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/raid1/www/Hosts/bankrupt/TCR_Public/040311.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, March 11, 2004, Vol. 8, No. 50 Headlines AEP INDUSTRIES: First Quarter 2004 Net Loss Narrows to $806,000 AFC ENTERPRISES: Releases Mid-Quarter Business Update For Q1 2004 AMKOR TECH: S&P Assigns B Rating to $250MM Sr. Unsecured Notes AMKOR TECHNOLOGY: Prices $250 Million Senior Debt Offering AMERCO: Inks Pact Resolving Interest Overpayment to JPMorgan ANC RENTAL: Sues 227 Vendors for Return of Preferential Payments ARCHIBALD CANDY: Creditors Panel Taps Trenwith to Co-Market Assets ARGENT SECURITIES: Fitch Takes Rating Actions on 2004-W4 Notes ARTISTDIRECT: Severs Professional Ties with KPMG LLP ATLAS WELDING CO: Case Summary & 20 Largest Unsecured Creditors AVITAR: Raises $1 Million in Second Closing of Private Placement BESS EATON: First Creditors' Meeting Slated for March 22, 2004 BIONOVA HOLDING: Buying Stock Back at $0.09 per Share BIOVAIL CORP: 2004 Revenue Guidance Spurs S&P's Negative Outlook BIOVAIL CORP: Releases Comments on Rating Agencies' Outlooks BOYDS COLLECTION: S&P Cuts Ratings Citing Heightened Business Risk CALIFORNIA STEEL: S&P Rates $150M Series B Senior Notes at BB- CENTURY THREE: Voluntary Chapter 11 Case Summary CHESAPEAKE CORP: Increases Public Offering to 3.65 Million Shares CORNING INC: S&P Assigns BB+ Rating to Proposed Sr. Unsec. Notes CORNING INC: Obtains Fitch's BB Rating for $400M Sr. Unsec. Notes COVANTA ENERGY: Court Confirms Ogden's Amended Liquidation Plan CUMBERLAND: S&P Hatchets Counterparty Rating After Rehabilitation DELTA FINANCIAL: Reports Income for 4th Quarter and FY 2003 DONLAR CORP: Wants Until March 26 to File Schedules & Statements DUKE FUNDING: S&P Maintains Class D Notes Rating at BB EAGLE FOOD: Richard Lehmann Highlights Bonds in Column ECHOSTAR COMMUNICATIONS: Featured in Schaeffer's Street Chatter ENRON: Werra Paper Compels Capital Unit to Pay $1M Obligation EXIDE TECHNOLOGIES: Richard Lehmann Highlights Bonds in Column FELCOR LODGING: Sells Four Hotels for $30 Million FIRST UNION: Fitch Affirms 7 Note Ratings at Lower-B Level FLEMING COS: Will Cancel Insurance Policies on Former Employees FLEXPOINT SENSOR: John Sindt Continues to Head Reorganized Company GLACIER FUNDING: S&P Assigns Prelim. BB- Preferred Stock Rating GOLDENTREE: Fitch Upgrades Ratings for Six Note Classes HOMEPORT HOLDINGS: Case Summary & 20 Largest Unsecured Creditors HOST MARRIOTT: Proposes $375 Million Senior Debt Offering IMC HOME EQUITY: S&P Junks Rating on 1998-1 Class B Notes INTERWAVE: Legal Counsel Investigates Ex-Employee's Allegations JOEAUTO: Gets Court Nod to Hire Ordinary Course Professionals KANSAS CITY: $150 Million Term Loan Facility Gets S&P's BB Rating KEYSTONE CONSOLIDATED: U.S. Trustee Appoints Official Committee KMART CORP: Wants Court to Reclassify 36 Florida Tax Claims KOREA EXCHANGE BANK: Liquidates New York Branch KOSA B.V.: S&P Revises Watch on Low-B Level Ratings to Negative LAIDLAW INT'L: Second Quarter 2004 Conference Call is on April 7 LDM TECHNOLOGIES: S&P Withdraws Ratings after Plastech Purchase LES BOUTIQUES SAN FRANCISCO: Brings-In Two New Directors LOUDEYE: Strengthens Management Team With 2 Executive Appointments LTV CORP: Court Clears Settlement Pact with Cuyahoga County, Ohio MERIT SECURITIES: Fitch Affirms & Cuts Ratings on Series 13 Notes MG ENTERPRISES: Case Summary & 3 Largest Unsecured Creditors MGM MIRAGE: Proposed $300M Senior Debt Issue Gets S&P's BB+ Rating MICRO COMPONENT: Receives $5 Million Financing from Laurus Funds MIDWEST PHYSICIAN: Fitch Cuts Bond Rating to Speculative Grade MIRANT CORP: Woos Court to Approve Texas Eastern Settlement Pact NATIONAL BENEVOLENT: Has Until April 17 to File Schedules NET PERCEPTIONS: Obsidian Urges Stockholders to Vote Against Plan NEW CONSTRUCTION: Taps Gary & Goodman as Bankruptcy Counsel NEWTOWN PROPERTIES: Case Summary & 18 Largest Unsecured Creditors NHC COMMS: Second Quarter 2004 Results is Being Webcast Today NORSKE SKOG: Gets S&P's BB Rating for $225MM Sr. Unsecured Notes NORSKE SKOG: Proposes Private Placement Offering of Senior Notes NORSKE SKOG: Commences Cash Tender Offer for 10% Senior Notes ONEIDA: Reschedules Q4 & Year-End Earnings Release to March 17 OWENS CORNING: Pushing Court to Expunge 612 Asbestos Claims PACIFIC GAS: Asks Court to Stretch Claims Objection Deadline PACIFIC GAS: Secures Commitments for $2.9 Billion Financing PANACO INCORPORATED: Richard Lehmann Highlights Bonds in Column PARMALAT GROUP: US Units Seek to Continue Cash Management System PARMALAT: US Units Get Okay to Maintain Existing Bank Accounts PG&E NATIONAL: Files Third Amended Plan & Disclosure Statement PILLOWTEX CORP: Auction for Non-Manufacturing Assets Continues PLAYBOY: S&P Assigns Stable Outlook to Affirmed B Credit Rating RADIANT: Plans to Borrow Additional $250K from Private Lenders RCN: Sells Carmel, NY Cable System to Susquehanna Unit for $120M SAFESCRIPT: Auditor Resigns & Withdraws June 2003 Report SAFETY-KLEEN CORP: Proposes Post-Effective Date Notice Procedures SEQUA CORPORATION: Reports Higher Results for 2003 SIERRA PACIFIC: Wants to Raise $300 Mil Through Private Offering SPIEGEL GROUP: US Trustee Amends Unsecured Creditors' Committee TEXAS INSTRUMENTS: Featured in Schaeffer's Street Chatter TIMKEN: Increasing Steel Bar Prices Beginning April 5, 2004 TITAN CORP: S&P Revises Watch Following Justice Dept. Probe US AIRWAYS: Settles & Reduces Ameriquest Claim to $2,625,000 U.S. STEEL: Issues Notice of Senior Notes' Redemption VERESTAR: SkyTerra Communications Bidding for Assets on March 30 WEBLINK WIRELESS: Will the Real Stakeholders Please Stand Up? WEIRTON STEEL: Wants to Set Up Asset Sale Bidding Procedures WESTPOINT STEVENS: Gets Go-Signal to Reject Simmons Trademark Pact WILSONS: Working with Banks to Amend Senior Credit Agreement WINN-DIXIE: Featured in Schaeffer's Street Chatter ZALE CORP: Richard Marcus to Succeed Robert DiNicola as Chairman * Sullivan & Worcester Expands Tax and Litigation Practices ********* AEP INDUSTRIES: First Quarter 2004 Net Loss Narrows to $806,000 --------------------------------------------------------------- AEP Industries Inc. (Nasdaq: AEPI) reported financial results for its fiscal first quarter ended January 31, 2004. Net sales increased 11.3 percent in the first quarter to $188,894,000 compared with $169,772,000 in fiscal 2003. Excluding $15,840,000 of positive impact of foreign exchange, worldwide net sales increased $3,282,000 or 1.9 percent. The increase in net sales was due to a 4.7 percent increase in unit prices partially offset by a 2.7 percent decrease in sales volume. Gross margin in the first quarter of 2004 improved to 17.3 percent from 17.0 percent in the same period of 2003. The $3,741,000 improvement in gross profit in the 2004 period is largely due to the above-mentioned positive impact of foreign exchange combined with increased unit sales prices in the current period. Operating expenses in the 2004 quarter increased $91,000 from the same period of 2003. The increase in operating expenses includes $1,945,000 of negative impact of foreign exchange effect partially offset by the net cost reduction of $1,008,000 resulting from the liquidation of FIAP. Income from operations improved to $6,685,000 in the 2004 period compared with $2,982,000 in the 2003 first quarter. This improvement is primarily the result of the previously mentioned increase in average sales prices. The net effect of the FIAP liquidation between the periods was to increase 2004 income from operations by $1,344,000. For the 2004 first quarter the Company reported a net loss of $806,000 or $0.10 per share, compared with a net loss of $4,206,000 or $0.53 per share in last year's first quarter. "We are very pleased to report that income from operations more than doubled during the first quarter. What is noteworthy is that this improvement took place in all of our geographic areas and included the absorption of $362,000 of current period net charges related to the continuing liquidation of the Company's FIAP business in Italy," stated Brendan Barba, Chairman and Chief Executive Officer of the Company. "Although there continues to be excess production capacity available to meet the needs of virtually all flexible packaging markets, our raw material margins have improved for the fifth consecutive quarter. Maintaining our position as the low cost producer in all of our major markets continues to be the cornerstone of our strategy. We will continue to make decisions consistent with that strategy," concluded Mr. Barba. AEP Industries Inc. (S&P, BB- Corporate Credit Rating, Negative Outlook) manufactures, markets, and distributes an extensive range of plastic packaging products for the food/beverage, industrial and agricultural markets. The Company has operations in ten countries throughout North America, Europe and Australasia. AFC ENTERPRISES: Releases Mid-Quarter Business Update For Q1 2004 ----------------------------------------------------------------- AFC Enterprises, Inc. (Ticker: AFCE), the franchisor and operator of Popeyes(R) Chicken & Biscuits, Church's Chicken(TM), Cinnabon(R) and the franchisor of Seattle's Best Coffee(R) in Hawaii, on military bases and internationally, announced operating performance results for the Company's fiscal period 1, which began December 29, 2003 and ended January 25, 2004, and fiscal period 2, which began January 26, 2004 and ended February 22, 2004. Overall Performance Domestic Same-Store Sales Growth The Company reported that blended domestic same-store sales growth at its restaurants, bakeries and cafes were up 3.7 percent in period 1 and up 3.1 percent in period 2 of 2004, compared to down 5.9 percent and down 6.9 percent for period 1 and period 2 of 2003. Periods 1 and 2 of 2004 represented AFC's most improved blended domestic same-store sales performance since the first quarter of 2002. The Company's average check was up for all brands in both period 1 and period 2 of 2004, with Popeyes up 4.8 percent and 6.0 percent, respectively, signifying its strongest improvement since the third quarter of 2001. Church's average check was also up 4.4 percent and 2.7 percent, respectively, and Cinnabon was up 5.9 percent and 4.9 percent, respectively. Specific drivers that impacted same-store sales in periods 1 and 2 of 2004 included: - Popeyes continued to build strength in periods 1 and 2 by focusing on bone-in chicken and boneless strips with single user dinners and family bundles, as well as launching the new advertising campaign featuring "Thrillseekers Prefer Popeyes" in period 2. - Popeyes marketing focus continues to be on seafood, featuring products such as new Cajun King Shrimp, Popcorn Shrimp and Catfish to increase transactions and drive profitability at the unit level. - Church's showed significant improvements in its operational excellence initiative that critically evaluates each restaurant on the six key measures of product quality, product availability, order accuracy, speed of service, guest hospitality, and restaurant cleanliness. - Church's promotional efforts included a Krispy Tender Strips combo and a MCI phone card promotion with the purchase of six pieces or more. - Cinnabon offered a combo promotion, which bundled a beverage with the classic Cinnabon, Cinnapoppers, or Cinnasticks. "We are extremely pleased with our operational performance for the first two periods of 2004. Church's period 1 results represented the best period performance since the first quarter of 1997 and Cinnabon had the strongest period performance since the first quarter of 2001. Popeyes continued to improve with period 2 recording the best results since the second quarter of 2002," commented Dick Holbrook, President and COO of AFC Enterprises. Unit Openings and Unit Count The AFC system opened 33 restaurants, bakeries and cafes during period 1 and period 2 of 2004, compared to 43 total system-wide openings during the same periods in 2003. On a system-wide basis, AFC had 4,091 units at the end of period 2 of 2004. The composition of units at the end of period 2 of 2004 consisted of 3,133 domestic units and 958 in 36 foreign countries and Puerto Rico. This total unit count represented 435 Company owned and 3,656 franchised restaurants, bakeries and cafes. Commitments As previously stated, the Company remains unable to participate in certain domestic franchise sales related activities until the filing of the 2004 franchise offering circulars and renewed state franchise registrations. On a system-wide basis, 6 new commitments for future development were signed during the first two periods of 2004, which comprised of 4 from Popeyes and 2 from Church's. As of February 22, 2004, AFC had a total of 2,144 outstanding commitments for future development. Other Key Business Matters Status of 2003 Regulatory Filings AFC does not expect to file its Form 10-K for 2003 by the new accelerated SEC filing timeline of March 12, 2004 due to having just recently completed its Form 10-K for 2002 and restated financial statements for 2000 and 2001. AFC is working diligently to complete the audit and file its Annual Report on Form 10-K for 2003 in March of this year. The Company will file its Form 10-Q for each of the first three quarters of 2003 subsequent to the filing of its Form 10-K for 2003. Upon completion and filing of such statements, AFC intends to begin the Nasdaq listing application process. Outstanding Debt AFC's outstanding debt under its credit facility agreement, net of investments, at the end of period 2 of 2004 was approximately $119 million versus $126 million at the end of 2003. Corporate Profile AFC Enterprises, Inc. is the franchisor and operator of 4,091 restaurants, bakeries and cafes as of February 22, 2004, in the United States, Puerto Rico and 36 foreign countries under the brand names Popeyes(R) Chicken & Biscuits, Church's Chicken(TM) and Cinnabon(R), and the franchisor of Seattle's Best Coffee(R) in Hawaii, on military bases and internationally. AFC's primary objective is to be the world's Franchisor of Choice(R) by offering investment opportunities in highly recognizable brands and exceptional franchisee support systems and services. AFC Enterprises can be found on the World Wide Web at www.afce.com . * * * Credit Facility and Current Ratings The Company's outstanding debt under its credit facility agreement, net of investments, at the end of Period 9 of 2003 was approximately $125 million, down from approximately $218 million at the end of 2002 as a result of cash generated from ongoing operations and the sale of its Seattle Coffee Company subsidiary. On August 25, 2003, Standard & Poor's Ratings Services raised the Company's senior secured bank loan ratings to 'B' from 'CCC+'. S&P's single-B rating means the obligation is vulnerable to nonpayment but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions, S&P explains, will likely impair the obligors capacity or willingness to meet its financial commitment on the obligation. Additionally, on August 28, 2003, Moody's Investor Service lowered the Company's secured credit facility rating from Ba2 to B1. A single-B rating from Moody's indicates that assurance of interest and principal payments or maintenance of other terms of the contract over any long period of time may be small. AMKOR TECH: S&P Assigns B Rating to $250MM Sr. Unsecured Notes -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' rating to Amkor Technolgy Inc.'s $250 million senior unsecured notes due 2014 and affirmed its 'B' corporate credit on the company and its other ratings. West Chester, Pa.-based Amkor is expected to use the proceeds of the notes issue in part to repay its $170 million term loan and to bolster cash balances. The outlook is stable. "Although improvements in operating profits should improve debt-protection measures, debt balances are expected to remain high as Amkor implements its capital spending program in 2004," said Standard & Poor's credit analyst Emile Courtney. "However, sustained improvements in operating profitability, combined with reduced debt balances and adequate liquidity, could result in a positive outlook over the intermediate-term." Amkor is the leading independent provider of outsourced packaging and testing services to semiconductor makers. Total lease-adjusted debt, pro forma for the notes issue, was about $1.8 billion at December 2003. The semiconductor industry recovery has led to increasing capacity utilization in Amkor facilities, as well as a rationalized pricing environment in line with historical industry norms. As a result, Amkor has increased its EBITDA profitability, and total debt-to- EBITDA, pro forma for the new notes issue, was 5.3x at December 2003. Amkor is expected to increase its capital-spending program in 2004 up to $500 million in total. Amkor is increasing its spending to fund new advanced packaging customer programs and increase capacity ahead of internal demand forecasts. "We expect Amkor to fund its spending program through a combination of operating cash flow and cash balances. As a result, Amkor is not expected to materially reduce debt balances over the near term." Standard & Poor's view of the long-term outsourcing trend in semiconductor packaging remains positive. AMKOR TECHNOLOGY: Prices $250 Million Senior Debt Offering ---------------------------------------------------------- Amkor Technology, Inc. (Nasdaq: AMKR) has priced an offering of $250 million of its senior unsecured notes. The notes will mature on March 15, 2011 and have a coupon rate of 7 1/8% annually. Amkor intends to use the net proceeds of the issuance to repay amounts outstanding under its senior secured credit facility and for general corporate purposes, including capital expenditures. The notes are being sold to qualified institutional buyers in reliance on Rule 144A and outside the United States in compliance with Regulation S under the Securities Act of 1933. The notes have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Amkor Technology, Inc. (S&P, B Corporate Credit and Senior Debt Ratings, Stable) is the world's largest provider of contract semiconductor assembly and test services. The company offers semiconductor companies and electronics OEMs a complete set of microelectronic design and manufacturing services. More information on Amkor is available from the company's SEC filings and on Amkor's Web site: http://www.amkor.com/ AMERCO: Inks Pact Resolving Interest Overpayment to JPMorgan ------------------------------------------------------------ The AMERCO Debtors' First Amended Joint Plan of Reorganization provides for, among other things, full satisfaction of JPMorgan Chase Bank's claims against the Debtors, and for the payment of postpetition interest on those claims at the non-default, contract rate of interest. After the Debtors filed the Plan, it was discovered that the Debtors had inadvertently paid JPMorgan interest at the default rate, as opposed to the contract rate, since the Amerco Petition Date. The total amount of interest paid to JPMorgan through January 2004 in excess of the contract rate is $2,009,994. The Debtors and JPMorgan acknowledge and agree that the Overpayment was made to JPMorgan in error and should be refunded to the Debtors' estates. Amerco has not paid any interest to JPMorgan for any date after January 31, 2004. The amount of interest owed for February 2004 is $671,554. The amount of interest owing on and after February 29, 2004 -- assuming the Plan Effective Date occurs before the end of March, as currently contemplated -- is $23,157 per day. Accordingly, the Debtors and JPMorgan stipulate and agree that the estate's error in making the Overpayment will be corrected by reducing the cash distributions to be made to JPMorgan under Section 5.1(a) of the Plan by $1,338,441 minus $23,157 for each day beginning and including February 29, 2004 until the Plan Effective Date. Judge Zive approves the parties' Stipulation. (AMERCO Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., 215/945- 7000) ANC RENTAL: Sues 227 Vendors for Return of Preferential Payments ---------------------------------------------------------------- The ANC Rental Corporation Debtors seek to recover $4,396,863 paid to 227 vendors during the 90-day period before the Petition Date. The Debtors assert that the payments were preferential in nature and are avoidable pursuant to Section 550(a) of the Bankruptcy Code. The Debtors ask Judge Walrath to: -- direct the 227 Vendors to return the transfers, plus interest and costs; and -- pursuant to Section 502(d) of the Bankruptcy Code, disallow any claim filed by the 227 Vendors against them until the Vendors pay in full the amount owed. The Vendors are: Vendors Amount of Transfer ------- ------------------ A & M Body Shop, Inc. $29,376 A Plus Auto Body & Paint Inc. 22,609 A R C LTDA 16,964 AAA Club of SCA 7,935 AAA Interins Exchange 12,375 AAA Quality Guaranteed Glass Co. 12,375 AAA Tank Testers, Inc. 18,939 Abba Auto Center, Inc. 9,074 ABM Coach Craft Auto Body 9,150 AC Delco 25,604 ADP Claims Solutions Group, Inc. 20,346 Advance Auto Works 32,059 Advance Rehab Center 8,625 Advanced Lighting Services, Inc. 21,318 Advanstar Communications, Inc. 10,070 AFS Auto Body Repair 7,969 AH the Gratefull Dent 8,760 Airport Auto Body, Inc. 54,231 All Florida Car Wash Service, Inc. 13,737 All Star Staffing, Inc. 26,683 Allied Security, Inc. 16,743 Alpine Auto Body Corp. 8,267 Altres, Inc. 13,351 America Auto Collision, Inc. 20,167 American Autoplex Collision Center 9,612 American Import Car Care Center 9,334 American South Central, Inc. 16,133 Americas Autoworks Corp. 16,002 Amoco Oil Company 13,029 Anderson Dent Company, Inc. 12,980 Andrew General Contractor, Inc. 291,109 Aopa Pilot 8,084 APR Construction Management 17,277 Architect Jeff Falkanger & Associates, Inc. 43,594 ARI Investigations 8,400 Arizona Boyz Towing and Transport LLC 30,161 Artistic Touch Auto Body 9,504 Artmax Building Maintenance 25,829 Arts Auto Body Shop, Inc. 33,414 ASAP Towing, Inc. 9,965 Audubon Physical Medicine & Rehabilitation P.C. 8,534 Auto Body of Lynn, Inc. 11,154 Auto Dynamics, Inc. 16,930 Auto Grooming Hawaii 9,318 Auto Quest West Collision and Frame, Inc. 23,517 Auto Recovery 26,397 Auto Specialists, Inc. 16,240 Automotive Networks, Inc. 27,185 Automotive Systems, Inc. 9,570 Autowash Systems, Inc. 21,120 Azady Shuttle Service 67,338 B & B Transport LLC 19,820 B & C Towing, Inc. 7,945 B & R Auto Collision 13,479 Barbara & Lorimier Warren 35,000 Beattie Padovano LLC 13,405 Bill Black 8,191 Brady Chiropractic 9,874 CAC Body Shop 9,099 Cahners Travel Group 42,318 Cals Towing 11,695 Capstar Radio Operating Co. 8,999 Car Place, Inc. 12,325 Car Tow, Inc. 17,542 Cardiam Inc. 14,729 Care Plus Injury Rehabilitation Center, Inc. 15,025 Carrillos Towing 7,906 Carnica, Inc. 18,890 Carr Engineering, Inc. 22,607 Cavender Buick 23,142 Central Florida Wash Systems, Inc. 27,279 Certified Medical Consultants, Inc. 16,965 Chans Auto Body Shop, Inc. 29,095 Crystal Springs Water Co. 12,178 D & You Auto Body 8,849 D and P Autoworks 7,904 Danshoe Auto Detailing 8,646 David Brotman DC 9,057 David Jones Plumbing, Inc. 7,778 Davis Towing, Inc. 15,395 Daytona Auto Body Shop 9,774 Del Amo Dodge, Inc. 25,192 Delivered Oil Change Service, Inc. 18,468 Delray Medical Center 10,000 Dempseys Auto Body 8,694 Dentpro of Maricopa, Inc. 15,365 Dents & Colors Express 42,280 Der Reisebuero 190,306 Desert Rose Collision Specialists, Inc. 11,815 Destination America, Inc. 17,142 Direct Towing, Inc. 14,554 DLG Carriers Inc. 19,637 Don Drennen Motor Company 16,902 Don Massey Cadillac, Inc. 70,970 Doxon Toyota 8,430 Doyne, Inc. 14,399 Dunning Motors, Inc. 15,285 Dutton Brock Macintyre & Collier Trust 16,500 Express Employment Corp. 18,212 G & K Services 9,545 G & S Car Movers, Inc. 21,564 G C Auto Transport 8,495 GAB Robins North America, Inc. 32,726 Gaby Paint & Body Shop 8,649 General Tire Inc. 48,579 Gilmore Associates, Inc. 8,084 Glass Magnum 7,542 Glen Grant Chevrolet, Inc. 35,989 Golden Gate Bridge Fas Trak 8,714 Goto.com, Inc. 10,241 Gravesend Neurology 7,981 Great Rigs, Inc. 9,956 Guaranteed Protection Services 7,807 Guide One Insurance 40,705 H & M Auto Body 29,892 H2 Enterprises, Inc. 7,956 Hadley Auto Transport 8,040 Haga Auto Body Shop 19,203 Hangar Auto Rebuild 8,266 Interior Repair Specialists, Inc. 9,085 Interplan Architecture, Inc. 8,247 Interstate 24 Hour Towing & Recovery 7,672 Inwood Hill Medical PC 11,750 Ionics Ultrapure Water 7,674 IRA/Buick/Pontiac 8,108 J & A Mechanical, Inc. 12,668 J & S Autobody, Inc. 44,564 Lafontaine Toyota 7,687 Landmark Chevrolet, Inc. 42,351 Larry Roesch Mitsubishi 22,651 Larry's Garage & Towing, Inc. 32,355 LD Lind Limited 29,770 Le Chateau Bodyshop, Inc. 19,640 N & D Auto, Inc. 8,720 N & D Auto, Inc. 7,778 Nab Towing & Recovery 96,963 Nacco Windshield Repair SW, Inc. 7,670 Nacco Windshield Repair SW, Inc. 12,120 Nams Auto Body, Inc. 10,506 NCO Financial Nationwide, Inc. 14,191 New Age Staffing, Inc. 30,117 New Concepts Paint and Body Shop, Inc. 8,469 New Image Body Works 10,865 New York Body Shop, Inc. 8,887 Noblestown Auto Sales, Inc. 32,669 Noblestown Auto Sales, Inc. 13,957 Norms Auto Delivery Service 26,921 North Broad Auto Center, Inc. 14,420 North Central Collision Repair, Inc. 17,593 Northside Transportation Service 12,150 Northwest Chevrolet, Inc. 8,315 Northwest Southwest Auto, Inc. 11,000 Novaks Collision Center, Inc. 10,166 Novus 8,478 Oak Park Isuzu/Suzuki 23,074 Oasis Environmental, Inc. 12,990 On Time Environmental Services, Inc. 29,543 ORHS, Inc. 13,649 Ourismans Rockmont Chevy, Inc. 38,660 Pacific Auto Body, Inc. 27,024 Pacific Escapes, Inc. 48,532 Paintless Dent Removal 8,742 Panrotas International, Inc. 14,012 Paradise Auto Body, Inc. 26,767 Parker Transport 11,705 Patterson Press, Inc. 15,686 Pelican Service and Collision 10,728 Penn Credit Corporation 8,975 Perfection Collision Center, Inc. 13,210 Perkins and Son Paint & Bodyshop, Inc. 13,232 Petroleum Resources, Inc. 11,917 Plymouth Mitsubishi 10,977 Portland Auto Auction, Inc. 33,334 Precision Auto Body Paint 27,936 Preferred Labor LLC 15,970 Premier Auto Body and Paint, Inc. 11,383 Premier Auto Works of Pinellas, Inc. 7,727 Premier Holidays Limited Travel 24,375 Preventative Security Corp. 17,696 Primary Medical Care, Inc. 9,685 Pro Action Performance Auto Body 22,213 Pro Collision Center 17,933 Prospect Auto Body 13,464 Putnam Toyota 17,092 Pyramid Auto Body 10,583 Quality Mitsubishi Inc. 14,682 Quality Mobile Service 12,640 Quality Windshield Repair 7,590 Quealy Towing, Inc. 18,925 R & R Body Shop, Inc. 7,634 Rays Drive Service, Inc. 13,173 Reflection Paint & Body 13,943 Remed Inc. Medical 11,147 Rite Now Mobile Detailing, Inc. 34,815 Riverside Collision Center 8,965 Robke Chevrolet Co. 9,627 Rockman Security Services 27,343 Roepnack Corporation 13,778 Roseville Chrysler Plymouth, Inc. 12,823 RSD Enterprises 10,709 RTS Services, Inc. 28,137 S & M Collision Center LLC 11,929 Sales Force.Com Inc. 10,560 Sams Towing & Transport, Inc. 17,736 Sams Travel Club 10,340 San Diego Dodge 11,028 Santa Monica Mitsubishi, Inc. 8,182 Tire Country Towing Div 10,318 Titan Security, Inc. 12,536 Toms Auto Body 9,062 Tonys Collision Center, Inc. 12,162 Toth Buick Isuzu 8,348 Toyota of Glen Burnie 8,326 Travel 800 LLC 17,290 Travel Industry Association of America 10,625 Travelbus, Inc. 16,283 Trif for Welfare Prem Paym 25,930 Tuckers Enterprises, Inc. 8,325 Turbo City Auto Body, Inc. 8,121 TWA 38,577 Ultimate Auto Collision Repair LLC 13,255 Unibodytech, Inc. 11,219 Universal Auto Body, Inc. 9,046 Valet Lube RGV 26,013 Vallop, Inc. 9,274 Verizon Communications, Inc. 7,772 Victory Auto Body Shop 10,932 Vintage Autobody Works, Inc. 24,312 Virgils Auto & Wrecker 20,987 ------------ $4,396,863 Headquartered in Fort Lauderdale, Florida, ANC Rental Corporation, is the world's third-largest publicly traded car rental company. The Company filed for chapter 11 protection on November 13, 2001 (Bankr. Del. Case No. 01-11200). Brad Eric Scheler, Esq., and Matthew Gluck, Esq., at Fried, Frank, Harris, Shriver & Jacobson, represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $6,497,541,000 in assets and $5,953,612,000 in liabilities. (ANC Rental Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service, Inc., 215/945-7000) ARCHIBALD CANDY: Creditors Panel Taps Trenwith to Co-Market Assets ------------------------------------------------------------------ Trenwith Securities LLC, a leading middle market investment bank and BDO Seidman, LLP affiliated company, has been retained, subject to Bankruptcy court approval, by the Official Committee of Unsecured Creditors of Archibald Candy Corporation as its exclusive investment banker to co-market the assets of Archibald Candy pursuant to an auction process in accordance with section 363 of the U.S. Bankruptcy Code. Interested parties are required to submit bid proposals for the intellectual property and/or real estate assets by Tuesday, March 30, 2004 with the Sale Auction scheduled for Thursday, April 1, 2004 in Chicago, Illinois. "Founded in 1921 and headquartered in Chicago, Illinois, Archibald Candy is a prominent manufacturer and marketer of quality boxed chocolates and other confectionary items under the Fannie May, Fanny Farmer and Laura Secord brands," said Rick Chance, Managing Director at Trenwith Securities. "These assets should be particularly attractive to existing competitors seeking to expand the breadth of their product offerings and market share, food companies in related industry segments with a desire to enter the candies and confections marketplace, and non-food companies in the direct sales, corporate gift or mail order industries that could leverage the Company's extensive sales channels and excellent brand equity." An acquisition of Archibald's assets will afford the winning bidder a number of significant benefits, including: -- Ability to leverage the recognition and reputation of Fannie May and Fanny Farmer, Archibald's 83 year old brand names. -- Ownership of the company's numerous proprietary candy recipes. -- 31 company-owned U.S. stores, and select equipment and machinery. -- Access to a network of 8,000 third-party retail outlets across the country. -- A variety of established non-retail sales programs, including mail order, corporate gift, and fundraising programs. -- Ability to create value through increased operational efficiencies and potential cross-selling of other related products. For additional information on participation in the Archibald Candy auction process, please contact Rick Chance, Managing Director at Trenwith Securities (714) 668-7364 or visit Trenwith Securities on the Web at http://www.trenwith.com/ ARGENT SECURITIES: Fitch Takes Rating Actions on 2004-W4 Notes -------------------------------------------------------------- Argent Securities Inc.'s asset-backed pass-through certificates, series 2004-W4, are rated by Fitch as follows: --$463.3 million class A 'AAA'; --$7.5 million class M-1 'BBB+'; --$5 million class M-2 'BBB'; --$6.3 million class M-3 'BBB-'; --$5.8 million class M-4 'BB+'. Credit enhancement for the 'AAA' rated class A certificates reflects the 4.90% subordination provided by classes M-1, M-2, M- 3, M-4, monthly excess interest, and initial overcollateralization (OC) of 2.45%. In addition, the class A certificates have the benefit of a certificate guaranty insurance policy issued by XL Capital Assurance Inc. (XL Capital), whose insurer financial strength is rated 'AAA' by Fitch. Credit enhancement for the 'BBB+' rated class M-1 certificates reflects the 3.40% subordination provided by classes M-2, M-3, M-4, monthly excess interest and initial OC. Credit enhancement for the 'BBB' rated class M-2 certificates reflects the 2.40% subordination provided by classes M-3, M-4, monthly excess interest and initial OC. Credit enhancement for the 'BBB-' rated class M-3 certificates reflects the 1.15% subordination provided by class M-4, monthly excess interest and initial OC. Credit enhancement for the 'BB+' rated class M-4 certificates reflects the monthly excess interest and initial OC. In addition, the ratings reflect the integrity of the transaction's legal structure as well as the capabilities of Ameriquest Mortgage Company as master servicer. Deutsche Bank National Trust Company will act as trustee. The mortgage pool consists of closed-end, first-lien subprime mortgage loans that may or may not conform to Freddie Mac and Fannie Mae loan limits. As of the cut-off date (March 1, 2004), the mortgage loans have an aggregate balance of $500,000,053. The weighted average loan rate is approximately 7.15%. The weighted average remaining term to maturity (WAM) is 354 months. The average cut-off date principal balance of the mortgage loans is approximately $180,115. The weighted average original loan-to- value ratio (OLTV) is 85.37% and the weighted average Fair, Isaac & Co. (FICO) score was 622. The properties are primarily located in California (26.82%), Florida (10.33%) and New York (9.94%). Approximately 95.07% of the loans were originated or acquired by Argent Mortgage Company, LLC (Argent), and 4.93% of the loans were originated or acquired by Olympus Mortgage Company. Both mortgage companies are subsidiaries of Ameriquest Mortgage Company, which is a specialty finance company engaged in the business of originating, purchasing, and selling retail and wholesale subprime mortgage loans. Both Argent and Olympus focus primarily on wholesale subprime mortgage loans. ARTISTDIRECT: Severs Professional Ties with KPMG LLP ---------------------------------------------------- Effective February 6, 2004, ARTISTdirect, Inc., a Delaware corporation, dismissed KMPG LLP as its independent accountant. The dismissal of KPMG was recommended by the Company's Audit Committee and approved by the Company's Board of Directors. KPMG's report, dated February 14, 2003, for the years ended December 31, 2002 and 2001 contained an explanatory paragraph stating that "the Company has incurred substantial operating losses and negative cash flows from operations to date and has funding commitments related to its record label joint venture. The Company needs additional capital to fund its operations and the operations of the record label joint venture. These conditions raise substantial doubt about the Company's ability to continue as a going concern." The company offers MP3 downloads, music video, chat, merchandise and CDs, concert tickets, news, and auctions. ATLAS WELDING CO: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Atlas Welding Company, Inc. 1300 North Nova Road Daytona Beach, Florida 32117-4099 Bankruptcy Case No.: 04-01361 Chapter 11 Petition Date: February 11, 2004 Court: Middle District of Florida (Jacksonville) Judge: Jerry A. Funk Debtor's Counsels: Robert N. Reynolds, Esq. Robert N. Reynolds PA 1881 Lee Road Winter Park, FL 32789 Ronald Cutler, Esq. Ronald Cutler PA 1172 Pelican Bay Drive Daytona Beach, FL 32119 Tel: 386-788-4480 Total Assets: $1,523,500 Total Debts: $3,603,391 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Temecula Valley Bank, N.A. Mortgage $997,694 c/o Joseph L. Schneider, PA 1720 Harrison St., Ste 1820 Hollywood, FL 33020 PREUSSAG International Steel $365,909 Corp. dba INFRA Metals Company c/o Larry Segall, Esq. 3321 Henderson Blvd. Tampa, FL 33601 Namasco $211,414 Canam Steel Corporation $163,053 Airgas South $118,000 Bridgefield Employers $112,082 Insurance Company Sun Trust Bank $102,265 Chatham Steel Corporation $100,838 Florida Health Care Plan $54,073 America Metals Supply, Inc. $44,410 Dick Smith $36,709 Imperial A.I. Credit $32,817 Companies United Rentals $29,399 Daytona Bolt & Nut Company $28,342 Ringhaver Equipment $26,387 Orlando Bolt & Screw $26,045 Citgo Petroleum Corporation $25,743 Southern Paint & Supply Co. $24,224 Corbett Cranes, Inc. $21,044 Volvo Rents $19,607 AVITAR: Raises $1 Million in Second Closing of Private Placement ---------------------------------------------------------------- Avitar, Inc. (Amex: AVR - News) announced that gross proceeds of $1,000,000 were raised in the second closing of the private placement entered into on September 30, 2003. In the second closing, which was completed on March 8, 2004, Avitar issued additional convertible preferred stock and warrants. Previously, Avitar raised $1,000,000 gross proceeds in the first closing held on September 30, 2003. On February 27, 2004, Avitar received shareholder approval for both transactions at a Special Meeting of Shareholders. All of the above securities have been placed with one investor. The securities sold in the second closing of the private placement were 1000 shares of 6% Convertible Preferred Stock, with Warrants to purchase Common Stock. The $1,000,000 of Preferred Stock is convertible into Common Stock at $0.216 per share, subject to adjustments, and the Warrants are exercisable at $0.135 per share. Peter P. Phildius, Chairman and CEO commented, "this closing represents the next step in our capital funding plan which will allow us to begin to invest in the resources necessary to take advantage of the business opportunity which our Oral Screen products offers. In anticipation of this, as previously announced, we have already hired a V.P. of Marketing and will be filling other key positions to help facilitate our growth". Avitar, Inc. develops, manufactures and markets innovative and proprietary products in the oral fluid diagnostic market, disease and clinical testing market, and customized polyurethane applications used in the wound dressing industry. Oral fluid diagnostics includes the estimated $1.5 billion drugs-of-abuse testing market, which encompasses the corporate workplace and criminal justice markets. Avitar's products include ORALscreen(TM), the world's first non-invasive, rapid, onsite oral fluid test for drugs-of-abuse. Additionally, Avitar manufactures and markets HYDRASORB(TM), an absorbent topical dressing for moderate to heavy exudating wounds. In the estimated $25 billion in vitro diagnostics market, Avitar is developing diagnostic strategies for disease and clinical testing. Some examples include influenza, diabetes and pregnancy. For more information, see Avitar's website at http://www.avitarinc.com/ * * * The Troubled Company Reporter's February 10, 2004 edition reported that, as a result of the Company's recurring losses from operations and working capital deficit, the report of its independent certified public accountants relating to the financial statements for Fiscal 2003 contains an explanatory paragraph stating substantial doubt about the Company's ability to continue as a going concern. Such report states that the ultimate outcome of this matter could not be determined as the date of such report The Company plans to address the situation, however, there are no assurances that these endeavors will be successful or sufficient. BESS EATON: First Creditors' Meeting Slated for March 22, 2004 -------------------------------------------------------------- The United States Trustee will convene a meeting of Bess Eaton Donut Flour Company Incorporated's creditors at 10:00 a.m., on March 22, 2004 in Room 915 at 10 Dorrane Street, Providence, Rhode Island 02903. 