/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/040322.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, March 22, 2004, Vol. 8, No. 57 Headlines ADELPHIA COMMS: Exclusivity Hearing Adjourned to April 26 AGRICORE UNITED: Better Grain Shipments Boost 1st Quarter Results AINSWORTH LUMBER: Closes Tender Offers for Senior Secured Notes AIR CANADA: Pursuing Okay to Enforce Perpetual Debt Pact in Plan AIR CANADA: Trinity's Pension Grab Gambling with Company's Future AIRLEASE: Plans to Sell Remaining Assets & Dissolve Partnership AIRLEASE: Will Make First Quarter Cash Distribution on May 14 ALLEGIANCE TELECOM: Files Reorganization Plan in S.D.N.Y. AURORA FOODS: Emerges from Chapter 11 & Completes Pinnacle Merger B & B COMMNET: Voluntary Chapter 11 Case Summary BEAR STEARNS: Fitch Assigns Low-B Ratings to 6 Note Classes BURLINGTON: BII Trust Wants to Extend Service Date for Complaints CARAUSTAR: Will Present at Lehman Brothers' Conference Tomorrow CARAUSTAR: Will Raise Tube & Core Product Line Prices on Apr. 12 CHYPS CBO: S&P Places Class A-3A & A-3B Ratings on Watch Negative CINCINNATI BELL: Lenders Agree to Waive Credit Default COMMSCOPE: Prices $225 Million Convertible Debt Private Offering COTT CORP: Appoints John K. Sheppard as Chief Executive Officer CSG SYSTEMS: S&P Affirms & Removes Low-B Ratings from Watch CSK AUTO: Reports Improved Sales and Profits for Q4 & FY 2003 DAVID ELLIS AGENCY: Voluntary Chapter 11 Case Summary DII INDUSTRIES: Court Okays Gelco Automotive Fleet Lease EDISON INT'L: Declares Quarterly Dividends Payable on April 30 ENRON CORP: Court Temporarily Allows 58 Claims for Voting ENRON CORP: Various Creditors Sell Claims Totaling $130,652,295 EXIDE TECH: Trade Creditors Sell 88 Claims Totaling $2.2 Million EXTENDICARE: Signs-Up Philip Small as Chief Operating Officer FALCON PRODUCTS: S&P Junks Rating over Lower-than-Expected Profits FAST FORWARD INC: Case Summary & 20 Largest Unsecured Creditors FOOTSTAR INC: Taps Hilco Merchant Resources as Liquidation Agent FOOTSTAR: Liquidating 88 Just for Feet & 75 Footaction USA Stores GARDEN RIDGE: Retains Andrews & Kurth as Real Estate Attorneys GEO SPECIALTY: Case Summary & 20 Largest Unsecured Creditors G+G RETAIL: S&P Lowers Ratings to D After Debt Restructuring HAVENS STEEL CO: Case Summary & 20 Largest Unsecured Creditors HYTEK MICRO: Expects Going Concern Qualification in 2004 Audit IMC HOME EQUITY: Moody's Takes Rating Actions on 4 Loan Trusts INDUSTRY MORTGAGE: Fitch Ratchets Class B Notes Rating to CCC INDYMAC ABS: Fitch Takes Rating Actions on Ser. SPMD 2001-A Notes INTERNATIONAL PAPER: Redeeming 8-1/8 Percent Notes on April 19 IVACO INC: Canadian Court Ends Truckers' Boycott of Services KAISER ALUMINUM: Selling Parcels 2A & 2B in Va. to Harley Douglas KCS ENERGY: S&P Assigns Low-B Level Credit & Debt Ratings KMART HOLDING: Profitable Since Reorganization, Says Report KMART: Featured in Schaeffer's Street Chatter LUIGINO'S INC.: S&P Rates Proposed Sr. Sec. Bank Facility at B+ MARINER: Discloses Risks Relating to Substantial Indebtedness MEDCOMSOFT: Completes Private Placement Equity Financing MEDMIRA: Raises Additional $350,000 Through Debenture Financing METROMEDIA: Russian Unit Buys 80% Stake in Pskov Telephone Network METROPOLITAN MORTGAGE: Fitch Affirms & Downgrades 3 Debt Issues MIRANT CORP: Court Clears Compromise Agreement with Insurers MIRANT: CDC Globeleq Sells Back Stake in Philippines Power Station MLEA INC: Voluntary Chapter 11 Case Summary NATIONAL CENTURY: Selling Lincoln Center to Promise Hospital NATIONSRENT: Creditor Trustee Wants 2 Duplicate Claims Disallowed NATIONAL WASTE: Seeks Nod to Pay Vendors' Prepetition Claims NORTEL NETWORKS: Featured in Schaeffer's Street Chatter NET PERCEPTIONS: Obsidian Enterprises Increases Stock Offer OREGON ARENA: U.S. Trustee Fails to Form Creditors Committee OWENS: Obtains Go-Ahead to Buy Jackson, Tenn. Facility Equipment PACIFIC GAS: Fitch Expects to Rate $6.7B Secured Debt at BBB PARMALAT GROUP: US Debtors Tap BSI as Claims & Noticing Agent PARMALAT: Gets Interim Nod to Amend Receivables Purchase Pact PEABODY ENERGY: Fitch Rates New Senior Unsecured Notes at BB PENTHOUSE: Rolling Stone Magazine Features Founder Robert Guccione PG&E NATIONAL: USGen Permits JPMorgan to File Consolidated Claims POLAROID: Settles False Claims Act Suit, Reports U.S. Attorney POTLATCH CORP: Fitch Affirms Ratings & Revises Outlook to Stable RESIDENTIAL ASSET: Fitch Slashes Class B Notes Rating to CCC RIGGS NATIONAL: Fitch Places Low-B Ratings on Watch Negative ROCKFORD PROPERTIES: Case Summary & Largest Unsecured Creditors ROGERS CABLE: Michael Adams is New CFO Effective April 20, 2004 SEALY CORP: S&P Rates $490 Million Sr. Sub. Notes at B- SEITEL INC: Bankruptcy Court Confirms Amended Reorganization Plan SHELBOURNE: Entering Into a Liquidating Trust Pact on April 16 SHERWOOD HD: Case Summary & 11 Largest Unsecured Creditors SOLECTRON CORP: Second Quarter Net Loss Reduces to $90 Million SOUTHWEST RECREATIONAL: Kaye Scholer Retained as Special Counsel SPECTRASITE INC: CFO to Speak at Lehman Brothers' Conference Today STOLT OFFSHORE: Settles European Patent Dispute Out of Court SUPERIOR ESSEX: Buying Belden's Comm. Cable Assets for $95 Million TEEKAY SHIPPING: Increased Debt Leverage Spurs S&P's Neg. Watch THOMPSON PRINTING: Taps Booker Rabinowitz as Bankruptcy Counsel TOTAL CONTAINMENT: Case Summary & 20 Largest Unsecured Creditors UAL CORP: Examiner Sides with Airline on Retiree Benefits Issue US AIRWAYS: Reaches Pact Resolving Four DFO Partnership Claims WORKFLOW MGT: Int'l Shareholder Urges Clients to Vote For Merger WORLDCOM INC: Reaches AT&T Dispute Settlement & Compromise W.R. GRACE: Neutocrete Wants to Defend Grace Lawsuit * Susan Kohlmann Joins Pillsbury's NY Office as Managing Partner * BOND PRICING: For the week of March 22 - 26, 2004 ********* ADELPHIA COMMS: Exclusivity Hearing Adjourned to April 26 --------------------------------------------------------- The hearing on the Adelphia Communications Debtors' request to extend their exclusive periods during which to file a plan of reorganization and solicit votes on that plan from their creditors is continued to April 26, 2004 at 9:45 a.m., and to the extent required, continued to April 28, 2004. The ACOM Debtors' Exclusive Periods, the Bankruptcy Court in Manhattan orders, are extended until the conclusion of that hearing. (Adelphia Bankruptcy News, Issue No. 53; Bankruptcy Creditors' Service, Inc., 215/945-7000) AGRICORE UNITED: Better Grain Shipments Boost 1st Quarter Results ----------------------------------------------------------------- Agricore United (TSX:AU) saw improved grain handling in the first quarter of 2004 as a result of a better growing season in 2003. The company's grain shipments for the three months ended January 31, 2004 increased by 53 percent over the same period last year. Agricore United's net loss of $12.7 million or $0.31 per share for the first quarter of 2004 improved by $6.9 million from a net loss of $19.6 million or $0.46 per share for the same quarter last year. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased by $8.8 million over the $1.9 million earned for the quarter last year - almost entirely related to higher gross profits from significantly increased grain shipments. However, even though industry grain shipments in the past quarter increased by 63 percent over the last year, they still only reached about 80 percent of pre-drought levels. "As we expected at the end of the 2003 fiscal year, grain handling picked up significantly despite a slower than expected start to the Canadian Wheat Board's export program and the outlook for grain movement through the summer is bullish," says Brian Hayward, Chief Executive Officer. "Even with higher grain shipments and sustained sales activity for Crop Production Services, our operating, general and administrative costs remained flat in the quarter compared to last year." Hayward notes that while crop production services and grain handling are improving, the same cannot be said for the livestock industry and the potential impact on the company's relatively smaller livestock feed business. "The livestock industry in Canada, especially western Canada, continues to be hammered by import restrictions and currency fluctuations," says Hayward. The western Canadian livestock industry's prospects and the impact on producer purchasing power remain uncertain. Import restrictions imposed by the United States and other countries as a result of BSE concerns continue to negatively impact the beef industry. In addition, hog producers may continue to suffer margin erosion as the Canadian dollar strengthens against the US dollar and the cost of certain feed ingredients remains high. Nevertheless, the company experienced its third consecutive quarter of improved earnings and realized a net profit of $4.6 million for the twelve months ended January 31, 2004 - the first profit for any trailing twelve month period since the impact of the first drought in 2001. FIRST QUARTER REPORT FOR THE THREE MONTHS ENDED JANUARY 31, 2004 Q1 Highlights - Higher Grain Handling Volumes - Industry grain shipments for the three months ended January 31, 2004 increased by 63% over the same period last year and the Company's shipments increased 53%. The Company's average grain margin per tonne declined to $20.56 from $22.53 last year, largely due to lower earnings from open market commodities. - Lower Expenses Despite Increased Grain Activity - The Company reduced operating, general and administrative expenses by $792,000 despite sustained sales activity for Crop Production Services and significantly higher grain shipment activity in the quarter. Increases in the cost of port terminal operations in Vancouver, British Columbia - that result from the absence of the labour dispute that temporarily reduced operating costs last year - were fully offset by an accrual for recovery of property taxes on port terminal operations in Thunder Bay, Ontario. - Improved EBITDA and EBIT (a) - EBITDA increased $8.8 million, almost entirely related to higher gross profits from Grain Handling as a result of the significantly increased grain shipments. Lower depreciation and amortization charges contributed to a $10.9 million improvement in EBIT for the quarter. - Improved Net Earnings - The net loss of $12.7 million ($0.31 per share) for the quarter ended January 31, 2004 improved by $6.9 million from the loss of $19.6 million ($0.46 per share) reported in the same quarter last year. - Improved Cash Flow from Operations - Largely as a result of improved EBITDA, cash used in operations of $1.7 million ($0.08 per share) improved by $13.7 million from cash used in operations of $15.4 million ($0.37 per share) for the quarter ended January 31, 2003. - First Annualized Profit Post-Merger - The Company realized a net profit of $4.6 million for the twelve months ended January 31, 2004 - the first profit for any trailing twelve-month period since the impact of the first drought in 2001. Consolidated Financial Results Crop Production Services Sales of seed, crop nutrients, crop protection and other products of $57.3 million for the quarter ended January 31, 2004 declined $7 million (10.9%) compared to sales of $64.3 million for the same quarter last year. While the Company does not record sales until products are delivered or services are rendered to customers, deferred sales revenue (prepaid sales not yet delivered) amounted to $111.8 million at January 31, 2004 compared to $121.5 million at January 31, 2003. This decline in recorded as well as deferred sales resulted from both advanced fertilizer sales in the quarter ended October 31, 2003 (due to favourable weather conditions) and producers delaying seed purchasing decisions for 2004 until later in the spring when final planting decisions are made. Other sales and revenue from services for the quarter ended January 31, 2004 declined by $4.5 million compared to last year due to reduced sales of agri-services (custom application, NH3 application and agronomic services), associated with lower crop input sales, and lower supplier rebates on crop protection products for the preceding season. Gross profit and net revenue from services of $20.9 million for the quarter ended January 31, 2004 increased $380,000 (1.8%) over the same quarter last year despite the underlying decrease in sales and revenue from services. The increased margin on sales is largely attributable to higher gross profits from the Company's joint venture, Western Co-operative Fertilizers Ltd., and its fertilizer manufacturing subsidiary, Canadian Fertilizers Limited. Crop Production Services operating, general and administrative ("OG&A") expenses of $22 million for the quarter ended January 31, 2004 were $2.1 million (8.5%) lower than the same quarter in 2003. The reduction reflects lower credit expenses, reduced staff levels and general cost containment. As a result, Crop Production Services EBITDA loss of $1 million for the quarter improved by $2.4 million over 2003. An $803,000 decrease in depreciation and amortization expenses further improved the EBIT loss for this segment to $6.0 million from a loss of $9.2 million in 2003. Grain Handling The Canadian Grain Commission ("CGC") reported that industry shipments of the six major grains (wheat, barley, oats, canola, flax, peas) were 6.8 million tonnes in the three months ended January 31, 2004, an increase of 2.6 million tonnes (63%) over the same period in 2003 - reflecting a return to more normal shipping patterns. Nevertheless, this was still only 78% of industry shipments in the same quarter ended January 31, 2001 (prior to the effects of either the 2001 or 2002 droughts). The timing of shipments of Canadian Wheat Board ("CWB") grains (wheat, durum and barley) was the predominant reason for the reduction in 2004 shipments compared to 2001. Reflecting the improvement in industry shipments, Agricore United handled 2.3 million tonnes in the quarter ended January 31, 2004, an increase of 779,000 tonnes (or 53%) over 2003. The Company shipped 1.1 million tonnes of CWB grains, an increase of only 256,000 tonnes (29%) over 2003, reflecting both lower industry shipments of CWB grains and the Company's reduced participation in CWB tenders during the quarter. As a result, the ratio of Company grain shipments to industry grain shipments for the quarter ended January 31, 2004 declined to 33.1% (2003 - 35.5%) but increased to 35.3% for the twelve months ending January 31, 2004 (2003 - 33.9%). The Company handled 1.2 million tonnes of grain through its port terminals in the quarter ended January 31, 2004 (2003 - 475,000 tonnes) - an increase of 149% - representing about 52.2% of its total grain shipments (2003 - 32.1 %). The lower port terminal handling in the prior year arose as a result of the 2002 drought as well as the closure of all grain terminals in the port of Vancouver from August 26th to December 6th, 2002 due to a labour dispute. The Company handled 1.7 million tonnes or 56.6% of its grain shipments through its port terminal operations in the three months ended January 31, 2002 (prior to the 2002 drought and labour dispute). Grain Handling gross profit and revenue from services of $46.5 million ($20.56 per tonne) for the latest quarter increased $8.5 million over last year. The average margin per tonne for the same period last year was $22.53 - excluding a $4.6 million additional recovery from the Company's grain volume insurance program related to the crop year ended July 31, 2002. The decline of $1.97 (8.7%) in the average margin per tonne resulted, in part, from the time- lag between estimating execution costs when commodities were purchased compared to higher than expected vessel freight rates once shipping was booked. Margins were negatively impacted by advance execution costs to move oilseeds, which have not yet been sold, to sale position in Europe. Increased competition to procure handling of open market (non-CWB) grains and oilseeds in place of the lower-than-expected