of the outstanding shareholder voting power of the Company without the approval of the Company's directors, or if a person or group announces a tender offer which if consummated would result in such person or group beneficially owning 20% or more of such voting power. The directors of the Company may redeem the Rights at $0.001 per Right at any time prior to the separation of the Rights from the Class A Common Stock and Class B Common Stock. The rights agreement makes clear that the tender offer announced by Press Holdings International Ltd for shares of Hollinger Inc. have not yet caused the Rights to separate. At any time prior to the closing of the share purchase contemplated by that offer, the Corporate Review Committee can determine a separation date and can also redeem the Rights. Under most circumstances involving an acquisition by a person or group of 20% or more of the shareholder voting power of the Company, each Right will entitle its holder (other than such person or group), in lieu of purchasing preferred stock, to purchase 10 shares of Class A Common Stock of the Company (or other common stock equivalents) at a 50% discount. In addition, in the event of certain business combinations following such an acquisition, each Right will entitle its holder to purchase the common stock of an acquiror of the Company at a 50% discount. Conrad M. Black and each of his controlled affiliates, including Hollinger Inc., are considered "exempt shareholders" under the Plan, meaning that, so long as Mr. Black and his affiliates do not collectively own more of the shares of Class A and Class B Common Stock owned by them as of January 25, 2004 (which represent in the aggregate approximately 73% of the voting power of the Company) directly or indirectly, the Rights will not separate as a result of such ownership. This exemption would not apply to any person or group to whom Mr. Black or one of his affiliates transfers ownership, whether directly or indirectly, of any of the Company's shares. Consequently, the Rights may become exercisable if Mr. Black transfers sufficient voting power to an unaffiliated third party through a sale of interests in the Company, Hollinger Inc., Ravelston Management Inc. or another affiliate, including pursuant to the tender offer for Hollinger Inc. shares announced by the Barclays. The agreement governing the rights plan provides that on or before January 25, 2005, the Special Committee (or any other committee of independent directors of the Board who were not the subject of the report delivered by the Special Committee) will re-evaluate the plan to determine whether it remains in the best interests of the Company's shareholders. If determined as necessary, such committee may recommend amendments to the Board of Directors to the rights plan, or a redemption of the Rights. Unless earlier redeemed, exercised or exchanged, the Rights will expire on January 25, 2014. The distribution of the Rights will not be taxable to shareholders. A summary of the Rights Plan will be mailed to shareholders. The Company filed a copy of the Rights Agreement on a Form 8-K on January 28, 2004, which can be accessed in the Financial Information section of the Company's Web site -- http://www.hollingerinternational.com/ Hollinger International Inc. is a global newspaper publisher with English-language newspapers in the United States, Great Britain, and Israel. Its assets include The Daily Telegraph, The Sunday Telegraph and The Spectator magazine in Great Britain, the Chicago Sun-Times and a large number of community newspapers in the Chicago area, The Jerusalem Post and The International Jerusalem Post in Israel, a portfolio of new media investments and a variety of other assets. The company's September 30, 2003, balance sheet shows a working capital deficit of about $293 million. HOVNANIAN: Fitch Rates $150 Million Senior Debt Issue at BB+ ------------------------------------------------------------ Fitch Ratings has assigned a 'BB+' rating to Hovnanian Enterprises, Inc. (NYSE:HOV) $150 million 6.375% senior notes due December 15, 2014. The Rating Outlook is Stable. The issue will be ranked on a pari passu basis with all other senior unsecured debt, including Hovnanian's revolving and letter of credit facility. A portion of the net proceeds of this issuance will be used to redeem Hovnanian's 9 1/8% senior notes due 2009. The balance will be used for general corporate purposes. The new issue has more favorable rates and attractive maturity relative to the debt it will replace. Ratings for Hovnanian are based on the company's successful execution of its business model, conservative land policies and geographic, price point and product line diversity. The company has been an active consolidator in the homebuilding industry which has led to above average growth during the past six years, but has kept debt levels somewhat higher than its peers. Management has also exhibited an ability to quickly and successfully integrate its acquisitions. In any case, now that the company has reached current scale there may be less use of acquisitions going forward and acquisitions are likely to be smaller relative to Hovnanian's current size. Risk factors include the inherent (although somewhat tempered) cyclicality of the homebuilding industry. The ratings also manifest the company's aggressive, yet controlled growth strategy and Hovnanian's capitalization and size. The company's EBITDA and EBIT to interest ratios tend to be modestly lower than the average public homebuilder, while inventory turnover tends to be moderately stronger. Hovnanian's leverage is somewhat higher and debt to EBITDA ratio is similar to the averages of its peers. Although the company has certainly benefited from the generally strong housing market of recent years, a degree of profit enhancement is also attributed to purchasing design and engineering, access to capital and other scale economies that have been captured by the large national and regional public homebuilders in relation to non-public builders. These economies, the company's presale operating strategy and a return on equity and assets orientation provide the framework to soften the margin impact of declining market conditions in comparison to previous cycles. Hovnanian's ratio of sales value of backlog to debt during the past few years has ranged between 1.2 times to 1.9x and is currently 1.8x - a comfortable cushion. Hovnanian employs quite conservative land and construction strategies. The company typically options or purchases land only after necessary entitlements have been obtained so that development or construction may begin as market conditions dictate. Hovnanian extensively uses lot options. The use of non- specific performance rolling options gives the company the ability to renegotiate price/terms or void the option which limits down side risk in market downturns and provides the opportunity to hold land with minimal investment. At present 71% of its lots are controlled through options - a higher percentage than most public builders. Total lots, including those owned, were 73,950 at Oct. 31, 2003. This represents a 6.4 year supply based on current production rates. However, the company has one of the lowest owned lot positions in the industry, Typically owning only a one to two year supply. An estimated 85%-90% of its homes are pre-sold. The balance are homes under construction or homes completed in advance of a customer's order. Fitch estimates that in recent years at least half of Hovnanian's growth has resulted from a series of acquisitions (twelve during the past six years). The acquisitions have enabled the company to grow its position and increase market share, often broadening product and customer bases in existing markets. They have also enabled the company to enter new markets. The combinations typically were funded by debt and to a lesser degree by stock. At times there were earn-outs which reduced risk and served to retain key management. In the future Hovnanian's acquisition strategy will focus on purchasing smaller builders and land portfolios in current markets and on making selected acquisitions in new markets if there is a good strategic fit and appropriate returns can be achieved. The key analysis will be return on capital as to whether an acquisition will be executed. Fitch believes that management would balance debt and stock as acquisition currency to maintain current credit ratios. The company is publicly committed to maintaining an average net debt/equity ratio of 1.0:1.0. Hovnanian maintains a $590 million revolving and letter of credit facility, all of which was available at the end of the fourth quarter. The revolving credit agreement matures in July 2006. The company has irregularly purchased moderate amounts of its stock in the past. Share repurchase authorization of 1.1 million shares remains as of October 31, 2003. JARDEN CORP: Dixon Extends Exclusivity Agreement to March 12 ------------------------------------------------------------ Dixon Ticonderoga Company (Amex: DXT) and Jarden Corporation (NYSE: JAH) have signed a second extension to the exclusivity agreement signed on January 9, 2004. The most recent extension will allow Jarden until 5:00 p.m. on March 12, 2004, subject to earlier termination under certain circumstances, to complete its remaining due diligence evaluation of a potential transaction among Jarden and Dixon in which Jarden or its affiliate may acquire specified assets of the Company, and to continue to negotiate the terms of related definitive documentation. Jarden Corporation Corporation (S&P, B+ Corporate Credit Rating, Stable) is a leading provider of niche consumer products used in and around the home, under well-known brand names including Ball(R), Bernardin(R), Crawford(R), Diamond(R), FoodSaver(R), Forster(R), Kerr(R), Lehigh(R) and Leslie-Locke(R). In North America, Jarden is the market leader in several consumer categories, including home canning, home vacuum packaging, kitchen matches, branded retail plastic cutlery, toothpicks and rope, cord and twine. Jarden also manufactures zinc strip and a wide array of plastic products for third party consumer product and medical companies, as well as its own businesses. JB POINDEXTER: Obtains S&P's Low-B Ratings for Credit & Sr. Debt ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit and 'B-' senior unsecured debt ratings to Houston, Texas- based J.B. Poindexter & Co. Inc.'s $125 million senior unsecured notes due 2014. Proceeds from the notes issuance will be used to refinance existing debt issued in a distressed exchange offer in 2003, repay outstanding indebtedness at step-van operation Morgan Olson, and for general corporate purposes. The outlook is stable. Total debt (including operating leases) was about $146 million at the end of 2003, pro forma for the senior notes offering. "Rating the senior unsecured notes one notch below the corporate credit rating reflects our expectations of the amount of priority claims, including operating leases and assumed modest usage under the company's new $30 million senior secured revolving credit facility, relative to total assets," said Standard & Poor's credit analyst Linli Chee. The senior notes will be guaranteed by all existing and future subsidiaries of J.B. Poindexter, including Morgan Olson. As part of the note offering, John Poindexter, the owner, president, chief executive officer of the company, will contribute Morgan Olson to the company. J.B. Poindexter will not pay any money to Mr. Poindexter but will repay outstanding indebtedness at Morgan Olson in connection with this note offering. In July 2003, Mr. Poindexter personally purchased Morgan Olson (certain assets of Grummon Olson Industries Inc.) for $13.9 million, in connection with Grummon Olson's bankruptcy filing at the end of 2002. J.B. Poindexter is a diversified manufacturer of van and truck bodies, truck accessories, packaging material and precision- engineered components in North America. The company operates through three divisions: Morgan (about 55% of 2003 sales and 54% of EBITDA), Truck Accessories Group (32% of 2003 sales and 39% of EBITDA), and Specialty Manufacturing Group (13% of 2003 sales and 7% of EBITDA). Upon closing of the notes issuance, the company will add a fourth segment--Morgan Olson, which generated about $35 million of revenues during the last five months of 2003. Financial policies are considered aggressive. Execution of the company's business strategy is largely dependent on Mr. Poindexter. The lack of management depth while adding a new division, renewing significant contracts, and turning around the company is a risk, although new operating management has demonstrated recent success. Liquidity is considered weak, given pro forma cash balances of $12 million at Dec. 31, 2003, and an unrated undrawn $30 million revolving credit facility, but should be adequate to meet the company's near-term operating needs that include increases in capital spending. While the company is expected to continue to further generate modest amounts of positive cash flow through continued growth, upside ratings potential is limited by a relatively moderate revenue base, cyclical businesses, and an aggressive financial profile. JP MORGAN: Fitch Upgrades B-Level Series 1997-SPTL-C1 Note Ratings ------------------------------------------------------------------ Fitch Ratings upgrades J.P. Morgan Commercial Mortgage Finance Corp.'s commercial mortgage pass-through certificates, series 1997-SPTL-C1, as follows: --$5.7 million class F to 'AAA' from 'BB+'; --$2.0 million class G to 'A' from 'B+'; --$3.0 million class H to 'A-' from 'B'. Fitch removes classes F and G from Rating Watch Negative. In addition, Fitch affirms: --Interest-only class X at 'AAA'. Fitch does not rate the $6.2 million class NR certificates. The upgrades are attributed to the increased subordination levels due to loan amortization and payoffs and low delinquency rates and stable performance of the remaining loans. Class G is experiencing interest shortfalls, due to trust expenses, special servicing fees, and other non-recoverable expenses. The shortfall, as well as the accrued interest on the shortfall, is expected to be repaid in full shortly. Based on the transaction's waterfall structure, the interest shortfall on class G will have to be repaid before principal to classes H and NR can be paid. As of the February 2004 distribution date, five loans (2.5%) were delinquent, including three (1.8%) 30 days, one (0.08%) 60 days and one (0.64%) 90 days delinquent. Two loans (3.25%) are specially serviced. Cumulative realized losses in the pool totaled $913,623, or 0.45% of the pool's original principal balance. The pool's aggregate principal balance has decreased by 92%, to $17.0 million from $203.1 million at issuance. The certificates are currently collateralized by 85 adjustable-rate mortgage loans, ranging from $13,706 to $1.0 million, with the largest loan representing 6% of the pool. The collateral consists primarily of multifamily (78%) and office (10%) properties, with significant concentrations in California (62%), Oregon (13%), 17%), and Washington (9%). KAISER: Retirees' Panel Signs-Up FTI Consulting as Fin'l Advisor ---------------------------------------------------------------- FTI Consulting discloses that it has been engaged by Comalco Aluminum Limited to provide advice with respect to the Kaiser Aluminum Debtors' bankruptcy proceeding. Comalco Aluminum, for its part, has given its consent to FTI to serve as financial advisors to the Retiree Committee, subject to the condition that FTI would not be involved in analyzing, reviewing, or advising the Retiree Committee with respect to any of the Debtors' asset sales. Comalco Aluminum is a supplier of bauxite, alumina and primary aluminum to Australia, New Zealand and export markets. It is a wholly owned subsidiary of Rio Tinto and provides about 20% of Australia's total production of bauxite, 8% of its alumina and 24% of its primary aluminum. It is the world's eighth largest aluminum company. In September 2001, Kaiser Alumina Australia Corporation sold 8.3% of its interest in Queensland Alumina Limited to Comalco Aluminum for $189,000,000. Consequently, Judge Fitzgerald authorizes the Retirees Committee to retain FTI as advisor. Judge Fitzgerald requires FTI to maintain and internal "information wall" mechanism to ensure that: (a) no FTI personnel providing services to the Official Committee of Retired Salaried Employees will provide services to or have access to files relating to FTI's work for Comalco Aluminum Limited; and (b) no FTI personnel providing services to Comalco Aluminum will provide services to or have access to files relating to FTI's work for the Retiree Committee. 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. 