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 Westerly, Rhode Island, Bess Eaton Donut Flour Company Incorporated, is an operator of 48 retail coffee and bake shops in locations throughout Rhode Island, Massachusetts and Connecticut. The Company filed for chapter 11 protection on March 1, 2004 (Bankr. D. R.I. Case No. 04-10630). Allan M. Shine, Esq., at Winograd Shine & Zacks represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $9,700,000 in total assets and $17,600,000 in total debts. BIONOVA HOLDING: Buying Stock Back at $0.09 per Share ----------------------------------------------------- Bionova Holding Corporation (Pink Sheets: BVAH) has mailed to its stockholders a Transaction Statement relating to the previously announced financial restructuring that will result in Bionova Holding becoming a private company. As part of the Transaction, Bionova Holding will be merged with an affiliate and the public stockholders will be paid $0.09 for each share they hold of Bionova Holding's common stock. Bionova Holding and its parent company, Savia, S.A. de C.V., have filed an amended Transaction Statement on Schedule 13E-3 with the Securities and Exchange Commission and expect to complete the Transaction on March 29, 2004. The completion of the Transaction is subject to the following conditions: the absence of any threatened or pending litigation or other legal action relating to the Transaction; neither Bionova Holding nor Savia incurring significant expenses associated with the Transaction, other than approximately $650,000 of professional fees and other expenses that Bionova Holding contemplates will be incurred by the parties in connection with the preparation and dissemination of the Schedule 13E-3 and Transaction Statement and the closing of the Transaction in an efficient and prompt manner; the fairness opinion of AgriCapital Securities Inc., Bionova Holding's independent financial advisor, not being withdrawn prior to the consummation of the Transaction; not more than 10% of the unaffiliated stockholders electing to exercise their statutory dissenters' rights in connection with, and prior to the effectiveness of, the merger; the absence of any law or order or other event preventing the Transaction; and other conditions described in the Transaction Statement. * * * In its latest Form 10-Q filed with the Securities and Exchange Commission, Bionova Holding reports: "As a result of the Company's operating losses during the past six years and its current financial structure, there continues to be substantial doubt about the Company's ability to continue as a going concern. Management has been and is continuing to address the Company's financial condition by selling non-core assets of the fresh produce business, and by selling and licensing its intellectual property. Bionova Holding completed a license of its Transwitch technology during the second quarter, sold its TAP subsidiary in Mexico and received proceeds on this sale during the second and third quarters, and sold land in California during the third quarter. During this first week of December 2003, the Company's Mexican farming subsidiary, Agrobionova, S.A. de C.V. sold a subsidiary company which generated $0.8 million in cash proceeds, after expenses. The Company expects to use this cash to pay overhead and other business expenses over the next few months. The Company also must find a solution to the $101.5 million of debt plus the interest accruing in 2003 that is due to Savia and its subsidiaries during 2003. There can be no assurance that these actions will result in sufficient working capital to significantly improve the Company's current financial position or its results of operations nor can there be any assurance the Company will be able to meet its obligations in 2003 nor secure funds to take it beyond the 2003 calendar year. This raises substantial doubt about the Company's ability to continue as a going concern." At September 30, 2003, Bionova Holding Corporation's balance sheet shows a total stockholders' deficit of $46,820,000. BIOVAIL CORP: 2004 Revenue Guidance Spurs S&P's Negative Outlook ---------------------------------------------------------------- Standard & Poor's Ratings Services revised the outlook on pharmaceutical company Biovail Corp. to negative from stable. At the same time, the ratings on Mississauga, Ontario-based Biovail, including the 'BB+' long-term corporate credit rating, were affirmed. The action is in response to the company's lower 2004 earnings guidance. The ratings on Biovail Corp. reflect the unclear direction of future earnings, in addition to the risks inherent in the company's growth strategy, which include managing and financing the manufacture, distribution, and marketing of an expanding product portfolio. These factors are partially offset by the promise of strong revenue growth from recently launched Wellbutrin XL and Cardizem LA and by the company's recent statement that it will be increasing transparency and disclosure, adopting more conservative financial reporting, and increasing focus on organic growth. "The negative outlook reflects Standard & Poor's expectation, notwithstanding the positive launch of Wellbutrin XL, that the lower revenue guidance and the execution risks inherent in Biovail's business strategy could affect the company's credit protection measures," said Standard & Poor's credit analyst Michelle Aubin. Ratings could be lowered should Biovail not provide a sustained demonstration of strong cash flow generation and debt reduction, in addition to the maintenance of its operating performance and credit protection measures. Biovail recently lowered its revenue and increased its operating expense guidance for 2004. The combined effect of the revised guidance signals the continued erosion of operating performance and credit protection measures. Biovail generated revenues of US$823.7 million in fiscal 2003 (year ended Dec. 31), which increased about 4.5% from 2002. Adjusted operating margin for 2003 was 46.8%, down from 53.6% the previous year. The decline in 2003 operating margin was primarily due to higher advertising and promotion costs of recently launched products and costs associated with the restructuring and expansion of the company's U.S. operations. Fiscal 2003 EBITDA interest coverage was 9.0x (compared with 12.3x in 2002), funds from operations to total unadjusted debt was 39% (compared with 50.9% in 2002), and total unadjusted debt to EBITDA was at 2.2x (compared with 1.8x in 2002). Standard & Poor's positively views Biovail's stated commitment to increased transparency and disclosure on its transactions and agreements. Although more conservative accounting practices might cause the company's financial metrics to deteriorate somewhat when they are compared with previously reported figures, they will present a more accurate financial profile. Biovail's sustained commitment to a more conservative and transparent approach could lessen some of the business profile risks typically associated with high growth companies. Biovail is an integrated pharmaceutical company that is engaged in the development, manufacture, license, distribution, and promotion of drug formulations using advanced drug delivery technologies for the treatment of chronic medical conditions. The company primarily focuses on three major therapeutic areas: cardiovascular (including Type II diabetes), central nervous system, and pain management. BIOVAIL CORP: Releases Comments on Rating Agencies' Outlooks ------------------------------------------------------------ Biovail Corporation (NYSE:BVF)(TSX:BVF) provided the following comments with respect to statements from both Moody's Investors Service and Standard and Poor's Ratings Services. Moody's Investors Service has placed the ratings of Biovail's senior subordinated notes due 2010 under review for a possible downgrade. Standard and Poor's Ratings Services revised the outlook on Biovail to negative from stable, although reaffirmed the existing ratings of the company, including the 'BB+' long-term corporate credit rating. Moody's Investors Service noted the rising sales of Biovail's Wellbutrin XL and Cardizem LA, while Standard and Poor's Ratings Services noted the strength of Wellbutrin XL and Biovail's core product portfolio, particularly Cardizem LA, as well as the Company's recent statement that it will be increasing transparency and disclosure, adopting more conservative financial reporting and increasing focus on organic growth. A possible ratings downgrade or revised outlook do not trigger any cash payment requirement or affect Biovail's available cash position. Biovail's bank covenants and interest rates are based on calculated Earnings Before Interest Tax Depreciation and Amortization (EBITDA) excluding certain items. Biovail is due to renew a Revolving Term Credit Facility with a syndicate of banks on mutually acceptable terms by March 25, 2004. If the parties cannot agree on terms, Biovail has the right to term out the existing loan balance by making eight equal quarterly payments. As of March 8, 2004, Biovail's revolving secured credit facility was $303 million and the Company had $168 million cash on hand. On Biovail's March 3, 2004 conference call, the Company provided 2004 cash flow from operations guidance of $300 million to $350 million and a spending range of $40 million to $60 million for capital expenditures during 2004. Biovail believes this level of cash flow provides the Company with sufficient liquidity to comfortably term out the Revolving Term Credit facility or reduce the available amount under a new facility as it is Biovail's intention to focus more of its Business Development activities in 2004 on out-licensing opportunities as opposed to acquisitions. Biovail Corporation is an international full-service pharmaceutical company, engaged in the formulation, clinical testing, registration, manufacture, sale and promotion of pharmaceutical products utilizing advanced drug delivery technologies. BOYDS COLLECTION: S&P Cuts Ratings Citing Heightened Business Risk ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on Boyds Collection Ltd., including its corporate credit rating to 'B' from 'B+', and placed the ratings on CreditWatch with negative implications, reflecting heightened business risk, successive quarters of declines in profitability, and increased debt leverage. Additionally, Standard & Poor's is concerned that the company's liquidity will weaken should operating performance continue to deteriorate. The Gettysburg, Pa.-based collectible products marketer and distributor had total debt outstanding of $76 million as of Dec. 31, 2003. Sales declined 25% in the fourth quarter ended Dec. 31, 2003. EBITDA fell about 70% as a result of increased inventory obsolescence reserves, higher expenses relating to establishing a national sales force, and loss of volume efficiencies. Debt to EBITDA rose to 2.7x in 2003 from 1.8x in 2002 as weak operating performance more than offset the decline in debt resulting from discretionary cash flow. "Business risk is increasing due to the company's niche position in the highly fragmented collectibles business and declining demand over the past several years," said Standard & Poor's credit analyst Hal Diamond. The company is restructuring costs, and anticipates realizing some cost savings. Nevertheless, Standard & Poor's is concerned that continued weak revenue trends and higher capital spending may reduce discretionary cash flow. The company plans to open a second retail store in 2004 and two additional stores in 2005. Near-term bank debt maturities are substantial and consist of $14 million in bank debt in 2004 and $28 million in 2005. The company has a $40 million undrawn revolving credit facility expiring in April 2005. There is a modest cushion against the debt to EBITDA bank covenant of 4.0x, though continued decline in operating performance would narrow the margin of covenant compliance. Standard & Poor's will review the firm's business strategies, operating outlook, and liquidity in completing its review. CALIFORNIA STEEL: S&P Rates $150M Series B Senior Notes at BB- -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' rating to Fontana, California-based California Steel Industries Inc.'s proposed $150 million senior notes due 2014, series B. At the same time, Standard & Poor's affirmed all its existing ratings, including the 'BB-/Stable/--' corporate credit rating on CSI. Proceeds from the proposed notes issue will be used to refinance the company's $150 million 8.5% senior notes due 2009. Total debt was $170 million (including capitalized operating leases) at Dec. 31, 2003. "The ratings on CSI are limited by its limited operating diversity (the company is reliant on one facility to process its steel slabs), and its heavy exposure to the south California market economy, cyclical commodity pricing and raw-material cost pressures," said Standard & Poor's credit analyst Paul Vastola. These factors are more than offset by the company's good position within its markets and its relatively strong credit measures currently. CSI, a 50/50 joint venture between Companhia Vale do Rio Doce and JFE Holdings Inc., processes flat-rolled sheet steel primarily from imported, semi-finished steel slabs. Only a few competitors have production facilities on the West Coast, and CSI's concentration in the Southern California market, which accounts for 50% of West Coast demand, gives it a distinct transportation- cost advantage over competitors in the Midwest and East. In addition, California's strict environmental regulations and costly utility rates reduce the risk of competitors developing additional capacity. CENTURY THREE: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Century Three Orlando Florida, Inc. Century Three at Universal Studios 2000 Universal Studios Plaza Orlando, Florida 32819 Bankruptcy Case No.: 04-01387 Chapter 11 Petition Date: February 11, 2004 Court: Middle District of Florida (Orlando) Judge: Arthur B. Briskman Debtor's Counsel: Lawrence H. Haber, Esq. Law Offices of Lawrence H. Haber PA 715 Bloom Street, Suite 200A Celebration, FL 34747 Tel: 407-506-0181 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20-largest creditors. CHESAPEAKE CORP: Increases Public Offering to 3.65 Million Shares ----------------------------------------------------------------- Chesapeake Corporation (NYSE: CSK) increased its previously announced public offering of 3.4 million shares of common stock to 3.65 million shares and priced the offering at $24.00 per share. Chesapeake expects the net proceeds from the sale of these shares, after deducting discounts, commissions and estimated expenses, to be approximately $82.5 million. This offering is expected to close on March 15, 2004. Chesapeake has granted to the offering syndicate a 30-day option to purchase up to 547,500 additional shares, solely to cover over-allotments, if any. Chesapeake intends to use the net proceeds from the sale of these shares to redeem up to 40.25 million pounds sterling principal amount of its outstanding 10-3/8% senior subordinated notes due 2011 at a redemption price equal to 110.375% of the principal amount plus accrued and unpaid interest. In the event that the net proceeds from the sale of the common stock exceeds the amount necessary (in light of the applicable U.S. dollar to pounds sterling exchange rate) to redeem 40.25 million pounds sterling of senior subordinated notes, the remaining net proceeds will be used to repay outstanding borrowings under Chesapeake's senior bank credit facility and to make open market purchases of its other debt securities. Chesapeake expects the sale of these shares and the use of the net proceeds from such sales to be neutral to earnings per share in fiscal year 2004 before one-time charges, and slightly accretive to earnings per share in 2005 due to a reduction in high coupon interest expense and related tax benefits. Citigroup Global Markets Inc. and Banc of America Securities LLC acted as joint book-running managers for the offering. Chesapeake is represented by Hunton & Williams LLP and the underwriters are represented by Shearman & Sterling LLP. Chesapeake Corporation is a leading international supplier of value-added specialty paperboard and plastic packaging with headquarters in Richmond, Virginia. The company is one of Europe's premier suppliers of folding cartons, leaflets and labels, as well as plastic packaging for niche markets. Chesapeake has more than 50 locations in Europe, North America, Africa and Asia and employs approximately 5,900 people worldwide. The company's website address is http://www.cskcorp.com/ * * * As reported in the Troubled Company Reporter's January 22, 2004 edition, Standard & Poor's Ratings Services assigned its preliminary 'BB' senior unsecured debt rating and preliminary 'B+' subordinated debt rating to specialty packaging producer, Chesapeake Corp.s $300 million Rule 415 universal shelf registration. All other ratings were affirmed. The outlook is stable. "Proceeds from any securities issued under the shelf registration could be used for general corporate purposes, including debt repayment or acquisition financing," said Standard & Poor's credit analyst Pamela Rice. Chesapeake's operating subsidiaries are not expected to guarantee any senior unsecured notes that might be issued under this registration. As a result, the actual senior unsecured debt rating at the time of issuance could be one or two notches below the corporate credit rating, based on the amount of priority liabilities expected to rank ahead of senior unsecured lenders in the event of bankruptcy. The ratings on Richmond, Virginia-based Chesapeake Corp. reflect its limited product diversity, competitive pricing pressures, modest level of discretionary cash flow, and aggressive debt leverage, partially offset by its leading position in European specialty packaging markets, value-added product mix, diverse end use markets, and relatively stable demand. CORNING INC: S&P Assigns BB+ Rating to Proposed Sr. Unsec. Notes ---------------------------------------------------------------- Standard & Poor's Rating Services assigned its 'BB+' rating to Corning Inc.'s proposed $400 million senior unsecured notes, consisting of a $200 million 10-year and a $200 million 12-year offering under the company's existing shelf registration. At the same time, Standard & Poor's affirmed its 'BB+' corporate credit rating and its other ratings on Corning. Proceeds of the issuance are expected to be used primarily to repay existing debt and for other corporate purposes. The ratings outlook is stable. Corning, New York-based Corning had total lease-adjusted debt of about $3 billion at Dec. 31, 2003. "While the debt offering is viewed as a mild positive by improving the term structure of Corning's debt profile in addition to already substantial debt reduction, we remain mainly focused on cash flow and earnings improvement by Corning," said Standard & Poor's credit analyst Robert Schulz. Corning's cash and investment position, along with the company's ongoing and near-term actions on cost reductions, focus on operating cash generation, and continued substantial progress toward profitability, should permit credit metrics to continue to improve toward levels consistent with the rating during 2004. Corning's business lines include telecommunications, display technologies (liquid crystal display, LCD), and environmental segments. CORNING INC: Obtains Fitch's BB Rating for $400M Sr. Unsec. Notes ----------------------------------------------------------------- Fitch Ratings has assigned a 'BB' rating to Corning Inc.'s proposed debt offering of $400 million of senior unsecured notes, consisting of two tranches of $200 million due 2014 and 2016. The 'B' convertible preferred stock is affirmed. Proceeds are expected to be used for debt refinancing and general corporate purposes. The Rating Outlook is Stable. Corning's ratings reflect the strained but improved credit protection measures, negative free cash flow, and stabilizing but still challenging telecommunications end-markets which still comprised 46% of revenue as of December 31, 2003. Also recognized are the company's improved balance sheet and liquidity and leading positions in diverse markets. The fiber and cable telecommunications markets continue to experience weak infrastructure spending and while 'fiber-to-the-home' initiatives look promising for 2005 there is still uncertainty to the timing or magnitude of a recovery. Fitch expects minor revenue increases as opposed to any significant turnaround in telecommunications. These factors continue to pressure the company's operating profitability, even though the fiber and cable business is free cash flow positive. Fitch believes that Corning's fiber telecommunications end markets have started to stabilize from a volume perspective while pricing pressures are anticipated to continue albeit at historical levels as industry-wide capacity reductions have taken place. Even as revenues from the telecommunications segment are stabilizing, Fitch does anticipate that it will become a significant profitability contributor for the next few years. Offsetting the weakness in the telecommunications segment is the continued improved performance of the various technologies businesses, with particular strength from the liquid crystal display glass business which has experienced more stable pricing than originally anticipated. However, Fitch believes pricing pressures could become more volatile going forward as several industry participants continue aggressive production capacity expansion. The LCD business increased nearly 50% in 2003 and should experience annual double digit growth through 2007 driven by an LCD upgrade cycle and further penetration of the television market. Corning further benefits from the growth of this business via its ownership in Samsung Corning Precision Glass, which is reflected in total equity earnings. A majority of the company's near-term profitability is dependent on the LCD business as telecommunications continues to focus on achieving break-even results. The Stable Outlook reflects Corning's strong progress through its intensive restructuring actions, which have included significant headcount reductions and closure and consolidation of a number of manufacturing locations, along with asset divestitures. Corning has downsized its cost structure dramatically to an estimated $3 billion revenue run rate from a $7 billion run rate at year-end 2000. The company is realizing the benefits of these cost reductions as it continues to make progress on operating profitability before special charges and when equity earnings are included. Revenue appears to have stabilized as it was flat from fiscal year 2003 compared to 2002 and was up 11% year-to-year in the fourth quarter of 2003, mostly due to the growth of the LCD business. Fitch's focus remains on the company achieving consistent and sustained operating profitability with positive cash flow. Corning has made solid strides improving its capital structure and reducing total debt. Particular focus has been placed on reducing the zero coupon convertible debentures which are puttable in 2005 and have clearly been a maturity risk and liquidity issue. Through a series of open market purchases as well as a tender offer, the company has reduced the puttable debentures from $2 billion to approximately $385 million as of December 2003. For 2003, total debt was reduced by $1.4 billion to $2.8 billion and currently consists primarily of various senior notes as well as the zero coupon convertible debentures. The company has minimal debt maturities for 2004. The current debt offering extends the company's debt maturities and further alleviates any liquidity concerns for the 2005 put. Additionally, the company's debt to capital ratio has decreased from a high of 50% in 2002 to 34% at the end of 2003 which is important given the one financial covenant in the company's bank agreement is a maximum debt/cap of 60%. The company has maintained adequate liquidity of about $1.3 billion cash and securities and still has access to a $2 billion un-drawn revolver which expires in 2005. Corning's liquidity position has benefited from asset dispositions, common stock issuances, and $440 million mandatory convertible preferred stock issuance, all of which were used for debt reduction and to strengthen liquidity. However, free cash flow remains negative and Fitch expects the company will continue to be a net user of cash through at least the first half of 2004, due mostly to cash restructuring charges. COVANTA ENERGY: Court Confirms Ogden's Amended Liquidation Plan --------------------------------------------------------------- Judge Blackshear finds that the Amended Second Joint Liquidation Plan of Covanta Debtor Ogden New York Services, Inc. and 59 of its debtor-affiliates, dated March 2, 2004, satisfies the requirements for confirmation under Section 1129(a) of the Bankruptcy Code: A. The Second Liquidation Plan satisfies Section 1129(a)(1): (a) Claims or Equity Interests in each Class are substantially similar to other Claims or Equity Interests in that Class, thus satisfying the requirements of Section 1122(a) of the Bankruptcy Code; (b) The Classes of Claims and Equity Interests are properly designated in accordance with the applicable provisions of the Bankruptcy Code; (c) Class 1 is specified as Unimpaired, thus satisfying the requirement of Section 1123(a)(2) of the Bankruptcy Code. Under Section 1126(f) of the Bankruptcy Code, Class 1 is deemed to accept the Second Liquidation Plan; (d) Classes 3, 7, 9 and 11 are specified as Impaired, thereby satisfying the requirements of Section 1123(a)(3) of the Bankruptcy Code. Pursuant to Section 1126(g) of the Bankruptcy Code, Classes 7, 9 and 11 are deemed to reject the Second Liquidation Plan by virtue of receiving no distributions or deemed distributions; (e) The same treatment of each Claim or Equity Interest of a particular Class or Subclass is provided, thereby satisfying the requirements of Section 1123(a)(4) of the Bankruptcy Code; (f) While Claims in Subclass 3A and Subclass 3B are classified together for voting purposes, the Claims are placed in separate Subclasses for distribution purposes in order to properly implement redistributions and third party settlements that differently impact the Claims within these separate Subclasses, thus further satisfying the requirements of Section 1123(a)(4) of the Bankruptcy Code; (g) The Second Liquidation Plan satisfies the requirements of Section 11123(a)(5) of the Bankruptcy Code since it provides for adequate means for its implementation, including: * the funding of the Operating Reserve and the Administrative Expense Claims Reserve by the Reorganizing Debtors pursuant to the Secured Creditor Direction and the DIP Lender Direction in amounts sufficient to make all anticipated payments required to be made on or about the Effective Date and to fund the dissolution of the Liquidating Debtors and the closing of the Liquidation Cases; * the designation of a Liquidating Trustee to wind-down and dissolve the Liquidating Debtors in accordance with applicable state law and close the Liquidation Cases; and * generally providing the Liquidating Trustee with any and all action necessary to effectuate the Second Liquidation Plan; (h) Section 1123(a)(6) of the Bankruptcy Code, which requires a reorganizing debtor's charter to include certain provisions, is inapplicable, because the Liquidating Debtors are liquidating; and (i) The Liquidating Debtors have selected the Liquidating Trustee and the Oversight Nominee in a fair and reasonable manner, consistent with the interests of creditors, equity security holders and public policy in accordance with Section 1123(a)(7) of the Bankruptcy Code; B. The Liquidating Debtors complied with Sections 1125 and 1126 of the Bankruptcy Code, and therefore satisfied the requirements of Section 1129(a)(2). Specifically, the Liquidating Debtors: (a) are eligible debtors under Section 109 and proper proponents of the Second Liquidation Plan under Section 1121(a); and (b) have complied with each of the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules and the Disclosure Materials and Balloting Procedures Order in transmitting notices and disclosure materials with respect to the Second Liquidation Plan. C. The Second Liquidation Plan has been proposed in good faith and not by any means forbidden by law, thereby satisfying the requirements of Section 1129(a)(3). D. The Second Liquidation Plan satisfies the requirements of Section 1129(a)(4). Any payments made or to be made by the Liquidating Debtors, or by the Reorganizing Debtors on behalf of the Liquidating Debtors, to professionals for services or for costs and expenses in, or in connection with, the Liquidation Cases, have been disclosed to the Court. E. Section 1129(a)(5) is inapplicable because the Liquidating Debtors are not reorganizing and consequently will not require services after the Effective Date of directors or officers. Instead, the Second Liquidation Plan contemplates the appointment of a Liquidating Trustee. The Liquidating Debtors have disclosed that they, together with the Reorganizing Debtors, have determined that James N. Lawlor will be the Liquidating Trustee and that Timothy J. Simpson, Senior Vice President, General Counsel and Secretary, of Covanta Energy Corp. will be the Oversight Nominee. F. Section 1129(a)(6) is satisfied because the Second Liquidation Plan does not provide for any change in rates over which a governmental regulatory commission has jurisdiction. G. The Second Liquidation Plan satisfies Section 1129(a)(7). With respect to each Impaired Class of Claims or Equity Interests, each holder of a Claim against or Equity Interest in the Liquidating Debtors: (a) has accepted the Second Liquidation Plan; or (b) will receive or retain under the Second Liquidation Plan, on account of the Claim or Interest, property of a value, as of the Effective Date of the Second Liquidation Plan, that is not less than the amount that the holder would so receive or retain if the Liquidating Debtors were to be liquidated under Chapter 7 of the Bankruptcy Code on that date. H. Class 1 is Unimpaired and is deemed to accept the Second Liquidation Plan under Section 1126(f). Class 3 is Impaired and designated as voting a Class under the Second Liquidation Plan. The Impaired Voting Class has voted to accept the Second Liquidation Plan thus satisfying Section 1129(a)(8). Classes 7, 9 and 11 are impaired and will receive no Distributions under the Second Liquidation Plan and therefore are deemed to reject the Second Liquidation Plan under Section 1126(g). Although Section 1129(a)(8) has not been satisfied with respect to the Rejecting Classes, the Second Liquidation Plan nevertheless is confirmable because it satisfies Section 1129(b) with respect to those Classes. I. The treatment of Allowed Administrative Expense Claims, Allowed Priority Tax Claims and Allowed Priority Non-Tax Claims under the Second Liquidation Plan satisfies the applicable requirements of Section 1129(a)(9) of the Bankruptcy Code. J. Class 3 in the Liquidation Cases is an Impaired Class of Claims that has voted to accept the Second Liquidation Plan and, to the best of the Liquidating Debtors' knowledge, does not contain "insiders," thus satisfying Section 1129(a)(10). K. The Liquidating Debtors will have sufficient funds to satisfy their obligations under the Second Liquidation Plan and furthermore, the Second Liquidation Plan satisfies Section 1129(a)(11), because the Second Liquidation Plan is a liquidating plan of reorganization. L. The fees due and payable by the Liquidating Debtors to the United States Trustee or the Clerk of Court, as provided under Section 1930(a)(6) of the Judiciary and Judicial Procedures, have been paid or will be paid by the Liquidating Trustee pursuant to the Second Liquidation Plan. Thus, the requirements of Section 1129(a)(12) are satisfied. Accordingly, the Court confirmed Ogden's Amended Second Liquidation Plan on March 5, 2004. All confirmation objections of the Second Liquidation Plan, that have not been withdrawn or resolved, are overruled. In addition, the Court: (a) approves the executory contracts and unexpired lease provisions under the Second Liquidation Plan; (b) approves the treatment of Intercompany Claims in its entirety; (c) orders that on the Effective Date, each Liquidating Debtor will irrevocably transfer and assign its Residual Liquidation Assets, if any, or cause the Residual Liquidation Assets to be transferred and assigned to the Liquidating Trust, to hold in trust for the benefit of all holders of Allowed Claim with respect to each Liquidating Debtor; (d) orders that on the Effective Date, all the capital stock of the Liquidating Debtors will be deemed cancelled and all Equity Interests in the Liquidating Debtors will be deemed extinguished without further corporate action; and (e) orders that on the Effective Date, the Designated DIP Collateral will be deemed transferred to Reorganized Covanta pursuant to the DIP Lender Direction. Judge Blackshear also made it clear that the Commonwealth of Pennsylvania, Department of Revenue, will receive in full satisfaction, settlement and release and discharge of and in exchange for its Priority Tax Claims, to the extent Allowed by the Court, Cash equal to the unpaid portion of the Allowed Priority Tax Claim on or as soon as practical after 30 days after the date on which the Priority Tax Claim becomes Allowed. Furthermore, on or before 60 days after the Effective Date, Ogden New York Services, will provide Pennsylvania with all tax reports required by law to have been submitted to Pennsylvania prior to the Effective Date in connection with the Pennsylvania Claims, to the extent Ogden New York has not yet submitted the tax reports to Pennsylvania. Headquartered in Fairfield, New Jersey, Covanta Energy Corporation -- http://www.covantaenergy.com/-- is a publicly traded holding company whose subsidiaries develop, own or operate power generation facilities and water and wastewater facilities in the United States and abroad. The Company filed for Chapter 11 protection on April 1, 2002 (Bankr. S.D.N.Y. Case No. 02-40826). Deborah M. Buell, Esq., and James L. Bromley, Esq., at Cleary, Gottlieb, Steen & Hamilton represent the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, they listed $3,280,378,000 in assets and $3,031,462,000 in liabilities. (Covanta Bankruptcy News, Issue No. 50; Bankruptcy Creditors' Service, Inc., 215/945-7000) CUMBERLAND: S&P Hatchets Counterparty Rating After Rehabilitation ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its counterparty credit and financial strength ratings on Cumberland Casualty & Surety Co. to 'R' from 'Bpi'. "This rating action was taken after CCS, based in Tampa, Florida, filed a voluntary petition for rehabilitation with the Florida Department of Financial Services," explained Standard & Poor's credit analyst Puiki Lok. On Feb. 26, 2004, Florida-based Cumberland Technologies Inc., the parent of CCS, announced that CCS will record a substantial net loss for the fourth quarter of 2003 and for the fiscal year of 2003. A portion of the loss is a charge of no less than $2.5 million stemming from adverse loss developments and adjustments to reinsurance recoverables related to claims incurred in the last three years, some exceeding CCS's reinsurance treaty limits. CCS has a capital deficiency as a result of this charge and is currently unable to issue insurance contracts. Established in 1988, CCS specializes in the provision of a full line of surety bonds, from contractors' performance and payment bonds to license and permit and court bonds. Earlier this year, Standard & Poor's lowered its ratings on CCS to 'Bpi' from 'BBpi', citing the company's weak and volatile operating performance, marginal capitalization, and high product- line concentration. CCS's earnings adequacy ratio, as measured by Standard & Poor's model, was negative, and surety insurance accounted for 84% of the company's direct business. In the past three years, there has also been significant deterioration in the company's combined ratio and surplus. An insurer rated 'R' is under regulatory supervision owing to its financial condition. During the pendency of the regulatory supervision, the regulators may have the power to favor one class of obligations over others or pay some obligations and not others. The rating does not apply to insurers subject only to non- financial actions such as market conduct violations. DELTA FINANCIAL: Reports Income for 4th Quarter and FY 2003 ----------------------------------------------------------- Delta Financial Corporation (Amex: DFC), a specialty consumer finance company that originates, securitizes and sells non- conforming mortgage loans, reported net income for the three months and full year ended December 31, 2003. Net income for the quarter ended December 31, 2003 was $7.4 million, or $0.37 per diluted share (on a fully taxed basis), compared to $4.7 million, or $0.28 per diluted share, for the same period one year ago, when