CWB export program also contributed to lower margins. Grain Handling OG&A expenses of $30.7 million for the three months ended January 31, 2004 increased by $4.6 million (15%) over 2003. The increase was entirely attributable to higher insurance costs and increased operating costs in the port terminals - reflecting normalized operations in the latest quarter compared to the prior year when a labour dispute closed the Vancouver port grain terminals and grain handling was unusually low following the 2002 drought. Accordingly, the balance of Grain Handling OG&A expenses related to merchandising, logistics and country operations did not increase significantly despite the substantial increase in grain handling activity this year and higher insurance costs. Offsetting the underlying increase in port terminal OG&A expenses, the Company accrued a recovery of $4.5 million from property tax reassessments related to its terminals in Thunder Bay, Ontario for the years 1996 to 2003, after both the Ontario Municipal Property Assessment Corporation and the Thunder Bay city council agreed to adjust the methodology underlying the assessment calculation. The Company had previously disclosed this recovery as a contingent gain in Note 19 to its consolidated financial statements for the fiscal year ended October 31, 2003. Accordingly, the Company reported a net increase in its Grain Handling OG&A expenses for the latest quarter of only $53,000. As a result, the $8.4 million increase in Grain Handling EBITDA to $15.7 million was due entirely to the higher volume of grain shipped and the related increase in gross profit. Depreciation and amortization expenses of $8 million for the three months to January 31, 2004 decreased by $920,000 (10.3%) over last year as the Company completes the consolidation of its country grain handling assets. Consequently, Grain Handling EBIT of $7.8 million ($3.43 per tonne) for the quarter ended January 31, 2004 represented an increase of $9.4 million over the segment's EBIT loss of $1.6 million in 2003 (loss of $1.08 per tonne). Livestock Services Manufactured feed sales of 224,000 tonnes for the quarter ended January 31, 2004 declined by 10,000 tonnes (4.3%) from 234,000 tonnes in the same quarter last year. The number of beef cattle on feed continues to be negatively impacted by ongoing import restrictions imposed by the United States and other countries following the single case of bovine spongiform encephalopathy ("BSE") discovered in Alberta on May 20, 2003. The relaxation of the import restrictions by many of these markets was delayed by the discovery on December 23, 2003 of a case of BSE in the United States which was subsequently traced to an animal originating from Alberta. Although affecting only a small part of the segment's manufactured feed tonnes, generally worse conditions for commercial fish farming in British Columbia and in other parts of the world also resulted in substantial reductions in the sale of high margin manufactured fish feed. Gross profit on feed sales of $9.9 million ($43.97 per tonne) for the quarter declined $413,000 (4%) from $10.3 million ($43.86 per tonne) in 2003. Most of the decline in gross profit arose from reductions in commercial fish feed sold. Feed prices tend to fluctuate in response to input prices and accordingly, the profitability of feed manufacturing tends to be more closely correlated to manufactured tonnes sold rather than sales values. Swine sales of $11.6 million for the quarter increased by $2.2 million over last year. However, gross profit on swine sales deteriorated by $193,000 due largely to the weakening U.S. dollar relative to the Canadian dollar, which has effectively reduced Canadian hog prices and resulted in relatively higher costs of certain feed ingredients. Other revenues decreased by a modest $78,000 over the same quarter last year, largely due to poorer performance by the Company's investment in The Puratone Corporation. Consequently, Livestock Services gross profit and revenue from services of $10.6 million for the quarter ended January 31, 2004 declined by $684,000. OG&A expenses increased by $896,000 to $8 million, reducing EBITDA to $2.6 million from $4.2 million last year. Depreciation and amortization expenses increased modestly to $813,000 as a result of ongoing investments in infrastructure renewal and contributed to a decline in EBIT of $1.6 million from last year to $1.8 million. Financial Markets and Other Investments On December 23, 2003, the Company and a Canadian chartered bank announced the implementation of a new credit program for livestock customers of Unifeed Limited, a wholly owned subsidiary of the Company. Similar to the existing arrangement for the same bank to provide credit financing to crop inputs customers under Agricore United Financial, the new financial product will be marketed under the brand Unifeed Financial. Commencing in the second quarter, Unifeed Financial will extend additional working capital financing to livestock producers to purchase feeder cattle, feeder hogs and related feed inputs under terms that do not require payment until the livestock is sold. Credit outstanding under AU Financial has increased significantly as customers increase their patronage of the program. At the same time, credit over 90 days at January 31, 2004 has declined to 7.4% of total outstanding receivables from 10.8% one year ago. Revenues from AU Financial increased $559,000 to $1.8 million for the three months ended January 31, 2004 compared to last year - the result of increased credit authorized during 2003. This increase was more than offset by a $734,000 reduction in earnings from other equity investments, lower credit recoveries as the quality of trade credit continues to improve and miscellaneous revenues from services which contributed to a $175,000 reduction in EBIT for the segment to $2.9 million (2003 - $3.1 million). Corporate Expenses Corporate OG&A expenses for the quarter ended January 31, 2004 increased $310,000 (3.4%) over last year but were entirely offset by a $374,000 reduction in corporate amortization costs, primarily resulting from reduced deferred financing expenses. Gross Profit and Net Revenue from Services, EBITDA and EBIT The Company's gross profit and net revenue from services increased $8 million (or 11%) to $80.9 million for the quarter ended January 31, 2004 compared to the same period last year, entirely due to improved profits from increased grain shipments. OG&A expenses for the quarter declined by $792,000 (1.1%) from last year due to lower Crop Production Services costs offset by higher Livestock Services costs. The weighted average equivalent full-time ("EFT") staff (b) for the 12 months ended January 31, 2004 was 2,739 compared with 2,707 at October 31, 2003 and 2,816 for the 12 months ended January 31, 2003. The latest quarter's depreciation and amortization expenses of $15.9 million decreased $2.1 million from the same period last year as a result of ongoing consolidation of the Company's country grain handling assets and a declining trend in the Crop Production Services segment's expense. As a result of the above, the EBIT loss of $5.2 million for the quarter ended January 31, 2004 improved by $10.9 million compared to the EBIT loss of $16.1 million last year. Gain on Disposal of Assets The $75,000 gain on disposal of assets in the quarter ended January 31, 2004 arose from dispositions in the normal course of business. The comparable gain of $970,000 in 2003 largely reflected the excess of insurance proceeds over the net book value of a country elevator destroyed by fire. Interest Expense Interest and securitization expenses of $13 million for the three months ended January 31, 2004 increased $1 million (9%) from $11.9 million in 2003 and included $9.7 million of interest on long-term debt (including $850,000 on the debt portion of the 9% convertible unsecured subordinated debentures), $3.1 million on short-term debt and $448,000 in securitization expenses, offset by $320,000 in