39; Bankruptcy Creditors' Service, Inc., 215/945-7000) KNOX COUNTY: Gets Nod to Hire TBG Specialist as Consultants ----------------------------------------------------------- Knox County Hospital Operating Corporation sought and obtained approval from the U.S. Bankruptcy Court for the Eastern District of Kentucky to hire TBG Specialist as its consultants. TBG Specialist has a background in healthcare facility operations and is willing to provide services to Knox County. TBG Specialist is expected to: a) provide regular advice and counsel to Hospital's executive management and governing board, attorneys and other consultants or agents or contractors regarding hospital operations; b) provide regular advice respecting implementation of operational plans to achieve cost-savings and operational efficiencies; and c) participate as deemed prudent and appropriate in negotiations or conferences with other interested parties, creditors, or stakeholders respecting hospital operations, requested by the governing board, Chairman of the board, airman of the special committee of the board authorized to carry on negotiations or discussions regarding hospital operations, or attorneys representing the Hospital. TBG Specialist's professionals and their hourly rates are: Professional's Name Billing Rate ------------------- ------------ David Ingram $700 per day Jonna Smith $700 per day Edward Warren $800 par day Melissa Moore $600 per day David Pilkington $600 per day Tim Artz $600 per day Tim Hill $800 per day Fran Fontenot $700 per day Connie Cockran $800 per day Pam Farrell $700 per day Susan Andrews $600 per day Tom Butler Jr. $800 per day $124 per hour Headquartered in Barbourville, Kentucky, Knox County Hospital Operating Corporation, owns a hospital and provides medical services. The Company filed for chapter 11 protection on January 26, 2004 (Bankr. E.D. Ky. Case No. 04-60083). Dean A. Langdon, Esq., and Tracey N. Wise, Esq., at Wise DelCotto PLLC represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts and assets of over $10 million. LENNOX INT'L: Reduced Debt Prompts S&P to Up Credit Rating to BB ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on Dallas, Texas-based Lennox International, Inc. The corporate credit rating is raised to 'BB\Stable\--' from 'BB-\Stable\--', and the subordinated debt rating is raised to 'B+' from 'B'. "The upgrade reflects substantial debt reduction over the past two years, improving profitability, and prospects for continuing favorable residential heating and cooling markets over the intermediate term," said Standard & Poor's credit analyst Pamela Rice. Debt at Dec. 31, 2003, including debt-equivalent operating leases, was about $500 million--$320 million below Dec. 31, 2001 levels. The ratings on Lennox reflect its mature and seasonal end markets, underperforming retail service business, modest geographic diversity, and aggressive financial profile. These factors partially are offset by the company's well-known air conditioning and heating equipment brand names and substantial sales to less cyclical repair and replacement markets. Lennox manufactures and markets a broad range of products for heating, ventilation, air conditioning, and refrigeration (HVACR) markets, including residential and commercial air conditioners, heat pumps, heating and cooling systems, furnaces, prefabricated fireplaces, chillers, condensing units, and coolers. Lennox has solid positions in its equipment markets, with well-established brand names, as well as products spanning all price points. Price competition and maximum geographic coverage are of particular importance in the U.S. residential sector, as there is often little perceived difference in equipment quality among competing brands. Absent acquisition activity, the five leading player's U.S. residential market shares tend to experience little change. MICROCELL: Commencing CDN$100 Million Equity Rights Offering ------------------------------------------------------------ Microcell Telecommunications Inc. (TSX: MT.A, MT.B) filed a preliminary prospectus with the securities authorities in each province of Canada for a rights offering to holders of its Class A Restricted Voting Shares, Class B Non-Voting Shares, First Preferred Voting and Non-Voting Shares, and Second Preferred Voting and Non-Voting Shares for minimum gross proceeds to Microcell of approximately C$100 million. In addition, the Company may receive up to an additional C$50 million from COM Canada, LLC, a private holding company of Craig O. McCaw, which will also act as standby purchaser for the rights offering. Shareholders will receive one right for every share held at the close of business on the record date. Every five rights will entitle the holder to purchase one Class B Non-Voting Share at a price of C$22.00 per share (equivalent to US$16.40 per share based on the current exchange rate) prior to the expiry date. The record date and expiry date will be determined when a final prospectus is filed, which is expected to take place in March. The closing of the rights offering is expected to occur in April. There are currently a total of 22,598,184 shares of Microcell issued and outstanding. The rights offering will result in the issuance by Microcell of 4,519,636 additional shares. COM Canada, LLC has agreed to purchase all of the Class B Non-Voting Shares not otherwise purchased pursuant to the rights offering. The obligation of COM Canada, LLC under the standby purchase agreement is subject to certain customary conditions, including the closing of the new bank credit facilities previously announced by Microcell. If COM Canada, LLC does not purchase shares under its standby commitment for total cash consideration of C$50 million, it will purchase concurrently, at a price of C$22.00 per share, the number of Class B Non-Voting Shares required to meet such minimum investment. Furthermore, the Company will grant COM Canada, LLC warrants to acquire, at a price of C$22.00 per share, additional Class B Non-Voting Shares equal to the number of shares purchased concurrently. Moreover, as consideration for its commitment to act as standby purchaser for the rights offering, the Company will grant additional warrants, identical in nature to those mentioned above, to COM Canada, LLC for exercise at a later date. As a result, in addition to the warrants issuable to COM Canada, LLC for the shares it will purchase to meet its minimum C$50 million investment, a minimum of 1.7 million warrants will be granted to COM Canada, LLC specifically for its standby commitment. If none of the rights pursuant to this transaction are exercised by their holders, COM Canada. LLC will be entitled to approximately 8.0 million warrants. The estimated net proceeds from the rights offering will be approximately C$97 million. Additional proceeds of up to approximately C$50 million may be received from the concurrent minimum purchase of Class B Shares by COM Canada, LLC. The combined proceeds will be used by the Company to redeem its preferred shares, and any balance will be used to fund capital expenditures and for general corporate purposes. "We are very pleased to welcome COM Canada, LLC as our new strategic investor," stated Andre Tremblay, President and Chief Executive Officer of Microcell Telecommunications Inc. "We look forward to working with Craig McCaw, who is not only a well-respected and credible figure in the North American telecommunications industry, but also one of its true pioneers. The incremental proceeds from this transaction, as well as the additional cash available from our bank debt refinancing, will further improve our already sound financial footing and provide us with better flexibility to pursue growth opportunities in the future." "Microcell's accomplishments since restructuring are quite impressive and I am pleased with the opportunity to invest," said Mr. McCaw. "Microcell is well positioned to develop and deliver a wide range of innovative wireless-based telecom products and services. I have been very impressed with the Company's management team and we are working together to further develop business strategies that take advantage of the Company's unique assets. Together, we are working toward a vision of wireless communications in Canada that will provide both the customer and the Company with unique products and services. I am excited by the opportunity to be of service to the Company and part of its future growth." Concurrently with the issuance of rights to Canadian shareholders by way of a Canadian prospectus, rights may also be issued to shareholders in the United States who are qualified institutional buyers ("QIBs") and/or institutional accredited investors in transactions exempt from the registration requirements of the United States Securities Act of 1933. The rights offering is subject to regulatory approval in Canada. This news release 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 or jurisdiction, including the United States, in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Any public offering of securities to be made in the United States can only be made by means of a prospectus pursuant to an effective registration statement. Microcell has no intention of filing such a registration statement in connection with this rights offering. Microcell Telecommunications Inc. is a major provider, through its subsidiaries, of telecommunications services in Canada dedicated solely to wireless. Microcell offers a wide range of voice and high-speed data communications products and services to over 1.2 million customers. Microcell operates a GSM network across Canada and markets Personal Communications Services (PCS) and General Packet Radio Service (GPRS) under the Fido(R) brand name. Microcell has been a public company since October 15, 1997, and is listed on the Toronto Stock Exchange. * * * As previously reported, Standard & Poor's Ratings Services assigned its 'B-' senior secured debt ratings to the first priority debt of Microcell Telecommunications Inc.'s proposed bank facility. Standard & Poor's also assigned its 'B-' senior secured debt rating to the C$50 million revolver and tranche A (C$200 million equivalent) portions of Microcell Solutions Inc.'s credit facility and its 'CCC-' senior secured debt ratings to the tranche B (C$200 million equivalent) portion of the facility. Proceeds will be used to refinance Microcell's existing bank debt. At the same time, the 'CCC+' long-term corporate credit ratings on Microcell Solutions and its parent Microcell Telecommunications were affirmed. Should the transaction close as planned, the new ratings will be assigned and existing ratings on the current bank facility will be withdrawn. The outlook is developing. MIRANT CORP: Pushing for Approval of Compromise Pact with Insurers ------------------------------------------------------------------ Prior to the Petition Date, the Mirant Corp. Debtors engaged in the construction of an electrical power generating facility at 425 Fairview Road in Zeeland, Michigan. Understanding the risks associated with the construction of the Zeeland Plant, the Debtors procured insurance to protect them against what is known as "builder's risk" or rather the risk that certain materials or equipment will be damaged during construction. Accordingly, on July 1, 2000, the Insurers -- Cox Power Services, Xchanging Claims Services Limited, on behalf of Certain Underwriting Members of Lloyds and XL Europe Insurance -- issued to the Debtors an insurance policy to cover any losses associated with the construction of the Zeeland Plant. Ian Peck, Esq., at Haynes and Boone LLP, in Dallas, Texas, relates that as part of the construction process, Mirant Zeeland LLC contracted with General Electric for the installation of an EX2000 exciter cabinet. On May 21, 2002, an electrical fault in the Cabinet caused a fire, which rendered the Cabinet completely unusable. Although the exact cause of the fire was never determined, GE agreed to replace the Cabinet at a discounted price of $733,333 -- the Loss Amount. Upon notification of the damage to the Cabinet and the Loss Amount, the Insurers agreed to compensate the Debtors for the Loss Amount less the $250,000 deductible set forth in the Policy, thereby reimbursing the Debtors $483,333 in exchange for a waiver of any additional claims relating to the damage to the Cabinet. To effectuate the agreement between the Debtors and the Insurers, on January 23, 2004, the Debtors and the Insurers entered into a Settlement Agreement. The salient terms of the Settlement Agreement are: (a) The Insurers will promptly pay to Mirant Zeeland $483,333 as full payment of its obligations relating to Loss under the Policy. The application of the Deductible to the Loss Amount will satisfy any and all claims by the Insurers against the Debtors for any damages and costs arising from the Loss; (b) The Insurers will release the Debtors from any and all claims, demands, actions or causes of action, which the Insurers had, or may now, or may in the future have, own, or hold for relief, compensation, damages, losses or remedy of any kind or character, relating to or arising from the Loss; and (c) The Debtors will release the Insurers from any and all claims, demands, actions or causes of action which the Debtors had, or may now, or may in the future have, own, or hold for relief, compensation, damages, losses or remedy of any kind or character, relating to or arising from the Loss. Accordingly, pursuant to Rule 9019(a) of the Federal Rules of Bankruptcy Procedure, the Debtors ask the Court to approve their Settlement Agreement with the Insurers. Although the Debtors would likely succeed in litigation, Mr. Peck says, the success would likely be limited to the Settlement Amount. Moreover, litigation would injure the Debtors because it would cause unnecessary delay in their receipt of the $483,333 due to them under the Policy and litigating the matter would cause unnecessary expense to the estate. (Mirant Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., 215/945-7000) MOORE WALLACE: S&P Withdraws BB+ Rating After Merger Completed -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings for R.R. Donnelley & Sons Co., including its long-term and short-term corporate credit ratings to 'A-' and 'A-2' from 'A' and 'A-1', respectively. In addition, the ratings for Donnelley were removed from CreditWatch where they were placed on Nov. 10, 2003, when Donnelley announced its intention to merge with Moore Wallace Inc. Concurrently, Standard & Poor's withdrew its 'BB+' corporate credit and senior secured ratings for Moore Wallace, and raised its senior unsecured note rating for Moore Wallace North America Inc. to 'A-' from 'BB-'. The ratings for Moore Wallace were also removed from CreditWatch where they were placed on Nov. 10, 2003. The outlook for Donnelley is now stable. Pro forma total debt outstanding approximates $2 billion. "The rating actions follow the announcement that Donnelley and Moore Wallace have completed their plans to merge, creating the world's largest full-service commercial printer," said Standard & Poor's credit analyst Michael Scerbo. NATIONAL BENEVOLENT: US Trustee Names 7-Member Creditors' Panel --------------------------------------------------------------- The United States Trustee for Region 7 appointed 7 creditors to serve on an Official Committee of Unsecured Creditors in The National Benevolent Association of the Christian Church's Chapter 11 cases: 1. First Bank 11901 Olive Boulevard St. Louis, Missouri 63141 Tel: 314 995 8757 Fax: 314 995 8770 Attn: Andrew Schmidt e-mail: Andrew.schmidts@fbol.com 2. FIT NBAS LLC c/o Fortress Investment Froup LLC 1251 Avenue of the Americas, 26th Floor New York, NY 10020 Tel: 212 798 6064 Fax: 212 798 6070 Attn: Darryl W. Copeland, Jr. e-mail: dcopeland@fortressinv.com 3. KBC Bank N.V. 125 West 55th street New York, NY 10019 Tel: 212 541 0708 Fax: 212 541 0784 e-mail: Michael.Curran@kbc.be 4. Sterling Grace Municipal Securities Corp. 100 Summerhill Rd. Spotswood, New Jersey 08884 Tel: 732 251 2200 Fax: 732 251 8193 Attn: Mark A. Doyle e-mail: mdoyle@sterlinggrace.org 5. Sysco Food Services of San Antonio 5711 FM 78 San Antonio, Texas 78244 Tel: 210 444 3490 Fax: 210 666 1549 Attn: Curtis A. Enke e-mail: enke.curtis@satx.sysco.com 6. UMB Bank, N.A., as Trustee c/o 2401 Grand Boulevard, Suite 200 Kansas City, MO 64108 Tel: 816 860 3250 Fax: 816 860 3021 Attn: Frank Bramwell e-mail: franklin.bramwell@umb.com 7. U.S. Bank, National Association 7th & Washington / SL-MO-T7CP St. Louis, MO 63101 Tel: 314 418 2264 Fax: 314 418 2135 Attn: David L. Orf e-mail: david.Lorf@usbank.com Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Saint Louis, Missouri, The National Benevolent Association of the Christian Church (Disciples of Christ) -- http://www.nbacares.org/-- manages more than 70 facilities financed by the Department of Housing and Urban Development (HUD) and owns and operates 18 other facilities, including 11 multi- level older adult communities, four children's facilities and three special-care facilities for people with disabilities. The Company filed for chapter 11 protection on February 16, 2004 (Bankr. W.D. Tex. Case No. 04-50948). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP represents the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed more than $100 million in both estimated debts and assets. NATIONAL CENTURY: Asks Clearance for Proposed LCS Settlement Pact ----------------------------------------------------------------- Prior to the National Century Debtors' liquidation, LCS Management, Inc. and LCS West, Inc. were in the business of providing home healthcare goods and services, including: (a) infusion, respiratory and durable medical equipment; and (b) home health or nursing services. Charles M. Oellermann, Esq., at Jones, Day, Reavis & Pogue, in Columbus, Ohio, relates that LCS was organized in 2000 and purchased home healthcare operations in the Northeastern United States from Home Medical of America, Inc. To the Debtors' knowledge, LCS' current principals are not affiliated with the Debtors or any of the Debtors' other provider clients. Prior to the Petition Date, LCS sold its accounts receivable to NPF VI pursuant to a sales and subservicing agreement among LCS, NPF VI and Debtor National Premier Financial Services, Inc. On November 15, 2002, LCS filed its own Chapter 11 case. The Debtors have filed proofs of claim in LCS' cases, asserting that LCS owes NPF VI $40,000,000 under the Sales Agreement. Debtors NPF-LL, Inc. and NPF-CSL, Inc. also filed proofs of claim in LCS' cases, asserting claims for amounts relating to equipment leases by NPF-LL and NPF-CSL to LCS. Debtor NPF X, Inc. is the assignee of certain notes from HMA under which approximately $2,000,000 is outstanding. LCS has disputed the amount and characterization of all liabilities arising out of the relationships with the Debtors, including the leasing arrangements. After arm's-length negotiations, the parties entered into a settlement agreement with respect to the Debtors' claims. Accordingly, the Debtors ask the Court to approve the Settlement Agreement with LCS. LCS has sought approval of the proposed settlement with the Debtors in the United States Bankruptcy Court for the Southern District of California. LCS anticipates filing the LCS Plan shortly thereafter. The relevant terms of the Settlement Agreement are: A. Settlement Amount LCS will pay to NPF VI $4,000,000 cash from prior collections of accounts receivable owned by or pledged to NPF VI. Under the LCS Plan, the LCS unsecured creditors, other than the Debtors and HMA, will receive a total of $1,330,000 in cash plus the proceeds of avoidance actions. NPF VI or its successor will be entitled to receive all other funds that become available to secured or unsecured creditors of the LCS estates after satisfaction of certain other agreed budgeted expenses and payments under the LCS Plan. B. Support of the LCS Plan The Debtors agree to support and vote in favor of the LCS Plan, to the extent that its terms are consistent with the Settlement Agreement. C. LCS Plan Terms The LCS Plan will incorporate these terms: (a) The general unsecured creditors will receive, in full settlement of all general unsecured creditor claims other than convenience claims, proceeds from certain specified assets totaling $1,330,000, namely: * the deferred purchase price payments of $500,000 from the sale of certain LCS assets; * the proceeds of a workers compensation insurance deposit estimated at $250,000; * the proceeds of an already completed avoidance action of approximately $420,000; * a refund of a deposit from Federal Express, estimated at $10,000; and * $150,000 cash. To the extent these specified assets do not provide a monetized recovery to the general unsecured creditors of $1,330,000, the general unsecured creditors will receive the shortfall from the Debtors' collateral. The general unsecured creditors will also receive the proceeds of additional avoidance action recoveries, if any, in addition to the $1,330,000. (b) Convenience claims will be paid up to a total of $125,000, in addition to the distributions described; (c) From the proceeds of the sale of the business to Westar Capital, LLC, LCS will distribute $400,000 to NPF-LL and NPF-CSL or their successors in respect of the parties' Subleases; and (d) LCS will forward all remaining proceeds related to the collection of the accounts receivable currently segregated from other estate bank cash on hand, less two months of receivables collection expenses, Medicare reserves and other expense reserves pursuant to a budget to be approved by the Debtors. LCS will continue to collect the accounts receivable in accordance with the approved budget provided by LCS, which, with the Debtors' consent and input, may be revised from time to time. Any remaining LCS assets or proceeds of LCS assets after allowed administrative claims, priority claims, operating payables and other estate-related expenses in accordance with a budget agreed upon by the Debtors and LCS, will be distributed to the Debtors in accordance with the confirmed LCS Plan. D. LCS Management Incentive The LCS Plan will implement, and the Debtors consent to, management incentives for the collection of accounts receivable consistent with the budget. E. Transfer of Liens to Proceeds The conclusion of the relationship between the Debtors and LCS under the LCS Plan binds any and all parties that may assert a lien, claim or interest in or to the Agreements or any prior agreements, with any liens transferring to the proceeds. F. Mutual Releases The Debtors and the LCS Parties will exchange mutual releases. Mr. Oellermann tells Judge Calhoun that several factors weigh in favor of the Settlement: (a) The results of any litigation between the Debtors and LCS regarding the amount of the Debtors' claims are uncertain. LCS disputes all or a portion of the Debtors' claims. The LCS Parties have also threatened to seek recharacterization or subordination of the Debtors' claims; (b) Given LCS' bankruptcy, the Debtors plainly would face significant difficulties in collecting more funds than those that would be paid under the Settlement Agreement and the LCS Plan. Pursuant to the proposed settlement, the Debtors estimate that they will receive in excess of 80% of the net amount available for distribution to all creditors. If the settlement is not approved, the amount that the Debtors possibly could collect might be less on a present value basis, insofar as protracted litigation of the parties' disputes would significantly delay distributions and further deplete the LCS estates; (c) Litigation over the amount and treatment of the Debtors' claims would be expensive and time-consuming for both the Debtors and the LCS Parties. Also, there is no assurance that the result would be any more favorable than the proposed treatment of the Debtors' claims pursuant to the LCS Plan; and (d) The proposed settlement will allow the Debtors to collect significant amounts of cash, including the initial $4,000,000 Cash Payment and a substantial likelihood of material additional recoveries to be distributed under the LCS Plan. Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- is the market leader in healthcare finance focused on providing medical accounts receivable financing to middle market healthcare providers. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. D. Ohio Case No. 02-65235). Paul E. Harner, Esq., Jones, Day, Reavis & Pogue represents the Debtors in their restructuring efforts. (National Century Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc., 215/945-7000) NETWORK STORAGE: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Network Storage Solutions, Inc. 14020 Thunderbolt Place, Suite 500 Chantilly, Virginia 20151 Bankruptcy Case No.: 04-10350 Type of Business: The Debtor develops and markets network attached storage systems and SAN storage products. See http://www.nssolutions.com/ Chapter 11 Petition Date: January 28, 2004 Court: Eastern District of Virginia (Alexandria) Judge: Stephen S. Mitchell Debtor's Counsel: Kevin M. O'Donnell, Esq. Henry & O'Donnell, P.C. 4103 Chain Bridge Road, Suite 100 Fairfax, VA 22030 Tel: 703-273-1900 Fax: 703-273-6884 Total Assets: $540,000 Total Debts: $9,251,000 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Hitachi Data Systems Trade Payable $252,467 750 Central Expressway Santa Clara, CA 95050 Network Associates Trade Payable $244,962 Promicro Systems Trade Payable $199,633 Tom Makmann Wages $197,197 Brad Clemmons Wages $125,917 Doug Donsbach Wages $120,567 Tom Piancentini Wages $115,735 Rob Fredericks Wages $97,792 Roger Kirkland Wages $96,550 nStor Technologies Trade Payable $88,838 Metavente 401K Services Unfunded 401(k) $77,099 Contributions 3Com Corporation Trade Payable $54,600 Regis Property Management Trade Payable $45,720 Franklin, Weinrib, Rudell Trade Payable $42,394 Aviv Trade Payable $41,079 Kenneth Cross Wages $37,776 Condre Storage Trade Payable $35,353 Delta Velocity Group Trade Payable $34,726 Joseph Oernberger Wages $33,914 Network Engines Trade Payable $33,500 NEW CONSTRUCTION: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: New Construction, Inc. 9650 Hawkins Drive Manassas, Virginia 20109 Bankruptcy Case No.: 04-10657 Type of Business: The Debtor provides site development, road construction and utilities services. Chapter 11 Petition Date: February 17, 2004 Court: Eastern District of Virginia (Alexandria) Judge: Stephen S. Mitchell Debtor's Counsel: Linda Dianne Regenhardt, Esq. Gary & Goodman PLLC 8500 Leesburg Pike, Suite 7000 Vienna, VA 22182-2409 Tel: 703-848-2828 Fax: 703-893-9276 Total Assets: $6,470,124 Total Debts: $21,018,941 The Debtor did not file a list of its 20-largest creditors. NORTHSTAR CBO: S&P Downgrades Ratings for Class A-2 & A-3 Notes --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class A-2 and A-3 notes issued by Northstar CBO 1997-2 Ltd., a high-yield CBO transaction originated in June 1997. At the same time, the ratings are removed from CreditWatch negative, where they were placed Jan. 21, 2004. The rating actions reflect factors that have negatively affected the credit enhancement available to support the class A-2 and A-3 notes since the transaction was last downgraded. Chief among these factors is a sharp increase in the number of defaults in the collateral pool securing the notes. As a result of asset defaults and the sale of credit risk assets, the class A-2/A-3 overcollateralization ratio has dropped significantly, and now stands at 63.1%. This contrasts with a ratio of 89.2% when the notes were last downgraded, and is well below their minimum requirement, which equaled 119.0% at the time of the last rating action, but has now stepped up to 140.0%. Similarly, the class B overcollateralization ratio has fallen to 50.7% from 86.8% when the rating on the notes was last lowered. This is in sharp contrast with a benchmark that now equals 120.0%. Including defaulted securities, $82.7 million (or approximately 60.4% of the collateral pool's par value) come from obligors now rated in the 'CCC' range or lower. RATINGS LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE Northstar CBO 1997-2 Ltd. Rating Class To From A-2 B+ A/Watch Neg A-3 CC CCC-/Watch Neg TRANSACTION INFORMATION Issuer: Northstar CBO 1997-2 Ltd. Co-issuer: Northstar CBO 1997-2 (Delaware) Corp. Manager: ING Investments Inc. Underwriter: Bear Stearns Cos. Inc. (The) Trustee: US Bank Transaction type: High-yield arbitrage CBO TRANCHE INITIAL LAST CURRENT INFORMATION REPORT ACTION ACTION Date (MM/YYYY) 07/1997 01/2004 02/2004 A-2 notes rtg. AAA A/Watch Neg B+ A-3 notes rtg. A- CCC-/Watch Neg CC B notes rating N.R. N.A. N.A. Cl. A-2/A-3 OC ratio N/A 68.5% 63.1% Cl. A-2/A-3 OC ratio min. 114.0% 135.0% 141.0% Class B OC ratio N.A. 56.6% 50.7% Class B OC ratio min. 104.0% 115.0% 120.0% A-2 note bal. $163.0mm $78.0mm $57.0mm A-3 note bal. $90.0mm $90.0mm $90.0mm B note bal. $33.3mm $33.3mm $33.3mm PORTFOLIO BENCHMARKS CURRENT S&P Wtd. Avg. Rtg. (excl. defaulted) B S&P Default Measure (excl. defaulted) 5.85% S&P Variability Measure (excl. defaulted) 4.89% Obligors Rated 'BB-' and Above 13.66% Obligors Rated 'B+' and Above 31.21% Obligors Rated 'B' and Above 31.21% Obligors Rated 'B-' and Above 39.61% Obligors Rated in 'CCC' Range 13.25% Obligors Rated 'SD' or 'D' 47.13% S&P RATED LAST CURRENT OC (ROC) RATING ACTION RATING ACTION Class A-2 82.17% (A/CW Neg) 92.60% (B+) Class A-3 64.43% (CCC-/CW Neg) N.A. (CC) OWENS: Demands Recovery of National Settlement Program Payments --------------------------------------------------------------- At the Official Committee of Unsecured Creditors' request, Debtors Owens Corning, Fibreboard Corporation, and Integrex seek to recover certain payments made to settle asbestos claims held by certain claimants under the Debtors' "National Settlement Program" represented by: (1) Langston, Frazer, Sweet & Freese, (2) Langston, Frazer, Sweet & Freese, P.A., (3) Langston, Sweet & Freese, P.A., (4) Frazer Davidson, P.A., and (5) unknown number of John Does. The Creditors Committee contends that these payments are avoidable and recoverable as fraudulent transfers. J. Kate Stickles, Esq., at Saul Ewing LLP, in Wilmington, Delaware, relates that the Debtors' National Settlement Program was designed to better manage the Debtors' asbestos liabilities, and to better predict the timing and amount of payments for both pending and future claims. Under the NSP, the Debtors negotiated with prominent asbestos plaintiff law firms to establish procedures and fix payments for resolving present claims as well as future claims brought by participating plaintiffs' law firms without litigation for a projected period of at least 10 years. In exchange for plaintiffs' firms resolving their clients' claims under the NSP, the Debtors became obligated to process the claim information under administrative procedures and make settlement payments to all qualifying plaintiffs. Under the NSP, plaintiffs' firms whose clients chose to participate were required to submit claim forms and supporting evidence for each of their clients. This information typically included proof of product exposure, supporting medical evidence, and an executed release. Under most agreements, Ms. Stickles informs the Court, the Debtors issued checks, either in a lump sum settlement for a group of plaintiffs' claims or individual checks for each particular plaintiff, to the plaintiff law firm in trust for the firm's clients. In certain cases, funds were distributed even though the plaintiffs did not satisfy some or all of the conditions precedent to the payments. In some instances, plaintiffs subsequently provided the requisite documentation after receiving payment. As of the Petition Date, Ms. Stickles reports that Owens Corning and Fibreboard entered into NSP agreements with more than 100 law firms, providing for the resolution of over 400,000 pending asbestos-related personal injury claims. Each of these agreements was reached with plaintiffs' firms after arm's- length negotiations. According to Ms. Stickles, the settlement agreements reflected the best resolution the Debtors could achieve, taking into account the myriad factors that inform asbestos settlements, including disease mix, jurisdiction, plaintiffs' firm, and overall docket conditions. The NSP allowed the Debtors to resolve claims for substantially less money than the plaintiffs sought in the tort system, and the average settlement payment was less than the Debtors' settlements in the years prior for similar claims. The agreements also allowed the Debtors to resolve the majority of the cases then pending against them, without the uncertainty and inconsistency of the tort system, and without the significant litigation costs that they would have incurred if the agreements were not reached. In exchange for the payments made to the Defendant Law Firms, and at least to the extent plaintiffs satisfied the conditions precedent to the Debtors' payment, the Debtors each received reasonably equivalent value and fair consideration in the form of releases of substantial claims asserted by the asbestos-tort plaintiffs represented by the Defendant Law Firms. The Commercial Creditors Committee alleged, inter alia, that payments made under the NSP were made with the actual intent to hinder, delay and defraud the Debtors' non-asbestos creditors. However, the Debtors maintain that the Commercial Creditors Committee's allegations are reckless and are unsubstantiated by any facts. To resolve the controversy created by the Commercial Creditors Committee's allegations, and to preserve any valid claim relating to the NSP payments for the benefit of creditors and the Debtors' estates, the Debtors seek to recover the NSP payments to ensure that the claims asserted by the Commercial Creditors Committee are reserved for Court determination. Declaring the Payments As Valid The Debtors ask the Court to determine that the NSP payments made to the Defendant Law Firms are not avoidable under Sections 544 and 548 or under any of the provisions of applicable state law. The Debtors ask the Court for declaratory relief determining that: (1) the NSP agreement with the Defendant Law Firms was a valid agreement enforceable in accordance with its terms, subject to applicable bankruptcy law, including without limitation to Section 365 of the Bankruptcy Code; and (2) the NSP payments made to the Defendant Law Firms, to the extent disbursed to its clients after the clients' satisfaction of the conditions precedent to payment, are not avoidable or recoverable as fraudulent transfers under Sections 544, 548 and 550 or any applicable state law. Avoidance of Fraudulent Transfers In the event that the Court does not grant the Debtors' request, or to the extent that funds were disbursed to the Defendant Law Firms or its clients even though the clients did not satisfy the conditions precedent to payment, then the Debtors have one or more claims against the Defendant Law Firms to avoid and recover NSP payments made to it as attorneys' fees and costs, or those portions of any NSP payment made to an individual asbestos claimant or group of asbestos claimants for payment to the Defendant Law Firms in compensation of attorneys' fees and costs. The Debtors do not assert any claim to recover any NSP