the Company's earnings were not fully taxed as a result of a valuation allowance it maintained against its deferred tax asset. Fourth Quarter Highlights -- Originated $516.3 million in loans; a year-over-year increase of 100%. -- Non-GAAP net income increased by 156% and Non-GAAP diluted EPS grew by 125% year-over-year. -- Direct cost to originate as a percentage of loan production decreased year-over-year by 36%, to 1.8% in Q4 2003 from 2.8% in Q4 2002. -- The Company completed a $470 million asset-backed securitization. Net income for the full year ended December 31, 2003 was $67.4 million, or $3.59 per diluted share - which was favorably impacted by an income tax benefit of $30.5 million in the third quarter 2003 - compared to net income of $17.6 million, or $1.04 per diluted share in 2002. Full Year 2003 Highlights -- Originated $1.7 billion in loans; a year-over-year increase of 96%. -- Non-GAAP net income increased by 168% and Non-GAAP diluted EPS grew by 138% year-over-year. -- Direct cost to originate as a percentage of loan production decreased year-over-year by 33%, to 2.0% from 3.0% last year. Although the Company recorded an effective 39 percent tax provision for the third and fourth quarters, it was able to utilize its net operating losses ("NOLs") to offset the vast majority of its tax obligations and is only paying minimal actual cash taxes. The Company expects to continue to pay only minimal cash taxes - either alternative minimum tax ("AMT") or excess inclusion income tax, as well as minimal state taxes - until its NOLs are fully utilized. The Company had approximately $27 million of NOLs, net of tax, outstanding at December 31, 2003. Commenting on these results, Hugh Miller, President and Chief Executive Officer said, "2003 was a truly momentous year for us. We achieved 96 percent origination growth year-over-year and we strengthened our financial position by paying off all our long- term unsecured debt. We also listed our shares on the American Stock Exchange and our solid performance was rewarded by the market, reflected in our significant stock price appreciation over the last year." The Company included a Non-GAAP presentation of earnings in this press release, in addition to GAAP earnings, to provide a more meaningful comparison to prior period results. The Non-GAAP presentation provides Non-GAAP net income and Non-GAAP EPS, which exclude (a) income produced by the reversal of the valuation allowance in the third quarter of 2003, (b) a special tax benefit in the third quarter of 2002, and (c) expenses related to a change in the Company's effective tax rate recorded in the third quarter of 2003. The Company began applying a 39 percent effective tax rate in the third quarter 2003. The Company's Non-GAAP net income for the three months ended December 31, 2003 was $12.1 million, or $0.63 per diluted share, an increase of 156 percent over the $4.7 million, or $0.28 per diluted share, for the comparable period last year. The Company's Non-GAAP net income for the full year 2003 was $41.3 million, or $2.17 per diluted share, an increase of 168 percent over the $15.4 million, or $0.91 per diluted share, one year ago. Loan Originations Delta originated $516.3 million of mortgage loans in the fourth quarter 2003, a 100 percent increase over the $257.7 million of mortgage loans originated during the comparable period last year. For the full year 2003, Delta originated $1.7 billion of mortgage loans, a 96 percent increase over originations of $872.2 million one year ago. Mr. Miller stated, "In addition to achieving robust origination volume for the year, we utilized our already advanced Click and Closer origination technology to reduce the direct cost to originate by 33 percent year-over-year." Mr. Miller continued, "For 2004, we expect to originate in excess of $2.0 billion in loans due to our continued expansion of existing retail origination centers and the addition of more staff to both the wholesale and retail channels. On the technology front, we anticipate further enhancements to Click and Closer as we aim to reduce our direct cost to originate even further." Loan Distribution Channels During the fourth quarter of 2003, wholesale and retail loan originations represented 62 percent and 38 percent, respectively, of Delta's total loan production, compared to 56 percent and 44 percent for the same period last year. Wholesale production from Delta's network of independent brokers for the fourth quarter 2003 grew 122 percent over the comparable period in 2002. Delta's retail loan production for the fourth quarter 2003 increased 73 percent over the same period in 2002. For the full year 2003, wholesale and retail loan originations represented 59 percent and 41 percent, respectively, of Delta's total loan production, compared to 61 percent and 39 percent for the same period last year. Wholesale production from Delta's network of independent brokers for the full year 2003 grew 88 percent over the comparable period in 2002. Delta's retail loan production for the full year 2003 increased 110 percent over the same period in 2002. Statement of Financial Accounting Standards (SFAS) No. 91 Under SFAS No. 91, certain nonrefundable fees and costs associated with originating loans are deferred at the point they are incurred and generally are recognized over the life of the loan. If a mortgage loan is sold, the deferred fees and costs are recognized at that time of sale. These loan origination fees and costs have been classified as a component of the gain on the sale of the loans sold in the fourth quarter of 2003. Previously reported amounts have been reclassified to conform to this presentation. This reclassification did not impact net income or earnings per share. Secondary Marketing (Securitization and Loan Sales) In the fourth quarter, Delta completed a $470 million senior- subordinate securitization structure under its Renaissance mortgage shelf and issued a NIM note (net interest margin note backed by the excess cashflow certificate received from the securitization). Similar to the structure of Delta's five most recent securitizations, this securitization contained a pre- funding feature under which Delta delivered approximately $361 million of mortgage loans to the securitization trust in the fourth quarter, and delivered the remaining mortgage loans in January 2004. This structure is designed to reduce execution and interest rate risk on the additional loans delivered to the securitization trust in the ensuing quarter, which the Company would otherwise seek to securitize or sell later in that quarter. During the fourth quarter, Delta also sold approximately $8.8 million of mortgage loans on a whole-loan basis and delivered approximately $90 million of mortgage loans relating to its third quarter securitization in October. Non-GAAP Presentation At September 30, 2003, the Company reversed a deferred tax asset valuation allowance, which it established in 2000. Management and the Audit Committee of the Board of Directors believed that the reversal was appropriate at that time principally in light of the Company's eight consecutive quarters of profitability and positive cash flow, together with its plan (executed in October 2003) to redeem all of its long-term unsecured debt. The Company recorded minimal taxes in its results of operations over the seven prior quarters - from the fourth quarter of 2001 through the second quarter of 2003 - as a result of the valuation allowance against its deferred tax asset, which was primarily generated by NOLs in 2000 and 2001. The reversal of the valuation allowance had two significant effects: -- First, in the third quarter of 2003, the Company recorded additional income equal to the amount of the valuation allowance reversal (which was partially offset by a change in its effective tax rate) reflected in its income statement in the line-item income tax benefit; and -- Second, the Company's financial statements now reflect an income tax provision using an effective income tax rate of approximately 39 percent. Despite this change, the Company expects to continue to pay only minimal cash taxes (either AMT or excess inclusion income tax, as well as minimal state taxes) until its NOLs are fully utilized. In 2002 and the first two quarters of 2003 (prior to our reversal of the deferred tax asset valuation allowance), the Company's financial statements included only a minimal tax provision. Because the foregoing effects of the reversal of the deferred tax asset valuation allowance may make it difficult for investors to make a meaningful period-over-period comparison, we have provided a Non-GAAP presentation in addition to our GAAP results to assist the investment community. This Non-GAAP presentation excludes (a) income produced by the reversal of the valuation allowance in the third quarter of 2003, (b) an income tax benefit in the third quarter of 2002, and (c) expense related to a change in our effective tax rate recorded in the third quarter of 2003. By doing so, we aim to provide investors with the ability to make period- over-period comparisons based upon our previously reported results of operations, which, in effect, approximates our pre-tax earnings and is reflected as "Non-GAAP net income" and "Non-GAAP EPS." Diluted Share Count Total diluted shares for the quarters ended December 31, 2003 and December 31, 2002 were 18.2 million and 17.1 million, respectively, and total diluted shares for the years ended December 31, 2003 and December 31, 2002 were 18.4 million and 17.0 million, respectively. The increase in the Company's diluted weighted average number of shares outstanding for both the three months and full year ended December 31, 2003 over the respective comparable periods in the prior year, was primarily the result of the dilutive effect of warrants and employee stock options the Company issued in prior periods. Under the treasury stock method, warrants and employee stock options become dilutive (i.e., increase the number of diluted shares outstanding) when their exercise price is below the then market price of the common stock. The greater the difference between the exercise price and market price, the greater the dilution. Accordingly, the significant increase in Delta's stock price over the past year - from $1.10 on December 31, 2002 to $7.15 on December 31, 2003 - was the primary cause of the increased dilution. The Company's diluted share count in the fourth quarter of 2003 was lower than the third quarter of 2003 primarily due to the expiration of 706,790 unexercised warrants, which were issued in connection with Delta's 9.5% Senior Notes due 2004, and which were previously included in the Company's diluted weighted average share count. About the Company Founded in 1982, Delta Financial Corporation is a Woodbury, New York-based specialty consumer finance company that originates, securitizes and sells non-conforming mortgage loans. Delta's loans are primarily secured by first mortgages on one- to four-family residential properties. Delta originates home equity loans primarily in 26 states. Loans are originated through a network of approximately 1,700 brokers and the Company's retail offices. Since 1991, Delta has sold approximately $9.3 billion of its mortgages through 38 securitizations. * * * In its Form 10-Q filed with the Securities & Exchange Commission, Delta Financial corporation reports: LIQUIDITY AND CAPITAL RESOURCES "We require substantial amounts of cash to fund our loan originations, securitization activities and operations. We have organically increased our working capital over the last eight quarters. In the past, however, we operated generally on a negative cash flow basis. Embedded in our current cost structure are many fixed costs, which are not likely to be significantly affected by a relatively substantial increase in loan originations. If we can continue to originate a sufficient amount of mortgage loans and generate sufficient cash revenues from our securitizations and sales of whole loans to offset our current cost structure and cash uses, we believe we can continue to generate positive cash flow in the next several fiscal quarters. However, there can be no assurance that we will be successful in this regard. "Historically, we have financed our operations utilizing various secured credit financing facilities, issuance of corporate debt (i.e., Senior Notes), issuances of equity, and the sale of interest-only certificates and/or NIM notes and mortgage servicing rights sold in conjunction with each of our securitizations to offset our negative operating cash flow and support our originations, securitizations, and general operating expenses. "To accumulate loans for securitization or sale, we borrow money on a short-term basis through warehouse lines of credit. We have relied upon a few lenders to provide the primary credit facilities for our loan originations and at September 30, 2003, we had two warehouse facilities for this purpose. Both credit facilities have a variable rate of interest and, as of September 30, 2003, were due to expire in May 2004. In October 2003, our warehouse financing providers each increased their commitment amounts to $250.0 million, from $200 million and lowered the financing rate. In addition, we extended the maturity date for one of the facilities to October 2004. "There can be no assurance that we will be able to either renew or replace these warehouse facilities at their maturities at terms satisfactory to us or at all. If we are not able to obtain financing, we will not be able to originate new loans and our business and results of operations will be materially and adversely affected." DONLAR CORP: Wants Until March 26 to File Schedules & Statements ---------------------------------------------------------------- Donlar Corporation wants the U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, to extend its time period to file their schedules of assets and liabilities, statements of financial affairs and list of executory contracts and unexpired leases required under 11 U.S.C. Sec. 521(1). The Debtor reports that it is currently in the process of gathering all of the information necessary to complete the Schedules of Assets and Liabilities and Statement of Financial Affairs. The Debtor requests that the Court extends the schedule-filing deadline to run through March 26, 2004. Headquartered in Summit Argo, Illinois, Donlar Corporation -- http://www.donlar.com/-- is a manufacturer of Biodegradable Specialty Chemicals that provides performance for various products and processes for the creation of non-toxic products. The Company filed for chapter 11 protection on February 26, 2004 (Bankr. N.D. Ill. Case No. 04-07455). Scott R. Clar, Esq., at Dannen Crane Heyman & Simon represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $10,880,022 in total assets and $27,371,432 in total debts. DUKE FUNDING: S&P Maintains Class D Notes Rating at BB ------------------------------------------------------ Standard & Poor's Ratings Services affirmed its ratings on the class B, C-1, and C-2 notes issued by Duke Funding II Ltd., a CDO backed by ABS and other structured securities and managed by Duke Funding Management LLC. At the same time, the ratings are removed from CreditWatch with positive implications, where they were placed Sept. 19, 2003. Concurrently, the ratings on the class A-1, A-2, and D notes are affirmed. The affirmed ratings being removed from CreditWatch positive reflect several factors that have negatively affected the credit enhancement available to support the rated notes. These factors include a negative migration in the overall credit quality of the assets within the collateral pool and a reduction in the level of overcollateralization available to support the notes. Based on the most recent monthly report (Feb. 15, 2004), and according to Standard & Poor's most current ratings, the portfolio holds two assets (representing a $2.85 million par value exposure) that are significantly stressed. Standard & Poor's will be reviewing the results of the cash flow runs generated for Duke Funding II Ltd. over the next several months to determine the level of future defaults the rated notes can withstand under various stressed default timing and interest rate scenarios while still paying all of the interest and principal due on the notes. The results of these cash flow runs will be compared to the projected default performance of the performing assets in the collateral pool to determine whether the ratings currently assigned to the notes remain consistent with the amount of credit enhancement available. RATINGS AFFIRMED AND OFF CREDITWATCH POSITIVE Duke Funding II Ltd. Rating Class To From B AA- AA-/Watch Pos C-1 BBB BBB/Watch Pos C-2 BBB BBB/Watch Pos RATINGS AFFIRMED Duke Funding II Ltd. Class Rating A-1 AAA A-2 AAA D BB TRANSACTION INFORMATION Issuer: Duke Funding II Ltd. Co-issuer: Duke Funding II Inc. Current manager: Duke Funding Management LLC Underwriter: Credit Suisse First Boston Trustee: JPMorganChase Bank Transaction type: CDO of ABS TRANCHE INITIAL LAST CURRENT INFORMATION REPORT ACTION ACTION Date (MM/YYYY) 12/2001 9/2003 3/2004 Class A-1 note rtg. AAA AAA AAA Class A-1 note bal. $200.00mm $200.00mm $200.00mm Class A-2 note rtg. AAA AAA AAA Class A-2 note bal. $33.00mm $33.00mm $33.00mm Class B note rtg. AA- AA-/Watch Pos AA- Class B note bal. $40.00mm $40.00mm $40.00mm Class A/B OC Ratio 110.086% 112.020% 111.468% Cl. A/B OC ratio min. 105.89% 105.89% 105.89% Class C-1 note rtg. BBB BBB/Watch Pos BBB Class C-1 note bal. $6.00mm $4.933mm $4.933mm Class C-2 note rtg. BBB BBB/Watch Pos BBB Class C-2 note bal. $8.00mm $6.578mm $6.578mm Class C OC ratio 104.716% 107.488% 106.958% Class C OC ratio min. 101.53% 101.53% 101.53% Class D note rtg. BB BB BB Class D note bal. $4.00mm $4.00mm $4.00mm Class D OC ratio 103.28% 106.00% 105.48% Class D OC ratio min. 100.10% 100.10% 100.10% PORTFOLIO BENCHMARKS CURRENT S&P Wtd. Avg. Rtg. (excl. defaulted) BBB- S&P Default Measure (excl. defaulted) 0.84% S&P Variability Measure (excl. defaulted) 1.73% S&P Correlation Measure (excl. defaulted) 1.51 Wtd. Avg. Coupon (excl. defaulted) 7.36% Wtd. Avg. Spread (excl. defaulted) 2.48% Oblig. Rtd. 'BBB-' and Above 82.19% Oblig. Rtd. 'BB-' and Above 87.58% Oblig. Rtd. 'B-' and Above 92.85% Oblig. Rtd. in 'CCC' Range 6.20% Oblig. Rtd. 'CC', 'SD' or 'D' 0.95% Obligors on Watch Neg (excl. defaulted) 4.79% S&P RATED OC (ROC) CURRENT Class A-1 notes 97.13% (AAA) Class A-2 notes 97.13% (AAA) Class B notes 97.73% (AA-) Class C-1 notes 98.73% (BBB) Class C-2 notes 98.73% (BBB) Class D notes 100.11%(BB) EAGLE FOOD: Richard Lehmann Highlights Bonds in Column ------------------------------------------------------ Richard Lehmann shared his 2004 outlook for high yield bonds and corporate defaults and talks about Eagle Food Centers, Inc. (OTC:EGLE) in a story available exclusively on Zacks.com at http://at.zacks.com/?id=84 Here are the highlights from the Featured Expert column: The Outlook for High Yield Bonds in 2004 from the February newsletter The high-yield bond market has been on a tear since late 2002. This phenomenal change in perception was no doubt stimulated primarily by the end of the 2000-02 default cycle, which saw a virtual meltdown of high-yield credits. The prevailing logic being that, with a growing economy and a cleanout of shaky companies, the surviving issuers were good for some time to come. History would bear out this opinion, but then times do change and every meltdown has new wrinkles. Coming out of the latest meltdown, Richard Lehmann sees signs that the groundwork for the next disaster is being laid early. This is mainly due to the fact that yields in the investment grade market are so abysmal that only by increased risk can fixed income investors receive the kind of returns they have gotten used to. What they fail to recognize is that high-yield bond investing is more analogous to total return stock investing than to fixed income investing. Hence, in the high rate environment of the past, gains from rate declines contributed as much or more to total return as the actual interest payments. In the current single- digit junk bond yield environment where there is little or no default risk premium, the capital gain aspect of total return is most likely to be a capital loss. Corporate Default Eagle Food Centers, Inc. (OTC:EGLE) has operated a regional supermarket chain in northern and central Illinois and eastern Iowa for over a century. Eagle reentered Chapter 11 on April 7, 2003 and filed a liquidating plan on December 24. The company has $85 million outstanding face value 11% 05 bonds listed as general unsecured debt under the plan. If approved, the plan calls for only a recovery of 7%-12.6% for bondholders. About Zacks Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 to compile, analyze, and distribute investment research to both institutional and individual investors. The guiding principle behind our work is the belief that investment experts, such as brokerage analysts and investment newsletter writers, have superior knowledge about how to invest successfully. Our goal is to unlock their profitable insights for our customers. And there is no better way to enjoy this investment success, than with a FREE subscription to "Profit from the Pros" weekly e-mail newsletter. For a free newsletter, visit: http://at.zacks.com/?id=87 Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates. ECHOSTAR COMMUNICATIONS: Featured in Schaeffer's Street Chatter --------------------------------------------------------------- The recent "Street Chatter" from Schaeffer's Investment Research focuses on EchoStar Communications (NASDAQ:DISH). "Street Chatter" is a report that analyzes three newsworthy stocks that are generating a lot of attention on Internet message boards. "Street Chatter" is published on -- http://www.SchaeffersResearch.com/ -- the home of Bernie Schaeffer and Schaeffer's Investment Research. For additional information about this report or to have it delivered to you free via email every day click on the following link: http://www.schaeffersresearch.com/addinfo Street Chatter They want their MTV! And their Comedy Central. And their CBS, Nickelodeon, VH-1, and BET. Over 1.5 million EchoStar Communications (NASDAQ:DISH) subscribers found their satellite subscriptions robbed of 11 Viacom-owned channels, as DISH officials struggle through a programming dispute with the media powerhouse. This blackout affects 16 markets, including New York, Philadelphia, Los Angeles, Chicago, and San Francisco. DISH didn't need this sort of cloudy publicity, as the stock has been in a downward spiral since mid-February. The stock has violated its 10- day and 20-day moving averages, which have themselves completed a bearish crossover. Also, DISH has moved beneath the 34.925 mark, which represents a 50-percent retracement between the stock's December low and its early-February peak. In today's action, DISH opened lower but has retraced its steps and is sitting near the breakeven mark in mid-session activity. Options players remain bullish on DISH, as suggested by the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.71, in the bottom one-fifth of the past year's worth of SOIR data. Schaeffer's Sentiment PowerTools (http://www.schaeffersresearch.com/powertoolsobs)findings indicate that DISH is prone to underperformance following SOIR readings between 0.66 and 0.76. Also, the number of DISH shares sold short declined by 10 percent last month to 8.4 million. This figure has been in decline mode since late 2001, when there were about 30,000 DISH shares sold short. Click the following link to see the Daily Chart of DISH Since December 2003 With 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=9637 The best way to take advantage of the timely Schaeffer commentaries is to sign up to receive their free e-newsletters -- Opening View, Midday Report, Market Recap and Monday Morning Outlook. Click here to have the Schaeffer's commentaries delivered to you free via email every day. About Schaeffer's Investment Research Schaeffer's Investment Research, founded by Bernie Schaeffer in 1981, is a financial information and trading resources company. It publishes Bernie Schaeffer's Option Advisor, the nation's leading options subscription newsletter. The firm's contrarian approach focuses on stocks with technical and fundamental trends that run counter to investor expectations. The firm's website, http://www.SchaeffersResearch.com, is recognized as one of the leading information sources for stock and options traders and was cited as the top options website by both Forbes and Barron's. Click here for more details about Schaeffer's trading methodology: http://www.SchaeffersResearch.com/method EchoStar Communications Corporation (NASDAQ: DISH) (S&P, BB- Corporate Credit Rating, Stable) serves over 9 million satellite TV customers through its DISH Network(TM), and is a leading U.S. provider of advanced digital television services. DISH Network's services include hundreds of video and audio channels, Interactive TV, HDTV, sports and international programming, together with professional installation and 24-hour customer service. DISH Network is the leader in the sale of digital video recorders (DVRs). EchoStar has been a leader for 23 years in satellite TV equipment sales and support worldwide. EchoStar is included in the Nasdaq-100 Index (NDX) and is a Fortune 500 company. Visit EchoStar's Web site at http://www.echostar.com/ ENRON: Werra Paper Compels Capital Unit to Pay $1M Obligation ------------------------------------------------------------- Timothy W. Walsh, Esq., at Piper Rudnick LLP, in New York, relates that on November 8, 2000, Enron Capital Trade & Resources International Corporation and Werra Paper Wernshausen GmbH entered into a commodity swap agreement. The term of the Swap Agreement commenced on December 1, 2000, and expires on November 30, 2005. According to Mr. Walsh, the commodity involved in the Swap Agreement is Mixed Paper B12. ECTRIC and Werra Paper agreed to a monthly Paper "strike price" of DM70 or EUR35.79 per metric ton of Paper. Pursuant to the Swap Agreement, Werra Paper agreed to make a fixed monthly payment to ECTRIC of the Strike Price multiplied by 2,000. Simultaneously, ECTRIC agreed to make a variable monthly payment to Werra Paper of the EUWID price per metric ton of Paper multiplied by 2,000. EUWID is a specialized publishing house that provides comprehensive market information about industrial sectors including the paper industry. In essence, if the EUWID market price of Paper on the Pricing Date in any month is below the Strike Price, Werra Paper owes to ECTRIC the difference between the Strike Price and the market value of Paper on the Pricing Date, multiplied by 2,000. However, if the EUWID market price of Paper on the Pricing Date in any month exceeds the Strike Price, ECTRIC owes to Werra Paper the difference between the market price and the Strike Price, multiplied by 2,000. Based on this calculation, Mr. Walsh informs the Court that from the Petition Date to November 25, 2003, ECTRIC owes to Werra Paper $1,040,282, pursuant to the Swap Agreement. Accordingly, pursuant to Section 503(b)(1)(A) of the Bankruptcy Code, Werra Paper asks the Court to compel ECTRIC to pay it $1,040,282, as an administrative expense. Mr. Walsh contends that it is only fair and reasonable to compel the payment because: -- the Swap Agreement is in full force and effect, which has neither been rejected or terminated by either party; and -- ECTRIC continued to receive the benefits of the relationship with Werra Paper postpetition. (Enron Bankruptcy News, Issue No. 100; Bankruptcy Creditors' Service, Inc., 215/945-7000) EXIDE TECHNOLOGIES: Richard Lehmann Highlights Bonds in Column -------------------------------------------------------------- Richard Lehmann shared his 2004 outlook for high yield bonds and corporate defaults and talks about Exide Technologies (OTC:EXDTQ) in a story available exclusively on Zacks.com at http://at.zacks.com/?id=84 Here are the highlights from the Featured Expert column: The Outlook for High Yield Bonds in 2004 from the February newsletter The high-yield bond market has been on a tear since late 2002. This phenomenal change in perception was no doubt stimulated primarily by the end of the 2000-02 default cycle, which saw a virtual meltdown of high-yield credits. The prevailing logic being that, with a growing economy and a cleanout of shaky companies, the surviving issuers were good for some time to come. History would bear out this opinion, but then times do change and every meltdown has new wrinkles. Coming out of the latest meltdown, Richard Lehmann sees signs that the groundwork for the next disaster is being laid early. This is mainly due to the fact that yields in the investment grade market are so abysmal that only by increased risk can fixed income investors receive the kind of returns they have gotten used to. What they fail to recognize is that high-yield bond investing is more analogous to total return stock investing than to fixed income investing. Hence, in the high rate environment of the past, gains from rate declines contributed as much or more to total return as the actual interest payments. In the current single- digit junk bond yield environment where there is little or no default risk premium, the capital gain aspect of total return is most likely to be a capital loss. Corporate Default Exide Technologies (OTC:EXDTQ) manufactures and markets lead acid batteries for automotive and industrial markets. The company filed a Chapter 11 petition in the District of Delaware on April 15, 2002. On October 7, 2003, Exide filed a motion to solicit acceptances of its plan. The court had given conditional approval to Exide's plan but rejected the plan on December 31, 2003. The judge ruled that the plan undervalued the company and that unsecured creditors should have a better settlement. The rejected plan gave Exide's 2.9% bonds of 2005 no consideration and the 10% bonds of '05 were to receive stock worth approximately 1.4% of the face amount. About Zacks Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 to compile, analyze, and distribute investment research to both institutional and individual investors. The guiding principle behind our work is the belief that investment experts, such as brokerage analysts and investment newsletter writers, have superior knowledge about how to invest successfully. Our goal is to unlock their profitable insights for our customers. And there is no better way to enjoy this investment success, than with a FREE subscription to "Profit from the Pros" weekly e-mail newsletter. For your free newsletter, visit: http://at.zacks.com/?id=87 Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates. FELCOR LODGING: Sells Four Hotels for $30 Million ------------------------------------------------- FelCor Lodging Trust Incorporated (NYSE: FCH), the nation's second largest hotel real estate investment trust (REIT), has closed on the sale of four previously identified non-strategic hotels for $30 million. The non-strategic hotels sold include: a Holiday Inn hotel in Plano, Texas; a Crowne Plaza(R) hotel, in Jackson, Miss., a Crowne Plaza hotel in Houston, Texas; and a Hampton Inn(R) hotel in Omaha, Nebraska. The hotels ranged in size from 131 to 354 rooms, and each hotel sale had a separate buyer. FelCor intends to use a portion of the proceeds to purchase the Holiday Inn in Santa Monica, Calif. The Holiday Inn - Santa Monica has 132 rooms. FelCor has entered into a contract to purchase the hotel for $27 million, which the Company expects to close within the next 30 days. The seven-story property is located on Ocean Drive and is across the street from the Santa Monica pier. The hotel will continue to be branded as a Holiday Inn and will be managed by InterContinental Hotels Group. The acquisition is currently anticipated to provide a $0.02 per share improvement to FelCor's previously announced earnings estimates for 2004. FelCor also reported that consolidated hotel portfolio revenue per available room (RevPAR) increased 1.0 percent in February and 1.7 percent year to date, compared to the same periods of 2003. RevPAR growth for January was 2.2 percent, compared to January 2003. FelCor has now seen RevPAR growth for three consecutive months. "We are pleased with the progress of our disposition program, which is the first phase of our repositioning strategy," said Thomas J. Corcoran, Jr., FelCor's President and Chief Executive Officer. "In addition, we are pleased to announce our first hotel acquisition since 2002. The Santa Monica Holiday Inn is a great piece of real estate and a strong fit with our refined investment strategy." FelCor (S&P, B Corporate Credit Rating, Stable Outlook) is the nation's second largest lodging REIT and the owner of the largest number of full service, all-suite hotels in the nation. FelCor's consolidated portfolio is comprised of 157 hotels, located in 33 states and Canada. FelCor owns 71 full service, all-suite hotels, and is the owner of the greatest number of Embassy Suites Hotels(R) and Doubletree Guest Suites(R) hotels. FelCor's portfolio also includes 74 hotels in the upscale and full service segments. FelCor has a current market capitalization of approximately $3.0 billion. Additional information can be found on the Company's Web site at http://www.felcor.com/ FIRST UNION: Fitch Affirms 7 Note Ratings at Lower-B Level ---------------------------------------------------------- First Union National Bank-Bank of America Commercial Mortgage Trust pass-through certificates, series 2001-C1 have been affirmed by Fitch Ratings as follows: --$131.9 million class A-1 'AAA'; --$793.2 million class A-2 'AAA'; --$60 million class A-2F 'AAA'; --Interest-only classes IO-I, IO-II and IO-III 'AAA'; --$52.3 million class B 'AA'; --$26.2 million class C 'A+'; --$26.2 million class D 'A'; --$16.4 million class E 'A-'; --$13.1 million class F 'BBB+'; --$26.2 million class G 'BBB+'; --$16.4 million class H 'BBB-'; --$19.6 million class J 'BB+'; --$16.4 million class K 'BB+'; --$13.1 million class L 'BB'; --$6.5 million class M 'BB-'; --$9.8 million class N 'B+'; --$13.1 million class O 'B'; --$6.5 million class P 'B-'. Fitch does not rate the $23 million class Q. The rating affirmations reflect the consistent loan performance and minimal reduction of the pool collateral balance since closing. There are two loans (3.7%) in special servicing and four additional loans with a debt service coverage ratio (DSCR) less than 1.0x (1.61%). The largest specially serviced loan, The Adams Grant Building (3.5%), is secured by an 189,690 sf office building in San Francisco. The property is currently listed for sale and the borrower continues with leasing efforts. The other specially serviced loan, Northwood Lake Apartments (0.2%), is secured by a 140-unit apartment complex in Shreveport, L.A. The borrower continues to make late payments and default charges remain outstanding. If the loan is not brought current, the special will pursue foreclosure. Expected losses on the specially serviced loans are expected to be absorbed by the unrated class Q. The two largest loans, the Cornerstone and RFS Hotel Portfolios, have investment grade credit assessments. The Cornerstone Portfolio (6.4%) consists of eight crossed multifamily loans. The pool continues to perform well indicated by a slight increase in DSCR to 1.93x at YE 2002 from 1.88 at issuance and a current occupancy of 92%. The year-to-date DSCR as of June 30, 2003 was 1.71x. The RFS Hotel Portfolio (3.9%) consists of eight crossed hotels located in seven states. The YE 2002 DSCR for the portfolio remains strong at 2.42x, but is down from 2.70x at issuance and has a current occupancy of 70%. The DSCR as of June 30, 2003 was 2.51. FLEMING COS: Will Cancel Insurance Policies on Former Employees --------------------------------------------------------------- The Fleming Debtors sought and obtained Judge Walrath's authority to, in their discretion, cancel life insurance policies currently covering former employees, officers and directors. The Debtors purchased life insurance policies issued by various life insurance providers to cover certain of their key employees, officers and directors. The purpose of these policies is to help the Debtors mitigate harm to their business that might be caused by the untimely death of those individuals. The Debtors own these policies and they have the right to cancel the policies and receive the cash surrender value of the policies upon cancellation. Ordinarily, certain employees, officers and directors ceased working for or on behalf of the Debtors, thus, eliminating the Debtors' need for the Life Insurance Policies covering those individuals. The Debtors currently own 40 policies. The cash surrender value of these policies is estimated to be $5,000,000. Upon cancellation, the Debtors will be entitled to receive the money for their estates. Headquartered in Lewisville, Texas, Fleming Companies, Inc. -- http://www.fleming.com/-- is the largest multi-tier distributor of consumer package goods in the United States. The Company filed for chapter 11 protection on April 1, 2003 (Bankr. Del. Case No. 03-10945). Richard L. Wynne, Esq., Bennett L. Spiegel, Esq., Shirley Cho, Esq., and Marjon Ghasemi, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, they listed $4,220,500,000 in assets and $3,547,900,000 in liabilities. (Fleming Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., 215/945-7000) FLEXPOINT SENSOR: John Sindt Continues to Head Reorganized Company ------------------------------------------------------------------ Flexpoint Sensor Systems, Inc. (Pink Sheets:FLXT) announced the executive management team who formally took over operations on February 19th, 2004. John Sindt, who successfully guided Flexpoint through its bankruptcy reorganization, will continue to serve as President and CEO, a position he has held for the last three years. Following service in the Marine Corps in 1965, Mr. Sindt served as Constable of Salt Lake County State of Utah for more than thirty years. From 1979-1985, Mr. Sindt owned and operated several jewelry stores in Utah once owned by Kay Jewelers. He has held the office of President, Corporate Secretary, and Director positions for the National Constables Association for more than twenty years. Donald Shelley will serve as Chief Financial Officer and Director. Mr. Shelley is the owner of Shelley and Company Certified Public Accountants. His firm conducts audits and performs accounting services for individual and business clients. Director Eric Jergensen is a Civil Engineer who holds a Bachelor of Science degree and a MBA from the University of Utah. Mr. Jergensen is the President and CEO of Contour Composites, Inc. Contour is a provider of highly technical composite products for the aerospace, industrial, and medical industries. "We have formed a seasoned executive team who has the leadership, knowledge, and experience to maximize our patented technology in the marketplace," stated CEO John Sindt. "The reason why I remained with this company through its reorganization was the immense potential and true scope for this technology. Our previous multimillion-dollar contracts with Fortune 500 companies and leaders in several industries demonstrate this ability. With this team we now have the guidance, financial discipline, and engineering expertise to begin operations and fulfilling orders." Flexpoint Sensor Systems, Inc. has developed and patented the Bend Sensor technology. The Bend Sensor is a technological breakthrough that offers a superior solution for applications that require accurate measurement and sensing of deflection, acceleration and range of motion. Global market opportunities include automotive, medical, industrial controls, government, health and fitness, security, computer, aerospace, transportation and consumer products. GLACIER FUNDING: S&P Assigns Prelim. BB- Preferred Stock Rating --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Glacier Funding CDO I Ltd./ Glacier Funding CDO I Inc.'s $300 million floating-rate notes and preferred shares. The preliminary ratings are based on information as of March 9, 2004. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: -- The expected commensurate level of credit support in the form of excess spread and subordination to be provided by the notes junior to the respective classes and by the preference shares; -- The cash flow structure, which is subject to various stresses requested by Standard & Poor's; -- The experience of the collateral manager; -- The coverage of interest rate risks through hedge agreements; and -- The legal structure of the transaction, which includes the bankruptcy remoteness of the issuer. Glacier Funding CDO I Ltd./Glacier Funding CDO I Inc. is the first cash flow arbitrage CDO brought to market by Terwin Money Management. PRELIMINARY RATINGS ASSIGNED Glacier Funding CDO I Ltd./Glacier Funding CDO I Inc. Class Rating Amount (mil. $) ----- ------ --------------- A-1 AAA 190.00 A-2 AAA 44.00 B AA 43.50 C BBB 9.00 Preferences shares BB- 10.25 GOLDENTREE: Fitch Upgrades Ratings for Six Note Classes ------------------------------------------------------- Fitch Ratings upgrades six classes of GoldenTree High Yield Opportunities II, L.P. These rating actions are effective immediately. --$300,000,000 Senior Credit Facility upgraded to 'AA+' from 'AA'; --$163,000,000 Class A notes upgraded to 'AA+' from 'AA'; --$40,000,000 Class B notes upgraded to 'A+' from 'A'; --$50,000,000 Class C notes upgraded to 'BBB+' from 'BBB'; --$20,000,000 Class D notes upgraded to 'BB+' from 'BB'; --$15,000,000 Class E notes upgraded to 'B+' from 'B'. GoldenTree High Yield Opportunities II, L.P. is a market value collateralized debt obligation ('CDO') that closed in September 2001. The fund is managed by GoldenTree Capital Partners III LLC (GTCP), which is a wholly owned subsidiary of GoldenTree Asset Management L.P., a New York-based investment manager with approximately $6.1 billion in assets under management and a focus on fixed-income investing. At inception, the investment manager targeted a portfolio of 50% to 70% high-yield bonds, 20% to 30% bank loans and the balance in mezzanine and special situations investments. Given the current economic environment, GTCP has defensively positioned the portfolio. At the February 13, 2004 valuation date, the fund's portfolio was comprised of approximately 39% high-yield bonds, 56% bank loans, 3% mezzanine and special situations investments and the remainder in cash. As of February 13, 2004, only 4% of the total capitalization of the fund consisted of illiquid investments. GTHY II is performing well, as illustrated by the fund's consistently strong over-collateralization ('OC') cushion. At the February 13, 2004 determination date, the discounted collateral value covered the senior and class A debt by approximately 158% relative to a test level of 100%. The magnitude of cushion is comparable for the mezzanine OC tests. At the same determination date the discounted collateral value covered the class B, class C, class D and class E notes by approximately 144%, 130%, 126% and 125%, respectively, relative to test levels of 100%. The consistently strong OC coverage of the rated liabilities can be attributed to the investment manager's stable investment philosophy and sound investment decisions. Based on the strong performance of the portfolio and significant over-collateralization cushion, as well as the experience and consistent management style of the investment manager, Fitch has upgraded the rated liabilities of GoldenTree High Yield Opportunities II, L.P. HOMEPORT HOLDINGS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: HomePort Holdings, LLC 1777 South Harrison Street, Suite 250 Denver, Colorado 80210 Bankruptcy Case No.: 04-13787 Type of Business: The Debtor arranges home equity loans and resells bundled satellite television, long- distance, Internet access and home security services. See http://www.homeport.com/ Chapter 11 Petition Date: March 2, 2004 Court: District of Colorado (Denver) Judge: Sidney B. Brooks Debtor's Counsel: Lee M. Kutner, Esq. Kutner Miller Kearns, P.C. 303 East 17th Avenue, Suite 500 Denver, CO 80203 Tel: 303-832-2400 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ John Pembroke Contract (Insider) $851,000 3883 Mountain Slide Trail Evergreen, CO 84039 Charles Frederickson Loan $249,300 Krendl, Krendl, Schnoff Services $169,342 & Way Ed Hoagland Payroll (Insider) $127,400 McIntosh Group Services $53,715 Sherman & Howard Services $30,772 Metzger Associates Trade debt $12,438 Holland & Hart, LLC Trade debt $4,278 Richey May Trade debt $3,005 AMPCO Parking Trade debt $1,356 Allegiance Telecom Trade debt $1,013 Better Business Bureau Trade debt $590 ICG Communications Trade debt $526 All Copy Products Trade debt $518 Quality Office and Printing Trade debt $516 Supply Pinnacle Club Trade debt $503 Patrick Quinlan Trade debt $397 Sierra Springs Trade debt $223 Great America Leasing Trade debt $197 Denver Business Journal Trade debt $83 HOST MARRIOTT: Proposes $375 Million Senior Debt Offering --------------------------------------------------------- Host Marriott Corporation (NYSE: HMT) announced that Host Marriott, L.P., for whom the Company acts as sole general partner, is proposing to offer in a private placement $375 million of exchangeable senior debentures due in 2024, subject to market conditions. An additional $75 million may be raised if the initial purchasers exercise their right to acquire additional debentures in connection with the offering. As the offering is a private placement, it will not be made to the general public. Only qualified institutional buyers may participate in the offering. The debentures will be exchangeable into shares of Host Marriott common stock upon the occurrence of certain events. The net proceeds of the offering are expected to be used to redeem, in part, Host Marriott, L.P.'s 7 7/8% Series B Senior Notes due 2008. Host Marriott (S&P, B+ Corporate Credit Rating, Stable) is a Fortune 500 lodging real estate company that currently owns or holds controlling interests in 113 upscale and luxury hotel properties primarily operated under premium brands, such as Marriott, Ritz-Carlton, Hyatt, Four Seasons, Westin and Hilton. For further information, go to http://www.hostmarriott.com/ IMC HOME EQUITY: S&P Junks Rating on 1998-1 Class B Notes --------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class B mortgage-backed certificates issued by IMC Home Equity Loan Trust 1998-1 to 'CCC' from 'B'. The lowered rating is a result of insufficient credit enhancement to support the previously assigned rating due to negative collateral performance. This transaction recently suffered a realized loss that caused the overcollateralization level to decrease by 56%. It is anticipated that credit support to the class B certificates will be reduced during the next few months. In the past six months, losses have, on average, surpassed excess interest by 51%, resulting in a reduction in overcollateralization. In addition, serious delinquencies (90-plus days, foreclosure, and REO) have averaged 24.31% of the current pool balance during the same six-month period. Due to these high levels of delinquencies, the loss trend is expected to continue in the near term. Due to the poor performance of this pool of mortgage loans, Standard & Poor's will continue to monitor this transaction on a monthly basis to ensure that the assigned rating accurately reflects the risks associated with this security. The underlying collateral for this transaction are fixed-rate, first and second lien mortgages on one- to four-family residential properties. RATING LOWERED IMC Home Equity Loan Trust 1998-1 Rating Class To From B CCC B INTERWAVE: Legal Counsel Investigates Ex-Employee's Allegations --------------------------------------------------------------- interWAVE Communications International Ltd. (Nasdaq: IWAV, IWAVE) recently filed an amended report on Form 10-Q for the quarter ended December 31, 2003. In the Explanatory Note contained in the amended 10-Q filing, interWAVE disclosed that the Company's legal counsel is investigating allegations from a former employee of interWAVE. KPMG, LLP, the Company's independent auditors, has informed interWAVE that its review of the Company's financial statements in the 10-Q will not be completed until KPMG, LLP has reviewed the legal counsel's investigation of the allegations. Subsequent to this filing by the Company, the Company has been notified by the Nasdaq Stock Market that its listing on the Nasdaq National Market is under review. This action has been taken by Nasdaq as a result of the Company's having filed a 10-Q for the December 31, 2003 quarter for which auditor review was not complete, which is not in compliance with Nasdaq Marketplace Rule 4310(c)(14). As a result of this notification, the Company's stock symbol will be changed to "IWAVE" effective with the opening of trading Wednesday March 10. In the Company's formal notice from Nasdaq, the Company was given the opportunity to appeal the potential delisting before a Nasdaq listings qualification panel. The Company presently intends to avail itself of that opportunity to appeal. The Company expects that the panel meeting will take place in late March or April 2004. At this panel meeting, if the panel accepts the Company's position, the Company would be permitted to retain its Nasdaq listing and the "E" designation would be removed from the Company's symbol when the Company is able to demonstrate compliance with the Nasdaq Listing Qualification rules. The Company expects that the investigation of the allegations by the former employee will be completed shortly and intends to work with its independent auditors to facilitate their review of the allegations and the outcome of the investigation. The Company presently anticipates to complete this process in the relatively near term, prior to a hearing before the Nasdaq listings qualification panel. * * * In its Form 10-Q for the quarter ended December 31, 2003 filed with the Securities and Exchange Commission, interWAVE Communications International Ltd. also states: Summary of Liquidity "We cannot assure you that our existing cash and cash equivalents plus short-term investments will be sufficient to meet our liquidity requirements. We have had recurring net losses for the past three fiscal years. Management is executing plans with the intent of increasing revenues and margins, reducing spending and raising additional amounts of cash through the issuance of debt or equity securities, asset sales or through other means such as customer prepayments. If additional funds are raised through the sale of our assets, we may be limited in the type of business we can carry on in the future. If additional funds are raised through the issuance of preferred equity securities or debt securities, these securities could have rights, preferences and privileges senior to holders of common shares, and the terms of any debt could impose restrictions on our operations. The sale of additional equity or convertible debt securities could result in dilution to our shareholders, and we may not be able to obtain additional financing on acceptable terms, if at all. If we are unable to successfully execute such plans, we may be required to reduce the scope of our planned operations or even cease our operations. We cannot assure you that we will be successful in the execution of our plans." JOEAUTO: Gets Court Nod to Hire Ordinary Course Professionals ------------------------------------------------------------- JoeAuto, Inc., sought and obtained approval from the U.S. Bankruptcy Court for the Southern District Of Texas, Houston Division, to continue the employment of the professionals in the ordinary course of business. Before the Petition Date, the Debtor employed various professionals, including accountants, auditors, appraisers, consultants, attorneys, agents and trustees, in the ordinary course of business to provide services relating to, among other things, routine and specialized litigation, advice on labor, environmental and regulatory matters, preparation and analysis of financial information concerning the Debtor and its various locations, and other matters requiring the advice and assistance of professionals. The postpetition retention of such Ordinary Course Professionals is necessary for the continued operation of the Debtor's business. Consequently the Court permits the Debtor to pay each Ordinary Course Professional, without prior application to the Court, 100% of the fees and disbursements incurred postpetition, upon submission of an appropriate invoice setting forth in reasonable detail the nature of the services rendered and disbursements actually incurred. Provided that the interim fees and disbursements do not exceed an aggregate amount of $5,000 per month and not to exceed $25,000 for the entire case for each Ordinary Course Professional. Headquartered in The Woodlands, Texas, JoeAuto, Inc. -- http://www.joeauto.com/-- an auto service and repair company, filed for chapter 11 protection on January 30, 2004 (Bankr. S.D. Tex. Case No. 04-31492). Christopher Adams, Esq., at Bracewell & Patterson, LLP represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $11,100,000 in total assets and $16,100,000 in total debts. KANSAS CITY: $150 Million Term Loan Facility Gets S&P's BB Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' rating and its recovery rating of '1' to Kansas City Southern Railway Co.'s new $250 million credit facility, consisting of a $150 million term loan B facility due 2008 and a $100 million revolving credit facility due 2007. Ratings on the company's existing credit facility are withdrawn. The debt is guaranteed by parent Kansas City Southern and certain subsidiaries. The 'BB-' corporate credit ratings for both KCSR and Kansas City Southern are affirmed. The new credit facilities are rated 'BB', one notch above the corporate credit rating, indicating high expectation of full recovery of principal in the event of default. The outlook is negative. The Kansas City, Mo.-based Class 1 railroad has about $850 million of lease-adjusted debt outstanding. "The ratings on Kansas City Southern reflect its aggressive financial profile and uncertainties related to its strategically important investment in TFM S.A. de C.V., somewhat offset by the favorable risk characteristics of the U.S. freight railroad industry and the company's strategically located (albeit limited in size) rail network," said Standard & Poor's credit analyst Lisa Jenkins. Kansas City Southern is a Class 1 (major) railroad, but it is significantly smaller and less diversified than its peers. Its core rail operations cover a 10-state region. Operating results have been depressed by the weak economy and increased cost pressures (especially fuel) over the past two years. Results in 2003 were also adversely affected by an adjustment in claims reserves and significantly reduced equity in earnings from the company's investment in Grupo Transportacion Ferroviaria Mexicana S.A. de C.V. (TFM), the main privatized Mexican railroad. In 2003, Kansas City Southern reported net income of $11.2 million versus $57.2 million in 2002. The new credit facility will consist of a $150 million term loan maturing in 2008 and a $100 million revolving credit facility maturing in 2007. The bank loan rating incorporates Standard & Poor's expectation that the collateral package will retain significant value in the event of a default or bankruptcy, and that there is a high expectation of full recovery of principal (100%), given the pledged collateral pool. Kansas City Southern's relationship with its affiliate, TFM, is strained at this time, and the status of its proposal to take control of TFM is uncertain. Ratings incorporate room for the company to pay its portion of the put option or for the company to complete the TFM transaction as originally proposed. However, if Kansas City Southern is forced to pay the full amount of the put, or if financial performance at Kansas City Southern or TFM weakens from expected levels, or if the TFM deal goes forward under more onerous terms, ratings could be reviewed for a downgrade. KEYSTONE CONSOLIDATED: U.S. Trustee Appoints Official Committee --------------------------------------------------------------- The United States Trustee for Region 11 appointed 7 creditors to serve on an Official Committee of Unsecured Creditors in Keystone Consolidated Industries, Inc.'s Chapter 11 cases: 1. The Bank of New York, as Indenture Trustee c/o Martin Feig, Acting Chairman 101 Barclay St. (8 West) New York, NY 10286 Tel: (212) 815-5383 Fax: (212) 815-5131 2. Pacholder Associates c/o Scott Tilford 8044 Montgomery Rd., Suite 382 Cincinnati, Ohio 45236 Tel: (513) 985-3200 Fax: (513) 985-3217 3. Ameren Cilco c/o Edward C. Fitzhenry Assoc. General Counsel PO Box 66149 St. Louis, Missouri 63166 Tel: (314) 554-3533 Fax: (314) 554-4014 4. Peoria Disposal Company c/o Steven C. Davison 4700 N Sterline Ave. Peoria, Illinois 61615 Tel: (309) 686-8033 Fax: (309) 688-9611 5. WHP Health Initiatives c/o Kelly Simenson 1417 Lake Cook Road Deerfield, Illinois 60015 Tel: (847) 964-6748 Fax: (847) 572-4128 6. Midwest Mill Service c/o Ken Walmsley 9300 Dix Ave. Detroit, Michigan 48209 Tel: (313) 429-2281 Fax: (313) 849-9441 7. Independent Steel Workers Alliance c/o Roy Griffith 106 Bolivia Bartonville, Illinois 61607 Tel: (309) 697-0126 Fax: (309) 697-0130 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 Dallas, Texas, Keystone Consolidated Industries, Inc., makes carbon steel rod, fabricated wire products, including fencing, barbed wire, welded wire and woven wire mesh for the agricultural, construction and do-it-yourself markets. The Company filed for chapter 11 protection on February 26, 2004 (Bankr. E.D. Wisc. Case No. 04-22422). Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., and David L. Eaton, Esq., at Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $196,953,000 in total assets and $365,312,000 in total debts. KMART CORP: Wants Court to Reclassify 36 Florida Tax Claims ----------------------------------------------------------- Kmart Corporation and its debtor-affiliates object to 36 claims filed by Florida Tax Collectors for prepetition ad valorem business personal property taxes that are in excess of the fair market value. The Debtors have calculated the correct appraised and assessed valuation and resulting tax assessment and claim amount based on the correct market value of the assets. Accordingly, the Debtors ask the Court to reclassify the Claims in their correct amounts. Reclassified Type of Claim Claim Amount Amount ------------- ------------ ------------ Secured Claims $1,618,869 - Priority Claims 184,358 $949,140 Unsecured Claims 67,675 - (Kmart Bankruptcy News, Issue No. 70; Bankruptcy Creditors' Service, Inc., 215/945-7000) KOREA EXCHANGE BANK: Liquidates New York Branch ----------------------------------------------- The New York Branch of Korea Exchange Bank, located at 460 Park Avenue, New York, was liquidated on February 2, 2004, under the provisions of the New York Banking Law Section 605.11(c). Korea Exchange Bank plans to surrender its branch license on March 31, 2004. The Bank will maintain a representative office at the same New York address. Inquiries or claims regarding the liquidation must be directed, on or before March 31, 2004, to: Mr. Yeon Sup Kang Senior Manager, New York Branch Korea Exchange Bank 212-350-7416 After March 31, direct claims or inquiries to: Mr. Ho Sung Lee Chief Representative of Korea Exchange Bank's Representative Office 460 Park Avenue, New York KOSA B.V.: S&P Revises Watch on Low-B Level Ratings to Negative --------------------------------------------------------------- Standard & Poor's Ratings Services revised its CreditWatch implications to negative from developing for the ratings on polyester producer KoSa B.V. At the same time, Standard & Poor's assigned its 'BB' senior secured bank loan rating and a recovery rating of '2' to the company's proposed $1.8 billion of bank credit facilities, based on preliminary terms and conditions. The '2' recovery rating indicates a substantial (80%-100%) recovery of principal in the event of a default. Standard & Poor's also assigned its 'B+' rating to the company's proposed $1.2 billion of senior unsecured notes due 2012 to be issued under Rule 144a with registration rights. The ratings, including the 'BB+' corporate credit rating, were placed on CreditWatch with developing implications on Aug. 12, 2003, following the announcement that KoSa's parent, Koch Industries Inc. had entered into exclusive negotiations with E.I. DuPont de Nemours & Co. regarding the possible purchase of INVISTA, formerly DuPont Textiles & Interiors. The CreditWatch was updated on Nov. 18, 2003, following the announcement that Koch had agreed to purchase INVISTA from DuPont. Proceeds from the new bank credit facilities and the senior notes are to be used to repay amounts outstanding under the company's existing credit facility and to finance the acquisition of INVISTA (along with over $2 billion of cash from Koch), which will be merged with KoSa. Houston, Texas-based KoSa has over $600 million of total debt outstanding. Standard & Poor's will resolve the CreditWatch when the acquisition of INVISTA is completed. At that time, the corporate credit rating of KoSa will be lowered to 'BB' from 'BB+', the ratings on the existing bank credit facilities will be withdrawn, and the ratings that are being assigned today will be affirmed. The outlook will be stable. Following completion of the acquisition, KoSa B.V. will likely be renamed INVISTA. "The overall creditworthiness of KoSa, when combined with INVISTA, will reflect an aggressive financial profile resulting from high debt leverage at the outset of the proposed acquisition, somewhat offset by the new KoSa's good business profile as the leading global manufacturer and marketer of fibers and intermediates," said Standard & Poor's credit analyst Peter Kelly. During the next few years, management is expected to balance capital spending, integration efforts and modest expansion efforts with debt reduction, thus maintaining key financial ratios at appropriate levels for the initial ratings. KoSa's credit quality will reflect its position as a leading producer of fibers and intermediates, with pro forma revenues of more than $8 billion. LAIDLAW INT'L: Second Quarter 2004 Conference Call is on April 7 ---------------------------------------------------------------- Laidlaw International (NYSE: LI; TSX: BUS), a leading provider of transportation services and emergency department management services, will release financial results for its fiscal second quarter ending February 29, 2004, on Wednesday, April 7, 2004, after market close. The company will hold a conference call hosted by senior management to discuss the financial results on Thursday, April 8, 2004, at 10:00 a.m. (EST). A web cast of the conference call will be accessible at Laidlaw International's Web site http://www.laidlaw.com/ To participate in the call, please dial: 877-691-0879 - (US and Canada) 973-582-2745 - (International) A replay will be available immediately after the conference call through May 8, 2004. To access the replay, dial 877-519-4471 (U.S and Canada) or 973-341-3080 (International); access code: 4564124. Additionally, the web cast will be archived on the Company's website. Laidlaw International, Inc. is a holding company for North America's largest providers of school and inter-city bus transport, public transit, patient transportation and emergency department management services. The company's shares are traded on the New York Stock Exchange (NYSE: LI). Additionally, the company's shares trade on the Toronto Stock Exchange (TSX: BUS). For more information, visit the company's Web site at http://www.laidlaw.com/ Laidlaw filed for chapter 11 protection on June 28, 2001 (Bankr. W.D.N.Y. Case No. 01-14099). Garry M. Graber, Esq., at Hodgson Russ LLP represents the Debtors in their restructuring effort. When the company filed for protection from its creditors, it listed $4,297,916,000 in assets and $4,763,217,000 in debt. LDM TECHNOLOGIES: S&P Withdraws Ratings after Plastech Purchase --------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings on Auburn Hills, Michigan-based LDM Technologies Inc. (B- Corp. Credit Rating/Watch Pos/--) and removed them from CreditWatch, where they were placed on Dec. 23, 2003. LDM is a manufacturer of plastic instrument panel and interior components, exterior trim components, and under-the-hood components. The action follows the completed acquisition of LDM Technologies by Plastech Engineered Products Inc. (BB-/Stable/--). LES BOUTIQUES SAN FRANCISCO: Brings-In Two New Directors -------------------------------------------------------- Les Boutiques San Francisco Incorporees appoints Mr. Michel Cadrin of Quebec City and Mr. Richard Soly of Montreal to its Board of Directors. Mr. Cadrin is a pharmacist by training and President of the Groupe Michel Cadrin inc., a large Quebec City-based company active in fields such as pharmaceuticals, food products and petroleum as well as hotels and the sale of heavy-duty vehicles. The Group's holdings include the Sonerco and Axco gasoline banners. Mr. Cadrin is also owner of a number of pharmacies that operate under the Brunet and Cadrin banners. Very involved in the community, he is associated with several sports and cultural organizations in the region, including the Quebec Ramparts of which he is one of the co-owners. Mr. Soly is President of the Music and Retail Group of Quebecor Media Inc., President of SuperClub Videotron and Chairman of the Board of the Archambault Group. Mr. Soly drove the growth of the SuperClub Videotron chain that now has 180 branches throughout Quebec. With recognized expertise in his field, he is Chairman of the Board of the Quebec Retail Council as well as Treasurer of the Retail Council of Canada. With these two appointments, the Corporation's Board of Directors now has seven members. The other directors are: Mr. Paul Delage Roberge, Chairman of the Board, Mr. Gaetan Frigon, Ms. Camille Roberge, Mr. J. Lucien Perron and Mr. Pierre Marchesseault. The Corporation obtained a court order in December under the Companies' Creditors Arrangement Act. The restructuring plan approved by the Court calls for the Corporation to concentrate its ongoing activities on the Les Ailes de la Mode banner and on its swimsuit division, including Bikini Village. LOUDEYE: Strengthens Management Team With 2 Executive Appointments ------------------------------------------------------------------ Loudeye Corp. (Nasdaq: LOUD), the worldwide leader in business-to- business digital media solutions, announced the appointments of Larry Madden as executive vice president and chief financial officer, and Bill Fasig as executive vice president of business development, sales and marketing. With decades of experience across major corporations, technology companies and music businesses, the appointments of Madden and Fasig strengthen Loudeye's ability to capitalize on emerging opportunities in the digital media marketplace. "We believe Larry and Bill's extensive, executive level experience, industry relationships and proven track record for driving growth in both domestic and multi-national markets will be important assets for Loudeye," said Jeff Cavins, president and chief executive officer of Loudeye. "The market for our digital music solutions is rapidly expanding across the globe as more companies realize the impact of digital music on their business. We look forward to having Larry and Bill's strategic expertise and global business development experience to accelerate our worldwide presence and drive the deployment of our products and services." Larry Madden, Loudeye's Executive Vice President and Chief Financial Officer Madden brings nearly 20 years of experience in senior financial management, most recently serving as executive vice president, chief financial officer and chief administrative officer for Equity Marketing, Inc., a Los Angeles based provider of integrated marketing services for connecting multinational corporate brands with popular entertainment content. Previously, Madden was executive vice president and chief financial officer for Atomic Pop, an online music distribution and marketing venture. Before that he served as senior vice president and chief financial officer for the recorded music and music publishing investments of Wasserstein & Co., Inc., an investment bank. Madden also held executive financial roles at Def Jam Records and Polygram International, a leading music and entertainment company. He began his career at Ernst & Young, where he spent 8 years in the firm's media and entertainment practice. "As consumers' preference continue to shift from physical delivery to legitimate digital media stores and services, the revenue potential for Loudeye increases substantially while our partners find new opportunities for online distribution," said Larry Madden, Loudeye's executive vice president and chief financial officer. "I look forward to being part of this team and helping drive the next generation of business-to-business digital media services." As executive vice president and chief financial officer, Madden will oversee all aspects of Loudeye's financial operations, human resources and administration, legal and business affairs, and strategic planning. Loudeye's current chief financial officer, Jerry Goade, is assuming the role of senior vice president of finance. "As we continue to grow on a global scale with increasingly complex deal structures, we will draw on the expertise and strategic insight from our senior financial executives," said Jeff Cavins, Loudeye's president and chief executive officer. "Adding Larry to this team enhances our financial leadership in managing the future growth of the company." Bill Fasig, Loudeye's Executive Vice President of Business Development, Sales and Marketing Prior to joining Loudeye, Fasig served as senior vice president of worldwide marketing and corporate affairs for VeriSign, Inc., where he was responsible for the development, implementation, and management of worldwide marketing strategies. In addition, Fasig supervised campaigns for corporate, divisional and geographic business units as well as directed regulatory issues, government relations and industry affairs. In 2001, Fasig was named AdWeek's Technology Marketing magazine's "Marketer of the Year." Before VeriSign, Fasig served as vice president of corporate communications for Compaq, and was chairman and managing director of the global technology practice at Young & Rubicam/Burson- Marsteller. Prior to that, he held several senior management roles during his 9-year tenure at Apple Computer and served as a policy analyst for the U.S. Department of Defense. In his new role, Fasig will oversee all aspects of Loudeye's worldwide business development and sales, corporate communications, brand building and marketing strategy and execution -- helping to facilitate the further adoption of Loudeye's turnkey digital music and media solutions across the globe. "The digital music market stands at a pivotal point where companies are seeking offerings to meet growing consumer demand and content owners are looking for new, secure revenue opportunities. Loudeye is perfectly positioned in the middle of the value chain with a strong solution suite and robust media operations infrastructure," said Bill Fasig, Loudeye's executive vice president of business development, sales and marketing. "I look forward to furthering Loudeye's leadership position, expanding our market penetration and driving growth for the company worldwide." About Loudeye Corp. Loudeye is the worldwide leader in business-to-business digital media solutions and the outsourcing provider of choice for companies looking to maximize the return on their digital media investment. Loudeye combines innovative products and services with the world's largest music archive and the industry's leading digital media infrastructure enabling partners to rapidly and cost effectively launch complete, customized digital media stores and services. Loudeye, The Business Behind Digital Media(TM). For more information, visit http://www.loudeye.com/ * * * In its latest Form 10-Q filed with the Securities and Exchange Commission, Loudeye Corp. reports: Going Concern Uncertainty "We have incurred losses since inception, have an accumulated deficit, and have experienced negative cash flows from operations since our inception and the expansion and development of our business may require additional capital. As a result of these issues, our independent accountants included an explanatory paragraph in their opinion on our audited consolidated financial statements for the year ended December 31, 2002 raising substantial doubt about our ability to continue as a going concern. "Management has restructured our operations, reduced our work force, renegotiated leases, and taken other actions to limit our expenditures. In addition, we raised $11.5 million in net proceeds from the sale in August 2003 of common stock and warrants exercisable for common stock. Finally, we have executed an agreement to sell substantially all of the assets and certain liabilities of our media restoration services subsidiary for $1.2 million, of which $900,000 will be paid at closing and $300,000 will be paid upon the satisfaction of certain conditions. However, there can be no assurance that our cash balances will be sufficient to sustain our operations until profitable operations and positive cash flows are achieved. Consequently, we may require additional capital to fund our operations. There can be no assurance that capital will be available to us on acceptable terms, or at all. "If we fail to generate positive cash flows or obtain additional capital when required, we could continue to modify, delay or abandon some or all of our business and expansion plans." LTV CORP: Court Clears Settlement Pact with Cuyahoga County, Ohio ----------------------------------------------------------------- The LTV Steel Company, Inc., sought and obtained Court approval for a settlement agreement with Cuyahoga County, Ohio, including the Treasurer of Cuyahoga County, and the Official Committee of Administrative Claimants. Sale of Cuyahoga County Assets By an order entered on February 28, 2002, the Bankruptcy Court approved the sale of substantially all of the assets of the Integrated Steel Business to WLR Acquisition Co., now known as International Steel Group, Inc., for $80,000,000 in cash, less certain adjustments, and the assumption of certain liabilities. The Acquired Assets included facilities located throughout Illinois, Indiana and Ohio, and LTV Steel's Cleveland Works facility and the LTV Technology Center, each of which is located in whole or in part in Cuyahoga County, Ohio. The closing of the Integrated Steel Sale transactions occurred on April 12, 2002 for the hard assets and May 13, 2002 for the inventory. The Tax Obligations For tax years 2000, 2001 and 2002, LTV Steel failed to pay the County: (i) $6,305,872.00 in real property taxes with respect to the Cleveland Works facility; (ii) $110,953.00 in real property taxes with respect to the LTV Tech Center; and (iii) $7,018,303.72 in personal property taxes with respect to its personal property subject to the County's tax jurisdiction. The County asserted statutory liens against various of the Acquired Assets sold in the Integrated Steel Sale. The ISG Sale Order provided that the sale of the Acquired Assets was free and clear of all liens, claims and encumbrances. The liens on the Acquired Assets were transferred to the net proceeds of the Integrated Steel Sale, in the order of their priority, with the same validity, force and effect before the sale. The Allocation Dispute The ISG Sale Order contained provisions describing the process pursuant to which the Bankruptcy Court would determine the allocation of the Net Proceeds among the Acquired Assets. Pursuant to those provisions, on May 15, 2002, the Debtors filed an Amended Notice of Allocation of Net Proceeds of the