carrying charges recovered from the CWB in respect of grain purchased on its behalf. Short-term interest costs for the quarter declined $605,000 compared to last year as a result of the Company reducing its average short-term indebtedness to $215 million - $68 million less than the average short-term indebtedness in the same quarter in 2003. Capitalized interest related to capital expenditures increased $199,000 to $279,000 for the quarter ended January 31, 2004. The average value of grain inventory held on behalf of the CWB during the three months ended January 31, 2004 was $54 million, $27 million (33%) lower than in 2003 - the primary reason for the reduction of $601,000 in carrying charges recovered from the CWB in respect of grain purchased on its behalf. Average long-term debt of $411 million for the quarter ended January 31, 2004 was $36 million (10%) higher than in the same period last year - the result of the debt restructuring which occurred on December 13, 2002. Consequently, long-term interest costs increased by $1.2 million (12%). Discontinued Operations The Company sold the assets and liabilities of its Farm Business Communications division effective September 30, 2003. As a result, there are no ongoing Farm Business Communications division operations and its earnings, net of taxes, of $256,000 for last year's quarter ended January 31 have been reclassified as discontinued operations in the presentation of the Consolidated Statements of Earnings and Retained Earnings for this year. Income Taxes The Company's effective tax recovery rate on losses from continuing operations was 29.9% for the three months ended January 31, 2004 (2003 - 26.4%). The low effective tax recovery rate reflects the differential tax rates of certain taxable wholly owned and partially owned subsidiaries and the effect of the federal Large Corporation tax (which levies a flat rate on capital employed at the end of the year). As at January 31, 2004, the Company has tax loss carry-forwards of over $300 million available to reduce income taxes otherwise payable in future years, with about $200 million expiring between October 2008 and 2010. Net Loss for the Period The net loss of $12.7 million for the quarter ($0.31 per share) was $6.9 million better than the net loss of $19.6 million or $0.45 per share for the same period ended January 31, 2003. Per share calculations deduct from the net loss the pro rata effect of the preferred share dividend of $276,000 (2003 - $276,000) and after-tax interest of $1 million (2003 - $626,000) on the equity component of the Debentures. The net loss from continuing operations for the same three-month period last year was $19.9 million or a loss of $0.46 per share. Liquidity and Capital Resources Short-term Debt Bank and other loans of $238.2 million at January 31, 2004 reflect a seasonal increase of $62.2 million from October 31, 2003. The $38.5 million increase in short-term borrowings compared to January 31, 2003 resulted from an increase in non-cash working capital of $48.6 million, net capital expenditures and investments of $25.4 million, scheduled debt repayments of $20.3 million, interest paid on the Debentures of $9.5 million, dividends of $2.5 million, deferred financing and other costs of $3.2 million and increased cash on deposit of $3 million, offset by cash flow provided by operations of $74 million for the twelve months ended January 31, 2004. The Company had $94 million in outstanding letters of credit at January 31, 2004 (an increase of $41.9 million from a year earlier) in support of the security requirements of the CGC, Winnipeg Commodity Exchange and the Company's grain volume insurance program. Accordingly, the Company's available uncommitted short-term revolving credit facility at January 31, 2004 was $52 million compared with an uncommitted facility of $113 million at the same time last year. On March 1, 2004, the Company obtained from a syndicate of banks a $375 million revolving facility maturing February 28, 2005 plus an incremental $50 million "swing" facility to handle seasonal requirements between November 1 and April 30 at prime rates plus up to 2% (subject to the Company's fixed charge ratio). The new facilities replaced the Company's existing $350 million revolving facility that matured February 29, 2004 and expanded the syndicate of banks (from the existing two Schedule A Canadian chartered banks and two major international banks) to include three additional Schedule A Canadian chartered banks. The terms of the new facility, including covenants and security, are substantially unchanged from the facility it replaced. Securitization Agreement On November 5, 2003, the Company transferred its securitization program to a new independent trust, which permits the Company to sell, on an unlimited basis, an undivided co-ownership interest in its right to receive reimbursements of amounts advanced to producers arising from the delivery of grains that are held in accordance with a grain handling contract between the Company and the CWB. As at January 31, 2004, the Company had securitized $64 million of CWB grain inventory compared with $81 million at January 31, 2003. The CWB compensates grain handlers for the cost of financing inventory purchased on its behalf and this recovery is recorded in Interest and Securitization Expenses on the Statement of Earnings and Retained Earnings. Cash Flow Used in Operations Cash flow used in operations of $1.7 million ($0.08 per share) for the quarter improved $13.7 million from cash flow used in operations of $15.4 million ($0.37 per share) for the same three months ended in 2003. Per share calculations add the pro rata effect of the preferred share dividend of $276,000 (2003 - $276,000) and accrued after-tax interest on the Debentures of $1.5 million (2003 - $1 million) to cash flow used in operations. The improved cash flow from operations resulted from an increase in EBITDA of $8.8 million, supplemented by a decrease of $2.7 million in cash income taxes and a decrease in non-cash post-employment benefit recoveries for the quarter ended January 31, 2004 compared to the same quarter last year. Working Capital The Company maintained its liquidity with a current ratio at January 31, 2004 of 1.25 to 1, unchanged from a year earlier but seasonally lower than the current ratio of 1.3 to 1 at October 31, 2003. Working capital of $147.8 million at January 31, 2004 was only $7.1 million lower than $154.9 million at January 31, 2003. Working capital at January 31, 2004 was $29 million lower than working capital of $176.8 million at October 31, 2003 - the result of seasonal changes. Non-cash working capital increased $48.6 million from January 31, 2003 to 2004. Accounts payable decreased $40.3 million (due to the Company taking advantage of cash discounts on pre-season inventory purchases) and unpresented cheques decreased $21.8 million (primarily due to lower deferred grain cash tickets and reduced grain deliveries in January resulting from unseasonably cold weather), offset by $3.3 million lower receivables and prepaid expenses. The modest $11.9 million decline in inventories included a $25.3 million reduction in crop protection product inventories (due to lower inventory carry-out following a relatively "normal" 2003 sales season), a $45.6 million reduction in non-CWB grain inventories (due to reduced stocks on hand) and a $457,000 decrease in feed and other merchandise, offset by a $32.7 million increase in fertilizer inventory and a $26.8 million increase in seed inventory, resulting from higher fertilizer prices, the delay in pre-season seed sales and the Company taking advantage of pre- season purchase discount opportunities. Capital Expenditures, Acquisitions and Divestitures Capital expenditures of $8.4 million for the quarter were $3.8 million higher than the $4.6 million spent in the same period last year. Individually large capital expenditures in the current period include $2.9 million for five strategic grain storage expansion projects and $1.9 million related to the ongoing construction of the replacement feed mill at Edmonton, Alberta. The Company anticipates spending between $30 million and $40 million on sustaining and expansion-related capital expenditures during the 2004 fiscal year. Pension Plan Surplus At January 31, 2004, the market value of aggregate plan assets of the Company's various defined benefit plans exceeded the aggregate accrued benefit obligation. The Company reported a deferred pension asset of $16.2 million in Other Assets at January 31, 2004. The Company made $15,000 in cash contributions to the defined benefit plan and $769,000 in cash contributions to the defined contribution and multi-employer plans for the quarter ended January 31, 2004 (compared to the pension expense of $1.2 million recorded in the financial statements). Leverage The Company's total funded debt (excluding the Debentures), net of cash, increased to $565 million at January 31, 2004 from $551 million a year earlier. The Company's leverage ratio (net funded debt to capitalization) fluctuates materially from month-to-month due to underlying seasonal variations in working capital, reflecting increased purchases of grain beginning in the fall and crop inputs inventory through the winter and early spring, all of which cannot be financed entirely with trade credit. Measured on a weighted average trailing twelve month basis, the Company's leverage ratio for the twelve months ended January 31, 2004 was 45.5%, a modest improvement from the ratio of 46% for the fiscal year ended October 31, 2003 and a significant improvement over the 51.6% ratio for the twelve months ended January 31, 2003. The Company's ratio of total net debt to net tangible assets at January 31, 2004 was 52.5% (2003 - 52%). Market Capitalization The market capitalization of the Company's 45,309,919 issued and outstanding Limited Voting Common Shares (60,980,822 common shares including convertible securities) was $422 million at March 15, 2004 or $9.31 per share compared with the Company's book value of $10.44 per share ($9.76 per share fully diluted) at January 31, 2004. Outlook The Company has already processed $712 million of AU Financial credit applications for the 2004 growing season, representing about 75% of the total expected applications for the upcoming spring sales season and consistent with the prior year. Unifeed Financial approved its first credit applicants in February 2004. The customer base for Unifeed Financial tends to be smaller with individually larger credit balances carried from one livestock marketing to another. At January 31, 2004, the Company had advanced $32 million in secured trade credit that may be eligible for credit under Unifeed Financial. As eligible customers complete the marketing of their current livestock, their credit programs will be transferred to Unifeed Financial. The Company also anticipates expanding its base of creditworthy customers accessing trade credit through Unifeed Financial. Western Canada's livestock industry's prospects and the impact on producer purchasing power remain uncertain. The industry continues to suffer under import restrictions imposed by the United States and other countries following the discovery of a single case of BSE in Alberta and a case of BSE in the United States. The relaxation of import bans to the United States that had begun, and was expected to continue in 2004, has now been delayed until at least the middle of this calendar year. Mitigating these conditions, federal and provincial programs - particularly in Alberta - have provided essential cash receipts to beef producers to support the industry during this period. Hog producers may continue to suffer margin erosion as the Canadian dollar strengthens against the US dollar and the cost of certain feed ingredients remains high. Production managed industries such as dairy and poultry remain largely unaffected although pressures on the beef and hog industries are expected to increase competition among feed manufacturers for access to these markets. Following a severe winter, the railways have experienced service issues that have resulted in execution delays to port terminals and other North American destinations. In addition, the spotting and lifting of intermodal equipment has caused shipping delays and increased expenses related to the execution of sales of low volume, high value special crops. The railways have committed to clearing delays in spotting cars and transit of up to three weeks to a month. However, if unresolved during the upcoming spring season, these events could negatively impact the industry's and the Company's grain movement during this period. CWB grain shipments were lower in the first quarter than anticipated and lower than the same period in the "benchmark" year of 2001 - the year prior to the last two droughts. The CWB has indicated that it still intends to execute its original marketing program over the 12 months ending October 31, 2004. Accordingly, the Company anticipates there will be higher levels of CWB shipments during each of the Company's next two quarters and possibly during its fourth quarter. To the extent that the original CWB marketing program is not fully executed in the current year, increased "carry-out" stocks may result in increased shipping of CWB grains during the crop year ending July 31, 2005. Precipitation from September 1, 2003 to March 10, 2004 has been mainly between 85% and 115% of historical averages across most of the arable land in Manitoba and Saskatchewan. Precipitation in Alberta was below average during that time period, at between 60% and 85% of historical levels with some parts of southern Alberta well below average (40% to 60%). However, Alberta also reported the highest levels of on-farm surface water supplies at September 1, 2003, mitigating, to some extent, the current level of precipitation. Generally, average precipitation across the prairies has improved from those noted in the Company's 2003 fourth quarter release on December 11, 2003. Adequate precipitation through the winter can be a positive factor during the initial spring growing season. However, moisture levels in the spring and early summer ultimately have the most impact on spring sales of crop inputs and therefore, the size and quality of the crop harvested and available for shipping in the following fiscal year. Average production in Western Canada for the 10 years ended July 31, 2001 (including the effects of the 2001 drought but excluding the effects of the unprecedented 2002 drought) was about 48 million tonnes with about 32 million tonnes of that exported (67% of average production). On March 12, 2004, Agriculture and Agrifood Canada forecast crop production levels for the crop year ending July 31, 2004 consistent with the 10-year average, including a 15% increase in canola acres seeded. Such a change may enhance canola seed sales during the spring of 2004 - to date producers have delayed their seed purchase decisions compared to the prior year - and any consequent increase in canola production would increase opportunities for non-CWB shipping during fiscal 2005. The rally in canola prices over recent weeks to around $400 per tonne may further encourage producers to increase total seeded canola acres. The Company is a principal supplier of canola seed inputs and a major shipper of canola production. The Company has engaged a third party to assist in the marketing and sale of one of its Vancouver grain terminals pursuant to an order of the Canadian Competition Bureau Tribunal. The proceeds of such a sale may be utilized for general corporate purposes, including the repayment of debt or sustaining capital reinvestment. The sale is not expected to have a material impact on the Company's ongoing operations. (a) Earnings before interest, taxes, depreciation and amortization, gains or losses on asset disposals, discontinued operations net of tax and unusual items ("EBITDA") and earnings before gains or losses on asset disposals, interest, taxes, discontinued