payments made to and for the benefit of any individual asbestos claimants, exclusive of the Defendant Law Firms' attorneys' fees and costs. Ms. Stickles relates that under the NSP agreement with the Defendant Law Firms, Ms. Stickles tells the Court that the Debtors incurred obligations and made transfers to the Defendant Law Firms since the NSP commenced -- $3,700,000 from Owens Corning in April 2000 and $9,295,000 from Fibreboard in January 2000. According to the Commercial Creditors Committee, the Debtors: (1) incurred the obligations and made the payments with intent to hinder, delay, or defraud its other non-asbestos creditors; (2) generally received less than reasonably equivalent value in exchange for the transfers or obligations, and each was insolvent on the date each transfer was made or the obligation was incurred, or became insolvent as a result of the transfer or obligation; (3) each of which was insolvent at the time of, or was rendered insolvent by, the transfer made or obligation incurred, also received less than reasonably equivalent value in exchange for any transfer or obligation to the extent funds were disbursed to the Defendant Law Firms' clients even though the clients did not satisfy the conditions precedent to payment; (4) engaged in business or transactions, or were about to engage in business or transactions, for which any property remaining with the Debtors was unreasonably small capital, or the Debtors intended to incur, or believed that they would incur, debts that would be beyond the Debtors' ability to pay as the debts matured; (5) made the transfers or incurred the obligations at a time when each Debtor was insolvent, or became insolvent as a result of the transfers or obligations, or was engaged in business or transactions, or was about to engage in business or transactions, for which any property remaining with the Debtors was unreasonably small capital, or the Debtors intended to incur, or believed that they would incur, debts that would be beyond the Debtors' ability to pay as the debts matured; (6) received less than fair consideration in exchange for the payments; (7) at the time the transfers or obligations were made or incurred, were engaged or about to be engaged in a business or transaction for which the remaining assets of the Debtors were unreasonably small in relation to their business transactions; and (8) each intended to incur, or believed, or reasonably should believed, that it would incur debts beyond its ability to pay as they became due. Moreover, the Commercial Creditors Committee believes that some or all of the Payments are avoidable as fraudulent transfers or obligations under Sections 544 and 548 and applicable state law. Thus, the Debtors ask the Court to enter a judgment: (1) avoiding some or all of the Payments as fraudulent transfers or obligations under Sections 544 and 548 and applicable state law; and (2) recovering some or all of the Payments, under Section 550; and (3) entering a money judgment against the Defendant Law Firms in the appropriate amount, plus interest and costs. (Owens Corning Bankruptcy News, Issue No. 68; Bankruptcy Creditors' Service, Inc., 215/945-7000) PACIFIC GAS: Court Approves $310 Million Mortgage Bond Payment -------------------------------------------------------------- PG&E Corporation's (NYSE: PCG) utility unit, Pacific Gas and Electric Company, has received approval from the U.S. Bankruptcy Court to pay $310 million of 6-1/4 percent Series 93G First and Refunding Mortgage Bonds maturing March 1, 2004. Pacific Gas and Electric Company will pay the bondholders from its current available cash. Bondholders who hold the bonds in a brokerage account will have principal and interest paid to their account. Certificate holders will need to deliver their certificates to the trustee, The Bank of New York, to receive payment for the principal. Interest checks to certificate holders will be mailed separately. PAK-A-SAK: Signing-Up Leonard W. Jones as Accountants ----------------------------------------------------- Pak-A-Sak food Stores, Inc., seeks permission from the U.S. Bankruptcy Court for the Eastern District of North Carolina, Wilson Division to employ Leonard W. Jones, CPA as its accountant. In this engagement, the Debtor expects Mr. Jones to: a. prepare bi-weekly payroll checks; b. prepare monthly payroll tax reports; c. prepare internal payroll reports allocating payroll expenses to stores and departments; d. prepare W-2 forms and annual tax returns; e. prepare monthly sales tax reports; f. provide monthly reconciliation of Debtor's bank accounts; and g. provide general accounting needs of Debtor has they arise. Mr. Jones will prepare the bi-weekly payroll checks and payroll tax reports on the Debtor's behalf at the rate of $750 bi-weekly. The Debtor reports that Mr. Jones is disinterested within the meaning of Section 327(a) of the Bankruptcy Code. Headquartered in Morehead City, North Carolina, Pak-A-Sak Food Stores, Inc., is engaged in the business of operating grocery stores located in Carteret County, Craven County and Onslow County, North Carolina. The Company filed for chapter 11 protection on January 22, 2004 (Bankr. E.D. N.C. Case No. 04- 00590). Trawick H. Stubbs, Esq., at Stubbs & Perdue, P.A., represents the Debtor in its restructuring efforts. When the company filed for protection from its creditors, it listed $6,678,838 in total assets and $6,669,439 in total debts. PARMALAT: Parma Court Establishes Deadlines for Filing Claims ------------------------------------------------------------- Judge Zanichelli directs creditors and other parties-in-interest who have real, transferable rights against Parmalat's assets to present their claims and payment applications to the Office of the Clerk of the Parma Court on or before these dates: Insolvent Unit Filing Deadline -------------- --------------- Parmalat SpA April 20, 2004 Parmalat Finanziaria SpA April 30, 2004 Eurolat SpA May 5, 2004 Lactis SpA May 5, 2004 Parmatour SpA May 15, 2004 Coloniale SpA May 20, 2004 Judge Zanichelli will convene a hearing on these dates in the civil hearings' room (Aula Corte d'Assise) to consider each debtor's liability status on claims filed against the companies: Insolvent Unit Hearing Date -------------- ------------ Parmalat SpA May 19, 2004 at 10:00 am Parmalat Finanziaria SpA May 26, 2004 at 9:30 am Eurolat SpA May 31, 2004 at 9:30 am Lactis SpA June 4, 2004 at 9:30 am Parmatour SpA June 10, 2004 at 9:30 am Coloniale SpA June 11, 2004 at 9:30 am (Parmalat Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) PETERRI TRANSPORT: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Peterri Transportation Service, Inc. 405A Blair Road, P.O. Box 508 Avenel, New Jersey 07001 Bankruptcy Case No.: 04-16442 Type of Business: The Debtor is a trucking company. Chapter 11 Petition Date: February 27, 2004 Court: District of New Jersey (Newark) Debtor's Counsel: Howard S. Greenberg, Esq. Ravin Greenberg, PC 101 Eisenhower Parkway Roseland, NJ 07068 Tel: 973-226-1500 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Zurich-American $72,214 Northland Insurance $35,000 United Healthcare $27,193 Rotenberg, Meril, Solomon, Bertiger & $13,000 Guttilla, P.C. Morgan Development Corp. $9,105 Liberty Kenworth $7,078 Tompkins, McGuire, Wachenfield & Barry $5,692 Penske Truck Leasing $5,439 Airbone Express $4,997 NUI Elizabethtown Gas $4,354 Horizon Blue Cross Blue Shield of NJ $3,699 Qualcomm Incorporated $3,548 Toshiba America Info Sys Inc. $3,440 Cummins Metropower, Inc. $3,310 Linden Operating Inc. $2,700 Staples Credit Plan $2,068 Top Hat Uniform Rental & Sales $1,694 Ohio Casualty Group $1,436 Network Billing Systems, LLC $1,375 Power Battery $1,200 PETROLEUM GEO: Releasing Preliminary 2003 Results on March 16 ------------------------------------------------------------- Petroleum Geo-Services ASA (OSE: PGS; OTC: PGEOY) expects to release unaudited, preliminary results for the fourth quarter and full year 2003 on Tuesday, March 16, 2004. The fourth quarter and full year information will be on a Norwegian GAAP basis only. The Company also expects to release certain information related to "fresh start" accounting under US GAAP following the Company's emergence from Chapter 11 proceedings in early November 2003. The unaudited, preliminary Norwegian GAAP information is being released to satisfy requirements of the Oslo Stock Exchange, which generally require disclosure of preliminary results for the fourth quarter and full year 2003 by the end of February 2004. The Company has contacted the Oslo Stock Exchange regarding obtaining an exemption from such timing requirement, but no assurance can be given that such exemption will be granted. If such exemption is not granted, the Company could incur monetary penalties (maximum of ten times the annual listing fee). The delay is mainly due to the substantial increase in workload and complexity associated with the financial reporting issues after the exit from Chapter 11 and the re-audit and audit of previous years' US GAAP financial statements. The Company continues to work on completing an audit of the Company's 2002 financial statements and a re-audit of the Company's 2001 financial statements and on addressing certain previously disclosed material weaknesses in its system of internal controls over financial reporting. The Company is also working on the audit of its financial statements for 2003 (both US and Norwegian GAAP) As previously announced, there can be no assurance as to whether or when these audits and re-audit can be completed. In addition, as previously disclosed, if and when completed, the audits and re- audit could result in restatements of the Company's previously filed US GAAP audited financial statements and restatements and other adjustments to its 2003 US GAAP financial statements. Those restatements and adjustments could be material, although they are expected to be of a non-cash nature. The Company does not expect to release any US GAAP figures related to periods prior to November 2003 until these audits and re-audit are completed. Furthermore, there can be no assurance that the audits and re- audit, although being conducted for US GAAP purposes, will not have an impact on Norwegian GAAP financial statements. The Company expects to be able to provide additional information on the status of the audits and re-audit for the 2001 - 2003 period at the time of its release of preliminary results. Petroleum Geo-Services is a technologically focused oilfield service company principally involved in geophysical and floating production services. PGS provides a broad range of seismic- and reservoir services, including acquisition, processing, interpretation, and field evaluation. PGS owns and operates four floating production, storage and offloading units (FPSO's). PGS operates on a worldwide basis with headquarters in Oslo, Norway. For more information, visit http://www.pgs.com/ PG&E NATIONAL: Wants to Assume & Assign Glencore Sale Agreement --------------------------------------------------------------- Consistent with the historical division of responsibilities between the ET Debtors and USGen New England, Inc., NEGT Energy Trading - Power, L.P., entered into a Master Coal Purchase and Sale Agreement with Glencore Limited, dated as of August 1, 2000. The Glencore Agreement is a standard trading agreement pursuant to which the parties may from time to time enter into individual transactions. These individual transactions are customarily documented in the form of confirmations, which set forth, among other terms and conditions: (a) specified quantities and delivery dates for physical transactions; (b) specified methods for calculation of payment amounts; and (c) specified payment dates for financial transactions. The Glencore Agreement also required ET Power to provide performance assurance in the form of a letter of credit or cash. Accordingly, ET Power has posted a $3,000,000 letter of credit in support of that obligation. Pursuant to the Glencore Agreement, ET Power executed three confirmations with Glencore, two of which have expired by their terms. The remaining outstanding confirmation, dated as of September 13, 2002, provides for the sale of 500,000 tons of coal during each month through December 31, 2003 and 100,000 tons of coal during January and February 2004, all at a price of $30.35 per ton. On December 2, 2002, ET Power and USGen entered into a confirmation providing that ET Power's interest in the Glencore coal be transferred to USGen at a price of $30.35 per ton, the exact price in the Glencore Agreement. On July 3, 2003, as part of the claims resolved under a Mutual Release -- entered into by the ET Debtors and USGen on July 3, 2003 -- ET Power credited $500,000 to USGen, which represented the difference between the then current market price of coal and the price of the coal under the Glencore Agreement. The Mutual Release's effect was to shift all of the rights in the Glencore coal from USGen back to ET Power, which was then free to do what it desired with the coal. Currently, USGen prepays Glencore for the coal on behalf of ET Power and Glencore is continuing to perform according to the terms of the Glencore Agreement. Despite this arrangement, in the absence of a specific confirmation between ET Power and USGen, ET Power is free to sell the Glencore coal either to USGen or to any other party. In addition, ET Power's letter of credit to the benefit of Glencore remains outstanding. As a result, ET Power is the actual party-in-interest under the Glencore Agreement. Given that the price of coal has risen since the Glencore Agreement was executed, the Glencore Agreement represents an "in the money contract" for the ET Power. By agreement reached between the ET Debtors and USGen in late September 2003, ET Power has agreed to assign its interest in the Glencore Agreement to USGen. In consideration of the assignment, USGen, which requires the coal for use in the ordinary course of its business, agreed to pay ET Power $700,000 in a one-time payment. Once released from the Glencore Agreement, ET Power would obtain from Glencore its $3,000,000 letter of credit and USGen would post substitute security. The consideration to be paid by USGen for the Glencore Agreement was calculated using the identical methodology as would have been employed in a transaction negotiated between unaffiliated parties. By this motion, the ET Debtors and USGen ask the Court to approve: (a) the assumption of the Glencore Agreement by ET Power; and (b) the assignment of the Glencore Agreement by ET Power to USGen. Paul M. Nussbaum, Esq., at Whiteford, Taylor & Preston, in Baltimore, Maryland, tells the Court that USGen and the ET Debtors have performed a market analysis of the Glencore Agreement and believe that the $700,000 consideration is reasonable. Moreover, USGen will be receiving the rights to a favorable coal contract, a commodity it requires in the ordinary course of its business, at a reasonable price. Headquartered in Bethesda, Maryland, PG&E National Energy Group, Inc. -- http://www.pge.com/-- develops, builds, owns and operates electric generating and natural gas pipeline facilities and provides energy trading, marketing and risk-management services. The Company filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md. Case No. 03-30459). Matthew A. Feldman, Esq., Shelley C. Chapman, Esq., and Carollynn H.G. Callari, Esq., at Willkie Farr & Gallagher represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $7,613,000,000 in assets and $9,062,000,000 in debts. (PG&E National Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000) PLIANT: Completes Senior Debt Sale & Secures New $100MM Facility ---------------------------------------------------------------- Pliant Corporation completed the sale of $306 million principal amount at maturity of its 11 1/8% Senior Secured Discount Notes Due 2009. The net proceeds from the offering of the Notes, in the amount of approximately $225.3 million, together with borrowings under the new revolving credit facility described below, were used to pay off Pliant's outstanding indebtedness under its existing term loan facilities in the aggregate amount of approximately $239.6 million, eliminating all principal amortization payments until 2009. Upon closing of the sale of the Notes, Pliant terminated its existing term and revolving credit facilities and entered into a new five- year asset-based revolving credit facility in the principal amount of up to $100 million. The Notes will accrete at the rate of 11 1/8% until December 15, 2006, after which cash interest will accrue and be payable semiannually commencing on June 15, 2007 and continuing until the maturity date of June 15, 2009. The offering and sale of the Notes was not registered under the Securities Act of 1933, as amended, and the Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration provisions of the Securities Act. Pay-off of the term debt (which had variable rates of interest) has substantially reduced the Company's exposure to interest rate risk. The new revolving credit facility also has no financial covenants through the first $75 million in borrowings, after which there is only a fixed charge ratio of 1.1 to 1. Although the effective interest rate on the Notes is higher than the interest rate on the paid-off term loans, sale of the Notes and the new revolving credit