Integrated Steel Sale. The Allocation Notice stated that the Net Proceeds were expected to be $65,000,000. The Debtors proposed an allocation based on the valuation of the Acquired Assets. Under the Allocation Notice, the Cleveland Works facility was to be allocated $0 of the Net Proceeds and the LTV Tech Center was to be allocated $1,900,000 of the Net Proceeds. The County objected to the Allocation Notice and asserted that the Debtors' allocation and corresponding valuations undervalued the property in which the County asserted its liens. In the Allocation Order, the Bankruptcy Court allocated $445,470.23 of the Net Proceeds to the Cleveland Works facility -- both real and personal property -- and allocated $2,182,804.14 of the Net Proceeds to the LTV Tech Center. The County appealed the Allocation Order. The appeal is currently pending before Judge John R. Adams of the United States District Court for the Northern District of Ohio, Eastern Division. The appeal has been consolidated with other appeals of the Allocation Order in an action styled "Hunter Corporation, et al. v. LTV Steel Company, Inc., et al." The ACC was granted leave to intervene in the Allocation Appeal by District Court Order entered in the Allocation Appeal on August 29, 2003. The State Litigation Before the Petition Date, the Tax Commissioner of Ohio issued amended preliminary assessments to LTV Steel, alleging that LTV Steel had undervalued its personal property for certain years in the 1990s. The increase in value set forth on the amended preliminary assessments would result in additional personal property taxes owed by LTV Steel to certain political subdivisions of the State of Ohio, including the County. LTV Steel filed petitions for reassessment with the Ohio Department of Taxation, challenging the increased values set forth in the amended preliminary assessments. The Tax Commissioner affirmed his initial determination of value. LTV Steel then appealed the matter to the Ohio Board of Tax Appeals where it is now pending. Furthermore, in early 1998, LTV Steel filed a complaint against the valuation of real property for the tax year 1997, seeking a reduced valuation, for tax purposes, of the real property portion of the Cuyahoga County Assets with the Cuyahoga County Board of Revision. In early 2001, LTV Steel filed a second complaint against the valuation of real property for the tax year 2000, seeking a reduced valuation, for tax purposes, of the real property portion of the Cuyahoga County Assets with the Board of Revision. Because LTV Steel paid real property taxes for the tax years 1997 and 2000 on the basis of the values determined by the County auditor for those years, the values asserted by LTV Steel in the 1997 Complaint and the 2000 Complaint, if successfully asserted, would result in a refund to LTV Steel of several million dollars. The 1997 Complaint and the 2000 Complaint remain pending before the Board of Revision. Summary of the Terms of the Settlement After negotiations between LTV Steel, the ACC and the County, the parties reached an agreement in principle regarding the settlement of the matters in dispute in all forums. The material terms of the Settlement are: (1) The County, LTV Steel and the ACC will enter into and file a stipulation to dismiss the County's appeal of the Allocation Order, with prejudice; (2) The County's Administrative Claim is allowed for $3,301,793.49; (3) The County will also be allowed a secured claim for $2,696,587.44; (4) LTV Steel will satisfy the Allowed Secured Claim by making a cash payment to the County for $2,696,587.44; (5) The County agrees to take appropriate actions to release and discharge any and all liens, claims or interests it has in the Net Proceeds; (6) The parties will take necessary steps to dismiss any administrative appeals filed by LTV Steel with respect to the taxes previously assessed by the County or the State of Ohio, which assessments are being resolved by the Settlement -- specifically including the Petitions for Reassessment, the 1997 Complaint and the 2000 Complaint; (7) The County waives, discharges and releases LTV Steel, the other Debtors, the Debtors' Chapter 11 estates and certain other parties from all tax claims. The County further covenants not to sue the parties for any tax claims or causes of action, other than to enforce its rights under the Settlement Agreement; and (8) The rights of LTV Steel, the ACC and the County are fixed by the terms of the Settlement Agreement, regardless of any subsequent developments in the Debtors' Chapter 11 cases or in the Allocation Appeal. Headquartered in Cleveland, Ohio, The LTV Corporation is a manufacturer with interests in steel and steel-related businesses, employing some 17,650 workers and operating 53 plants in Europe and the Americas. The Company filed for chapter 11 protection on December 29, 2000 (Bankr. N.D. Ohio, Case No. 00-43866). Richard M. Cieri, Esq., and David G. Heiman, Esq., at Jones, Day, Reavis & Pogue, represent the Debtors in their restructuring efforts. On August 31, 2001, the Company listed $4,853,100,000 in assets and $4,823,200,000 in liabilities. (LTV Bankruptcy News, Issue No. 61; Bankruptcy Creditors' Service, Inc., 215/945-7000) MERIT SECURITIES: Fitch Affirms & Cuts Ratings on Series 13 Notes ----------------------------------------------------------------- Fitch Ratings has taken the following rating actions on Merit Securities Corp. manufactured housing contract, Series 13. --Class A3 affirmed at 'AAA'; --Class A4 downgraded to 'AA-' from 'AAA'; --Class M-1 downgraded to 'BBB+' from 'AA'; --Class M-2 downgraded to 'BB+' from 'A'; --Class B-1 downgraded to 'B+' from 'BBB'; In addition, classes A3, A4, M-1, M-2 and B-1 are removed from Rating Watch Negative. The rating actions reflect the poor performance of the collateral pool and are a result of both the losses incurred to date and the level of losses expected in the future. The collateral supporting Merit 13 was originated by Origen Financial (Origen), previously under the name Dynex Financial, Inc.. Origen currently services this transaction. Origen's outstanding servicing portfolio is $1.3 billion as of year-end 2003. The manufactured housing industry is experiencing its worst downturn ever. Relaxed credit standards, overbuilding by manufacturers, and the difficulties relating to servicing this unique asset have all contributed to poor performance of MH securities. Fitch believes the industry will continue to struggle for some time. Servicers must still contend with saturated repossession inventories, and Fitch does not expect recoveries on sold repossessions to improve in the near future. In addition, given the depreciating nature of the assets, as pools have seasoned, recoveries have generally declined. For these reasons, Fitch expects recovery rates to remain at low levels for some time. When forecasting transaction performance and assessing credit risk to the bonds, Fitch begins by determining an expected loss percentage for the remaining current pool balance. This figure is a product of default frequency and loss severity assumptions which Fitch feels are the most likely to occur. Fitch then uses stressed variations of these 'expected case' assumptions to determine loss expectations at the various rating categories. Finally, Fitch values the excess spread available to cover losses at each rating category to determine how much subordination is required for any bond to be assigned a given rating. A change in the expected case loss assumption affects loss assumptions at each rating category and consequently the amount of credit enhancement required at each rating category. The A3 and A4 classes have a current credit enhancement (excluding a Collateral Fund) of approximately 40%, compared with an initial credit enhancement of 32%. The class M1 has current enhancement of approximately 24.5%, compared with an initial credit enhancement of 22%. The class M2 has current enhancement of approximately 14%, compared with an initial credit enhancement of 15%. The class B-1 has current enhancement of approximately 6.5%, compared with an initial credit enhancement of 11%. In addition, the pool is experiencing on average a 5% constant default rate, a 75% loss severity and has experienced 12.25% in cumulative losses. This transaction benefits from two additional credit enhancement features. On the closing date, Merit deposited additional MH loans into a Collateral Fund with an original principal balance of $15.11 million ($7.1 million currently outstanding). The interest payments from this fund are available to cover interest payment to the senior bonds and losses on the pool. The principal payments are available to cover losses on the pool. Additionally, interest payments payable to the subordinated class B2 and B3 bonds (privately placed) will be redirected as part of principal payments to the more senior bonds in the event of insufficient funds due to losses. Fitch affirms the 'AAA' rating for the class A3. Classes A3 and A4 are paid sequentially, with class A3 receiving all principal payments before class A4. Over the last three months, class A3 has been paying down at an average principal payment of $1.6 million per month. Based on this pay-down rate, the class A3 would be paid off within 24 months. In addition, with the growth of enhancement for class A3 each month due to de-leveraging, Fitch believes that there is sufficient enhancement to maintain the 'AAA' rating on class A3. While credit enhancement has grown for some of the bonds, current losses to date and Fitch's future loss expectations for the pool exceed Fitch's original loss expectations, causing the rating downgrades listed above. MG ENTERPRISES: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: MG Enterprises Corporation 5425 Weld County Road 32, Unit #15 Longmont, Colorado 80504 Bankruptcy Case No.: 04-13053 Chapter 11 Petition Date: February 23, 2004 Court: District of Colorado (Denver) Judge: Sidney B. Brooks Debtor's Counsel: Robert H. Carpenter, Esq. 4901 East Dry Creek Road #102 Centennial, CO 80122 Tel: 303-771-0607 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 3 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ FC Mortgage 1st mortgage $1,750,000 c/o Leanne B. De Vos Sherman & Howard, LLC 633 17th St. #3000 Denver, CO 80202 Lake Thomas Development Corp 2nd mortgage $727,000 5425 Weld County Rd. 32 Longmont, CO 80504 Rick Nicoletti Unstated MGM MIRAGE: Proposed $300M Senior Debt Issue Gets S&P's BB+ Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB+' rating to MGM MIRAGE's proposed $300 million 5.875% senior notes due Feb. 27, 2014. This offering is an add-on to the $225 million 5.875% senior notes due Feb. 27, 2014, issued by MGM MIRAGE in February 2004. Proceeds from this offering will be used to reduce amounts outstanding under the company's revolving credit facility. At the same time, Standard & Poor's affirmed its ratings on the company, including its 'BB+' corporate credit rating. Las Vegas, Nev.-based MGM MIRAGE is one of the world's largest gaming companies. The outlook is stable. Total debt outstanding was approximately $5.5 billion at Dec. 31, 2003. Ratings for MGM MIRAGE reflect its significant reliance on one market (Las Vegas), high debt leverage, a relatively aggressive financial policy, and high near-term capital spending levels. These factors are offset by its high-quality, relatively new, and well-located assets on the Las Vegas Strip, experienced management team, and leadership position in the high-end segment of the gaming industry. "Standard & Poor's expects that the operating environment in Las Vegas will continue to improve during the next few quarters and that MGM MIRAGE will benefit given its favorable position in the market," said Standard & Poor's credit analyst Michael Scerbo. However, the company's somewhat more aggressive financial policy during 2003 leaves little room for credit measures to deteriorate within the current rating and outlook. MICRO COMPONENT: Receives $5 Million Financing from Laurus Funds ---------------------------------------------------------------- Micro Component Technology, Inc. (OTCBB:MCTI) has received $5 million in financing from Laurus Master Fund, Ltd., a New York City based institutional fund that specializes in providing asset- based financing to growing, public companies. Pursuant to this financing, Laurus is providing the Company with a $3 million secured revolving line of credit. Laurus Funds may convert $750,000 of the facility to the Company's common stock at a price of $1.92 per share which represents a premium of 9% to the market price of the common stock at the time of closing. Additionally, Laurus is providing the Company $2.0 million in long-term convertible notes, convertible to Laurus Funds at a price of $1.79 per share. The long-term convertible notes will be repaid by the Company over the three-year term of the agreement. This credit facility is secured by all the assets of the Company. In connection with the execution of this credit facility, the Company issued Laurus Funds a seven-year warrant to purchase 400,000 shares of the Company's common stock at exercise prices ranging from $2.30 to $2.80. The Company's present lending relationship with Silicon Valley Bank was terminated as a result of this transaction. MCT's Chief Executive Officer, Roger E. Gower, commented, "This financing with Laurus Funds both lowers our short term borrowing costs and affords us the flexibility to meet our working capital needs in the present rising markets. This agreement reflects the true effectiveness of our restructuring efforts undertaken over the last year and half and gives the needed financial strength to capitalize on our new strip product technologies and increase our competitive positions in the marketplace." MCT -- whose September 27, 2003 balance sheet shows a total stockholders' deficit of $7,695,000 -- is a leading manufacturer of test handling and automation solutions satisfying the complete range of handling requirements of the global semiconductor industry. MCT has recently introduced several new products under its Smart Solutions line of automation products, including Tapestry, SmartMark, and SmartSort, designed to automate the back- end of the semiconductor manufacturing process. MCT believes it has the largest installed IC test handler base of any manufacturer, with over 11,000 units worldwide. MCT is headquartered in St. Paul, Minnesota, with its core manufacturing operation in Penang, Malaysia. MCT is traded on the OTC Bulletin Board under the symbol MCTI. MIDWEST PHYSICIAN: Fitch Cuts Bond Rating to Speculative Grade -------------------------------------------------------------- Fitch Ratings downgrades the approximately $20.7 million Illinois Health Facilities Authority revenue refunding bonds, series 1998 (Midwest Physician Group Ltd.; MPG) to 'BB' from 'BBB-'. The Rating Outlook is Stable. The rating downgrade is primarily due to MPG's sizeable reduction in medical staff since Fitch's initial rating in 1994, continued operating losses, very low debt service coverage, and bond covenant violation. MPG experienced a negative 6.3% operating margin ($2.6 million loss from operations) in fiscal 2003, a significant decline from a negative 0.7% in the prior year, and the seventh loss in the last eight years. While Fitch notes MPG's operations are generally close to break-even, the loss in 2003 is larger due to the termination of MPG's exclusive provider contract with Olympia Fields Hospital, MPG's primary inpatient referral center, and a $1.1 million accounts receivable write-down. The expired service agreement, combined with the closing of Columbia/HCA's Hyde Park facility in 1996, has led MPG to close some of its centers, eliminate physicians, and focus more on developing its outpatient services. Fitch believes the smaller physician group size (from 209 in 1994 to 81 currently) could pose challenges related to managed care contracting, especially given Chicago's competitive provider market. In addition, one of Fitch's primary concerns is MPG's ability to recruit and retain physicians going forward. Maximum annual debt service coverage by EBITDA for fiscal 2003 was only 0.1 times, compared to 1.5x in fiscal 2002. Bond covenants require a two-year average coverage ratio of at least 1.1x, causing MPG to be in violation of its bond covenant in 2003 and 2004. MPG was required to retain a consultant due to the covenant violation and has notified Fitch that it has already entered into a contract. MPG's main credit strength is its adequate liquidity. Days' cash on hand at Dec. 31, 2003 was 130 days, above Fitch's 'BBB' median of 112 days, providing MPG with some financial flexibility. Fitch also notes that although MPG's medical staff has been reduced, it is still the largest physician group in its service area. Fitch's Stable Outlook reflects MPG's ability to completely change its business plan from being hospital based to predominantly outpatient focused. While Fitch believes the change in focus could result in improved efficiencies from MPG having more control over its operations, ongoing concerns remain as to MPG's ability to retain its current medical staff and stabilize as a break-even operation. Additionally, Fitch believes the 2004 budgeted 0.5% operating margin will be difficult to achieve given its negative 1.8% margin through the six-month interim period, despite additional revenues expected from HMO bonuses in the third and fourth quarters. MPG is an 81-physician, independent, multi-specialty, physician practice group with various locations in the south and southwest Chicago markets. Disclosure to Fitch has been good and management provides quarterly information to investors, which is viewed favorably. MIRANT CORP: Woos Court to Approve Texas Eastern Settlement Pact ---------------------------------------------------------------- Mirant Americas Energy Marketing LP and Texas Eastern Transmission LP are parties to several agreements: * Transportation Agreement No. 910016, dated October 31, 2000, which provides for transportation services under Texas Eastern's Rate Schedule FT-1 for a maximum daily quantity of 30,000 dth/day on the 24-inch pipe with a primary term from November 1, 2001 to October 31, 2011 -- the First Transportation Agreement; * Transportation Agreement No. 910019, dated October 31, 2000, which provides for transportation services under Texas Eastern's Rate Schedule FT-1 for a maximum daily quantity of 100,000 dth/day on the 30-inch pipe with a primary term from November 1, 2001 to October 31, 2008 -- the Second Transportation Agreement; * Transportation Agreement No. 711506, dated July 2, 1993, which provides for interruptible transportation services under Texas Eastern's Rate Schedule IT-1 for a maximum daily quantity of 50,000 dth/day with a primary term from November 1, 1993 to June 30, 1994, and continuing from year to year thereafter -- the Third Transportation Agreement; * Transportation Agreement No. B11506, dated July 2, 1993, which provides for interruptible backhaul transportation services under Texas Eastern's Rate Schedule IT-1 for a maximum daily quantity of 50,000 dth/day with a primary term from November 1, 1993 to June 30, 1994, and continuing from year to year thereafter -- the Fourth Transportation Agreement; * Transportation Agreement No. 770213, dated June 22, 2000, which provides for interruptible transportation services under Texas Eastern's Rate Schedule LLIT-1 for a maximum daily quantity of 50,000 dth/day with a primary term from June 22, 2000 to June 21, 2001, and continuing from year to year thereafter -- the Fifth Transportation Agreement; * Transportation Agreement No. BB0213, dated June 22, 2000, which provides for interruptible backhaul transportation services under Texas Eastern's Rate Schedule LLIT-1 for a maximum daily quantity of 50,000 dth/day with a primary term from June 22, 2000 to June 21, 2001, and continuing from year to year thereafter -- the Sixth Transportation Agreement; and * Transportation Agreement No. 500161, dated November 25, 1996, which provides for interruptible storage services under Texas Eastern's Rate Schedule ISS-1 for a maximum storage quantity of 2,920,000 dth/day, a Maximum Daily Injection Quantity of 15,009 dth/day, and a Maximum Daily Withdrawal Quantity of 48,667 dth/day, with a primary term from November 25, 1996 to November 30, 1997, and continuing from year to year thereafter -- the Storage Agreement. Michelle C. Campbell, Esq., at White & Case LLP, in Miami, Florida, relates that MAEM's obligations under the Transportation and Storage Agreements are secured by a $4,920,136 letter of credit issued by Wachovia Bank, National Association for the benefit of Texas Eastern. The Releases According to Ms. Campbell, Mirant Corporation has released, on a non-recallable basis: * 6,000 dth/day of the capacity provided for in the First Transportation Agreement to Sempra Energy Trading Corp. for a primary term from November 1, 2003 to October 31, 2004, at Texas Eastern's maximum tariff rate; * 10,000 dth/day of the capacity provided for in the Second Transportation Agreement to Southern Connecticut Gas Co., for a primary term from November 1, 2003 to October 31, 2008, at Texas Eastern's maximum tariff rate; and * 5,000dth/day of the capacity provided for in the Second Transportation Agreement to Consolidated Edison Energy, Inc. for a primary term from August 1, 2003 to May 31, 2005 at Texas Eastern's maximum tariff rate. Mirant has also released, on a recallable basis, 13,000 dth/day of the capacity provided for in the Second Transportation Agreement to Southern Connecticut for the months of November through and including March, for a primary term from November 1, 2002 to March 31, 2007 at Texas Eastern's maximum tariff rate. The Settlement Ms. Campbell reports that the Debtors commenced negotiations with Texas Eastern to reach a compromise that would benefit the Debtors' estates and avoid litigation with Texas Eastern. The goal of these negotiations was to determine the amount of Texas Eastern's rejection damage claim against the Debtors' estates and to establish the effect of the rejection of the Transportation and Service Agreements on the Releases. The parties successfully reached a compromise. The Settlement Agreement provides that: (a) The Debtors will reject the Transportation and Service Agreements effective March 31, 2004; (b) The Releases will remain in effect and all parties will continue to perform as required thereunder until the Releases expire; (c) In full and final satisfaction of all claims of Texas Eastern arising under or in connection with the Transportation and Storage Agreements: (i) MAEM will pay Texas Eastern $4,720,136; (ii) MAEM will pay Texas Eastern all amounts due and owing for services provided under the Transportation and Service Agreements, through March 31, 2004; and (iii) Texas Eastern will have an allowed, prepetition claim against Mirant and MAEM as a result of the rejection of the Transportation and Service Agreements amounting to $20,000,000; (d) The Settlement Payment will be satisfied by a draw of $4,720,136 by TETCO on the LC; and (e) The parties will mutually release all claims and potential claims, including avoidance action claims arising under the Bankruptcy Code, relating to or arising from any payments, proposed amendment, rejection, breach of, or default under the Transportation and Storage Agreements or the Letter of Credit that occur on or after the date on which the Court may enter an order approving the Settlement Agreement. By this motion, the Debtors ask the Court to approve the Settlement Agreement. The Debtors also seek Judge Lynn's permission to reject the Transportation and Service Agreements, effective as of March 31, 2004. Ms. Campbell contends that the Settlement Agreement is fair and reasonable given that: (i) An outright rejection of the Transportation and Service Agreements could result in damage claims exceeding $70,000,000, including damage claims asserted by Texas Eastern and by the parties to the Releases. The Settlement Agreement minimizes the damage claims to about $25,000,000; (ii) Assumption of the Transportation and Storage Agreements is not as beneficial as the settlement because they are significantly "out of the money" as to MAEM; (iii) Because of the complexity of the Transportation and Storage Agreements, litigation regarding the rejection damage claim would be complex and quite possibly involve expert testimony; (iv) Since the Debtors and Texas Eastern are parties to other interruptible agreements the Debtors are not seeking rejection at this time, the Debtors believe that it is important to maintain a working relationship with Texas Eastern and that the Settlement Agreement will assist in preserving this relationship; and (v) Being "out of the money" contracts, the Debtors avoid future losses by rejecting the Transportation and Storage Agreements now. Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- together with its direct and indirect subsidiaries, generate, sell and deliver electricity in North America, the Philippines and the Caribbean. The Company filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03- 46590). Thomas E. Lauria, Esq., at White & Case LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service, Inc., 215/945-7000) NATIONAL BENEVOLENT: Has Until April 17 to File Schedules --------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Texas, San Antonio Division, gave the National Benevolent Association of the Christian Church and its debtor-affiliates an extension to file their schedules of assets and liabilities, statements of financial affairs and lists of executory contracts and unexpired leases required under 11 U.S.C. Sec. 521(1). The Debtors have until April 17, 2004 to file their Schedules of Assets and Liabilities and Statement of Financial Affairs. 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. NET PERCEPTIONS: Obsidian Urges Stockholders to Vote Against Plan ----------------------------------------------------------------- Obsidian Enterprises, Inc. (OTC Bulletin Board: OBDE), a holding company headquartered in Indianapolis, announced that it filed definitive proxy materials with the Securities and Exchange Commission on March 5, 2004, in connection with the special meeting of stockholders of Net Perceptions to be held March 12, 2004, and commenced distributing its proxy materials to Net Perceptions' stockholders. As elaborated in Obsidian's proxy materials, Obsidian urges Net Perceptions' stockholders to vote AGAINST the plan of liquidation proposed by Net Perceptions' management. Obsidian previously announced that it sent a letter to Net Perceptions' stockholders dated March 5, 2004 urging stockholders to wait to act until they had received Obsidian's definitive proxy materials. Obsidian has mailed its definitive proxy materials; however, stockholders who wait to act may be deprived of their right to vote. Stockholders who plan to submit proxies in connection with the special meeting are urged to act immediately. Only proxies received before the special meeting scheduled for 10:00 a.m., Central Standard Time, on March 12, 2004, may be voted at the special meeting. If a stockholder has already returned Net Perceptions' proxy card, and Obsidian does not receive a later- dated proxy card from the stockholder before the special meeting, the stockholder's shares will be voted in accordance with its prior proxy card. If a stockholder has not returned any other proxy card, and Obsidian does not receive the stockholder's proxy card before the special meeting, the non-vote of the stockholder's shares will have the same effect as a vote AGAINST approval and adoption of the plan of liquidation proposed by Net Perceptions' management. Stockholders may read Obsidian's definitive proxy materials on the SEC's Web site at http://www.sec.gov/ Obsidian filed a Registration Statement on Form S-4 and a Tender Offer Statement with the Securities and Exchange Commission on December 15, 2003 and an amendment to each on December 17, 2003. Obsidian filed additional amendments to the Tender Offer Statement on December 23, 2003, January 21, 2004, February 17, 2004, February 20, 2004, February 27, 2004, and March 5, 2004. It anticipates filing further amendments to these documents this week. The amended offer is scheduled to expire at 5:00 p.m., New York City time, on March 17, 2004, unless the offer is extended. The offer is subject to certain conditions, including that: * Net Perceptions takes appropriate action to cause its poison pill to not be applicable to the offer; * we are satisfied that Section 203 of the Delaware General Corporation Law will not be applicable to the contemplated second-step merger; * stockholders tender at least 51% of the outstanding shares of common stock of Net Perceptions; and * Net Perceptions not take any further action in connection with the liquidation or dissolution of Net Perceptions. The Exchange Agent for the exchange offer is StockTrans, Inc., 44 West Lancaster Avenue, Ardmore, Pennsylvania 19003. The Information Agent for the exchange offer is Innisfree M&A Incorporated, 501 Madison Avenue, 20th Floor, New York, New York 10022. Obsidian is a holding company headquartered in Indianapolis, Indiana. It conducts business through its subsidiaries: Pyramid Coach, Inc., a leading provider of corporate and celebrity entertainer coach leases; United Trailers, Inc., and its division, Southwest Trailers, manufacturers of steel-framed cargo, racing ATV and specialty trailers; U.S. Rubber Reclaiming, Inc., a butyl- rubber reclaiming operation; and Danzer Industries, Inc., a manufacturer of service and utility truck bodies and steel-framed cargo trailers. NEW CONSTRUCTION: Taps Gary & Goodman as Bankruptcy Counsel ----------------------------------------------------------- New Construction, Inc., asks the U.S. Bankruptcy Court for the Eastern District of Virginia, Alexandria Division, for permission to retain and employ Gary & Goodman PLLC, as its counsel. The Debtor has determined the Gary & Goodman has considerable experience in matters of this nature and believes that the firm is well qualified to represent it in this proceeding. The Debtor reports that Gary & Goodman will assist it in the performance of its duties in this case, as well as provide advice and assistance. The attorneys who will primarily be responsible for this matter and their current billing rates are: Professional Name Billing Rate ----------------- ------------ Stuart H. Gary $400 per hour Linda D. Regenhardt $300 per hour Nancy D. Greene $200 per hour Harold Hancock $160 per hour Rachel Goldstein $140 per hour Headquartered in Manassas, Virginia, New Construction, Inc., provides site development, road construction and utilities services. The Company filed for chapter 11 protection on February 17, 2004 (Bankr. E.D. Va. Case No. 04-10657). Linda Dianne Regenhardt, Esq., at Gary & Goodman PLLC represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $6,470,124 in total assets and $21,018,941 in total debts. NEWTOWN PROPERTIES: Case Summary & 18 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Newtown Properties, LLC 5 Pritchard Lane Westport, Connecticut 06470 Bankruptcy Case No.: 04-50257 Chapter 11 Petition Date: February 27, 2004 Court: District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: Mark L. Bergamo, Esq. The Marcus Law Firm 111 Whitney Avenue New Haven, CT 06510 Tel: 203-787-5885 Total Assets: $1,750,000 Total Debts: $5,420,531 Debtor's 18 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Hudson United Bank $778,414 130 North Main St. Southington, CT 06489 Bank of Westport Mortgage $350,000 180 Port Road East Westport, CT 06880 Bank of Westport $350,000 180 Port Road East Westport, CT 06880 Elwood Pack $300,000 171 Woody Lane Fairfield, CT 06432 Esther C. Pack et al. $278,000 94 Roberton Crossing Fairfield, CT 06432 Esther C. Pack et al. $275,000 94 Roberton Crossing Fairfield, CT 06432 Elwood Pack & Barbara Bauner $250,000 Elwood Pack et al. $144,000 Stevenson Lumber Co. $86,500 Elwood Pack et al. $81,000 Alliance Heating & Air $13,500 Conditioning Ace Hardware Mill Creek $10,881 Cary Corp, dba New England $7,500 A-1 Services, Inc. $7,398 H.O. Penn Machinery Co., Inc. $6,354 The Hartford $4,792 James Accousti $3,326 M&M Precast Corp. $3,039 NHC COMMS: Second Quarter 2004 Results is Being Webcast Today ------------------------------------------------------------- Notification: NHC Communications Inc. (NHC) Second Quarter 2004 Results March 11th 2004 at 5:00 PM (ET) -- To listen to this event, visit using your web browser: http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID(equalsign)755700 At October 31, 2003, the Company's balance sheet shows a working capital deficit of about $7 million, and a total shareholders' equity deficit of about $6.5 million. NHC Communications Inc. is a leading provider of products and services enabling the management of voice and data communications for telecommunication service providers. NHC's ControlPoint(TM) solutions utilize a high-performance software driven Element Management System controlling an automated, true any-to-any copper cross-connect switch, to enable incumbent local exchange carriers and other service providers to remotely perform the four key tasks that historically have required manual on-site management. These four tasks fundamental to all operations are loop qualification, deployment and provisioning, fallback switching and service migration of Voice and Data services including DSL and T1/E1. Using ControlPoint(TM) NHC's customers avoid the risk of human error and dramatically reduce labour and operating costs. NHC maintains offices in Montreal, Quebec; Paris, France; and Manassas, Virginia. "ControlPoint(TM)" is a trademark of NHC Communications Inc. NHC may be contacted through its web site at http://www.nhc.com/ NORSKE SKOG: Gets S&P's BB Rating for $225MM Sr. Unsecured Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' rating to pulp and paper producer Norske Skog Canada Ltd.'s proposed US$225 million senior unsecured notes due 2014. At the same time, the 'BB' long-term corporate credit rating and 'BB+' senior secured debt rating on Vancouver,B.C.