operations net of tax and unusual items ("EBIT") are provided to assist investors in determining the ability of the Company to generate cash from operations to cover financial charges before income and expense items from investing activities, income taxes and items not considered to be in the ordinary course of business. A reconciliation of such measures to net income is provided in the Consolidated Statements of Earnings and Retained Earnings and Note 4 to the Consolidated Financial Statements below. The items are excluded in the determination of such measures as they are non-cash in nature, income taxes, financing charges or are otherwise not considered to be in the ordinary course of business. EBITDA and EBIT provide important management information concerning business segment performance since the Company does not allocate financing charges or income taxes to these individual segments. Such measures should not be considered in isolation of or as a substitute for (i) net income or loss, as an indicator of the Company's operating performance or (ii) cash flows from operating, investing and financing activities, as a measure of the Company's liquidity. Such measures do not have any standardized meanings prescribed by Canadian generally accepted accounting principles ("GAAP") and are therefore unlikely to be comparable to similar measures presented by other companies. (b) Excluding staff related to non-wholly owned subsidiaries and operations discontinued during fiscal 2003 as a result of the sale of the Farm Business Communications Division. c Book value per share is derived by dividing the shareholders' equity (excluding the equity portion of the Debentures) at the end of the period by the total number of Limited Voting Common Shares outstanding at the end of the period as if the Series A convertible preferred shares had been converted on a 1:1 basis. The fully diluted book value per share is derived by dividing the shareholders' equity (including both the debt and equity portions of the Debentures and the value of executive stock options) at the end of the period by the total number of Limited Voting Common Shares outstanding at the end of the period as if the Series A convertible preferred shares, executive stock options and the Debentures had been fully converted. About the Company Agricore United (S&P, BB Long-Term Corporate Credit and Senior Secured Debt Ratings, Negative Outlook) is one of Canada's leading agri-businesses. The prairie-based company is diversified into sales of crop inputs and services, grain merchandising, livestock production services and financial markets. Agricore United's shares are publicly traded on the Toronto Stock Exchange under the symbol "AU". AINSWORTH LUMBER: Closes Tender Offers for Senior Secured Notes --------------------------------------------------------------- Ainsworth Lumber Co. Ltd. announced that the tender offers and consent solicitations initiated on February 17, 2004, relating to Ainsworth's 13.875% Senior Secured Notes due July 15, 2007, and its 12-1/2% Senior Secured Notes due July 15, 2007, have expired. As previously announced, Ainsworth accepted and paid for Secured Notes tendered prior to the February 27, 2004 consent payment deadline. Since that time, an additional US$125,000 total aggregate principal amount of 12 1/2% Notes has been tendered. Ainsworth has accepted and paid for these additional notes. The aggregate principal amount of Secured Notes outstanding prior to the commencement of the tender offers was US$89,085,000 aggregate principal amount of 13.875% Notes and US$184,600,000 aggregate principal amount of 12-1/2% Notes. A total of US$87,085,000 aggregate principal amount of 13.875% Notes and US$182,249,000 aggregate principal amount of 12-1/2% Notes have been tendered and accepted. This press release is not an offer to purchase, a solicitation of an offer to purchase, or a solicitation of an offer to sell securities, with respect to any Notes. Ainsworth Lumber Co. Ltd. has operated as a forest products company in Western Canada for over 50 years. The company's facilities have a total annual capacity of approximately 1.5 billion square feet - 3/8" of oriented strand board (OSB), 155 million square feet - 3/8" of specialty overlaid plywood, and 55 million board feet of lumber. In Alberta, the company's operations include an OSB plant at Grande Prairie and a one-half interest in an OSB plant at High Level. In B.C., the company's facilities include an OSB plant at 100 Mile House, a veneer plant at Lillooet, a plywood plant at Savona and finger-joined lumber plant at Abbotsford. * * * As reported in the Feb. 19, 2004, issue of the Troubled Company Reporter, Standard & Poor's Ratings Services raised its long-term corporate credit rating on wood products producer Ainsworth Lumber Co. Ltd. to 'B+' from 'B-' due to a strong financial performance and a strengthened balance sheet following completion of the company's proposed refinancing. At the same time, Standard & Poor's assigned its 'B+' senior unsecured debt rating to Ainsworth's proposed US$200 million notes maturing in 2014. The outlook is stable. "The upgrade stems from Ainsworth's strengthened balance sheet following strong profitability and cash generation in a year of record demand and pricing for oriented strandboard (OSB)," said Standard & Poor's credit analyst Clement Ma. Using a combination of approximately C$194 million cash and the new senior unsecured notes, Ainsworth is expected to retire its US$281.5 million in existing secured debt through a public tender offer. Following the refinancing, the company's total debt to capitalization should eventually decrease to less than 45% from approximately 67% at Dec. 31, 2003. The ratings on Ainsworth reflect the company's narrow product concentration in the production of OSB, and its mid-size market position. These risks are partially offset by the company's strong cost position stemming from its modern asset base, and its high fiber integration. AIR CANADA: Pursuing Okay to Enforce Perpetual Debt Pact in Plan ---------------------------------------------------------------- The Air Canada Applicants seek the CCAA Court's authority to incorporate the terms of a settlement agreement reached between certain holders of Air Canada senior unsecured debt and certain holders of Air Canada subordinated unsecured perpetual debt in their plan of compromise or arrangement. Ashley John Taylor, Esq., at Stikeman Elliott LLP, in Toronto, Ontario, explains that a majority of the holders of Senior Debt and a significant majority of the holders of Perpetual Debt have negotiated and agreed as to the relative treatment of their debt in the Plan. The Applicants believe that the Settlement Agreement is fair and equitable. Incorporating the terms of the Settlement Agreement into the Plan and allowing the interested stakeholders to vote on the Plan is commercially reasonable and represents the most efficient way to resolve the issues of enforceability. "[T]he Agreement represents a fair and reasonable way of accommodating a complex and difficult issue in the restructuring of Air Canada without placing the restructuring itself in jeopardy," Mr. Taylor says. On the Petition Date, the Applicants had over CN$4,000,000,000 in outstanding long-term debt obligations, which are made up of Senior Debt and Perpetual Debt. Approximately CN$1,193,000,000 of the total outstanding debt relates to Perpetual Debt issued pursuant to these financial instruments: * 5-3/4% Subordinated Perpetual Bonds 1986 (CHF200,000,000); * 6-1/4% Subordinated Perpetual Bonds 1986 (CHF300,000,000); * 6-3/8% Adjustable Subordinated Perpetual Bonds 1987 (DEM200,000,000); * Subordinated Loan Agreement, November 14, 1989 (JPY20,000,000,000); and * Subordinated Loan Agreement, November 14, 1989 (JPY40,000,000,000). Each Instrument contains a covenant whereby the purchaser of the Perpetual Debt agreed to subordinate the payment of its debt to the payment of "Senior Indebtedness." The definition