facility have enabled the Company to realize greater short- term liquidity and flexibility in its debt structure. Pliant Corporation is a leading producer of value-added film and flexible packaging products for personal care, medical, food, industrial and agricultural markets. Pliant operates 25 manufacturing and research and development facilities around the world and employs approximately 3,250 people. * * * As reported in the Troubled Company Reporter's January 30, 2004 edition, Standard & Poor's Ratings Services assigned its 'BB-' rating and a recovery rating of '1' to Pliant Corp.'s proposed $100 million senior secured revolving credit facility due 2009, subject to preliminary terms and conditions. The 'BB-' rating is one notch higher than the corporate credit rating; this and the '1' recovery rating indicate a high expectation of full recovery of principal in the event of a default. At the same time, Standard & Poor's assigned its 'B' rating to the company's proposed $225 million senior secured discount notes due 2009 and assigned a recovery rating of '4' to these notes. The 'B' rating is one notch lower than the corporate credit rating; this and the '4' recovery rating indicate that creditors would recover a marginal (25%-50%) amount of principal (including accreted interest until 2007), in the event of a default. Cash interest on the senior secured discount notes is payable at the option of the company until 2007, after which cash interest is payable. Proceeds of the senior secured discount notes would be used to repay the existing credit facilities and for fees and expenses. Following completion of the proposed transaction, ratings on the existing credit facilities would be withdrawn. In addition, Standard & Poor's affirmed its 'B+' corporate credit rating on Schaumburg, Illinois-based Pliant Corp. The outlook is stable. Pro forma for the refinancing transaction, Pliant, a producer of plastic films and flexible packaging, will have approximately $789 million in total debt outstanding. "The ratings reflect Pliant's very aggressive debt leverage and sub par credit measures, which overshadow its below-average business position in plastic film and flexible packaging segments," said Standard & Poor's credit analyst Liley Mehta. PRIDE INT'L: S&P Puts BB+ Corporate Credit Rating on Watch Neg. --------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB+' corporate credit rating on Pride International Inc. on CreditWatch with negative implications, along with other ratings. The rating action is based on the company's net loss in fourth-quarter 2003, and lower cash flow from operations leading to credit measures that are below expectations for the rating. Texas-based Pride International has about $1.8 billion of debt outstanding. Pride encountered significant challenges in connection with the construction of four deepwater platform rigs, and in fourth- quarter 2003 reported considerable losses related to these construction projects. Additional losses and charges in the fourth quarter (attributable to the financial difficulties of a shipyard, provisions for settling commercial disputes, and revised estimates for certain cost items) depressed operating results. "This causes further uncertainty about the company's ability to meet previously outlined debt-reduction goals for 2004," said Standard & Poor's credit analyst Kimberly Stokes. Ratings reflect a competitive position in highly cyclical and competitive contract drilling market; a broad, geographically diverse fleet; and stability provided by multiyear contracts. These strengths, however, are more than offset by aggressive financial leverage and subpar operating performance. The CreditWatch listing will be resolved in the near term following a comprehensive review of Pride's business and financial profile, and new management's plan to improve operating and financial performance. QWEST COMMS: Qwest Capital Closes Tender Offer for Debt Securities ------------------------------------------------------------------ Qwest Communications International Inc. announced that its wholly owned subsidiary, Qwest Capital Funding, Inc. (QCF), successfully closed its previously announced tender offer for approximately $963 million of aggregate principal amount of outstanding 5.875 percent notes due August 3, 2004. A total of approximately $921 million, or approximately 96 percent, in principal amount of QCF notes maturing in 2004 were tendered prior to the expiration, and have been accepted and paid. The offer expired at midnight EST, on Thursday, February 26, 2004 and final settlement of notes tendered after the Early Participation Deadline on February 11, 2004 was completed Friday. Banc of America Securities LLC and UBS Investment Bank were the Dealer Managers for the Offer. About Qwest Qwest Communications International Inc. (NYSE: Q) is a leading provider of voice, video and data services to more than 25 million customers. The company's 47,000 employees are committed to the "Spirit of Service" and providing world-class services that exceed customers' expectations for quality, value and reliability. For more information, please visit http://www.qwest.com/ RELIANCE GROUP: Plan-Filing Exclusivity Extended to March 30, 2004 ------------------------------------------------------------------ Judge Gonzalez extends Reliance Group Holdings and Reliance Financial Services' exclusive periods to file a plan until March 30, 2004, and to solicit acceptances of that plan through June 1, 2004, in view of the Official Unsecured Creditors Committee and the Official Unsecured Bank Committee's request for approval of a Term Sheet that provides for post-confirmation funding of RFSC by RGH. (Reliance Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., 215/945-7000) RESOURCE AMERICA: S&P Withdraws B Rating After Sr. Debt Redemption ------------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its 'B' corporate credit ratings on Resource America Inc. Following the redemption of the remaining $53 million of its 12% senior notes due August 2004, the company has no outstanding public debt and has asked Standard & Poor's not to rate its bank facilities. Resource America Inc. is a proprietary asset management company that uses industry specific expertise to generate and administer investment opportunities for its own account and for outside investors in the energy, real estate and equipment leasing industries. For more information please visit its Web site at http://www.resourceamerica.com/ ROTHCHILD JEWELERS: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Rothchild Jewelers, Inc. 304 Libbie Avenue Richmond, Virginia 23226 Bankruptcy Case No.: 04-30721 Type of Business: The Debtor is an in-house jeweler specializing in one-of-a-kind designs. The shop also has a collection of pearls and estate jewelry dating from the 1700s. Chapter 11 Petition Date: January 28, 2004 Court: Eastern District of Virginia (Richmond) Judge: Douglas O. Tice Jr. Debtor's Counsel: J. Ellsworth Summers, Jr., Esq. Kaufman & Canoles, P.C. 150 West Main Street, Suite 1900 P.O. Box 3037 Norfolk, VA 23510 Tel: 757-624-3000 Fax: 757-624-3169 Total Assets: $9,473,027 Total Debts: $578,761 The Debtor did not file a list of its 20-largest creditors. RURAL/METRO: Remains as Apache Junction's 911 Ambulance Provider ---------------------------------------------------------------- Rural/Metro Corporation (Nasdaq:RURL), the leading national provider of medical transportation and fire protection services, announced that its Southwest Ambulance division has been awarded a new contract to remain the exclusive emergency ambulance provider in the City of Apache Junction, Arizona. The contract was awarded on a unanimous decision of the Apache Junction Fire District Board and calls for an initial three-year term, followed by two, three-year optional renewal periods, for a total possible length of nine years. Southwest Ambulance has been the exclusive provider of emergency ambulance services in Apache Junction since 1993. The company serves the medical transportation needs of more than 3,000 Apache Junction patients each year. The city is home to more than 100,000 permanent residents and part-time winter visitors. Jack Brucker, President and Chief Executive Officer, said, "Our ability to generate same-service area revenue increases has been effective, in part, due to Rural Metro's strong regional presence in areas that hold promise for continued growth such as Apache Junction. Southwest Ambulance's significant base of operations enables us to create the economies of scale necessary to perpetuate high-quality service to our customers." Barry Landon, President of Southwest Ambulance, added, "We are pleased to continue serving the emergency medical transportation needs of Apache Junction. Our employees are committed to contributing to the ongoing success of the EMS systems in this and other communities we serve through excellent patient care and customer service." Rural/Metro Corporation -- whose December 31, 2003 balance sheet shows a total stockholders' equity deficit of $210,080,000 -- provides emergency and non-emergency medical transportation, fire protection, and other safety services in 24 states and more than 400 communities throughout the United States. For more information, visit http://www.ruralmetro.com/ SMITHFIELD FOODS: Denies Acquisition Talks with Swift & Co. ----------------------------------------------------------- Smithfield Foods, Inc. (NYSE: SFD), in response to several inquiries, said that the company was not involved in discussions with Swift & Co. concerning the acquisition of Swift's pork and beef assets. With annualized sales of $9 billion, Smithfield Foods (S&P, BB+ Corporate Credit Rating, Negative) is the leading processor and marketer of fresh pork and processed meats in the United States, as well as the largest producer of hogs. For more information, please visit http://www.smithfieldfoods.com/ SMTC CORP: Sets 4th Quarter Results Teleconference for March 10 --------------------------------------------------------------- SMTC Corporation (Nasdaq: SMTX) (TSX: SMX), a global electronics manufacturing services (EMS) provider, has scheduled its fourth quarter results teleconference. The teleconference will be held on March 10, 2004 at 5:30 PM EST. Those wishing to listen to the teleconference should access the webcast at the investor relations section of SMTC's Web site at http://www.smtc.com/ A rebroadcast of the webcast will be available on SMTC's website following the teleconference. Participants should assure that they have a current version of Microsoft Windows Media Player before accessing the webcast. Members of the investment community wishing to ask questions during the teleconference may access the teleconference by dialing 416-640-4127 or 1-800-814-4859 ten minutes prior to the scheduled start time. A rebroadcast will be available following the teleconference by dialing 416-640-1917 or 1-877-289-8525, pass code 21040688 followed by the pound key. SMTC Corporation is a global provider of advanced electronic manufacturing services to the technology industry. SMTC offers technology companies and electronics OEMs a full range of value- added services including product design, procurement, prototyping, printed circuit assembly, advanced cable and harness interconnect, high precision enclosures, system integration and test, comprehensive supply chain management, packaging, global distribution and after-sales support. SMTC is a public company incorporated in Delaware with its shares traded on the Nasdaq National Market System under the symbol SMTX and on The Toronto Stock Exchange under the symbol SMX. For more information about the Company, visit SMTC's web site at http://www.smtc.com/ The company's Sept. 28, 2004, balance sheet is upside-down by $19 million. SOLUTIA INC: PPG Asks Court Permission to Set Off Mutual Debts -------------------------------------------------------------- PPG Industries, Inc., as the Solutia, Inc. Debtors' 22nd largest unsecured creditor, holds a $1,209,213 unsecured claim. John J. Winter, Esq., at Harvey, Pennington, Cabot, Griffith & Renneisen, Ltd., in Philadelphia, Pennsylvania, tells Judge Beatty that PPG is a custom manufacturing producer involved with a wide variety of products, including the production of high-quality chlorine/caustic soda, which the Debtors use in a number of their own product lines used in the manufacture and repair of automobiles. PPG entered into a Chlorine/Caustic Soda Sales Agreement with the Debtors, which provided for a two-year term beginning January 1, 2003 and ending on December 31, 2004. The Chemicals Contract requires: -- the Debtors to provide, in advance, their prospective requirements for Chemicals; -- PPG to manufacture and deliver the Chemicals to the Debtors; -- the Debtors to accept and purchase Chemicals conforming to the Contract upon receipt; and -- the Debtors to pay PPG for the Chemicals thus accepted and received. Similarly, PPG and the Debtors entered into a Materials Purchase Order, which required the Debtors to sell and PPG to purchase certain laminate films and other materials. In accordance with the Chemicals Contract, PPG sold Chemicals to the Debtors for which it issued prepetition invoices. The Chemicals Invoices remaining outstanding as of the Petition Date totaled $1,209,213, as scheduled by the Debtors. The Materials Invoices remaining outstanding as of the Petition Date is at least $814,242. According to Mr. Winter, the Chemicals Invoices and the Materials Invoices are held by and between the same parties, standing in the same capacity with respect to each other, and PPG desires to set off the mutual obligations. In addition to shipments represented by the Chemicals Invoices, PPG had shipped one barge of Chemicals to the Debtors 10 days prior to the Petition Date, under Invoice No. 1204015, for $178,418. The Chemicals shipment arrived at the Debtors' plant immediately before the Petition Date, on December 16, 2003. PPG sent a Reclamation Notice, which was actually received by the Debtors on December 19, 2003. PPG asserts an administrative priority claim for the shipment. Mr. Winter says that PPG considers itself to be a "Critical Vendor" in that its ability to timely ship Chemicals in the quantities, and in the grade required, are so critical to the Debtors' ability to service its own customers, that it would severely disrupt the Debtors' business if PPG ceased or interrupted the shipments. In fact, as of the Petition Date, PPG had commenced, but not physically completed, certain deliveries of Chemicals to the Debtors consisting of an entire barge-load of Chemicals, each with an invoice price similar to that of the Reclaimed Goods. Because it has not been paid for a significant amount of goods previously shipped to the Debtors -- roughly $1,200,000 worth -- PPG had every right as a reclaiming seller to stop further shipments of additional Goods to the Debtors, even if they were en route. However, in determining whether or not to stop shipments en route or withhold further shipments, PPG carefully monitored the initial developments in the Debtors' bankruptcy case to make an informed decision. PPG observed that the DIP Financing Motion was granted on an interim basis by a Court Order entered on December 19, 2003. This was a significant development because, according to the DIP Financing Motion, the bankruptcy was necessitated by a liquidity crisis, as a result of which the Debtors have had virtually no available cash to meet ongoing obligations they must incur to run their businesses. The Debtors urgently need bank credit to purchase raw materials and inventory, maintain their manufacturing and distribution systems, and to pay their employees. Postpetition financing is needed to avoid severe tightening or elimination of trade credit, damaged relationships with trade suppliers, delayed deliveries and cancelled sales, lost employees, and impairment of the value of the Debtors' businesses. Thus, it appeared, that the granting of the DIP Financing was to enable the Debtors to promptly pay their trade creditors. Mr. Winter recalls that on December 17, 2003, the Debtors sought to pay postpetition suppliers in the ordinary course of business, and to secure their obligations with administrative priority claims. The Debtors requested discretionary authority to pay undisputed claims for postpetition shipments, and to protect the Suppliers with first administrative expense priority, for efforts in preserving the estate, as authorized by Section 503(b)(1)(A) of the Bankruptcy Code. Furthermore, it was suggested that the Debtors have enough cash on hand, as well as cash availability resulting from the DIP Financing, that they can timely make all payments. On December 17, 2003, the Debtors also sought to pay prepetition claims of critical trade vendors. In the ordinary course of business, the Debtors rely on third parties to supply goods, materials and services without which the Debtors' business either simply could not operate or would operate at prohibitively reduced profitability. Specifically, these vendors: (i) provide either "single source" goods or other goods and services that are essential to the Debtors' operations and that cannot be obtained elsewhere or that cannot be replaced except at exorbitant additional cost or excessive delay; and (ii) do not have long-term supply contracts with the Debtors such that they could be compelled to continue providing goods and services to the Debtors postpetition. Mr. Winter states that based on the developments, PPG determined to continue to ship Chemicals to the Debtors, but only until it could be promptly determined how it would be treated in accordance with the Supplier Order and the Critical Vendor Order. As of December 30, 2003, PPG has, in fact, continued to release additional barge-loads of Chemicals to the Debtors. In light of its cooperation with the Debtors' efforts to conduct "business as usual," PPG feels that the Debtors' failure to make firm commitments to PPG for payment of shipments is unfair and an inequitable treatment by an otherwise valued business partner. PPG, therefore, believes that unless and until its Chemicals Contract is affirmatively assumed, and its prepetition defaults cured, it will remain in legal limbo with respect to these payments. Moreover, PPG runs a significant risk of extending "open-ended credit" to the Debtors beyond their estate's ultimate ability to fully pay administrative expenses. PPG is unwilling to incur an open-ended liability as the one-sided obligation to indefinitely ship chemicals to the Debtors, without adequate assurance of it being fully paid for all Chemicals shipped to date, or to be shipped in the future. PPG believes that being permitted to effect set-off, combined with the prompt payment of postpetition invoices, provides a significant portion, although not necessarily all, of the adequate assurance it needs to continue in its relationship as a supplier of Chemicals to the Debtors. Mr. Winter contends that PPG is entitled to set off the amounts it owes to the Debtors under the Materials Invoices against the amounts the Debtors owe to it under the Chemicals Invoices. Accordingly, PPG asks the Court to: (i) modify the automatic stay to enable PPG to effect a set-off; and (ii) authorize PPG to effect the set-off. (Solutia Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) SOUTHWEST RECREATIONAL: Creditors to Convene on April 22, 2004 -------------------------------------------------------------- The United States Trustee will convene a meeting of Southwest Recreational Industries, Inc.'s creditors at 12:00 p.m., on April 22, 2004, in The Forum Room 1-D at 2 Government Plaza, Rome, Georgia. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Leander, Texas, Southwest Recreational Industries, Inc. -- http://www.srisports.com/-- designs, manufactures, builds and installs stadium and arena running tracks for schools, colleges, universities, and sport centers. The company filed for chapter 11 protection on February 13, 2004 (Bankr. N.D. Ga. Case No. 04-40656). Jennifer Meir Meyerowitz, Esq., Mark I. Duedall, Esq., and Matthew W. Levin, Esq., at Alston & Bird, LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, they listed $101,919,000 in total assets and $88,052,000 in total debts. STOLT-NIELSEN: Sells 2 Million Shares in Stolt Offshore ------------------------------------------------------- Stolt-Nielsen S.A. (Nasdaq: SNSA; Oslo Stock Exchange: SNI) announced the sale of two million shares of Stolt Offshore S.A. (SOSA). The shares were sold at the market price of 24 Norwegian Kroner per share (approximately $3.46 per share at current exchange rates). SNSA, through its wholly owned subsidiary, Stolt-Nielsen Transportation Group (SNTG), retains approximately a 41 percent economic and voting interest in Stolt Offshore. SNSA expects that, assuming no other changes to SOSA's share capital, its ownership interest in SOSA will increase, but remain below 50 percent following both the completion of SOSA's previously announced plans to raise up to $50 million in a subsequent equity issue and the conversion of $50 million of subordinated debt owed to SNSA by SOSA into 22.7 million SOSA Common Shares. Upon completion of these actions, SNSA expects to have an approximately 43 percent ownership interest in SOSA. "We can now deconsolidate SOSA for financial reporting purposes. This will simplify SNSA's balance sheet and allow us to achieve compliance with the financial covenants contained in our original borrowing arrangements with our primary creditors," said Niels G. Stolt-Nielsen, Chief Executive Officer of SNSA. "We will continue working closely with our primary lenders." About Stolt-Nielsen S.A. Stolt-Nielsen S.A. is one of the world's leading providers of transportation services for bulk liquid chemicals, edible oils, acids, and other specialty liquids. The Company, through its parcel tanker, tank container, terminal, rail and barge services, provides integrated transportation for its customers. The Company also owns 41 percent of Stolt Offshore S.A. (Nasdaq: SOSA; Oslo Stock Exchange: STO), which is a leading offshore contractor to the oil and gas industry. Stolt Offshore specializes in providing technologically sophisticated offshore and subsea engineering, flowline and pipeline lay, construction, inspection, and maintenance services. Stolt Sea Farm, wholly-owned by the Company, produces and markets high quality Atlantic salmon, salmon trout, turbot, halibut, sturgeon, caviar, bluefin tuna, and tilapia. * * * As reported in the December 30, 2003 edition of the Troubled Company Reporter, Stolt-Nielsen S.A. (Nasdaq: SNSA; Oslo Stock Exchange: SNI) announced that its primary lenders agreed to extend the waivers of covenant defaults granted by the lenders until May 21, 2004. SNSA also reported that it will pay down its $160 million revolving credit facility by $20 million on February 29, 2004, and that the Company has received an extension on repayment of the remaining $140 million until May 21, 2004. The waiver extensions provide SNSA with increased flexibility on the debt-to-tangible-net-worth covenant during the waiver period, setting the ratio at 2.75-to-1 at November 30, 2003, and 2.65-to-1 at February 29, 2004. SNSA must also maintain a specified minimum tangible net worth level. Pursuant to the waiver terms, SNSA will develop a financial restructuring plan with its lenders by March 31, 2004. Additionally, the waivers call for improvements in SNSA's liquidity during the waiver period through dispositions or capital-raising initiatives, and oblige SNSA to work with its lenders to provide available collateral to unsecured or under-secured lenders during the waiver period. STOLT-NIELSEN: 2003 Year-End Net Loss Triples to $315.9 Million --------------------------------------------------------------- Stolt-Nielsen S.A. (Nasdaq: SNSA; Oslo Stock Exchange: SNI) reported results for the fourth quarter and the year ended November 30, 2003. Net loss for the fourth quarter was $216.3 million, or $3.94 per Common share, on net operating revenue of $684.2 million, compared with a net loss of $101.1 million, or $1.84 per share, on net operating revenue of $827.7 million for the same quarter in 2002. The basic weighted average number of shares outstanding for the fourth quarter of 2003 and 2002 was 54.9 million. Net loss for the year ended November 30, 2003 was $315.9 million, or $5.75 per Common share, on net operating revenue of $3,017.6 million, compared with a net loss of $102.8 million, or $1.87 per share, on net operating revenue of $2,908.1 million for the same period in 2002. The basic weighted average number of shares outstanding for fiscal 2003 and 2002 was 54.9 million. "Fiscal 2003 was a difficult and frustrating year for SNSA," said Niels G. Stolt-Nielsen, Chief Executive Officer. "I am glad it is over. Over the last six months, SNSA has raised over $210 million in liquidity and reduced its indebtedness by over $187 million, while at the same time negotiating three short-term waivers and one conditional longer-term waiver with our lenders. In January we successfully completed a $104 million private placement of the 7.7 million Common shares we held in treasury. We are pleased and encouraged by the strong support our company has in the capital markets. Since July, we have also raised over $100 million via sale/leaseback transactions and the sales of non-strategic assets. "In Stolt Offshore (SOSA) the new management, headed by Mr. Tom Ehret, has been working very hard to limit the losses on the unfortunate "legacy" contracts, which have caused us much damage, and to reorganize and re-focus SOSA, reduce workforce and restructure senior management with new appointees. Still, SOSA reported a loss of $416.4 million for the year after $183.1 million write down of assets. "SOSA, has commenced a process which, when completed in the second quarter this year, will increase its shareholders' equity by $200 million and provide $100 million of performance bonds from certain of its banks. Of this, $100 million equity is now in place as well as the performance bonds. SNSA has agreed to convert its subordinated $50 million loan to SOSA, into equity at the same terms as the new equity, and SOSA will do a subsequent issue of $50 million to existing shareholders who did not participate in the first issue. SNSA has as part of this process agreed to convert its 34 million SOSA Class B shares into 17 million SOSA Common shares. As a result of the actions taken by the two companies in recent months, SOSA will shortly be deconsolidated for financial reporting purposes from SNSA, and as a result SNSA expects to be in compliance with the financial covenants in its original borrowing arrangements. SNSA continues to work closely with its primary lenders. Stolt-Nielsen Transportation Group (SNTG) "For the full year, SNTG reported income from operations of $83.8 million in 2003, compared with $123.8 million in 2002. "SNTG's parcel tanker division's income from operations in 2003 was $65.3 million, compared with $92.8 million in 2002. The 2003 figure includes $15.5 million of costs related to the legal issues in SNTG and $7.5 million of costs for the wind-up of SNTG's U.S. flag joint venture. The remaining $4.5 million of the decline in income from operations was attributable to higher bunker costs and a weaker U.S. dollar in 2003. For the year, the Stolt Tanker Joint Service Sailed-in Time Charter Index was 5% lower in 2003 versus 2002. "As a result of the overall pickup in global economic conditions, the spot market is now strong, with rates rising on average some 25% on major trade lanes. An industry order book for parcel tanker newbuildings of only 12.5% of the core competitive existing fleet, combined with a continued recovery in the global economies, should bode well for an improvement in SNTG's results going forward. "SNTG's tank containers division delivered slightly weaker results in 2003, with income from operations of $18.7 million in 2003 versus $21.7 million in 2002. The decline was almost exclusively due to higher administrative and general costs, partially as a result of a weaker U.S. dollar. Business operations remained strong, with gross profit rising to $45.8 million in 2003 from $43.8 million in 2002. Shipments rose 12% and utilization set a new record, improving from 75.8% in 2002 to 79.2% in 2003. Utilization is expected to remain high in 2004, along with a 6% to 8% increase in volumes. "Income from operations for SNTG's terminal division was $7.3 million in 2003 compared with $18.9 million in 2002. The 2003 results included an impairment charge of $10.4 million on the anticipated sale of SNTG's interest in Dovechem terminals. A sale of this interest was negotiated in November and completed in December of 2003. Adjusting for this loss, the results were broadly similar, with high utilization at all owned terminals. Increased income from operations at the wholly owned terminals was offset by reduced profits in the Asian joint-ventures. We added new capacity in Houston, Braithwaite, and Santos and have begun to develop plans for the phase III expansion at Braithwaite, for which we have strong leads for several potential customers. Stolt Offshore (SOSA) "Consistent with expectations, SOSA reported a net loss, before minority interest, for the full year of $416.4 million, compared with a net loss of $151.9 million in 2002. "Operationally, the focus for SOSA this year has been the completion or near completion of several major loss-making legacy contracts and the implementation of new project tendering and management disciplines to prevent such problems from reoccurring in the future. "The year ended on an upbeat note when SOSA was awarded a $280 million contract for the installation of the first half of the Ormen Lange pipeline, to be the largest in the world on completion. The contract includes an option in 2006 for the remainder of the installation. In the first quarter of 2004, SOSA was awarded the largest deepwater contract in its history from BP and Sonangol. The Greater Plutonio contract, for offshore work in Angola, was valued at $730 million, with $550 million representing Stolt Offshore's share. SOSA's backlog now stands at $849 million, of which $556 million is for fiscal 2004. Stolt Sea Farm (SSF) "For the full year, SSF reported a loss from operations of $63.6 million, compared with the loss from operations of $20.0 million reported in 2002. SSF took provisions in the fourth quarter of 2003 to reflect the impairment of certain tangible and intangible assets. We have made further provisions against inventories in several of our businesses around the world, especially in Japan where the markets for several of the species we sell have been soft and are showing few signs of improvement. We also had a loss in Japan due to fraud. We are addressing this situation by a number of actions including putting in place a new management team and improving controls. "Our re-organized sales and marketing function in the Americas and Europe continues to develop and improve its profitability. Salmon pricing in Europe in the fourth quarter showed signs of greater strength than earlier in the year, with prices up 20% on average over the previous quarter. Salmon prices in North America remain at acceptable levels. "In Asia, we expect to regain profitability in Japan after last year's setback. "Our turbot operations in Iberia continued to post solid results, and we are looking forward to the commissioning of our new turbot facility in Vilano, Spain in the first half of 2004. Outlook "Looking ahead, we are confident about the prospects for growth in earnings at SNTG, driven by improving global economic conditions, robust trade to China, the rebounding chemical industry, and a relatively small order book for new buildings. The outlook for SSF also looks good, as the long- anticipated recovery of salmon prices in Europe finally appears to have arrived. At SOSA, the business has been focused and streamlined. The key going forward will be turning contracts into profits. We expect the financial recovery to fully manifest itself in 2005," Mr. Stolt-Nielsen concluded. About Stolt-Nielsen S.A. Stolt-Nielsen S.A. is one of the world's leading providers of transportation services for bulk liquid chemicals, edible oils, acids, and other specialty liquids. The Company, through its parcel tanker, tank container, terminal, rail and barge services, provides integrated transportation for its customers. The Company also owns 42.6 percent of Stolt Offshore S.A. (Nasdaq: SOSA; Oslo Stock Exchange: STO), which is a leading offshore contractor to the oil and gas industry. Stolt Offshore specializes in providing technologically sophisticated offshore and subsea engineering, flowline and pipeline lay, construction, inspection, and maintenance services. Stolt Sea Farm, wholly-owned by the Company, produces and markets high quality Atlantic salmon, salmon trout, turbot, halibut, sturgeon, caviar, bluefin tuna, and tilapia. * * * As reported in the December 30, 2003 edition of the Troubled Company Reporter, Stolt-Nielsen S.A. (Nasdaq: SNSA; Oslo Stock Exchange: SNI) announced that its primary lenders agreed to extend the waivers of covenant defaults granted by the lenders until May 21, 2004. SNSA also reported that it will pay down its $160 million revolving credit facility by $20 million on February 29, 2004, and that the Company has received an extension on repayment of the remaining $140 million until May 21, 2004. The waiver extensions provide SNSA with increased flexibility on the debt-to-tangible-net-worth covenant during the waiver period, setting the ratio at 2.75-to-1 at November 30, 2003, and 2.65-to-1 at February 29, 2004. SNSA must also maintain a specified minimum tangible net worth level. Pursuant to the waiver terms, SNSA will develop a financial restructuring plan with its lenders by March 31, 2004. Additionally, the waivers call for improvements in SNSA's liquidity during the waiver period through dispositions or capital-raising initiatives, and oblige SNSA to work with its lenders to provide available collateral to unsecured or under-secured lenders during the waiver period. STOLT OFFSHORE: Sells ROV Drill Support Business for $48 Million ---------------------------------------------------------------- Stolt Offshore S.A. (Nasdaq: SOSA; Oslo Stock Exchange: STO) had closed the sale of its ROV drill support business to Oceaneering International, Inc. (NYSE: OII) for $48 million. This sale will realise approximately $43 million in cash to Stolt Offshore after minority interests and transaction costs. Tom Ehret, Chief Executive Officer of Stolt Offshore S.A., said, "The significance of the disposal of the