-based NorskeCanada were affirmed. The outlook is negative. Proceeds from the issue are to be used to refinance the existing US$200 million 10% notes due 2009 issued formerly by Pacifica Papers Inc., and for general corporate purposes. The effect of the transaction on the company's credit parameters is expected to be minimal. "The ratings on NorskeCanada reflect the company's average cost position in groundwood papers and narrow revenue base, which expose the company to weak financial performance at the bottom of the cycle," said Standard & Poor's credit analyst Clement Ma. These risks are partially offset by the company's moderate financial policies. NorskeCanada's profitability and cash flows are currently unfavorable for the ratings category. Recent performance reflects the company's average cost structure and vulnerability to pricing for newsprint, groundwood papers, and pulp, which has squeezed operating margins significantly. The company has made progress in improving its cost position with the achievement of C$104 million in annualized run rate savings as of Dec 31, 2003, ahead of its initial C$100 million target. The benefits of the program have helped the company support year-over-year improvement in financial performance for 2003, which makes it unique among its peers. The negative outlook reflects Standard & Poor's uncertainty that NorskeCanada can achieve financial performance at trend levels that are commensurate with the ratings. The company is expected to average EBITDA interest coverage of 4.0x and funds from operations to total debt of 15%-20% through the cycle. Failure to make progress toward these targets in the near term will result in a downgrade. NORSKE SKOG: Proposes Private Placement Offering of Senior Notes ---------------------------------------------------------------- Norske Skog Canada Limited intends to sell, on a private placement basis, approximately US$225 million in aggregate principal amount of senior notes with a proposed maturity of 2014 through an offering within the United States pursuant to Rule 144A under the Securities Act of 1933, and in certain Canadian Provinces. The net proceeds of the offering of the Senior Notes will be used to purchase or redeem the Company's outstanding US$200 million 10% Senior Notes due 2009, including for payment of accrued interest and related fees and expenses. The Company intends to use the balance of the net proceeds of the offering for general corporate purposes. The Senior Notes have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. NorskeCanada (S&P, BB Senior Unsecured Notes Rating, Negative Outlook) - formerly Norske Skog Canada -- is North America's third largest newsprint and specialty groundwood papers company, serving the publishing and commercial printing industries. NORSKE SKOG: Commences Cash Tender Offer for 10% Senior Notes ------------------------------------------------------------- Norske Skog Canada Limited commenced a cash tender offer to purchase all of its outstanding $200 million principal amount of 10% Senior Notes due 2009. In conjunction with the tender offer, the Company is soliciting consents to effect certain proposed amendments to the indenture governing the Senior Notes. The tender offer and consent solicitation are being made pursuant to an Offer to Purchase and Consent Solicitation Statement dated March 9, 2004, and a related Consent and Letter of Transmittal, which more fully set forth the terms and conditions of the tender offer and consent solicitation. The total consideration to be paid to holders that tender their Senior Notes and deliver their consents prior to 5:00 p.m., New York City time, on March 22, 2004, will be equal to $1,053.75 per $1,000 principal amount of the Senior Notes, which includes a consent payment of $30.00 per $1,000 principal amount of the Senior Notes (if such Senior Notes are accepted for purchase). Holders that tender their Senior Notes after 5:00 p.m. on March 22, 2004, and prior to the expiration of the tender offer will receive $1,023.75 per $1,000 principal amount of the Senior Notes (if such Senior Notes are accepted for purchase). In addition, the Company will pay accrued and unpaid interest on the purchased Senior Notes up to, but not including, the date such Senior Notes are accepted for purchase by the Company (if such Senior Notes are accepted for purchase). The tender offer will expire at 12:01 a.m., New York City time, on April 6, 2004, unless extended or earlier terminated by the Company. Among other things, the proposed amendments to the indenture governing the Senior Notes would eliminate most of the indenture's principal restrictive covenants and would amend certain other provisions contained in the indenture. Adoption of the proposed amendments requires the consent of the Holders of at least a majority of the aggregate principal amount of the Senior Notes outstanding. Holders who tender their Senior Notes will be required to consent to the proposed amendments and Holders may not deliver consents to the proposed amendments without tendering their Senior Notes in the tender offer. Tendered Senior Notes may be withdrawn and consents may be revoked at any time prior to the expiration of the consent solicitation, but not thereafter. The Company intends to redeem all Senior Notes not tendered and accepted for payment shortly after the expiration or termination of the tender offer at a redemption price of $1,050 for each $1,000 principal amount of the Senior Notes, plus accrued and unpaid interest to, but not including, the redemption date. Information regarding the pricing, tender and delivery procedures and conditions of the tender offer and consent solicitation is contained in the Offer to Purchase and Consent Solicitation Statement dated March 9, 2004, and related documents. Copies of these documents can be obtained by contacting Global Bondholder Services Corporation, the information agent, at (866) 873-7700 (toll free) or (212) 430-3774 (collect). Merrill Lynch & Co. and Banc of America Securities LLC are the exclusive dealer managers and solicitation agents. Additional information concerning the terms and conditions of the tender offer and consent solicitation may be obtained by contacting Merrill Lynch & Co. at (888) ML4-TNDR (toll free) or (212) 449-4914 (collect) and Banc of America Securities LLC at (888) 292-0070 (toll free) or (704) 388-9217 (collect). The tender offer is subject to various conditions including the receipt of consents necessary to approve the amendments to the indenture governing the Senior Notes and the completion of an offering by the Company of approximately $225 million aggregate principal amount of senior notes with a proposed maturity of 2014. The Company intends to pay the consideration under this tender offer and consent solicitation from the proceeds of the offering of the notes. These notes will not be registered under the Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. NorskeCanada (S&P, BB Senior Unsecured Notes Rating, Negative Outlook) - formerly Norske Skog Canada -- is North America's third largest newsprint and specialty groundwood papers company, serving the publishing and commercial printing industries. ONEIDA: Reschedules Q4 & Year-End Earnings Release to March 17 -------------------------------------------------------------- Oneida Ltd. (NYSE:OCQ) announced that the release of its results for the fourth quarter and fiscal year ended January 31, 2004 has been rescheduled from March 10, 2004 to Wednesday, March 17, 2004 after the market closes. Finalization of the results is taking longer than anticipated, primarily due to the accounting for the company's previously announced ongoing restructuring activities. The conference call that was scheduled for March 11, 2004 also has been revised. Management will host a rescheduled conference call with analysts and investors on Thursday, March 18, 2004 at 9:00 a.m. ET to discuss the Company's results and operating performance for the fourth quarter and year ended January 31, 2004. The conference call will be broadcast live over the Internet at http://www.oneida.com/ To access the webcast, participants should visit the Investor Relations section of the web site at least 15 minutes prior to the start of the conference call to download and install any necessary audio software. This will be archived for 30 days, beginning one hour after the call. About Oneida Ltd. Oneida Ltd. is a leading source of flatware, dinnerware, crystal, glassware and metal serveware for both the consumer and foodservice industries worldwide. * * * As reported in the Troubled Company Reporter's March 3, 2004 edition, Oneida Ltd. (NYSE:OCQ) obtained further waiver extensions through March 15, 2004 from its lenders in regard to the company's financial covenants and in respect to certain payments that are due. Previously announced waivers were effective through March 1, 2004. Oneida's bank lenders agreed to further postpone, until March 15, 2004, reductions of $5 million, $10 million and $20 million in the company's credit availability that originally were scheduled to take effect on November 3, 2003, January 30 , 2004 and February 7, 2004, respectively, under the company's revolving credit agreement. Oneida's senior note holders also agreed to further defer until March 15, 2004 a $3.9 million payment from the company that was originally due on October 31, 2003. As was indicated during the previous waiver announcements, Oneida is working with its lenders to make appropriate modifications to its credit facilities, and continues to provide lenders with updated financial information regarding the company's operations and restructuring plans. The company expects there will be a further deferral of the above credit availability reductions and principal payment until such modifications have been agreed upon. OWENS CORNING: Pushing Court to Expunge 612 Asbestos Claims ----------------------------------------------------------- Owens Corning and its debtor-affiliates the Court to disallow and expunge 612 asbestos-related property damage claims. On the Petition Date, six asbestos property damage claims were pending against Owens Corning and Fibreboard Corporation. Two had been active in the prior five years. This small number of claims was not unusual. In fact, in the five years leading up to the Petition Date, Owens Corning, for example, paid to resolve four asbestos property damage claims. In total, over the 15-year period prior to the Petition date, Owens Corning paid $13,800,000 for individual asbestos property damage claims. Fibreboard's total was even less -- $7,700,000. The vast majority of prepetition asbestos property damage claims against Owens Corning and Fibreboard were resolved for no money at all. Indeed, over 90% of all asbestos property damage claims against the Debtors were so-called "zero pays," generally because the claimant lacked product identification, or the claim was untimely. Norman L. Pernick, Esq., at Saul Ewing LLP, in Wilmington, Delaware, relates that the establishment of the Bar Date attracted property damage claims and property damage claim values far in excess of the Debtors' historical experience. In all, 693 asbestos property damage proofs of claim were filed against the Debtors asserting claims in excess of $797,000,000. The claimed value of $797,000,000, while greatly out of proportion to the Debtors' historical experience, is apparently only the start. That is the case because only 65 of the 319 property damage claims against Owens Corning and only 26 of the 276 property damage claims against Fibreboard asserted a claimed amount. The other 98 Claims were filed against the other Debtors and were essentially duplicate claims of those filed against Owens Corning or Fibreboard. All but one of the 693 claims are unliquidated, contingent and disputed claims. The Debtors do not dispute Claim No. 7123, which is a class proof of claim filed on behalf of the In re Asbestos School Litigation class action claimants in the amount of Owens Corning's outstanding obligations under a prepetition settlement agreement. On April 9, 2002, the Court approved a stipulation permitting the filing of this claim. The Debtors are now preparing a stipulation to honor the terms of the prepetition class action settlement after the Plan Effective Date. On January 7, 2003, the Debtors sought to disallow property damage claims that failed to provide any supporting documentation whatsoever, duplicate claims and claims filed after the Bar Date. In February 2003, the Court disallowed and expunged 34 claims filed by claimants who did not respond to the Debtors' objection. Also around this time, 37 claimants withdrew their property damage claims and 33 duplicate claims were disallowed. The Debtors also asked the Court to issue a case management order requiring the remaining asbestos property damage claimants to provide the Debtors with certain basic information both to discover whether the property damage claimants actually had any basis for filing a proof of claim and, if so, to enable the Debtors to begin to assess the validity and value of these claims. On March 31, 2003, the Court entered a case management order. Non-Responding Asbestos PD Claimants Mr. Pernick informs the Court that 361 Asbestos Property Damage Claimants failed to respond to the Case Management Order, including these claims: Claimant Claim No. Claim Amount -------- --------- ------------ Alliance Public Schools 8226 $100,000 Homer Community School 3203 474 City of Newark 8943 1,122,529 Isd 23 Frazee-Vergas Schools 5433 1,008 Main Plaza Associates, Ltd. 8935 45,541 Northwestern Mutual Life 8240 6,620,000 Our Mother of Sorrows School 5625 157,000 Tommy Lamb 5878 1,100 W.P. Grace and Company 6520 3,000,000 The deadline to respond to the Case Management Order was July 29, 2003, and as of that date, the holders of the 361 Property Damage Claims failed to provide the Debtors with any Supporting Evidence. Those claims should therefore be disallowed and expunged in their entirety, Mr. Pernick asserts. Wrong Debtor Claims In addition, 50 Claims were filed against the Debtors other than Owens Corning or Fibreboard. Because no other Debtor, apart from Owens Corning or Fibreboard, is associated with asbestos property damage claims, these Claims should be disallowed and expunged in their entirety. These claims include: Claimant Claim No. Claim Amount -------- --------- ------------ City of Newark 5582 $1,122,529 8932 1,122,529 8944 1,122,529 9071 1,122,529 9131 1,122,529 Herman Barish 5568 600 Main Plaza Associates, Ltd. 8889 45,541 9242 45,541 8901 45,541 Pittsburgh New Church School 6785 2,639 School Class Action Settlement Claims In response to the Case Management Order, 128 property damage claimants provided at least the name and address of the building upon which their claim is based. With the names and addresses of the buildings, the Debtors were able to search their computerized database to determine if any of the claims had been settled prior to the Petition Date. A review of these records demonstrates that 32 Claims belong to the In re Asbestos School Litigation class action, and their claims against Owens Corning were resolved prepetition pursuant to the School Class Action Settlement. These 32 Claims are being resolved under the In re Asbestos School Litigation class claim, the filing of which was approved by the Court. The Debtors ask the Court to disallow and expunge the 32 Claims so that they may be resolved pursuant to the Class Proof of Claim and the prepetition Class Settlement. These claims include: Claimant Claim No. Claim Amount -------- --------- ------------ Milwaukee Public Schools 6288 $3,667,362 Aquinas School 7879 not stated Corpus Christi School 7880 not stated Linton High School 7884 not stated Our Lady of Good Counsel School 7891 not stated Saint John School 7897 not stated St. Agnes School 7887 not stated St. Mary School 7858 not stated St. Charles Borromeo Church 7865 not stated St. Michael School 7853 not stated Non-Complying Asbestos PD Claims According to Mr. Pernick, there are 73 Claims that failed to provide any information either in response to the Case Management Order or with their proof of claim indicating that the Debtors' asbestos-containing products were used in their buildings. Thus, the Claims should be disallowed. The Claims include: Claimant Claim No. Claim Amount -------- --------- ------------ Alliance Public Schools 8229 $100,000 Blackhawk School District 5974 51,945 City of Newark 9116 1,122,529 Conestoga Valley School District 11956 563,786 Lawrence University 6424 2,794,771 Napoleon Area City Schools 7492 329,500 Niskayuna Central School 3384 338,472 Powerline Oil Company 7059 110,076 Solanco School District 8848 214,723 Tazwell Investment Fund LLC 8016 129,467 The Debtors searched their computerized database for evidence tying the Debtors' products to these buildings. The Debtors found no evidence. State Law Objections The Debtors also object to and dispute each of those property damage claims on the grounds that each of the 612 claims is not a valid liability of the Debtors under the applicable state law, and because the Debtors have valid state law defenses to each of those claims, including, but not limited to, applicable statutes of limitations. In addition, even if the Debtors are found to be liable for any of these claims, the Debtors dispute the amount of the asserted liability. Other Deficient Asbestos PD Claims The Debtors also dispute the vast majority of remaining property damage claims because the information provided in response to the Case Management Order or with their proof of claim demonstrates that the asserted claims are barred by the applicable statute of limitations or the claim is based on products, which the Debtors did not manufacture. Headquartered in Toledo, Ohio, Owens Corning -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. The Company filed for chapter 11 protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837). Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom represents the Debtors in their restructuring efforts. On June 30, 2001, the Debtors listed $6,875,000,000 in assets and $8,281,000,000 in debts. (Owens Corning Bankruptcy News, Issue No. 69; Bankruptcy Creditors' Service, Inc., 215/945-7000) PACIFIC GAS: Asks Court to Stretch Claims Objection Deadline ------------------------------------------------------------ Pursuant to the confirmed Settlement Plan, the deadline for Pacific Gas and Electric Company to object to claims against the estate, other than administrative expense claims, is the effective date of the Plan. While the Plan Effective Date has not yet occurred, the Plan contemplates that the Effective Date will occur by March 31, 2004. Under the Plan, all ISO, PX and Generator Claims in Class 6 constitute Disputed Claims, which will be resolved in accordance with the refund proceedings before the Federal Energy Regulatory Commission. Those Claims will be allowed following the resolution of the FERC Refund Proceedings. The Plan precludes PG&E from seeking Bankruptcy Court intervention in matters relating to the FERC Refund Proceedings, although PG&E retains the right to object to the ISO, PX and Generator Claims on other grounds. Since the FERC Refund Proceedings remain pending and are not expected to be resolved by the March 31 anticipated Effective Date, PG&E asks Judge Montali to extend its deadline to file objections to the ISO, PX and Generator Claims until the date the Claims are allowed under the Plan. PG&E also requests that the extension will apply to other components of Claims containing ISO, PX and Generator Claims, even if those components are not directly affected by the resolution of the FERC Refund Proceedings. Given the complex nature of the Refund Proceedings and the controversy and parties involved, the FERC is not expected to make determinations regarding the amounts owed to and owing by relevant parties until the latter part of 2004 at the earliest, and quite possibly not until 2005. PG&E also asks Judge Montali to extend its objection deadline with respect to: -- other claims that are expected to be affected by the resolution of the FERC Refund Proceedings. These include claims under PG&E's Reliability Must Run Agreements, claims for imbalance energy and energy services and claims by qualifying facilities pursuant to their power purchase agreements with PG&E; and -- claims which are subject to pending objections or otherwise constitute Disputed Claims as of the Effective Date, until 30 days after the objections or disputes with respect to those Claims are resolved. The extension will conserve estate resources by preventing PG&E from being forced to make potentially unnecessary objections which might otherwise be required if the objections or disputes were not resolved before the Effective Date. PG&E also proposes that the Claims subject to the extension be deemed Disputed Claims under the Plan until the expiration of the Objection Deadline so it may avoid paying claims that are later disallowed. Headquartered in San Francisco, California, Pacific Gas and Electric Company -- http://www.pge.com/-- a wholly-owned subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest combination natural gas and electric utilities in the United States. The Company filed for Chapter 11 protection on April 6, 2001 (Bankr. N.D. Calif. Case No. 01-30923). James L. Lopes, Esq., William J. Lafferty, Esq., and Jeffrey L. Schaffer, Esq., at Howard, Rice, Nemerovski, Canady, Falk & Rabkin represent the Debtors in their restructuring efforts. On June 30, 2001, the Company listed $23,216,000,000 in assets and $22,152,000,000 in debts. (Pacific Gas Bankruptcy News, Issue No. 72; Bankruptcy Creditors' Service, Inc., 215/945-7000) PACIFIC GAS: Secures Commitments for $2.9 Billion Financing ----------------------------------------------------------- Pacific Gas and Electric Company has secured commitments for $2.9 billion in credit facilities to support its working capital needs and to refinance certain obligations related to pollution control bonds. The funds also may be used to pay a portion of the utility's creditor claims on the effective date of the plan of reorganization, which is the earliest date that draws on these facilities may be made. On March 5, 2004, the company entered into the following agreements: -- An $850 million three year revolving credit facility. The loan will be used primarily to cover operating expenses and seasonal fluctuations in working capital, and may be used to pay creditors on the effective date of the plan of reorganization. -- Agreements providing for the sale of a portion of the company's electricity and natural gas customer accounts receivable to commercial paper conduits or banks for up to $650 million. -- Four reimbursement agreements under which the lender has agreed to issue approximately $620 million in new letters of credit to support approximately $614 million in pollution control bonds that will be reinstated on the effective date of the plan of reorganization. -- Two term loan facilities related to the remaining pollution control bonds: One of these facilities will provide $345 million to fund the purchase or redemption of certain pollution control bonds on the effective date. The other facility will enable the company to satisfy its obligation to reimburse lenders for approximately $454 million drawn upon during the Chapter 11 proceeding to redeem certain pollution control bonds. The California Public Utilities Commission authorized the exit financing structure, including these transactions, on January 8, 2004. The Commission's financing team concurred with the exit financing structure on March 4, 2004; this concurrence was necessary under the terms of the settlement agreement. Implementation of the plan of reorganization is subject to various conditions, among which are the receipt of investment grade credit ratings and the consummation of the public offering of the long- term debt that represents the balance of the financing needed to enable Pacific Gas and Electric Company to emerge from Chapter 11. PANACO INCORPORATED: Richard Lehmann Highlights Bonds in Column -------------------------------------------------------------- Richard Lehmann shared his 2004 outlook for high yield bonds and corporate defaults and talks about Panaco Incorporated (OTC:PNOIQ) in a story available exclusively on Zacks.com at http://at.zacks.com/?id=84 Here are the highlights from the Featured Expert column: The Outlook for High Yield Bonds in 2004 from the February newsletter The high-yield bond market has been on a tear since late 2002. This phenomenal change in perception was no doubt stimulated primarily by the end of the 2000-02 default cycle, which saw a virtual meltdown of high-yield credits. The prevailing logic being that, with a growing economy and a cleanout of shaky companies, the surviving issuers were good for some time to come. History would bear out this opinion, but then times do change and every meltdown has new wrinkles. Coming out of the latest meltdown, Richard Lehmann sees signs that the groundwork for the next disaster is being laid early. This is mainly due to the fact that yields in the investment grade market are so abysmal that only by increased risk can fixed income investors receive the kind of returns they have gotten used to. What they fail to recognize is that high-yield bond investing is more analogous to total return stock investing than to fixed income investing. Hence, in the high rate environment of the past, gains from rate declines contributed as much or more to total return as the actual interest payments. In the current single- digit junk bond yield environment where there is little or no default risk premium, the capital gain aspect of total return is most likely to be a capital loss. Corporate Default Panaco Incorporated (OTC:PNOIQ) owns and operates 180 oil and gas wells in the Gulf of Mexico Coast region. The company originally filed for Chapter 11 protection in Texas on July 16, 2002. On January 22, 2004, Foothill capital filed a disclosure statement regarding the first amended plan of reorganization for Panaco. If holders of the $100 million face value outstanding 10 5/8% notes vote to accept the plan, they will receive their pro rata portion of the Recovery Trust Assets and a their pro rata portion of 5% of the reorganized equity interest. This amounts to a projected 2.5% recovery for the bondholders. About Zacks Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 to compile, analyze, and distribute investment research to both institutional and individual investors. The guiding principle behind our work is the belief that investment experts, such as brokerage analysts and investment newsletter writers, have superior knowledge about how to invest successfully. Our goal is to unlock their profitable insights for our customers. And there is no better way to enjoy this investment success, than with a FREE subscription to "Profit from the Pros" weekly e-mail newsletter. For your free newsletter, visit: http://at.zacks.com/?id=87 Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates. PARMALAT GROUP: US Units Seek to Continue Cash Management System ---------------------------------------------------------------- To efficiently and seamlessly operate their businesses, the U.S. Parmalat Group Debtors employ a cash management system that collects, concentrates, and disburses funds generated by their operations among their operating entities. By utilizing the Cash Management System, the U.S. Debtors facilitate their cash forecasting and reporting, monitor the collection and disbursement of funds, and maintain control over the administration of their bank accounts located at various banks. Pursuant to their Cash Management System, Farmland and Milk Products, the operating companies, each maintains its own deposit accounts into which its receivables are deposited. The deposited funds are transferred on an as-needed basis into a Farmland concentration account maintained at Citibank, N.A. Amounts swept out of Milk Products' Deposit Account into the Concentration Account are recorded on Farmland's books and records as an intercompany payable to Milk Products. Farmland also maintains six accounts for disbursements, including payroll and customer rebates. The Disbursement Accounts are funded from the Concentration Account on an as-needed basis. Milk Products' financial obligations are paid out of one of Farmland's Disbursement Accounts, and each payment is recorded on Farmland's books and records as an intercompany receivable from Milk Products. At the end of each month, Farmland reconciles Milk Products' intercompany payables and receivables and the balance, if any, is rolled over into the next month. Marcia L. Goldstein, Esq., at Weil, Gotshal & Manges LLP, in New York, tells the Court that the U.S. Debtors' Cash Management System constitutes an ordinary course, essential business practice. The Cash Management System provides significant benefits to the U.S. Debtors including, inter alia, the ability to: (i) control corporate funds; (ii) ensure the maximum availability of funds when necessary; and (iii) reduce administrative expenses by facilitating the movement of funds and the development of more timely and accurate account balance information. Maintaining the existing Cash Management System is necessary for the effective reorganization of the U.S. Debtors' operations. At the First Day Hearing, Judge Drain authorized the U.S. Debtors to continue to manage their cash pursuant to the Cash Management System. Judge Drain, however, requires the U.S. Debtors to maintain accurate records of all transfers within the Cash Management System so that all postpetition transfers and transactions will be adequately and promptly documented in, and readily ascertainable from, their books and records. The Cash Management System may be modified to allow the U.S. Debtors to comply with the $35,000,000 postpetition financing they secured from General Electric Capital Corporation. Headquartered in Wallington, New Jersey, Parmalat USA Corporation -- http://www.parmalatusa.com/-- generates more than 7 billion euros in annual revenue. The Parmalat Group's 40-some brand product line includes milk, yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices and employs over 36,000 workers in 139 plants located in 31 countries on six continents. The Company filed for chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04- 11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP represent the Debtors in their restructuring efforts. On June 30, 2003, the Debtors listed EUR2,001,818,912 in assets and EUR1,061,786,417 in debts. (Parmalat Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000) PARMALAT: US Units Get Okay to Maintain Existing Bank Accounts -------------------------------------------------------------- The United States Trustee has established "Operating Guidelines and Financial Reporting Requirements Required in All Cases Under Chapter 11," which mandate, among other things, the closure of a Parmalat debtor's prepetition bank accounts and the opening of new bank accounts. This requirement is designed to provide a clear line of demarcation between prepetition and postpetition claims and payments, and helps protect against the inadvertent payment of prepetition claims by preventing the banks from honoring checks drawn before the Petition Date. However, Gary T. Holtzer, Esq., at Weil, Gotshal & Manges LLP, in New York, points out that in other large Chapter 11 cases, the Bankruptcy Court has recognized that the strict enforcement of the requirement that a debtor close its bank accounts does not serve the rehabilitative process of Chapter 11. Accordingly, the Bankruptcy Court has waived such requirements and replaced them with similar alternative procedures in In re WestPoint Stevens Inc., et al., Case No. 03-13532 (RDD) (Bankr. S.D.N.Y. June 2, 2003); In re WorldCom, Inc., et al., Case No. 02-13533 (AJG) (Bankr. S.D.N.Y. July 22, 2002); In re Adelphia Business Solutions, Inc., et al., Case No. 02-11389 (REG) (Bankr. S.D.N.Y. March 27, 2002); and In re Enron Corp., et al., Case Nos., 01- 16033 through 16047 (AJG) (Bankr. S.D.N.Y. December 3, 2001). Mr. Holtzer asserts that similar authorization is appropriate in the U.S. Debtors' Chapter 11 cases. If the U.S. Debtors are not permitted to maintain and utilize their existing bank accounts, their ordinary financial affairs and business operations will be seriously disrupted, causing delay in the administration of their estates. Setting up new systems and opening new accounts will also add costs to their estates. In the ordinary course of business, the U.S. Debtors maintain 24 bank accounts with a number of different banks. Three of the Banks where the U.S. Debtors maintain accounts do not appear on the U.S. Trustee's List of Authorized Bank Depositories for the Southern District of New York. These Banks are comprised of: (i) Comerica, (ii) Columbus Bank and Trust, and (iii) Regions Financial Corp. All of these banks are members of the Federal Deposit Insurance Corporation. The U.S. Debtors do not maintain over $100,000 in their Columbus accounts and, accordingly, the amounts are fully insured by the FDIC. The Debtors maintain two accounts at Comerica, one for general checking uses and one as a payroll account. The Comerica Checking Account has a $500 balance. The amounts in the Comerica Payroll Account, before every payroll cycle, will exceed $100,000, but generally will not go over $130,000. The Regions account is a deposit account for Milk Products. The balance of the Regions account is generally between $150,000 and $500,000. The U.S. Debtors believe that their transition to Chapter 11 will be smoother and more orderly, with minimum harm to operations, if the Bank Accounts are continued with the same account numbers following the commencement of their cases. However, the checks issued or dated before the Petition Date will not be honored, absent a prior Court order. "By preserving business continuity and avoiding the disruption and delay to the Debtors' payroll activities and businesses that would necessarily result from closing the Bank Accounts and opening new accounts, all parties-in-interest, including employees, vendors, and customers, will be best served," Mr. Holtzer says. To facilitate the U.S. Debtors' transition into Chapter 11, Judge Drain waives the U.S. Trustee's Operating Guidelines and authorizes the U.S. Debtors to: -- designate, maintain and continue to use any or all of their Bank Accounts in the names and with the account numbers existing immediately before the Petition Date; -- deposit funds in and withdraw funds from the Bank Accounts by all usual means including, without limitation, checks, wire transfers, automated transfers and other debits; and -- treat their Bank Accounts for all purposes as debtor-in- possession accounts. Headquartered in Wallington, New Jersey, Parmalat USA Corporation -- http://www.parmalatusa.com/-- generates more than 7 billion euros in annual revenue. The Parmalat Group's 40-some brand product line includes milk, yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices and employs over 36,000 workers in 139 plants located in 31 countries on six continents. The Company filed for chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04- 11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP represent the Debtors in their restructuring efforts. On June 30, 2003, the Debtors listed EUR2,001,818,912 in assets and EUR1,061,786,417 in debts. (Parmalat Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000) PG&E NATIONAL: Files Third Amended Plan & Disclosure Statement -------------------------------------------------------------- On February 26, 2004, National Energy & Gas Transmission, Inc. (formerly PG&E National Energy Group Inc.) delivered its Third Amended Reorganization Plan and Disclosure Statement to the Court. Continuation of Operations The Third Amended Plan provides that, even if Reorganized NEG's power generation and pipeline businesses, including interests in USGen New England, Inc., are retained or sold, NEG will continue to own and manage real estate worth $50,000,000, and own additional miscellaneous non-cash assets up to a $20,000,000 value, including a barge and certain power plants. Issuance of New Debt Securities With respect to the New Notes to be secured by pledges of the equity interests in NEG's directly owned subsidiaries, the Third Amended Plan states that the pledges will, on a pari passu basis but subject to a priority in favor of the Tranche A Notes upon certain asset/equity sales, be subject to the first priority pledge of the equity interests in favor of the lender under the Working Capital Facility. The new indentures will contain various covenants affecting Reorganized NEG and certain of its subsidiaries, but will not include: (a) USGen; (b) the subsidiaries whose equity interests or assets are to be transferred to lenders pursuant to the Plan; and (c) certain other subsidiaries. The forms of indentures for the New Notes will be filed with the Court before the commencement of the Confirmation Hearing. Class 3 -- General Unsecured Claims Under the Third Amended Plan, the Allowed Class 3 Claimholders will receive, among others, its Ratable Share of a Catch-Up Distribution and any Additional Sale Distributions, if applicable. The Distributions will be pursuant to the New Stock Option Plan. According to the proposed distributions under the Third Amended Plan, the Allowed Class 3 Claims total $3,357,000,000 -- a $244,000,000 difference from the $3,113,000,000 proposed under the Second Amended Plan. The provisions regarding the allowance of specified guarantee claims includes an additional provision, which states that: "If no Project Guarantee Claim Objection is duly filed in accordance with the provisions of [the Plan], or if any such objection that has been filed is overruled, then any right of the Debtor or the Reorganized Debtor to seek reimbursement or exercise any right of subrogation under the applicable Project Guarantee from the applicable entities that were or are borrowers under the applicable project loan documents shall be extinguished." Claim Related to the Attala Facility The Third Amended Plan provides information about NEG's Attala facility. Under the Plan, claims against NEG asserted under a tolling agreement guarantee in connection with the termination of the Tolling Agreement between Attala Energy Company, LLC, and Attala Generating Company, LLC, are capped at $300,000,000 plus costs of collection. The Attala Certificateholders -- those entities that purchase debt securities relating to Attala Generating -- have asserted $976,000,000 General Unsecured Claims against NEG allegedly arising from, among other things, the Tolling Agreement guarantee. Moreover, the Attala Certificateholders have asserted that NEG must be substantively consolidated with certain of its non-Debtor controlled subsidiaries, including Attala Energy and Attala Generating. NEG is still analyzing whether any amounts are due under the Tolling Agreement Guarantee or under the certain Indemnity Guaranties. The Third Amended Plan indicates that the total amount to be distributed to all Allowed Class 3 Claimholders will not be affected regardless of the total amount of Allowed Class 3 Claims. Rather, an increase in the total amount of Allowed Class 3 Claims will decrease the actual recovery of all other Class 3 Claimants. In the event that NEG is liable for any amounts due to Attala and the Certificateholders more than $229,585,000, distributions to Allowed Class 3 Claimholders will be diluted. Depending on the ultimate amount of Allowed Class 3 Claims, the dilution may be significant and could potentially reduce the percentage recovery for Allowed Class 3 Claims to 35%. Distributions to Holders of Old Senior Notes Claims The Third Amended Plan specifies that, on the date of initial distribution, Reorganized NEG will immediately pay the reasonable fees and expenses of Wilmington Trust Company as the Old Indenture Trustee -- including fees and expenses of counsel -- outstanding as of the Effective Date, not exceeding $500,000. Prepetition Tax Sharing Agreement with PG&E Corp. The Official Committee of Unsecured Creditors for the ET Debtors asserts that certain of the ET Debtors may be entitled to receive some benefits associated with the tax sharing agreement between PG&E Corp. and NEG such that, as a result, certain of the ET Debtors may assert sizeable claims against NEG. In the event that the parties cannot reach an agreement, NEG, the ET Debtors and the ET Creditors Committee reserve all rights with respect to any claim by any of the ET Debtors for the tax benefits and related matter. Claims Resolution The Third Amended Plan reflects the corrected total amount of "timely filed asserted claims, excluding claims, if any, by certain insiders and certain intercompany claimants not required to file claims by the Bar Date," to be $4,049,000,000 and not $4,049,000 as previously disclosed. The Debtors, including the ET Debtors, USGen, and NEG's non- Debtor subsidiaries, which were not required to file proofs of claim in advance of the Bar Date, have a number of intercompany claims running between and among them which in the aggregate totals hundreds of millions of dollars. NEG is not aware of any significant disputes with respect to claims involving its Controlled Subs. Nonetheless, to enhance the certainty of recovery by the NEG creditors and to avoid establishing large, unnecessary reserves, before the Confirmation Date, NEG expects to present a request under Sections 502 and 363 of the Bankruptcy Code and Rule 9019 of the Federal Rules of Bankruptcy Procedure, settling and resolving all intercompany claims. The result of the 9019 Motion will be, in part, to fix and establish for all purposes the amount of the intercompany claims. If NEG is unable to reach a resolution with each of the Controlled Subs, NEG will seek to establish an intercompany bar date in its case. At present, NEG does not believe that it