of "Senior Indebtedness" is virtually and effectively identical in each Instrument, and is defined to mean all Indebtedness, which is not expressly subordinated to or ranking pari passu with the loan whether by operation of law or otherwise, in the event of a winding-up, liquidation or dissolution, whether voluntary or involuntary, whether by operation of law or by reason of insolvency legislation. The Settlement Agreement provides that: (a) The holders of Perpetual Debt will not be included in a separate class, but rather will be included in a general class of unsecured creditors; (b) Notwithstanding the treatment of holders of Perpetual Debt as proposed, each creditor holding Perpetual Debt will be entitled to vote the face value of its claim in the same manner as all other unsecured creditors; (c) The holders of Perpetual Debt will be entitled to a distribution under the Plan, which provides to them, in the aggregate, on a pro rata basis, 26% of the aggregate distribution, which would otherwise be made to them if they were not subordinated to the Senior Debt; (d) Seventy-four percent of the aggregate distribution, which would otherwise be made to the holders of Perpetual Debt if they were not subordinated to Senior Debt, will be distributed, on a pro rata basis, to the holders of Senior Debt, in addition to all other distributions to which they are entitled as unsecured creditors under the Plan; (e) For certainty, a party entitled to a distribution in accordance with the Agreement will be entitled to receive a corresponding portion of all direct or indirect benefits which may accrue to or be enjoyed by unsecured creditors pursuant to any rights offering, over-subscription mechanism or otherwise; and (f) The agreed upon mechanism will allow for the distributions to occur without the necessity of the holders of Senior Debt or Air Canada enforcing the subordination covenants directly against the holders of Perpetual Debt. Five unsecured creditors led by Canadian Imperial Bank of Commerce are currently seeking a declaration that the holders of Perpetual Debt are subordinated to all unsecured creditors and that any distribution due to the holders of Perpetual Debt must be distributed pro rata to the general unsecured creditors. Mr. Taylor tells the Court that the general unsecured creditors, including CIBC and the other four creditors, have no standing to enforce the terms of the Instruments. The general unsecured creditors are strangers to the Instruments. If the Instruments are effective to subordinate the payment of the Perpetual Debt, it is only to the payment of "Senior Indebtedness." There is no basis on which to extend the subordination to other creditors. Mr. Taylor points out that the subordination provisions in the Instruments do not alter the priority scheme or the distributions that the general unsecured creditors receive under the Plan. Creditors in the same class as the subordinating creditor should not receive the benefit of a subordination agreement to which they are not a party and on which they are not entitled to rely. To permit the general creditors to do so would result in a windfall benefit. Headquartered in Saint-Laurent, Quebec Canada, Air Canada -- http://www.aircanada.ca/-- represents Canada's only major domestic and international network airline, providing scheduled and charter air transportation for passengers and cargo. The Company filed for CCAA protection on April 1, 2003 (Ontario Superior Court of Justice, Case No. 03-4932) and Section 304 petition with the U.S. Bankruptcy Court for the Southern District of New York (Case No. 03-11971). Matthew A. Feldman, Esq., and Elizabeth Crispino, Esq., at Willkie Farr & Gallagher serve as the Debtors' U.S. Counsel. When the Debtors filed for protection from its creditors, they listed C$7,816,000,000 in assets and 9,704,000,000 in liabilities. (Air Canada Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service, Inc., 215/945-7000) AIR CANADA: Trinity's Pension Grab Gambling with Company's Future ----------------------------------------------------------------- March 18 /CNW/ Trinity Times Investments' last minute pension grab is a gamble for more concessions from Air Canada's unions that threatens the airline and its workers, CUPE Air Canada Component president Pamela Sachs said. "Since day one Trinity knew that the unions made huge financial sacrifices to Air Canada in exchange for a signed agreement protecting our defined benefit pension plan," said Sachs. "We did that under instructions from our members, as part of a collective agreement ratified by our members, and signed by the employer as part of a court-approved process." "What part of 'a deal is a deal' does Trinity not understand? The investor clearly knew we had a signed pension protection guarantee from Air Canada when it made its investment offer in November. It knew when it made a second offer in December." "Trinity's assertions that the unions have not fully understood Trinity's pension grab proposal is outrageous. The February 5 Trinity proposal is what Air Canada tried to get in the last round of bargaining in 2002. We know exactly how it will strip pension benefits and retirement security from our members and we have communicated the reasons for rejecting its proposal repeatedly to Air Canada and Trinity," Sachs said. "We've given out of our pockets to secure the future of the company," said Sachs. "All we ask in return is for our members to continue to retire with dignity collecting the benefit from their own deferred wages. If Trinity is serious about Air Canada it will have to respect the deals the airline has made and behave responsibly with Canada's national airline." AIRLEASE: Plans to Sell Remaining Assets & Dissolve Partnership --------------------------------------------------------------- Airlease Ltd., a California Limited Partnership (OTC Bulletin Board: AIRL), announced that the Board of Directors of its General Partner, acting in response to a recommendation made by a special committee of independent directors, has directed the General Partner to sell the Partnership's remaining assets as attractive sale opportunities arise, distribute sale proceeds (after repaying debt and establishing appropriate reserves) to unitholders after disposition, and dissolve the Partnership when all assets are sold. Given current market conditions, the General Partner cannot predict either the actual timing for completing such sales or the prices and other terms of such sales. The General Partner also cannot predict when net proceeds will be distributed to unitholders or the aggregate amount of such net proceeds, both of which will depend upon a number of factors, including market conditions, the timing and terms of such asset sales, the amount of cash required to settle outstanding liabilities and contingencies, the amount of necessary cash reserves, and the expenses associated with selling assets and dissolving the Partnership. In 1997, the unitholders of the Partnership authorized the General Partner to decide not to make new aircraft investments, to sell aircraft when attractive opportunities arise, to distribute net sale proceeds and to dissolve the Partnership when all assets are sold. Since that time, the General Partner has continued to operate the Partnership and consider, from time to time, alternative investments. However, the General Partner has not made new investments in aircraft, primarily due to the weak aircraft leasing market. For a variety of reasons, including the General Partner's belief that significant improvement in this market is not forthcoming in the near term for the Partnership's three aircraft, the General Partner has now determined that unitholders likely will realize greater value from a dissolution of the Partnership compared to continued operation of the Partnership. Accordingly, the General Partner intends to exercise fully and promptly the authority granted to it previously by the unitholders to sell assets, distribute net proceeds and dissolve the