ROV business goes beyond the cash resources it brings into the Group. Having re-designed and restructured Stolt Offshore in 2003, we have commenced re- orienting our asset base to fit our target markets and required operating cost profile." Stolt Offshore is a leading offshore contractor to the oil and gas industry, specialising in technologically sophisticated deepwater engineering, flowline and pipeline lay, construction, inspection and maintenance services. The Company operates in Europe, the Middle East, West Africa, Asia Pacific, and the Americas. * * * As reported in Troubled Company Reporter's January 2, 2004 edition, Stolt Offshore S.A. obtained an extension from December 15, 2003 until April 30, 2004 of the waiver of banking covenants. Stolt Offshore continues discussions with its lenders towards a long-term agreement. STORAGE ENGINE: Files Voluntary Chapter 11 Petition in New Jersey ----------------------------------------------------------------- Storage Engine, Inc. (OTCBB: SENG) a provider of fault tolerant information systems, data storage and document imaging solutions, along with all of its subsidiaries, has voluntarily filed for protection under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the District of New Jersey. The Company intends to utilize the Chapter 11 process to reorganize its business and re-emerge shortly from this process, while continuing to provide service to its business customers and potential customers. The Company emphasized that this Chapter 11 filing will not impact day-to-day operations with regard to its employees, customers and general business operations. Several non-essential employee positions have been eliminated. "While this was a very difficult decision to make, given the current circumstances, we determined that we needed to take decisive action for our employees, customers and creditors, to maximize the value of our business," said a Company spokesman. About Storage Engine, Inc. (SEI) Storage Engine (SEI) is a provider of cost effective data storage solutions, and document imaging solutions for departments and enterprises that serve a wide range of business and government markets along with a wide range of other services to enable the capture, tracking, storing, sharing and utilization of information assets cost effectively. STORAGE ENGINE: Case Summary & 21 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Storage Engine, Inc. 1 Shelia Drive Tinton Falls, New Jersey 07724 Bankruptcy Case No.: 04-16727 Type of Business: The Debtor provides document imaging and fault- tolerant data storage solutions that store, protect and manage and replicate data in complex networks. See http://www.storeengine.com/ Chapter 11 Petition Date: March 1, 2004 Court: District of New Jersey (Trenton) Debtor's Counsel: Timothy P. Neumann, Esq. Broege, Neumann, Fischer & Shaver 25 Abe Voorhees Drive Manasquan, NJ 08736 Tel: 732-223-8484 Estimated Assets: $500,000 to $1 Million Estimated Debts: $500,000 to $1 Million Debtor's 21 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Skadden, Arps, Slate, Meagher Flom LLP $41,404 Hale & Dorr LLP $40,297 Option One $7,852 Granite Coast Tech LLC $7,020 Spectra Logic $5,777 CHE Consulting Inc. $4,760 Gorilla Circuits Inc. $4,618 Circuit Assembly $3,919 McLaughlin Gelson LLC $3,689 RRJ Co Inc. $3,150 Anacomp Inc. $2,752 American Stock Trans & Trust $2,250 Pelco Inc. $1,663 Coverall of Northern NJ Inc. $1,537 Dell Marketing LP $1,350 George H. Swatek, Inc. $1,210 Mckinstry, Susan $1,035 Ayaya Inc. $930 Bell Microproducts Inc. $72 Sara M. Bloom, Asst $0 Dynamics Research Corporation $0 UAL CORP: Bankruptcy Court Appoints Ross Silverman As Examiner -------------------------------------------------------------- Bankruptcy court Judge Eugene Wedoff approved the appointment of Ross O. Silverman as the examiner to investigate United's plan to change retiree medical benefits for workers who retired before July 1, 2003. United Airlines flight attendants, represented by the Association of Flight Attendants-CWA, AFL-CIO, and supported by the International Association of Machinists and Aircraft Mechanics Fraternal Association in court, contend United intentionally misled thousands of workers into ending their careers or retiring early, defrauding them out of their retirement benefits. The bio of Ross O. Silverman on his law firm website, Katten, Muchin, Zavis, and Rosenman explains that he "concentrates his practice on white collar criminal defense, insurance fraud related litigation, and civil as well as criminal tax litigation. Before joining the Firm, Mr. Silverman was a Trial Attorney for the Criminal Section of the Tax Division at the United States Justice Department for two and a half years and an Assistant United States Attorney in Chicago for four years." "We are encouraged with the appointment of Mr. Silverman and the experience he brings to this important investigation," said United Master Executive Council President Greg Davidowitch. "The thousands of employees who have sacrificed billions of dollars annually to see United succeed deserve to know whether their concessions were made in good faith. We look forward to working with Mr. Silverman and his team to thoroughly examine the facts of this issue." The court requires that Mr. Silverman report his findings to the bankruptcy court by March 19. The scope of the investigation aims to determine if United decided to use the bankruptcy code to pursue changes to retiree medical benefits prior to July 1, 2003. This date was significant because United established it as the deadline by which an employee would have to retire to secure less costly and more comprehensive medical benefits. United had not notified retirees that it intended to use the bankruptcy code to pursue changes to these benefits prior to that date. These changes would force retirees to pay hundreds of dollars more per month of their modest pensions just to continue reduced health insurance. More than 46,000 flight attendants, including the 21,000 flight attendants at United, join together to form AFA, the world's largest flight attendant union. AFA is part of the 700,000 member strong Communications Workers of America, AFL-CIO. Visit the company at http://www.unitedafa.org/ UNITED AIRLINES: Asks Court to Okay ESOP Committee Stipulation -------------------------------------------------------------- United Airlines Inc., and its debtor-affiliates ask Judge Wedoff to approve a stipulation with the members of the UAL Corporation Employee Stock Ownership Plan -- Craig Musa, Donald Clements, Barry Wilson, Doug Walsh, Marty Torres, Ira Levy, Lynn Hughitt, and William Hobgood -- and the ESOP Plan Committee. On February 28, 2003, a complaint entitled Summers v. UAL Corporation Employee Stock Ownership Plan was filed before the United States District Court for the Northern District of Illinois, Case No. 03 C 1537. The suit seeks $2 billion in damages against the ESOP Committee and the ESOP Members. The ESOP Committee and the ESOP Members filed proofs of claim against UAL seeking indemnification for $2 billion each, alleging contingent and unliquidated damages arising out of performance of their duties on the ESOP Committee. James H.M. Sprayregen, Esq., at Kirkland & Ellis, in Chicago, Illinois, says that based on the redundancy of the Member Claims and the Committee Claims, the Parties agree to enter into a stipulation that consolidates the Claims into a single Claim. The salient terms of the Stipulation are: (a) Member Claim Nos. 38745, 34193, 35431, 36638, 3641, 36499, 43315 and 37725 will be withdrawn with prejudice and deemed disallowed; and (b) Committee Claim No. 35437 will constitute a claim on behalf of the ESOP Committee and all current, former and future members. Any ESOP Member is entitled to seek allowance of any Committee Claim in the event the ESOP Member incurs expenses that are not reimbursed or relates to this litigation or performance of duties on the ESOP Committee. Mr. Sprayregen assures the Court that the Stipulation will benefit the estates because it reduces the total claims filed by ESOP Members and the ESOP Committee by $14 billion. In exchange, the Debtors have not waived any right to object to the remaining Committee Claim. (United Airlines Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., 215/945-7000) US DATAWORKS: Will Present at RedChip Investor Conference Tomorrow ------------------------------------------------------------------ US Dataworks Inc (Amex: UDW) announces the following Webcast: What: UDW Presentation at RedChip Resources and Moors & Cabot's Small-Cap Investor Conference When: 03/03/04 @ 9:00 a.m. Pacific Where: http://www.firstcallevents.com/service/ajwz400924122gf12.html How: Live over the Internet -- Simply log on to the web at the address above. Contact: John Figone Investor Relations 713-934-3855 ext. 250 jfigone@usdataworks.com US Dataworks is a developer of payment processing software, focused on the Financial Services market, Federal, State and local governments, billers and retailers. Software developed by US Dataworks is designed to enable organizations to transition from traditional paper-based payment and billing processes to electronic solutions that automate end-to-end processes for accepting and clearing checks. * * * In its latest Form 10Q filed with the Securities and Exchange Commission, US Dataworks reports: LIQUIDITY AND CAPITAL RESOURCES CASH AND CASH EQUIVALENTS "We have incurred significant losses and negative cash flows from operations for the last two fiscal years. We have obtained our required cash resources through the sale of debt and equity securities. We may not operate profitably in the future and may be required to continue the sale of debt and equity securities to finance our operations. "Cash and cash equivalents increased by $1,912,306 to $1,920,870 at December 31, 2003 from $8,564 at March 31, 2003. Cash used for operating activities was $2,666,912 in the nine months ended December 31, 2003 compared to $1,173,194 to the same period in the prior year. Net loss from continuing operations reduced cash by $6,744,688 and $1,846,085 in the nine months ended December 31, 2003 and 2002, respectively. CASH USED FOR INVESTING ACTIVITIES "Cash used for investing activities of $62,304 and $87,435 in the nine months ended December 31, 2003 and December 31, 2002, respectively, was due to equipment purchases, and in the nine months ended December 31, 2002 we repaid our affiliates $54,506. FINANCING ACTIVITIES "Financing activities provided net cash of $4,641,522 in the nine months ended December 31, 2003 and included the issuance of $2,190,000 in convertible promissory notes. In addition, we received a gross aggregate of $4,225,000 pursuant to the sale of 1,825,000 shares of our common stock for a purchase price of $3,650,000 and a $575,000 debenture, due October 2, 2004, with interest at 1%, which may be converted into 287,500 shares of our common stock. The common stock and the debenture were sold with warrants to purchase 1,056,250 shares of our common stock at an exercise price of $2 per share. The gross proceeds were reduced by approximately $245,000 of issuance costs related to this financing. "Financing activities provided net cash of $1,323,062 for the nine months ended December 31, 2002 and included the issuance of $210,700 in promissory notes, $702,500 in convertible promissory notes and $830,000 in demand promissory notes due to a related party. "We recognize the need for the infusion of additional cash to sustain our operations and are actively pursuing financing options. However, there can be no assurance that we will be able to raise additional funds on favorable terms or at all. "In addition, we may wish to pursue possible acquisitions of, or investments in businesses, technologies or products complementary to ours in order to expand our geographic presence, broaden our product offerings and achieve operating efficiencies. We may not have sufficient liquidity, or we may be unable to obtain additional financing on favorable terms or at all, in order to finance such an acquisition or investment. We are not currently in negotiations for any specific acquisition or investment. "We believe we currently have adequate cash to fund anticipated cash needs for at least the next six months. An adverse business or legal development may also require us to raise additional financing sooner than anticipated. We recognize that we may be required to raise such additional capital, at times and in amounts, which are uncertain, especially under the current capital market conditions. If we are unable to acquire additional capital or are required to raise it on terms that are less satisfactory than we desire, it may have a material adverse effect on our financial condition. If necessary, we may be required to consider curtailing our operations significantly or to seek arrangements with strategic partners or other parties that may require us to relinquish significant rights to products, technologies or markets. In the event we raise additional equity financings, these financings may result in dilution to existing stockholders. "As of December 31, 2003, our accumulated deficit was $39,489,219. Our auditors have included an explanatory paragraph in their Independent Auditor's Report included in our audited financial statements for the years ended March 31, 2003 and 2002 filed with our annual report on Form 10-KSB/A for fiscal year ended March 31, 2003, to the effect that our loss from operations for the year ended March 31, 2003, and the accumulated deficit at March 31, 2003 raise substantial doubt about our ability to continue as a going concern." VALHI INC: Reports Improved Fourth Quarter & FY 2003 Results ------------------------------------------------------------ Valhi, Inc. (NYSE: VHI) reported net income of $10.7 million, or $.09 per diluted share, in the fourth quarter of 2003 compared to $5.6 million, or $.05 per diluted share, in the fourth quarter of 2002. For the full year of 2003, the Company reported income before cumulative effect of a change in accounting principle of $38.9 million, or $.32 per diluted share, compared to income of $1.2 million, or $.01 per diluted share, for 2002. Chemicals sales and operating income increased in 2003 compared to the same periods of 2002 due primarily to higher sales and production volumes for titanium dioxide pigments ("TiO2"), and higher average TiO2 selling prices in the year-to-date period. Excluding the effect of fluctuations in the value of the U.S. dollar relative to other currencies, Kronos' average TiO2 selling prices in billing currencies in the fourth quarter of 2003 were 2% lower than the fourth quarter of 2002, but were 3% higher in 2003 compared to 2002. Expressed in U.S. dollars computed using actual foreign currency exchange rates prevailing during the periods, Kronos' average TiO2 selling prices in the fourth quarter of 2003 were 8% higher than the fourth quarter of 2002, and were 13% higher in 2003 compared to 2002. Kronos' TiO2 sales volumes in the fourth quarter of 2003 increased 9% compared to the fourth quarter of 2002, with substantially all of the increase occurring in the European and export markets. Kronos' TiO2 sales volumes in 2003 were 2% higher than 2002. Kronos' TiO2 production volumes in the fourth quarter of 2003 were 14% higher than the fourth quarter of 2002, and were 8% higher for the full year, with operating rates at near capacity in all periods presented. Kronos' sales and production volumes in 2003 were new records. Component products sales were higher in 2003 compared to the same periods in 2002 due primarily to the favorable effect of fluctuations in foreign currency exchange rates. Fluctuations in the value of the U.S. dollar relative to other currencies increased component products sales by $2.6 million in the fourth quarter of 2003 as compared to the fourth quarter of 2002, and increased sales by $8.9 million for the full year. The favorable effect of fluctuations in foreign currency exchange rates is primarily due to the weakening of the U.S. dollar in relation to the Canadian dollar and the euro. In addition to the favorable impact of changes in foreign currency exchange rates, component products sales increased in the 2003 periods due to the net effects of higher sales volumes of security products, higher sales volumes of slide products to North American markets, lower sales volumes of ergonomic products and lower sales volumes of precision slide products to the European market. Despite the favorable effect of fluctuations in foreign currency exchange rates on component products sales, such fluctuations unfavorably impacted component products operating income by $1.2 million and $3.8 million in the fourth quarter and full year of 2003, respectively, as compared to the same periods in 2002. Such unfavorable impact is due primarily to CompX's Canadian operations, where a majority of its sales are denominated in U.S. dollars while the majority of its expenses are denominated in Canadian dollars. Component products operating income comparisons were also affected by (i) a $3.3 million restructuring charge in the third quarter of 2003 associated with the implementation of certain headcount reductions in CompX's Netherlands operations, (ii) $3.5 million of charges in the fourth quarter of 2002 related to the retooling of one of CompX's manufacturing