has substantial obligations owing to any of the Controlled Subs. If USGen or the ET Debtors were to assert substantial claims against NEG it might impact the amount and timing of distributions to creditors in Class 3. In its estimation of distributions to Allowed Class 3 Claimholders, NEG assumes that USGen and the ET Debtors will not have any Allowed Claims. While NEG hopes to reach an agreement with USGen on all tax issues, there can be no assurance that a consensual result can be achieved. Unresolved USGen claims will be treated as Disputed Claims. The Pipeline Sale The Third Amended Plan discloses the contemplated sale of NEG's Gas Transmission Northwest Corporation assets. In February 2004, after in-depth review of submitted bids and consultation with Lazard Freres & Co. LLC and NEG's other legal advisors, and after extensive arms-length negotiations, NEG selected TransCanada American Investment, Ltd., a wholly owned subsidiary of TransCanada Corporation, as the "stalking horse" bidder for the GTNC assets. NEG executed a Stock Purchase Agreement with TransCanada American and TransCanada Corp. on February 24, 2004. TransCanada American will purchase all of the issued and outstanding shares of GTNC's capital stock for $1,203,000,000 in cash and assume all of the outstanding long-term debts of GTNC, which aggregates $500,000,000. The IPP Portfolio Sale The U.S. Trustee complained that the previous disclosure statements failed to provide detailed information regarding the IPP Portfolio sale transaction. In the Third Amended Disclosure Statement, NEG reports that it received revised bids and mark-ups of the equity purchase agreements from three of the six bidders -- including from two bidders who have teamed up to make a joint bid. Two of the three bidders were selected for a second round process during which bidders are continuing to conduct due diligence, including follow-up meetings and conference calls. NEG will continue negotiations with the bidders and intends to select a "stalking horse" bidder. Mediation Protocol With respect to the ET Debtors' proposed mediation protocol, the Third Amended Plan indicates that NEG may participate in the Mediation Protocol to the extent that it has exposure with respect to the subject Trading Guarantees. Litigation Trust The Third Amended Plan provides that on the Plan Effective Date, the litigation trust to be established in accordance to an agreement which sets forth the powers and responsibilities of a litigation trustee will be funded in an amount to be jointly determined by the Official Committee of NEG Unsecured Creditors and the Official Noteholders Committee. In the event that the Official Committees cannot agree on the amount of funding for the Litigation Trust, NEG will determine the amount of funding, which will be within the range provided by the Official Committees. However, each Official Committee will have the right to file an objection with the Court as to the amount selected by NEG solely on the grounds that the amount is inconsistent with the interests of creditors or with public policy. NEG will contribute all of the Litigation Trust claims and may contribute, subject to the reasonable consent of the Official Committees, all or part of the equity interests in on or more of its direct or indirect subsidiaries to the Litigation Trust. Any contribution of the equity interests will be for the sole purpose of liquidating the equity interests. For the purpose of liquidating all causes of action of NEG against its parent, PG&E Corp., all claims of NEG arising from an adversary proceeding, and avoidance actions, the Litigation Trust will be established with no objective to continue or engage in the conduct of a trade or business. Reorganized NEG will determine the fair market value of each item of property that is contributed to the Litigation Trust. The Litigation Trustee and the Litigation Trust beneficiaries will consistently use the valuation for all federal income tax purposes. Furthermore, the beneficial interests in the Litigation Trust to be allocated in accordance with the Plan may not be transferred or assigned except by operation of law, by will or in accordance with the laws of descent and distribution, and to certain affiliates of Litigation Trust Beneficiaries as set forth in the Litigation Trust Agreement. The Litigation Trust Beneficial Interests may in the future also be transferable to the extent set forth in any "no action" letter or other confirmation received by Reorganized NEG or the Litigation Trustee from the Securities and Exchange Commission, or a legal opinion issued to the Litigation Trustee for the benefit of the Litigation Trust Beneficiaries that the interests may be freely transferable under the provisions of the Securities Act. Reorganized NEG and the Litigation Trustee will use commercially reasonable efforts to obtain the authorization from the Court to transfer the Litigation Trust Beneficial Interests. Corporate Issues The term "Non-Cash Consideration" is revised to specifically mean "New Common Stock, New Tranche A Notes, and New Tranche B Notes". NEG's Retention of Causes of Action Certain claims and actions will be waived, release and otherwise extinguished under the Plan and the Confirmation Order. The particular claims and actions are: (a) Causes of Action against: (i) holders of non-Affiliate and non-Insider Claims; and (ii) current directors who are being released, provided that there will be not release or waiver with respect to claims against any of non-Affiliate and non- Insider Claims, and released current directors: -- to enforce the agreements, terms and provision of the Plan; and -- with respect to Disputed Claims, excluding Specified Guarantee Claims, as to which Disputed Claims Reorganized NEG or the Litigation Trustee, as applicable, will retain reserve, and be entitled to assert any defenses and counterclaims, including, to assert a right to setoff or similar rights, limited in all cases however to the amount of the Disputed Claim; and (b) All preference claims and actions held by NEG or its estate that may be recoverable from, or could otherwise affect GTNC and its subsidiaries after the Closing Date, if all sale transactions are consummated under the TransCanada Purchase Agreement -- and NEG will cause each of the non-Debtor selling parties under the TransCanada Purchase Agreement not to pursue any preference claim or action. All of the rights of NEG, its estate, and the Official Committees to pursue the Litigation Trust Claims on behalf of NEG and its estate, and any defenses and counterclaims related to the Litigation Trust Claims, will vest in the Litigation Trust. The Litigation Trustee will be representative of NEG's estate with respect to the Litigation Trust Claims for purposes of Section 1123(b)(3)(B). Closing of the Sale Transactions The Third Amended Plan includes a new provision, which states: "Reorganized NEG will remain obligated pursuant to the terms of the TransCanada Purchase Agreement, and, to the extent approved by the Court, will pay or reserve for: (a) the administrative expenses of TransCanada Corporation, TransCanada PipeLine USA, Ltd., and TransCanada American Investments, Ltd.; and (b) all taxes, if any, resulting from the transactions contemplated under the TransCanada Purchase Agreement as reasonably determined by NEG or Reorganized NEG." Additionally, the provision for the contemplated transfers and sales specifies and includes the TransCanada Purchase Agreement. Under the Third Amended Plan, the new procedure for applying the net proceeds from the relevant Sale Transactions -- including the TransCanada Purchase Agreement -- will be: (a) first, to fund Cash on Hand; (b) second, to pay amounts outstanding under any working capital facility; (c) third, to prepay first, Tranche A Notes and then, Tranche B Notes; and (d) fourth, to the holders of Allowed Class 3 Claims as "Additional Excess Cash". Reorganized NEG may make interim distributions and "Catch-Up Distributions" -- a distribution of cash or non-cash consideration to the holder of an Allowed Class 3 Claim that was a Disputed Claim as of the initial distribution date. Disputed Claims Reserve With respect to the Disputed Claims Reserve, which will be established on the Plan Effective Date, the Third Amended Plan provides that: "The Reorganized NEG will use reasonable best efforts to hold the cash portion comprising the Disputed Claims Reserve in an interest-bearing account and shall pay over the holder of a Disputed Claim that becomes an Allowed Claim that portion of interest allocable to such Allowed Claim net of any taxes which may have been paid or any that become due to such interest." Moreover, the distributions upon allowance of Disputed Claims will be "less any applicable taxes paid by the Litigation Trustee in respect of income earned, if any, on amounts held in the Disputed Claims Reserve." Administrative Claims Bar Date Reorganized NEG will provide sufficient notice of, among other things, the Administrative Bar Date -- specified by the Plan, or may be fixed by Court order -- by which an Administrative Claim must be filed with the Court for any resolution of any disputes. The Administrative Claims Bar Date will not apply to: (a) TransCanada Corporation, TransCanada PipeLine, and TransCanada American Investment with respect to all Administrative Claims arising under the TransCanada Purchase Agreement; and (b) fees payable pursuant to 28 U.S.C. Section 1930. A full-text copy of NEG's Third Amended Plan and Disclosure Statement is available for free at: http://bankrupt.com/misc/neg_third_amended_plan.pdf 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. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000) PILLOWTEX CORP: Auction for Non-Manufacturing Assets Continues -------------------------------------------------------------- The dispensation of assets of the former Pillowtex Corp. continued March 9-10 with the sale of computer and IT equipment from the Kannapolis, N.C., headquarters. The items include hundreds of computers, including laptops and PC's, laser printers, color copiers and other equipment. All textile manufacturing machinery, equipment and related assets from former Pillowtex plants across North America, originally valued in the hundreds of millions of dollars, is being sold on a direct-sale basis by Gibbs International of Spartanburg, S.C., the world's leading reseller of textile equipment. "This represents the largest and most-important sale of textile equipment in years," said Jimmy Gibbs, president of Gibbs International. All plant and facility real estate is also being sold on a direct- sale basis through SB Capital Group of Great Neck, N.Y. Only non- textile furniture, fixtures, computers, vehicles and other non- manufacturing related assets are being sold at auction. Gibbs International and SB Capital Group are part of GGST LLC, a partnership formed in 2003 to purchase certain assets and the rights to sell particular assets of Pillowtex, which last year filed for relief under Chapter 11 of the U.S. Bankruptcy Code. GGST's principals are highly experienced in repositioning distressed companies, and will sell the majority of assets other than textile machinery in a series of auctions. All auctions are subject to prior sale, which would result in cancellation. The remainder of the tentative schedule is as follows: - April 1 - Auction of non-textile equipment and items from the manufacturing and warehouse facility in Chicago. - April 8 - Auction of vehicles, and material-handling and shop equipment from the Kannapolis manufacturing and warehouse facility. - April 22 - Auction of non-textile equipment and items from the feather processing plant in Dallas, Texas. - April 29 - Auction of non-textile equipment and items from the manufacturing plant in Concord, N.C. - May 6 - Auction of non-textile equipment and items from the manufacturing plant in Phenix City, Ala. - May 13 - Auction of non-textile equipment and items from the manufacturing and warehouse facility in Eden, N.C. - May 27 - Auction of non-textile equipment and items from the manufacturing and warehouse facility in Hanover, Pa. - June 1 - Auction of miscellaneous items at the Kannapolis, N.C., facility. - June 10 - Auction of non-textile equipment and items from the manufacturing and warehouse facility in Tunica, Miss. - June 24-25 - Auction of non-textile equipment and items from the manufacturing and warehouse facility in Fieldale, Va. - July 8 - Auction of non-textile equipment and items from the warehouse and distribution center in Mauldin, S,C., and manufacturing facility and equipment in Union, S.C. GGST LLC is a joint venture of Gibbs International, SB Capital Group, Gordon Brothers Retail Partners LLP, Tiger Capital Group, and Crescent Financial LLP. PLAYBOY: S&P Assigns Stable Outlook to Affirmed B Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Chicago, Illinois-based Playboy Enterprises Inc., including its 'B' corporate credit rating. The rating outlook is stable. Total debt outstanding on Sept. 30, 2003, was $156 million, including $41 million in Califa Entertainment Group Inc. and Playboy TV International LLC acquisition liabilities (payable in cash and stock), but excluding $16.7 million in Series A preferred stock owned by Mr. Hugh Hefner. The company has not released its balance sheet information for 2003. Playboy plans to issue 3.2 million shares of Class B common stock in the second quarter of 2004. Proceeds will be used to buy back a portion of outstanding secured notes. In conjunction, Mr. Hefner will convert his $16.7 million in Series A preferred stock into Class B common stock, eliminating all preferred securities from Playboy's balance sheet. "These two transactions, when completed, will improve interest coverage and debt leverage ratios as well as cash flow," said Standard & Poor's credit analyst Andy Liu. "Upon completion of the two transactions, Standard & Poor's expects to revise its rating outlook to positive from stable, reflecting the improvement in credit measures and the additional financial flexibility," Mr. Liu added. The rating on Chicago, Illinois-based Playboy reflects the niche audience for paid adult content, the company's relatively smaller cable TV distribution compared to top 10 broadcast networks, the abundance of free adult materials online, and high financial risk. These factors are only partly offset by the company's significant presence in the non-cyclical adult entertainment industry, strong brand recognition, and good satellite direct-to-home TV coverage. While the company's operating performance improved in 2003, some of the improvement could be attributed to the Playboy's 50th Anniversary, a special one-time event, and to sales of art and memorabilia. RADIANT: Plans to Borrow Additional $250K from Private Lenders -------------------------------------------------------------- Radiant Energy Corporation (TSX Venture: RDT), developer and marketer of InfraTek, the patented, infrared pre-flight aircraft deicing system, announces their intention to borrow $250,000 from private lenders. The Company is seeking additional funding by way of an 8% unsecured short-term loan. The loan will bear interest at 8% per year and the loan is repayable on demand by the lender. The lenders will also receive a bonus of common shares based on a rate of 2 common shares for every one dollar Canadian loaned. Issuance of the common share bonus is subject to approval by the TSX Venture Exchange. The Common Share certificates to be issued may not be sold, transferred, or otherwise traded for one year from the date of issuance. To date, the Company has received $105,000 under this loan arrangement. Of the amount received to date, three insiders of the Corporation loaned $70,000. The Company will continue to seek additional lenders up to the close of business on March 30, 2004. Legal Settlement with Third Party In November 2002, the State of New York Supreme Court: County of Erie ordered the Company to pay, the final payment due on an out of court settlement of $50,000 USD plus legal fees. The third party sought judgment for payment with the Ontario Superior Court of Justice. On March 5, 2004, the Company and the third party reached an out of court settlement on the claim of $67,101. The payment terms under the settlement agreement included an initial payment on settlement and 12 equal monthly payments commencing June 1, 2004. The third party will continue to hold 129,778 common shares of the Company that were pledged as security by two shareholders of Radiant. The shares may be sold on Radiant's direction. Proceeds from the sale of the shares will be applied to the monthly payments. The Company will apply for acceptance by the TSX Venture Exchange to issue 129,778 common shares to the two shareholders as replacement for the common shares held by the third party. Radiant has signed a Consent to a default judgment in the event the monthly payments are not met. Stock Options On December 17, 2003, the Shareholders of the Company approved the increase in the maximum number to options available to issue under the Company Stock Option Plan from 1,400,000 to 2,500,000. On February 13, 2003, the Board of Directors approved the issuance 710,000 stock options to employees, directors and consultants of the Company subject to approval by the TSX Venture Exchange and processing of the documentation. On March 3, 2004, 170,000 options were issued of which directors Milton Klyman and James Golla received 25,000 each and an officer and director Colin Digout received 60,000. The remainder of the options will be granted on acceptance by the TSX Venture Exchange. The exercise price of the options is $0.15 and expires March 2, 2009. Radiant currently has 25,780,433 common shares outstanding and the common shares trade on the TSX Venture Exchange (symbol RDT). RCN: Sells Carmel, NY Cable System to Susquehanna Unit for $120M ---------------------------------------------------------------- RCN Corporation (Nasdaq: RCNC) completed the sale of its Carmel, New York cable system to Carmel Cable Television, Inc., a subsidiary of Susquehanna Communications, for $120 million. The deal had been previously announced on July 10, 2003. RCN will assist Susquehanna with the migration of the video and high-speed data customer base, and support the system's voice services for a period following the closing of the sale. Approximately $62 million of the net proceeds from this sale will be used as a partial pay-down of RCN's senior secured bank facility. In addition, approximately $45 million of the net proceeds will be restricted in a cash collateral account by the terms of the senior secured bank facility, and $5 million will be placed in escrow to cover post-closing purchase price adjustments and indemnification obligations, if any. The remainder will be unrestricted and used, in part, to cover transaction costs associated with the sale. About Susquehanna Communications Susquehanna Communications is a top 20 cable MSO serving over 230,000 customers. The company is a subsidiary of Susquehanna Media Co., a diversified radio broadcaster and cable operator. About RCN RCN Corporation (Nasdaq: RCNC) is the nation's first and largest facilities-based competitive provider of bundled phone, cable and high-speed Internet services delivered over its own fiber-optic local network to consumers in the most densely populated markets in the U.S. RCN has more than one million customer connections and provides service in the Boston, New York, Philadelphia/Lehigh Valley, Chicago, San Francisco, Los Angeles and Washington, D.C. metropolitan markets. * * * As reported in the Troubled Company Reporter's March 3, 2004 edition, RCN Corporation announced that negotiations with its senior secured lenders, members of an ad hoc committee of holders of its Senior Notes and others on a consensual financial restructuring of its balance sheet are continuing. In connection with the continuing negotiations, the Company, the Lenders and members of the Noteholders' Committee have agreed to extend expiration of their previously announced forbearance agreements until March 15, 2004. RCN remains hopeful that these negotiations will lead to agreement on a consensual financial restructuring plan in the near term, although there is no assurance this will occur. Under the forbearance agreements, the Lenders and members of the Noteholders' Committee have agreed not to declare any Events of Default, which they would be entitled but not required to do, under RCN's senior credit facilities or RCN's senior notes, respectively, as a result of RCN not making an interest payment on its 10 1/8% Senior Notes due 2010. RCN has said that it expects any financial restructuring to be implemented through a reorganization of RCN Corporation under chapter 11. RCN believes that a consensual financial restructuring pursuant to a chapter 11 reorganization would achieve the most successful financial outcome for the company and its constituents. RCN does not intend that its market operating subsidiaries be included in such a chapter 11 filing, although there is no assurance this will occur. SAFESCRIPT: Auditor Resigns & Withdraws June 2003 Report -------------------------------------------------------- On February 5, 2004, the Board of Directors of Safescript Pharmacies, Inc. (formerly RTIN Holdings, Inc.) authorized the replacement of Heard, McElroy & Vestal, L.L.P. Also on February 5, 2004, the Company received a letter of resignation in which Heard, McElroy & Vestal, L.L.P. stated that it had received information that: (a) the Company, its officers and directors and others likely made or caused to be made false or misleading statements or omitted material facts necessary to make prior statements not misleading in connection with the audit and examination of the Company's financial statements for the years ended December 31, 2002, and December 31, 2001, and the periods then ended, and (b) it is likely that the Company's financial statements for the year ended December 31, 2002 and the period then ended contain materially false or misleading statements or omit material facts necessary to make prior statements not misleading. Heard, McElroy & Vestal, L.L.P. notified the Company that it can no longer state that the consolidated financial statements of the Company for December 31, 2002, and 2001, present fairly in all material respects, the financial position of the Company as of December 31, 2002 and 2001, and the results of operations and its cash flows for the years then ended, that such financial statements should no longer be relied upon by any shareholder, potential shareholder or any other person, and that it withdrew the independent auditor's report dated June 30, 2003, included in the Company's Amended Annual Report on Form 10-KSBA filed on July 17, 2003. The opinion of Heard, McElroy & Vestal, L.L.P. for the years ended December 31, 2002, and December 31, 2001 contained the qualification that the financial statements for such years and the periods then ended were prepared on a "going concern" basis and were qualified regarding the uncertainty of the Company continuing as a going concern but did not otherwise contain any adverse opinion or qualification as to uncertainty, audit scope, or accounting principles. The Board of Directors has not discussed the foregoing with representatives of Heard, McElroy & Vestal, L.L.P. The Company has not yet engaged new independent auditors. SAFETY-KLEEN CORP: Proposes Post-Effective Date Notice Procedures ----------------------------------------------------------------- The Reorganized Safety-Kleen Corp. Debtors ask Judge Walsh to approve new post-Effective Date procedures for providing notices to interested parties in these cases. Rule 2002 of the Federal Rules of Bankruptcy Procedure prescribes the general rules regarding the provision of notices to creditors and other parties-in-interest during the pendency of a case brought pursuant to the Bankruptcy Code. In accordance with Bankruptcy Rule 2002, a substantial number of parties filed notices of appearance and requests for notices in the Reorganized Debtors' cases. Any party filing a request in these cases is required by Delaware Bankruptcy Local Rule and the Bankruptcy Rule 2002(b) to serve notice of that request on the 2002 Notice Parties. In light of the confirmation of the Plan and the occurrence of the Effective Date, the Reorganized Debtors believe that many of the 2002 Parties will no longer be interested in receiving every pleading filed in these cases. Bankruptcy Rule 2002(m) provides that the Court "may from time to time enter orders designating the matters in respect to which, the entity to whom, and the form and manner in which notices shall be sent except as otherwise provided by these rules." To save the administrative expense of providing notices to the 2002 Parties, the Reorganized Debtors propose that any party filing a future pleading in these cases provide notice of that pleading to: (i) the Reorganized Debtors' counsel; (ii) those parties directly affected by the relief requested in any pleading; (iii) the United States Trustee; (iv) the counsel for Oolenoy Valley Consulting, LLC, as Trustee of the Safety-Kleen Creditor Trust; and (v) any party that files with the Court and serves upon the Reorganized Debtors' counsel a renewed request for notices under Bankruptcy Rule 2002. Additionally, the Reorganized Debtors propose to modify the application of Del. Bankr. L. R. 9029(a)(iii) such that the service of agendas for hearings in these cases be made only on the Limited Notice Parties with respect to each hearing. Reduction of Cost of Mailings Currently, there are 350 2002 Notice Parties. The Debtors estimate, based on recent filings, that serving a pleading, and its related order when entered, on the Limited Notice Parties instead of the 2002 Parties would reduce the administrative expense associated with the service by thousands of dollars per service, dependant on the size of the pleading and the destination to which it will be mailed. No Prejudice The Reorganized Debtors believe that no party will be prejudiced by the post-Effective Date Notice Procedures. Additionally, any party that wishes to continue to receive service of every pleading in these cases may do so by merely filing a renewed request for notices in these cases. Moreover, all parties have access to all pleadings in these cases on the Court's website. The post-Effective Date Notice Procedures will benefit the Reorganized Debtors by reducing the administrative burden, and the associated cost, of providing notice of all pleadings to all of the 2002 Parties. Additionally, it will also reduce the burden of many creditors that, after the Effective Date, are no longer concerned with every pleading filed in these cases, by reducing the pleadings they must analyze to only those pleadings that directly affect them. (Safety-Kleen Bankruptcy News, Issue No. 74; Bankruptcy Creditors' Service, Inc., 215/945-7000) SEQUA CORPORATION: Reports Higher Results for 2003 -------------------------------------------------- Sequa Corporation (NYSE:SQAA) posted higher results for 2003, with strong gains recorded at four of five operating segments. Businesses in these segments, which represent 60 percent of the company's revenue base, recorded a combined sales increase of 15 percent and a 76 percent increase in operating profit. Total sales for the year ended December 31, 2003 rose eight percent to $1.7 billion from $1.5 billion, and operating income advanced 17 percent to $57.0 million from $48.7 million in 2002. The overall advance in 2003 results, which includes the effect of a sharp increase in pension expense, was also moderated by a lower level of sales and income at the company's Chromalloy Gas Turbine unit, which makes up the aerospace segment. The market for Chromalloy's jet engine component repair service was sluggish throughout 2003, as the airline industry struggled to emerge from the long and steep decline that followed the events of September 11. Income from continuing operations advanced to $4.9 million in 2003 from $1.7 million a year ago, despite the slowdown at Chromalloy and the effect of sharply higher pension costs and interest expense. On a per-share basis, results from continuing operations amounted to income of 27 cents in 2003 and a loss of three cents in 2002. Results for 2002 have been restated to reflect the classification of the company's ARC Propulsion unit as a discontinued operation. ARC Propulsion was divested in October 2003 for $133 million and at a preliminary gain of $3.1 million after tax. Net income for 2003 totaled $11.4 million or 90 cents per share, while in 2002 the company recorded a net loss of $116.5 million or $11.39 per share. Both years included results from discontinued operations, which amounted to income of $6.6 million or 63 cents per share in 2003 and a loss of $105.3 million or $10.11 in 2002. Results for 2002 were lowered by a change in accounting for goodwill that was related primarily to the discontinued ARC Propulsion unit. In commenting on the company's performance, Sequa's chairman and chief executive officer, Norman E. Alexander, noted, "A large portion of our operations produced solid sales and income gains in 2003, though the year's results clearly do not reflect the full earning power of the company. To support the further growth of operations, we have taken a number of key steps. "For example, the issuance of $100 million in new senior notes and the establishment of additional credit facilities during 2003 strengthened our financial position and improved liquidity. In addition, the sale of ARC Propulsion generated substantial cash proceeds - part of which was used for a $75 million contribution to our pension plan." Mr. Alexander concluded, "Many of the businesses that were strong last year are continuing to advance. Chromalloy's performance will benefit in 2004 from an improving market environment and, importantly, from a series of strategic growth initiatives that are now beginning to yield results." Summary of Segment Results Aerospace Chromalloy recorded slightly lower sales and sharply lower operating income for the year, the result of reduced demand and a restrictive pricing environment in the commercial aftermarket for jet engine component repairs. These conditions have persisted for more than two years and are currently beginning to ease. To position the business for renewed growth, Chromalloy has strengthened its ties to major airlines through the addition of long-term maintenance and materials-by-the-hour contracts. The unit has also broadened its participation in joint venture partnerships serving the worldwide industrial gas turbine market. These actions will contribute to results in the first quarter of 2004. Automotive The automotive segment - which consists of ARC Automotive and Casco Products - posted improved results for the year, with both units contributing to the advance. Higher domestic volume and a broadened product line for international markets led to a 20 percent sales increase at ARC Automotive, and this unit generated a $6.9 million swing in operating results. The improved profit position reflects the benefit of higher sales, improvements from Operational Excellence initiatives, and the effect of favorable exchange rate movement. Casco Products posted a 68 percent higher operating profit on a nine percent increase in sales. The profitability improvement reflects the benefit of restructuring and enhanced efficiency at overseas operations, augmented by favorable currency movements. In the US, Casco completed the transfer of production from a plant in Connecticut to lower cost facilities in the South and overseas - a move that will generate further profit improvement in 2004. Metal Coating Sales of Precoat Metals rose 12 percent and operating income advanced 14 percent in 2003. The sales increase was fueled by rising demand from the building products and manufactured products markets; by the addition of new metal management programs; and by improved pricing and continued market share gains. Profits benefited from a higher level of sales, improved product mix, and ongoing efficiency gains derived from Six Sigma initiatives. Specialty Chemicals Results of United Kingdom-based chemicals supplier Warwick International moved sharply higher in 2003, with solid increases in local currency results bolstered by the effect of translation into US dollars. Warwick's sales rose 22 percent, driven both by a sustained high level of demand for the detergent additive TAED and by improved sales at the international network of chemicals marketing units. Operating income advanced 34 percent, ahead of the sales gain, largely due to internal efficiencies derived from Operational Excellence programs. Other Products Overall segment results - with higher sales and a profit from operations for the year - reflect solid improvement at the two larger operations in the segment, MEGTEC Systems and Sequa Can Machinery. The third business, After Six, recorded lower results and ended the year with a reduced backlog. For MEGTEC Systems, 2003 marked a turnaround in performance that is expected to continue in 2004. Sales rose seven percent last year in response to demand from European customers for graphic arts machinery and emission control equipment and as a result of higher aftermarket sales and service. Profitability gains stemming from restructuring actions and ongoing Operational Excellence programs continued to accumulate in 2003. As a result, MEGTEC posted a modest profit for the year, even after recording a $2.9 million restructuring charge. Sequa Can Machinery posted sharply higher sales and profits for 2003, largely due to strength in demand from the container market during the first half of the year. By year-end, the market had softened considerably, and the unit's order backlog declined more than 60 percent. Summary of Fourth Quarter Results Paced by advances in the automotive, metal coating and specialty chemicals segments, sales for the fourth quarter of 2003 increased seven percent, rising to $440.4 million from $410.8 million in the same period of 2002. Operating income eased slightly - declining to $14.0 million from $14.6 million a year ago - as the large aerospace business and several other units recorded lower profits. Income from continuing operations was $3.3 million or 26 cents per share, compared with $3.5 million or 29 cents per share in the fourth quarter of 2002. After including the results of discontinued operations, the company recorded net income for the 2003 fourth quarter of $4.4 million or 37 cents per share and a net loss for the 2002 fourth quarter of $4.6 million or 49 cents per share. Results for 2002 have been restated to reflect the classification of ARC Propulsion as a discontinued operation. * * * As previously reported in the Troubled Company Reporter, Fitch Ratings downgraded the existing senior unsecured debt of Sequa Corporation to 'B+' from 'BB-' and assigned a rating of 'B+' to SQA's $100 million senior unsecured notes that are expected to close on June 5, 2003. Fitch also revised the Rating Outlook to Stable from Negative. SIERRA PACIFIC: Wants to Raise $300 Mil Through Private Offering ---------------------------------------------------------------- Sierra Pacific Resources (NYSE: SRP) is seeking to raise $300 million through a private placement of senior notes due 2014. The notes will be unsecured obligations of Sierra Pacific Resources and will rank equally with its other senior indebtedness. The offering will be made only to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended and outside the United States in compliance with Regulation S under the Securities Act. Sierra Pacific Resources plans to use the net proceeds from the sale of the notes to fund the repurchase of its $300 million unsecured 8 3/4% Notes due 2005 pursuant to a tender offer that was previously announced. The notes will not be registered under the Securities Act and may not be offered or sold by holders thereof without registration unless an exemption from such registration is available. Headquartered in Nevada, Sierra Pacific Resources (S&P, B+ Corporate Credit Rating, Negative) is a holding company whose principal subsidiaries are Nevada Power Company, the electric utility for most of southern Nevada, and Sierra Pacific Power Company, the electric utility for most of northern Nevada and the Lake Tahoe area of California. Sierra Pacific Power Company also distributes natural gas in the Reno-Sparks area of northern Nevada. Other subsidiaries include the Tuscarora Gas Pipeline Company, which owns 50 percent interest in an interstate natural gas transmission partnership. SPIEGEL GROUP: US Trustee Amends Unsecured Creditors' Committee --------------------------------------------------------------- The United States Trustee for Region 2 amends the membership of the Official Committee of Unsecured Creditors appointed in the Chapter 11 cases of the Spiegel Group Debtors to reflect the resignation of Commerzbank AG - NY Branch, Deutsche Bank AG New York Branch and AT&T Corp., and the addition of JPMorgan Chase Bank to the group. The current members of the Committee are: (1) Dresdner Kleinwort Wasserstein 75 Wall Street New York, New York 10005-2889 Attn: James Gallagher Tel. No. (212) 429-2294 (2) DZ Bank AG (Deutsche Zentral-Genossenschaftsbank) DG Bank Building 609 Fifth Avenue New York, NY 10017-1021 Attn: David Fischbein, Vice President Tel. No. (212) 745-1574 (3) Bank of America, N.A. 231 South LaSalle Street, 10th floor Chicago, IL 60697 Attn: Bridget Garavalia Tel. No. (312) 828-1259 (4) JPMorgan Chase Bank 270 Park Avenue Floor 20 New York, New York 10017 Attn: Thomas F. Maher, Managing Director Tel. No. (212) 270-0426 (5) WestLB 1211 Avenue of the Americas New York, NY 10017 Attn: Michael F. McWalters Tel. No. (212) 852-6147 (6) R.R. Donnelley & Sons Company 77 Wacker Drive Chicago, IL 60601 Attn: Ruby Kerr Tel. No. (312) 326-8373 (7) Simon Property Group, LP 115 West Washington Street Indianapolis, Indiana Attn: Ronald M. Tucker Tel. No. (317) 263-2346 Headquartered in Downers