facilities and inventory- related charges and (iii) the favorable impact in 2003 resulting from the retooling of one of CompX's facilities in 2002. Waste management sales declined in 2003, and its operating loss increased, due to continued weak demand for waste management services as well as costs incurred in 2003 related to certain licensing and permitting activities. TIMET's sales increased from $85.0 million in the fourth quarter of 2002 to $100.6 million in the fourth quarter of 2003, and increased from $366.5 million to $385.3 million for the full year. TIMET's operating results improved from an operating loss of $4.8 million in the fourth quarter of 2002 to operating income of $14.3 million in the 2003 period, and increased from an operating loss of $20.8 million in calendar 2002 to operating income of $5.4 million in 2003. The improvement in TIMET's results in the fourth quarter of 2003 were due in part to a 16% increase in sales volumes of mill products and a 143% increase in sales volumes of melted products (ingot and slab), partially offset by a 7% decrease in mill product average selling prices (which was mitigated by the weakening of the U.S. dollar in relation to the British pound sterling and the euro) and changes in product mix. The improvement in TIMET's year-to-date results was due in part to a 97% increase in melted product sales volumes, changes in product mix and the relative changes in foreign currency exchange rates, partially offset by a 16% decrease in melted product average selling prices. TIMET's operating results also improved in 2003 due in part to relative changes in TIMET's LIFO inventory reserves, which favorably impacted TIMET's operating income by $9.2 million and $20.7 million in the fourth quarter and full year of 2003, respectively, as compared to the same periods in 2002. TIMET's results in 2003 also include a $6.8 million third quarter charge related to the termination of TIMET's purchase and sales agreement with Wyman- Gordon Company. The Company's equity in losses of TIMET in 2002 includes (i) a third quarter impairment provision of $15.7 million ($8.0 million, or $.07 per diluted share, net of income tax benefit and minority interest) related to an other than temporary decline in value of the Company's investment in TIMET and (ii) a $10.6 million first quarter charge ($5.4 million, or $.05 per diluted share, net of income tax benefit and minority interest) related to TIMET's impairment for an other than temporary decline in value of certain preferred securities held by TIMET. General corporate expenses were higher in calendar 2003 compared to 2002 due primarily to higher environmental expense accruals of NL related principally to one formerly-owned site for which the remediation process is expected to occur over the next several years. The legal settlement gains in both 2002 and 2003 (which aggregated $1.5 million, or $.01 per diluted share, net of income taxes and minority interest in the fourth quarter of 2002 and $2.7 million, or $.02 per diluted share, in calendar 2002) related to legal settlements with certain of NL's former insurance carriers. The foreign currency transaction gain in 2002 ($4.7 million, or $.04 per diluted share, net of income taxes and minority interest) related principally to the second quarter extinguishment of certain intercompany indebtedness of NL. The gain on the disposal of fixed assets, which aggregated $5.7 million, or $.05 per diluted share, net of income taxes and minority interest in calendar 2003 ($1.0 million, or $.01 per diluted share, in the fourth quarter), related primarily to the sale of certain real property of NL not associated with Kronos' TiO2 operations. Securities transactions gains in the 2002 periods, which aggregated $4.2 million, or $.04 per diluted share, net of income taxes in 2002 ($2.9 million, or $.03 per diluted share, in the fourth quarter) related to the disposal of certain marketable securities. The Company recognized a $24.6 million income tax benefit in 2003 ($20.8 million, or $.17 per diluted share, net of minority interest) related to NL's previously-reported second quarter favorable German court ruling concerning NL's claim for refund suit. The provision for income taxes in the fourth quarter of 2002 includes a $2.7 million tax benefit ($2.2 million, or $.02 per diluted share, net of minority interest) related to certain changes in the Belgian income tax law. The provision for income taxes in 2002 also varies from the U.S. statutory income tax rate in part because no income tax was recognized on NL's general corporate foreign currency transaction gain, as NL offset such income tax by utilizing certain income tax attributes, the benefit of which had not previously been recognized. The cumulative effect of the change in accounting principle in 2003 relates to the Company's adoption of Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations, effective January 1, 2003. Such change in accounting relates principally to accounting for closure and post-closure obligations at the Company's waste management operations. * * * As reported in the Troubled Company Reporter's December 9, 2003 edition, Fitch Ratings has affirmed Valhi, Inc.'s senior secured credit 'BB-' rating and senior unsecured (implied) 'BB-' rating. The Rating Outlook remains Stable. Valhi, Inc. is a holding company with ownership stakes in: NL Industries, a producer of titanium dioxide pigments; CompX, a producer of locks and ball bearing slides serving the office furniture industry; TIMET, a producer of titanium metals products; and Waste Control Specialists, a provider of hazardous waste disposal services. Valhi generated over $1.1 billion of sales and reported EBITDA of approximately $153 million in 2002. VERITAS DGC: Unsecured Note Issuance Spurs S&P to Affirm Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Veritas DGC Inc. (BB+\Negative\--) following the company's announcement that it will refinance a large portion of its secured debt by issuing new unsecured convertible notes. The outlook remains negative. Houston, Texas-based Veritas has about $195 million of outstanding debt. "In a privately placed transaction, Veritas is selling up to $155 million of senior unsecured convertible notes priced at three- month LIBOR less a spread of 0.75%, that will be used to repay up to $130 million of bank debt that carries an average interest rate of around 8.5%," noted Standard & Poor's credit analyst Paul B. Harvey. "As such, Veritas will save about $7 million per year on interest expense, provided that interest rates are not raised," he continued. Although Standard & Poor's is affirming Veritas' ratings, its ratings outlook remains negative because of few signs that continued, difficult industry conditions will abate soon. Veritas reported strong second-quarter results, although much of the improvement is largely due to strong late sales that may not be sustainable. Veritas compensates for its participation in a difficult industry by maintaining moderate financial leverage and solid liquidity. Total debt to total capital is expected to remain in the mid-30% area. The negative outlook on Veritas reflects Standard & Poor's negative short- to medium-term view of the seismic services industry and its participants, including Veritas, and the possibility of negative rating actions if competitive pressures become more extreme. In addition, Standard & Poor's is concerned that short-term cash flow gains from reduced multiclient spending will be more than offset by a longer-term deterioration in Veritas' asset base, resulting in reduced earnings power and the ability to service its obligations. WALKER ISLAND: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Walker Island Moorings Marina, Ltd. 3500 Island Moorings Parkway Port Aransas, Texas 78373 Bankruptcy Case No.: 04-20127 Chapter 11 Petition Date: February 2, 2004 Court: Southern District of Texas (Corpus Christi) Judge: Richard S. Schmidt Debtor's Counsel: Allan L. Potter, Esq. Attorney at Law P.O. Box 3159 Corpus Christi, TX 78463 Tel: 361-888-8203 Fax: 361-888-7788 Total Assets: $3,502,550 Total Debts: $3,469,358 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Graff Chevrolet Co. Personal loan $50,000 Internal Revenue Service 941 2002 3rd quarter, $34,276 941 2002 2nd quarter, 2001 3rd quarter, 2001 4th quarter, 2000 2nd quarter English Clemons Lamara Service expenses $22,512 Clemons Southwest Service Service expenses $14,625 Harris & Greenwell, LLP Service expenses $13,666 The Blackburn Insurance Service expenses $12,000 Agency Gexa Energy Corp. Service expenses $10,987 Comptroller of Public Sales Tax June 2000 $10,135 Accounts - July 31, 2001 Belaire Environmental, Inc. Service expenses $9,692 Law Office of Mithcell Service expenses $7,871 Madden CPL Retail Energy Utility Services $4,427 Island Moorings Community Service expenses $3,739 Imp. Assoc. Eagle Construction & Service expenses $3,179 Environmental, LP Tideland Signal Corp. Service expenses $2,669 Bracht's Lumber Co. Inc. Service expenses $2,246 Bridge Harbor Marina Service expenses $1,800 ADT Security Services Service expenses $1,117 Port Aransas South Jetty Service expenses $1,090 BFI Service expenses $998 Century Tel Service expenses $997 WARNACO GROUP: Bank of Nova Scotia Discloses 7.68% Equity Stake --------------------------------------------------------------- David Smith, Group Compliance Vice-President of The Bank of Nova Scotia, reports to the Securities and Exchange Commission that as of December 31, 2003, The Bank of Nova Scotia, in Toronto, Ontario, Canada, owns 3,468,400 shares of Warnaco Common Stock, which represents 7.68% of the Class. (Warnaco Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service, Inc., 215/945-7000) WELLS FARGO: Fitch Takes Rating Actions on Series 2002-1 Notes -------------------------------------------------------------- Fitch Ratings has upgraded 1 class and affirmed 5 classes from Wells Fargo Alternative Loan 2002-1 Trust, Mortgage Asset-Backed Pass-Through Certificates, Series 2002-1. Wells Fargo Alternative Loan 2002-1 Trust, Mortgage Asset-Backed Pass-Through Certificates, Series 2002-1 --Class A affirmed at 'AAA'; --Class B-1 upgraded to 'AAA' from 'AA'; --Class B-2 affirmed at 'A'; --Class B-3 affirmed at 'BBB'; --Class B-4 affirmed at 'BB'; --Class B-5 affirmed at 'B'. These rating actions are being taken as a result of low delinquencies and losses, as well as increased credit support. WORLDCOM INC: Inks Stipulation Resolving Capital Telecom Claim -------------------------------------------------------------- MCI WorldCom Network Services, Inc. and Capital Telecommunications, Inc. are parties to a Telecommunications Services Agreement dated December 13, 1999. The Services Agreement was amended twice -- on November 5, 2001 and July 22, 2003. The Second Amendment is the operative agreement between the parties. The Debtors ordered certain services from Capital Telecom pursuant to the terms of the Second Amendment and Capital Telecom deployed network equipment and procured network services to provide services to the Debtors as required by the Second Amendment. Before accepting any additional services under the Second Amendment, the Debtors notified Capital Telecom that they intend to reject the Services Agreement pursuant to Section 365 of the Bankruptcy Code. On October 15, 2003, the Debtors filed a Plan Supplement, which called for the rejection of the Services Agreement. Capital Telecom then asked the Court to compel the Debtors to pay a $2,940,000 administrative expense claim on account of an alleged six-month minimum service commitment by the Debtors under the Second Amendment. The Debtors objected to the request, contending that Capital Telecom is not entitled to an administrative expense claim. To resolve the dispute and avoid the cost and burden of further litigation, without admission of liability by any party, the Debtors and Capital Telecom executed a stipulation, which the Court approved. The parties agree that: (1) Capital Telecom's administrative expense claim request is withdrawn; and (2) Capital Telecom will be allowed an administrative expense claim for $1,500,000. (Worldcom Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., 215/945-7000) ZOOLINK COMMS: Files Notice to Reorganize Under BIA in Canada ------------------------------------------------------------- ZooLink Corporation (ZLNK: OTCBB) announces that its subsidiary, ZooLink Communications Ltd., is unable to meet creditor obligations. ZooLink Communications is in the business of connectivity; wireless, ADSL, and dial- up. The primary business of hosting and managed co-location which operate under i3DataCenters Ltd. and ZooLink Corporation, are not part of this Notice and these Companies will continue business as usual. The most recent SEC Filing by ZooLink Corporation, the 10-QSB for the period ending December 31st, 2003, the MD&A (Management Discussion and Analysis), stated that during the past quarter, the Company has found it difficult to manage the carrying debt owed to its suppliers without the cooperation of those suppliers. While most suppliers have agreed to payment plans, the Company is experiencing difficulty implementing its business plan. "ZooLink Communications Ltd. has not been successful in its attempts to reduce expenses and debts to allow the Company to continue operations in its present condition," stated West McDonald, President & CEO of ZooLink Corporation. "Recent events make it clear that the Company cannot meet current creditor obligations and this is why we are filing the Notice of Intention to make a Proposal under the terms of the Bankruptcy & Insolvency Act of Canada. To clarify, i3DataCenters Ltd. and ZooLink Corporation are not part of this Notice and these Companies will continue business as usual." Filing of this notice will allow ZooLink Communications Ltd. the time necessary to file a Proposal. The purpose of the Proposal is to try and reorganize the Company to improve its viability. The filing of this Notice will limit the actions that creditors may take against the company. ZooLink Corporation is consulting with its various advisors concerning various options for the future of ZooLink Communications Ltd. About ZooLink ZooLink -- http://www.zoolink.com/-- is a leading developer of next generation Intelligent Internet Data Centers. Our Data Centers serve as platforms to provide co-location services to companies with mission critical Internet infrastructure. Our services are also ideal for Web-centric businesses, such as Internet Service Providers (ISPs), Applications Service Providers (ASPs), Content Providers and Carriers. Its customers primarily use the company's services to maintain complex computer equipment in a secure, fault-tolerant environment with connectivity to a high-speed, high-capacity, direct link to the Internet and to support complex Internet applications. We currently offer our services from our Intelligent Data Center facilities in the cities of Vancouver and Calgary, Canada. ZooLink has developed a "franchise type" methodology, though all data centers are corporately owned; to identify, acquire, convert and operate Intelligent Data Centers to transform them into profitable business units in Canada and the US. * 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 (175) 280 140 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) Columbia Laboratories CBRX (8) 13 5 Cubist Pharmaceuticals CBST (7) 221 131 Cedara Software CDE (2) 20 (12) Choice Hotels CHH (118) 265 (43) Cherokee International CHRK (120) 64 15 Compass Minerals CMP (90) 644 101 Covad Comm Group COVD (5) 335 46 Caraco Pharm Labs CPD (20) 20 (2) Volume Services CVP (5) 280 (11) 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) Dun & Bradstreet DNB (19) 1,528 (104) Education Lending Group EDLG (26) 1,481 N.A. Eyetech Pharma EYET (78) 76 62 Graftech International GTI (95) 980 105 Integrated Alarm IASG (11) 46 (8) Imax Corporation IMAX (104) 243 31 Imclone Systems IMCL (186) 484 139 Journal Register JRC (4) 702 (20) Kinetic Concepts KCI (80) 618 244 KCS Energy KCS (30) 268 (16) Kos Pharmaceuticals KOSP (239) 338 (248) Lodgenet Entertainment LNET (101) 298 (5) Lucent Technologies LU (3,371) 15,747 2,818 Memberworks Inc. MBRS (20) 248 (89) Millennium Chem. MCH (46) 2,398 637 Moody's Corp. MCO (327) 631 (190) McDermott International MDR (417) 1,278 154 McMoRan Exploration MMR (31) 72 5 Maxxam Inc. MXM (582) 1,107 133 Nuvelo Inc. NUVO (4) 27 21 Northwest Airlines NWAC (1,483) 13,289 (762) ON Semiconductor ONNN (498) 1,144 201 Airgate PCS Inc. PCSAD (293) 574 (364) Petco Animal PETC (11) 555 113 Primus Telecomm PRTL (168) 724 65 Per-Se Tech Inc. PSTI (21) 171 (1) Qwest Communications Q (916) 26,219 (1,129) Quality Distribution QLTY (126) 387 19 Rite Aid Corp RAD (93) 6,133 1,676 Revlon Inc. REV (1,726) 892 (32) Sepracor Inc SEPR (619) 1,020 728 Silicon Graphics SGI (165) 650 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 Valence Tech VLNC (17) 36 4 Ventas Inc. VTR (56) 812 N.A. Warnaco Group WRNC (1,856) 948 471 Western Wireless WWCA (464) 2,399 (120) Xoma Ltd. XOMA (11) 72 30 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L. Metzler, Bernadette C. de Roda, Donnabel C. Salcedo, Aileen M. Quijano and Peter A. Chapman, Editors. Copyright 2004. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $675 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***