Grove, Illinois, Spiegel, Inc. -- http://www.spiegel.com/-- is a leading international general merchandise and specialty retailer that offers apparel, home furnishings and other merchandise through catalogs, e-commerce sites and approximately 560 retail stores. The Company filed for Chapter 11 protection on March 17, 2003 (Bankr. S.D.N.Y. Case No. 03-11540). James L. Garrity, Jr., Esq., and Marc B. Hankin, Esq., at Shearman & Sterling represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $1,737,474,862 in assets and 1,706,761,176 in debts. (Spiegel Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000) TEXAS INSTRUMENTS: Featured in Schaeffer's Street Chatter --------------------------------------------------------- The recent "Street Chatter" from Schaeffer's Investment Research focuses on Texas Instruments (NYSE:TXN). "Street Chatter" is a report that analyzes three newsworthy stocks that are generating a lot of attention on Internet message boards. "Street Chatter" is published on -- http://www.SchaeffersResearch.com/ -- the home of Bernie Schaeffer and Schaeffer's Investment Research. For additional information about this report or to have it delivered to you free via email every day click on the following link: http://www.schaeffersresearch.com/addinfo Street Chatter Multi-talented semiconductor and electronics firm, Texas Instruments (NYSE:TXN), said last night that its first-quarter earnings (due on or around April 26) will total somewhere between 19 and 22 cents per share, on sales of $2.84 billion to $2.95 billion. The firm's previous first-quarter estimate called for a slightly wider range between 16 and 22 cents per share. Analysts currently expect TXN to collect 19 cents per share. Technically speaking, TXN shares have been moseying sideways for the past few weeks and are trading just above historical support in the 28 region. Turning to sentiment analysis, the picture is mixed on TXN. The equity's SOIR suggests pessimism from the options crowd, as the indicator weighs in at 0.893, which is just 11 percent shy of a new annual peak. On the other hand, short interest on TXN has been declining, dropping 18 percent during the last reporting period to 21.3 million shares, the lowest reading since April. The resultant short-interest ratio stands at 1.76, which is the lowest figure since July. Click the following link to see the Daily Chart of TXN Since September 2003 With 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=9637 The best way to take advantage of the timely Schaeffer commentaries is to sign up to receive their free e-newsletters -- Opening View, Midday Report, Market Recap and Monday Morning Outlook. Click here to have the Schaeffer's commentaries delivered to you free via email every day. About Schaeffer's Investment Research Schaeffer's Investment Research, founded by Bernie Schaeffer in 1981, is a financial information and trading resources company. It publishes Bernie Schaeffer's Option Advisor, the nation's leading options subscription newsletter. The firm's contrarian approach focuses on stocks with technical and fundamental trends that run counter to investor expectations. The firm's website, http://www.SchaeffersResearch.com, is recognized as one of the leading information sources for stock and options traders and was cited as the top options website by both Forbes and Barron's. Click here for more details about Schaeffer's trading methodology: http://www.SchaeffersResearch.com/method TIMKEN: Increasing Steel Bar Prices Beginning April 5, 2004 ----------------------------------------------------------- The Timken Corporation announced price increases on steel bar products. Non-contract prices will increase by $30 per ton for all sizes and grades of carbon and alloy steel bars effective with shipments beginning April 5, 2004. "Scrap concerns are well documented throughout the industry and our surcharge system has been effective in recovering some of those cost increases. Escalating costs in our industry have permeated all other consumable items as well, and this base price increase is necessary to address those costs," said Robert N. Keeler, director - steel sales - North and South America. The Timken Corporation is a U.S. sales and marketing subsidiary of The Timken Company. The Timken Company (NYSE: TKR)(Moody's, Ba1 Senior Unsecured Debt, Senior Implied and Senior Unsecured Issuer Ratings) -- http://www.timken.com/-- is a leading global manufacturer of highly engineered bearings and alloy steels and a provider of related products and services with operations in 29 countries. The company recorded 2003 sales of $3.8 billion and employed approximately 26,000 at year-end. TITAN CORP: S&P Revises Watch Following Justice Dept. Probe ----------------------------------------------------------- Standard & Poor's Ratings Services revised its CreditWatch listing of Sept. 16, 2003, on Titan Corp. to developing from positive, following a Justice Department probe into whether overseas consultants for Titan Corp. made illegal payments to foreign officials, which may jeopardize the completion of its acquisition by Lockheed Martin Corp. (BBB/Stable/A-2). Standard & Poor's placed its 'BB-' corporate credit and senior secured debt ratings, and 'B' subordinated rating of Titan on CreditWatch with positive implications following the announced acquisition of Titan by Lockheed Martin. The transaction is valued at $2.4 billion, including the assumption of approximately $580 million of Titan's debt outstanding. Standard & Poor's will continue to monitor the situation. Should the merger close as planned, Titan and Lockheed Martin are expected to commence an offer to exchange Titan's existing 8% senior subordinated notes due 2011, which will have substantially identical terms to the existing notes, except that the new notes will be registered under the Securities Act and will be guaranteed by Lockheed Martin. At the closing of the merger and issuance of the new notes, Standard & Poor's will equalize Titan's ratings to that of its new parent."Should either party terminate the merger agreement, we would re-evaluate Titan's ratings and determine the impact, if any, the investigation could have on Titan's business practices and financial profile," said Standard & Poor's credit analyst Philip Schrank. US AIRWAYS: Settles & Reduces Ameriquest Claim to $2,625,000 ------------------------------------------------------------ The Reorganized US Airways Debtors and Ameriquest Holdings, LLC agree to resolve a contested claim matter. Ameriquest filed Claim No. 4444 for $5,300,000, asserting claims relating to aircraft with Tail No. N277AU. Ameriquest and the Reorganized Debtors agree that Claim No. 4444 is reduced and allowed as a Class USAI-7 general unsecured claim for $2,625,000. All other Ameriquest claims are withdrawn. (US Airways Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service, Inc., 215/945-7000) U.S. STEEL: Issues Notice of Senior Notes' Redemption ----------------------------------------------------- United States Steel Corporation (NYSE: X) announced it has provided notice to the Bank of New York, as Trustee, for the redemption of $187,250,000 principal amount of its 10-3/4% Senior Notes due August 15, 2008, (CUSIP number 91263PAB1) and the redemption of $71,500,000 principal amount of its 9-3/4% Senior Notes due May 15, 2010, (CUSIP number 912909AA6) under certain optional redemption provisions of the senior notes indentures. The Corporation can redeem up to 35 percent of the notes solely with the proceeds of an underwritten primary public offering of common stock under such provisions. The Corporation will use the proceeds from its recently completed common stock offering to fund the redemptions, consistent with the announced use of proceeds in the offering. The notes to be redeemed will be selected by the Trustee in accordance with the applicable procedures of The Depository Trust Company and the indentures under which the notes were issued. U. S. Steel expects redemption to occur on April 19, 2004. U. S. Steel, through its domestic operations, is engaged in the production, sale and transportation of steel mill products, coke, and iron- bearing taconite pellets; the management of mineral resources; real estate development; and engineering and consulting services and, through its European operations, which include U. S. Steel Kosice, located in Slovakia, and U. S. Steel Balkan located in Serbia, in the production and sale of steel mill products. Certain business activities are conducted through joint ventures and partially owned companies. United States Steel Corporation is a Delaware corporation. * * * As reported in the Troubled Company Reporter's February 4, 2004 edition, Standard & Poor's Ratings Services assigned its preliminary 'BB-' senior unsecured and preliminary 'B' subordinated debt ratings to United States Steel Corp.'s $600 million universal shelf. The company may also issue preferred stock under the shelf. At the same time, Standard & Poor's affirmed all its existing ratings, including the 'BB-' corporate credit rating on U.S. Steel and revised its outlook on the company to stable from negative. Total debt for the Pittsburgh, Pennsylvania-based company was $2.2 billion (including operating leases) for the December 2003 quarter. "The outlook revision reflects the anticipated improvements in the company's financial profile owing to its ongoing cost-reduction initiatives, as well as benefits from management's actions to moderate potentially high cash outlays for its pension obligations in the next few years," said Standard & Poor's credit analyst Paul Vastola. The ratings reflect the company's aggressive financial leverage-- including its underfunded postretirement benefit obligations--and challenging market conditions, which overshadow its good liquidity and its improved market share and cost position following its May 20, 2003, acquisition of National Steel Corp. The company also benefits from a product mix that is more diverse than its competitors. Following its acquisition of the assets of National, U.S. Steel's domestic steel production capability increased to 19.4 million tons, making it the largest integrated steel producer in North America. VERESTAR: SkyTerra Communications Bidding for Assets on March 30 ---------------------------------------------------------------- SkyTerra Communications, Inc. (OTC BB: SKYT) has executed an asset purchase agreement to acquire, through a newly formed subsidiary, substantially all of the assets and business of Verestar, Inc. and its subsidiaries, which are currently in bankruptcy. As part of the transaction, SkyTerra will also acquire the outstanding equity of Verestar A.G., Verestar's non-bankrupt Swiss operating subsidiary. Verestar is a leading global provider of integrated satellite and fiber services to government organizations, multi-national corporations, broadcasters and communications companies. By utilizing leased satellite and terrestrial capacity, its teleports in the United States and Europe, and a team of approximately 200 employees, Verestar designs, engineers and deploys managed networks for data, voice and video communications services. The transaction is subject to a number of contingencies, including an auction on March 30, 2004 at which Verestar will consider other qualifying offers, and final approval by the bankruptcy court and the Federal Communications Commission. Pursuant to the purchase agreement, if SkyTerra is the winning bidder at the auction on March 30 and the bankruptcy court approves the transaction, SkyTerra will, among other things, provide the estate of Verestar with $7 million in cash and loan forgiveness, including forgiveness of the existing senior secured note payable to SkyTerra, and will provide the estate of Verestar with 19.9% of the equity of the newly formed SkyTerra subsidiary that will acquire the business and assets. In addition, SkyTerra will provide an additional $3 million in funding to the new business upon closing of the purchase. WEBLINK WIRELESS: Will the Real Stakeholders Please Stand Up? ------------------------------------------------------------- WebLink Wireless, Inc., filed for chapter 11 protection in 2001 (Bankr. N.D. Tex. Case No. 01-34275-SAF-11) and inked a debt restructuring agreement with its creditors in July 2002. WebLink filed a formal chapter 11 plan and disclosure statement and sent the plan out for a vote. The creditors accepted the plan. The Plan outlined that: * the Company would emerge from bankruptcy with $40 million in debt; and * creditors, in compromise of their claims, would receive: -- $7,000,000 in cash; -- a 89% share of new secured PIK notes; and -- 90% of the new equity plus some warrants. Old shareholders took nothing from WebLink's Chapter 11 restructuring. The company said in a September 11, 2002, press release that it consummated the Plan and emerged from bankruptcy on September 9, 2002. Last month, Weblink's attorneys asked Judge Felsenthal to enter a Final Decree to formally close the chapter 11 proceeding. King Street Capital, L.P., and King Street Capital, Ltd., balked. "For reasons unknown to [us], no distribution to unsecured creditors has ever been made under the confirmed Chapter 11 Plan," Jason S. Brookner, Esq., at Andrews & Kurth LLP, former counsel to Weblink's official creditors' committee tells Judge Felsenthal. "Until such time as distributions have been received by unsecured creditors, a final decree should mot be entered," Mr. Brookner cautions the bankruptcy court in Dallas. A January 6, 2003, a WebLink press release reports that Leucadia National Corp. inked a deal to buy the company, after buying-up 80% of the company's stock and 94% of the company's secured debt. A November 19, 2003, press release from Metrocall Holdings, Inc., reports that Metrocall acquired Weblink in exchange for a basket of common stock and warrants. King Street says that the Metrocall transaction is based on false representations. King Street says that WebLink has rebuffed its requests to make things right with its old creditors. King Street has turned to the Delaware Chancery Court (C.A. No. 255-n) for relief under Sec. 220 of the Delaware General Corporation Law. John M. Seaman, Esq., at Bouchard Margules & Friedlander, P.A., in Wilmington, Del., represents King Street before the Chancery Court. WEIRTON STEEL: Wants to Set Up Asset Sale Bidding Procedures ------------------------------------------------------------ According to Mark E. Freedlander, Esq., at McGuireWoods, in Pittsburgh, Pennsylvania, in order to ensure that maximum value is obtained for the Sale Assets, the sale of the Weirton Steel Debtors' Sale Assets is subject to higher and better offers. In that regard, the Debtors propose these Bidding Procedures to govern the submission of competing bids for the Sale Assets: A. Copies of the Debtors' request and the order and notice of hearing will be sent all known parties that have expressed an interest in purchasing the Sale Assets or that have been contacted. Before any potential purchaser is granted access to any non-public, confidential, proprietary, or otherwise sensitive information about the Debtors, their assets, or their finances, the potential purchaser must execute and deliver to the Debtors a confidentiality agreement. B. Any entity other than ISG Weirton and ISG that wishes to participate in the bidding process must first deliver to the Debtors on or before 4:00 p.m. on April 6, 2004: * an executed asset purchase agreement in a form substantially similar to the Agreement and marked to clearly reflect all variations from the Agreement; * the most current audited and latest unaudited financial statements of the Potential Bidder, or, if the Potential Bidder is an entity formed for the purpose of the Acquisition of the Sale Assets, then (x) the financials of the equity holder of the Potential Bidder or other form of financial disclosure as is acceptable to the Debtors in their sole discretion, and (y) the written commitment in a form acceptable to the Debtors of the equity holder of the Potential Bidder agreeing to be responsible for the Potential Bidder's obligations in connection with the proposed acquisition of the Sale Assets; * a board resolution or similar document authorizing the Potential Bidder to consummate the proposed Sale and, if applicable, authorizing the equity holder of the Potential Bidder to financially support the Potential Bidder's obligations; and * a Bid Deposit. C. In order to be a Qualified Bidder, a Potential Bidder must submit a Qualified Bid. The Qualified Bid must: * be for all Sale Assets; * acknowledge that the Potential Bidder's offer is subject to the Debtors' obligations to pay the Break-Up Fee and Expense Reimbursement; * be accompanied by a $7,875,000 cash deposit; and * propose total consideration of cash and assumed liabilities with "a fair market value" of at least $7,875,000 greater than $255,000,000 and the bid must also provide for the indefeasible and final payment of the Senior Debt in cash in full at the closing. The Minimum Overbid is equal to the sum of the Break-Up Fee, the maximum Expense Reimbursement and $1,000,000. D. If a Qualified Bid other than that of ISG Weirton and ISG is received by the Bid Deadline, then an Auction will take place. The Auction will occur at 10:00 a.m. on April 12, 2004 at the offices of McGuireWoods LLP. If no Qualified Bid other than that of ISG Weirton and ISG is received by the Bid Deadline, then the Auction will not be held. ISG Weirton and ISG will be deemed as the Successful Bidder. The Agreement will be the Successful Bid, and at the Sale Hearing, the Debtors will seek the Court's authority to consummate the Sale contemplated by the Agreement. E. Only a Qualified Bidder who has submitted a Qualified Bid will be eligible to participate at the Auction. Only the authorized representatives of each the Qualified Bidders, the Debtors, Fleet Capital Corporation, the Ad Hoc Committee of Noteholders, the Official Committee of Unsecured Creditors, and the ISU will be permitted to attend the Auction. At the Auction, Qualified Bidders will be permitted to increase their bids. The bidding at the Auction will start at the purchase price stated in the highest or otherwise best Qualified Bid as disclosed to all Qualified Bidders prior to the commencement of the Auction, and continue in increments of at least $2,000,000 in cash after the Minimum Overbid. ISG Weirton will be credited with, and have added to the aggregate amount of its bid at the Auction, an amount equal to the Break-Up Fee and the maximum Expense Reimbursement to which it would be entitled if it is not the Successful Bidder. F. Unless otherwise agreed by the Debtors, no Qualified Bidder will be permitted more than 30 minutes to respond to the previous bid at the Auction. Immediately prior to the conclusion of the Auction, the Debtors will review each Qualified Bid on the basis of its financial and contractual terms and its impact on creditors and parties-in-interest of the Debtors; and determine and identify the Successful Bid and the next highest or otherwise best offer after the Successful Bid. G. In the event that the Successful Bidder is unable or unwilling to close the Sale, the Debtors will be permitted to consummate the Sale with the Backup Bidder according to the terms of the Backup Bid without necessity for further notice or hearing. H. After the Auction but before the Sale Hearing, the Debtors will file with the Court and serve a Notice of Successful Bidder on all parties listed on the Official Service List established in these cases. I. On April 14, 2004, at 10:30 a.m., the Debtors will present the results of the Auction together with the Successful Bid at a hearing before the Bankruptcy Court, at which time the Bankruptcy Court will be requested by the Debtors to make certain findings of fact and conclusions of law in connection with the Agreement, the Sale, the Successful Bid and the Backup Bid The Debtors propose to serve by first-class mail, postage prepaid, copies of the Bidding Procedures Order, the Sale Motion, and a notice of the Auction and Sale Hearing and related Bidding Procedures and Contract Objection Procedures on the interested parties. The Debtors also propose that publication of the Sale Notice in the national editions of The Wall Street Journal and The New York Times, be deemed proper notice to any other interested parties whose identities are unknown to the Debtors. Accordingly, the Debtors ask the Court to approve: (a) the Bidding Procedures for submission and acceptance of any competing bids; and (b) the form and manner of notice with respect to the Bidding Procedures and the Auction. (Weirton Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000) WESTPOINT STEVENS: Gets Go-Signal to Reject Simmons Trademark Pact ---------------------------------------------------------------- John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP, in New York, related that on April 1, 2001, the WestPoint Stevens Debtors entered into a Trademark License Agreement with Simmons Company for exclusive licensing rights to use certain trademarks in connection with the manufacture, marketing, advertising, sale and distribution of acrylic, cotton and wool blankets, automatic bed warmers, and blankets in the United States and Puerto Rico. The Contract terminates by its own terms on June 30, 2004, but automatically renews for an additional year unless either party provides written notice at least 60 days before the termination date. Pursuant to the Contract, the Debtors are required to pay, on a quarterly basis, royalties equal to 7% of the Blanket sales. Furthermore, the Debtors are required to pay a minimum royalty each quarter based on certain sales minimums regardless of whether Blankets are actually sold. Minimum Royalties called for under the Contract escalate annually. Mr. Rapisardi related that for the current contract year, July 1, 2003 through June 30, 2004, sales of Blankets amounting to over $6,000,000 would be needed to meet the Minimum Royalties of $425,000 required under the Contract. To date, the Debtors have only generated sales of $1,700,000, or roughly $4,300,000 below the sale amounts necessary to meet the Minimum Royalties. With less than half a year left in the current contract year, the Debtors believe that they will be unable to obtain the sales amounts necessary to make up the shortfall. Mr. Rapisardi contended that continued payment of the Minimum Royalties, without a corresponding level of sales to meet the minimum, rendered the Contract unprofitable and a burden to the Debtors' estates. Thus, the Debtors sought and obtained the Court's authority to reject the contract with Simmons Company. (WestPoint Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., 215/945- 7000) WILSONS: Working with Banks to Amend Senior Credit Agreement ------------------------------------------------------------ Wilsons The Leather Experts Inc. (Nasdaq:WLSN) announced results for the fourth quarter ended January 31, 2004, and fiscal year 2003. Net sales at Wilsons Leather stores for the fourth quarter decreased 11.5% to $268.1 million versus $303.1 million for the year-ago quarter. Included in the sales for the current fourth quarter was approximately $3.3 million in liquidation sales resulting from the transfer of inventory to an independent liquidator in conjunction with the expected closing of approximately 111 stores. The Company reported fourth quarter net income of $12.4 million, or $0.60 per fully diluted share, versus net income of $2.4 million, or $0.12 per fully diluted share, in the year-ago fourth quarter. Included in the results for the fourth quarter of 2003 is an after-tax loss of $8.6 million, or $0.41 per fully diluted share, related to the transfer of inventory to an independent liquidator in conjunction with the expected closing of approximately 111 stores; severance related to staff reductions; accelerated depreciation related to store closings; a loss on the disposal of assets associated with the closing of the Las Vegas, Nevada distribution center; and other miscellaneous charges. Included in the results for the fourth quarter of 2002 was an after-tax loss of $27.4 million, or $1.34 per fully diluted share, related to the discontinued operations associated with the closing of the travel subsidiaries. Net income from continuing operations for the fourth quarter of 2003, when adjusted to remove the $8.6 million in restructuring and other charges, was $21.0 million, or $1.01 per fully diluted share, and compares to year-ago net income from continuing operations of $29.8 million, or $1.46 per fully diluted share. Also included in the current quarter was a charge of $13.4 million related to a valuation allowance for deferred taxes. Net sales for the full year ended January 31, 2004, decreased 8.8% to $521.0 million versus $571.5 million for the prior fiscal year. The year-over-year decline in sales is attributable to a 6.8% decline in comparable store sales. The net loss for the current twelve-month period was $33.6 million, or $1.64 per fully diluted share, versus the year-ago net loss before discontinued operations related to the travel subsidiaries, and the cumulative effect of a change in accounting principle, of $14.3 million, or $0.71 per fully diluted share. The net loss for 2003, when adjusted to remove the $8.6 million in restructuring and other charges, was $25.0 million, or $1.22 per fully diluted share. The increase in loss in 2003 was the result of a combination of lower sales, reduced income tax benefits, store liquidations, and restructuring and other charges. The year-ago net loss after discontinued operations related to the travel subsidiaries, and the cumulative effect of a change in accounting principle was $80.9 million, or $4.03 per fully diluted share. Joel Waller, Chairman and Chief Executive Officer, commented, "2003 was a disappointing year for Wilsons Leather. Our number one priority was to improve our operating performance and grow sales and profitability. While we did make significant improvements on the cost side of the business--improving our cash position by 39.3% and reducing our accounts payable balance by 47.6% over 2002--in the end, we didn't grow the top line and that's unacceptable. As a result, we are being very aggressive in taking immediate actions to improve our performance and drive sales in 2004." In January, the Company reduced its work force to more accurately reflect the current revenue base, announced the closure of up to 111 under-performing stores and began liquidating excess inventory. Mr. Waller concluded, "During the next year, our focus will be to increase sales and margins by enhancing the productivity of our existing store base, strengthening our overall capital position and reducing our risk profile, and enhancing our brand position." The Company is currently working with certain current noteholders and the bank syndicate to attempt to refinance its 11 1/4% Senior Notes due August 2004 and amend its senior credit agreement. Under the terms of the Senior Credit Agreement, the Company is required to have a plan acceptable to its senior lenders to amend, refund, renew, extend, or refinance its 11 1/4% Senior Notes by March 15, 2004. The refinancing of the 11 1/4% Senior Notes is required to occur on or before April 15, 2004. If the Company does not present a plan satisfactory to the senior lenders by March 15, 2004, or if it is unable to amend, refund, renew, extend, or refinance its 11 1/4% Senior Notes on or before April 15, 2004, it will be in default of its Senior Credit Agreement. In that event, General Electric Capital Corporation would be entitled to suspend the Company's right to borrow under its senior credit agreement and could accelerate payment of its $25 million Term B promissory note. The Company is currently in discussions with some of its noteholders, but cannot provide any assurance that it will be able to amend, refund, renew, extend, or refinance its 11 1/4% Senior Notes on or before April 15, 2004. Wilsons Leather today issued guidance for the fiscal year ending January 29, 2005. At this time, the Company anticipates full year net sales in the range of $410-$430 million and a fully diluted loss per share of between $1.33 and $1.68. Included in the fully diluted loss per share are additional restructuring and other charges of $25-27 million related to the store closures announced in the fourth quarter of 2003. About Wilsons Leather Wilsons Leather is the leading specialty retailer of leather outerwear, accessories and apparel in the United States. As of January 31, 2004, Wilsons Leather operated 460 stores located in 45 states and the District of Columbia, including 334 mall stores, 107 outlet stores and 19 airport stores. During the month of January 2004, the Company engaged an independent liquidator to operate 111 stores that are expected to close in the next 60 days. The Company, which regularly supplements its permanent mall stores with seasonal stores during its peak selling season from October through January, operated 229 seasonal stores in 2003. WINN-DIXIE: Featured in Schaeffer's Street Chatter -------------------------------------------------- The recent "Street Chatter" from Schaeffer's Investment Research focuses on Winn-Dixie (NYSE:WIN). "Street Chatter" is a report that analyzes three newsworthy stocks that are generating a lot of attention on Internet message boards. "Street Chatter" is published on -- http://www.SchaeffersResearch.com/ -- the home of Bernie Schaeffer and Schaeffer's Investment Research. For additional information about this report or to have it delivered to you free via email every day click on the following link: http://www.schaeffersresearch.com/addinfo Street Chatter Beleaguered grocery name Winn-Dixie (NYSE:WIN) received a jolt in the arm today as Merrill Lynch boosted its rating on the stock to a "neutral" from a "sell." The brokerage firm noted that Chapter 11 bankruptcy filling would probably not be on the horizon for WIN, as the family-dominated board would not permit it. WIN shares have gapped higher today on above-average volume, causing their 10-day and 20-day moving averages to complete a bullish crossover. The stock is now on its way to filling its January 30 bear gap, which was formed following lackluster earnings news and a downgrade from S&P. Looming immediately overhead, however, are the security's 10-week and 20-week moving averages. On the sentiment front, SOIR for WIN checks in at 0.934, in the 61st annual percentile. Meanwhile, shorted WIN shares surged by 37 percent last month to 30.2 million, an all-time high. The accompanying short-interest ratio stands at almost eight times the equity's average daily volume. Click the following link to see the Daily Chart of WIN Since December 2003 With 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=9637 The best way to take advantage of the timely Schaeffer commentaries is to sign up to receive their free e-newsletters -- Opening View, Midday Report, Market Recap and Monday Morning Outlook. Click here to have the Schaeffer's commentaries delivered to you free via email every day. About Schaeffer's Investment Research Schaeffer's Investment Research, founded by Bernie Schaeffer in 1981, is a financial information and trading resources company. It publishes Bernie Schaeffer's Option Advisor, the nation's leading options subscription newsletter. The firm's contrarian approach focuses on stocks with technical and fundamental trends that run counter to investor expectations. The firm's website, http://www.SchaeffersResearch.com, is recognized as one of the leading information sources for stock and options traders and was cited as the top options website by both Forbes and Barron's. Click here for more details about Schaeffer's trading methodology: http://www.SchaeffersResearch.com/method ZALE CORP: Richard Marcus to Succeed Robert DiNicola as Chairman ---------------------------------------------------------------- Zale Corporation (NYSE:ZLC), North America's largest specialty retailer of fine jewelry, announced that Robert J. DiNicola, Chairman of the Board of Directors, will be succeeded in that position by long time board member Richard C. Marcus at the close of the fiscal year on July 31, 2004. Mr. Marcus has served as a Zale board member since 1993 and is currently Chairman of Zale's Compensation Committee. He is the former Chairman and Chief Executive Officer of Neiman Marcus. Mr. DiNicola has served as the Chairman of the Board for the past two years. Prior to that role, he was the Chairman and Chief Executive Officer. "After two years of a successful management transition, it is now time to complete the process," said Mr. DiNicola. He continued, "Clearly, the leadership of the Corporation under the direction of Mary Forte is in very good hands and her hard work and determination over the course of her tenure has proven to be a formula for success. I am very proud of our entire team and all that has been accomplished." Mary Forte, President and Chief Executive Officer added, "We want to thank Bob for all that he has achieved going back to 1994 as he rebuilt Zale from Chapter 11 to the industry leader that it is today. Furthermore, on a more personal note, I want to thank Bob for all of his support and guidance over the years and certainly want to wish him all the best in his future endeavors." Zale Corporation is North America's largest specialty retailer of fine jewelry operating approximately 2,230 retail locations throughout the United States, Canada and Puerto Rico, as well as online. Zale Corporation's brands include Zales Jewelers, Zales Outlet, Zale Direct at www.zales.com, Gordon's Jewelers, Bailey Banks & Biddle Fine Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Additional information on Zale Corporation and its brands is available on the Internet at www.zalecorp.com. * * * As recently reported, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on the specialty jewelry retailer Zale Corp. to 'BB+' from 'BBB-'. At the same time, Standard & Poor's withdrew its 'BBB-' senior unsecured debt ratings on Zale's $87 million outstanding 8.5% senior unsecured notes due 2007 and $225 million unsecured revolving credit facility. The rating withdrawal follows the company's announcement that it redeemed the senior notes and refinanced the revolving credit facility with a new $500 million secured revolving credit facility. All ratings have been removed from CreditWatch where they were placed July 2, 2003. The outlook is stable. About $87 million of total debt was outstanding at April 30, 2003. The downgrade follows Zale's announcement of the results of its "Dutch Auction" tender offer that expired July 29, 2003. In conjunction with the tender, Irving, Texas-based Zale intends to purchase 4.7 million shares of its common stock at a total cost of $225.6 million. Zale had previously expected to purchase up to 6.4 million shares at an aggregate amount of about $307 million. * Sullivan & Worcester Expands Tax and Litigation Practices ----------------------------------------------------------- Sullivan & Worcester LLP, a leading corporate law firm with offices in Boston, New York and Washington, DC, announced the addition of Richard S. Sanders as partner with the firm's Boston office and Walter Nagel as of counsel in the firm's DC office. Richard S. Sanders specializes in intellectual property litigation and joins Sullivan & Worcester as partner and chair of the Technology Litigation Practice Group in the firm's Boston office. Sanders was previously a partner in the Litigation and IP Litigation Practice Groups at Testa, Hurwitz & Thibeault LLP. He concentrates in all areas of IP litigation, including patent, and trade secret litigation, non-competition litigation, inventorship, licensing disputes, and other complex litigation and dispute resolution, including antitrust, unfair competition, and general corporate/commercial litigation. Sanders is a former co-chair of the Intellectual Property Litigation Committee of the Boston Bar Association. He has a B.S (physiology) and M.S. (immunopathology) from McGill University in Montreal, Canada. Formerly president and COO of Peracon, Inc., an internet application service provider, Walter Nagel joins Sullivan & Worcester's DC office as of counsel within the firm's Tax Practice Group, focusing on the DC market. He has strong experience in telecommunications and electronic commerce and will concentrate his practice on federal and state tax planning, and controversies. Prior to Peracon, Inc. Nagel held tax management positions at TWA and AT&T and was most recently general tax counsel for MCI. He is currently a member of the nominating committee for the American Bar Association Tax Section, has served on the board of directors for the National Foreign Trade Council and was a member of the District of Columbia Tax Revision Commission. "Both Walter and Richard bring significant experience to Sullivan & Worcester and we are very pleased to welcome them as part of the team," said Joel Carpenter, co-managing partner of Sullivan & Worcester. "The firm is committed to continued growth and the addition of these two attorneys significantly enhances our tax and intellectual property practice areas." About Sullivan & Worcester LLP Sullivan & Worcester is a leading corporate law firm with more than 160 attorneys in Boston, New York and Washington, D.C. The firm offers extensive expertise and sophisticated legal services in a wide range of practice areas including corporate finance, securities, mergers and acquisitions; bankruptcy and reorganization; real estate; employment and benefits; litigation; and tax, trusts and estates. The firm also includes nationally recognized energy, investment company and REIT practices. Driven by a dedication to superior client service, Sullivan & Worcester represents domestic and international clientele ranging from Fortune 500 companies to emerging businesses. For more information, please visit http://www.sandw.com/ ********* 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, Rizande B. Delos Santos, Paulo Jose A. Solana, 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 ***