Partnership. In 1997, the unitholders also authorized the General Partner to impose restrictions on the transferability of outstanding units. The General Partner has not taken this action, although it reserves the right to do so if it concludes that implementing such restrictions would be in the best interests of the unitholders in light of current partnership tax law. The Partnership's portfolio consists of three aircraft. One aircraft, a 727-200FH, is leased to FedEx Corporation under a lease which expires in April 2006. The other two aircraft are MD- 82s leased to CSI Aviation Services, Inc. through May 2004. The General Partner is actively seeking buyers for these aircraft. AIRLEASE: Will Make First Quarter Cash Distribution on May 14 ------------------------------------------------------------- Airlease Ltd., A California Limited Partnership, (OTC Bulletin Board: AIRL), said its directors approved a first quarter 2004 regular cash distribution of 5 cents per unit, the same as the 2003 fourth quarter regular cash distribution. The board of directors also approved a special cash distribution of 26 cents per unit, as a result of the recently completed sale of one MD-81 aircraft. Due to the lack of attractive alternative investments, the Partnership elected to disburse the sale proceeds to unitholders. Additional information concerning the sale of this aircraft and 2003 financial results is set forth in the Company's recent Form 10-KSB which will be filed shortly with the Securities and Exchange Commission. The first quarter cash distribution will be payable May 14, 2004, to unitholders of record on March 31, 2004. ALLEGIANCE TELECOM: Files Reorganization Plan in S.D.N.Y. --------------------------------------------------------- Allegiance Telecom, Inc. (OTC Bulletin Board: ALGXQ), a national local exchange carrier providing competitive telecom services to business, filed its proposed plan of reorganization with Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York. The company also filed a disclosure statement that explains the details of the proposed plan. The company will request that a hearing on the adequacy of the disclosure statement and related procedures to solicit votes in favor of the plan be scheduled by the Bankruptcy Court for April 16, 2004. On February 13, 2004, Allegiance selected XO Communications Inc. (OTC Bulletin Board: XOCM) as the winning bidder to purchase substantially all of the assets of Allegiance Telecom and its subsidiaries, including the stock of Allegiance's regulated operating subsidiaries. XO will not purchase Allegiance's customer premises equipment sales and maintenance business operated under the name of Shared Technologies, its dedicated dial-up access services business with Level 3, and certain other Allegiance assets and operations. Under the terms of its bid, XO will purchase substantially all of Allegiance's assets for approximately $311 million in cash and approximately 45.38 million shares of XO common stock. The bid was approved by the court on Feb. 19, 2004, and is currently undergoing certain federal and state government approvals. The Company anticipates that, subsequent to receipt of the federal approvals which are expected by mid-April, 2004, XO Communications will run the Allegiance business under the terms of an operating agreement until final closing. Allegiance also recently announced that it reached a settlement with Level 3 Communications, which subject to approval of the Allegiance bankruptcy court and other conditions, would terminate a multi-year contract Level 3 has to purchase wholesale dial access services, including the use of operating equipment, from Allegiance. Under this settlement, Level 3 has agreed to pay Allegiance $54 million in cash in exchange for Allegiance's contract with Level 3 and certain associated assets dedicated to this contract. With the sale to XO and the settlement agreement with Level 3, Allegiance's remaining operations consist of its Shared Technology customer premise equipment installation and maintenance business and the Allegiance shared hosting business. The Company plans to operate the Shared Technology business as a free-standing enterprise, the stock of which will be held for the benefit of, or distributed to, the Allegiance creditors. Allegiance is in the process of selling its shared hosting business. Allegiance Telecom is a facilities-based national local exchange carrier headquartered in Dallas, Texas. It announced financial restructuring plans under Chapter 11 of the U.S. Bankruptcy Code on May 14, 2003. As a leader in competitive local service for medium and small businesses, Allegiance offers "One source for business telecom(TM)" -- a complete package of telecommunications services, including local, long distance, international calling, high-speed data transmission and Internet services and a full suite of customer premise communications equipment and service offerings. Additional information regarding the Company's reorganization is available at http://www.algx.com/restructuring AURORA FOODS: Emerges from Chapter 11 & Completes Pinnacle Merger ----------------------------------------------------------------- Aurora Foods Inc. (OTC Bulletin Board: AURF), a producer and marketer of leading food brands, announced that its Plan of Reorganization under Chapter 11 of the Bankruptcy Code, which was filed on December 8, 2003, has become effective and Aurora has completed its previously announced merger with Pinnacle Foods Holding Corporation. The reorganized company has been renamed Pinnacle Foods Group Inc. and is headquartered in Cherry Hill, N.J. "The successful emergence from Chapter 11 after less than four months and the merger with Pinnacle Foods represent the final steps in Aurora's financial restructuring," said Dale F. Morrison, Aurora's outgoing Chairman and interim Chief Executive Officer. "With the valued support of our vendors and employees, we continued to operate the business in the ordinary course while accomplishing a restructuring that maximized value for our stakeholders and produced a strong branded food company that is re-energized and well positioned for future growth." About the Reorganized Company The reorganized company is a producer and marketer of leading branded food products, including Duncan Hines(R) baking mixes; Log Cabin(R), Mrs. Butterworth's(R) and Country Kitchen(R) syrups; Lender's(R) bagels; Van de Kamp's(R) and Mrs. Paul's(R) frozen seafood; Aunt Jemima(R) frozen breakfast products; Celeste(R) frozen pizza; Chef's Choice(R) skillet meals; Swanson(R) and Hungry-Man(R) frozen dinners; Vlasic(R) pickles; and Open Pit(R) barbecue sauces. B & B COMMNET: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: B and B CommNet Spectron Inc. 516 Industrial Drive Lewisberry, Pennsylvania 17339 Bankruptcy Case No.: 04-01370 Chapter 11 Petition Date: March 9, 2004 Court: Middle District of Pennsylvania (Harrisburg) Judge: Mary D. France Debtor's Counsel: Lawrence G. Frank, Esq. 2023 North Second Street Harrisburg, PA 17102 Tel: 717-234-7455 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20-largest creditors. BEAR STEARNS: Fitch Assigns Low-B Ratings to 6 Note Classes ----------------------------------------------------------- Bear Stearns Commercial Mortgage Securities Trust 2004-PWR3, commercial mortgage pass-through certificates are rated by Fitch Ratings as follows: --$186,500,000 class A-1 'AAA'; --$150,000,000 class A-2 'AAA'; --$158,000,000 class A-3 'AAA'; --$469,869,000 class A-4 'AAA'; --$1,108,470,769 class X-1 'AAA'; --$1,072,357,000 class X-2 'AAA' --$26,326,000 class B 'AA'; --$12,471,000 class C 'AA-'; --$16,627,000 class D 'A'; --$9,699,000 class E 'A-'; --$15,241,000 class F 'BBB+'; --$11,085,000 class G 'BBB'; --$13,856,000 class H 'BBB-'; --$2,771,000 class J 'BB+'; --$5,542,000 class K 'BB'; --$6,928,000 class L 'BB-'; --$5,543,000 class M 'B+'; --$2,771,000 class N 'B'; --$2,771,000 class P 'B-'; --$12,470,769 class Q 'NR'. Classes A-1, A-2, A-3, A-4, B, C, D, and E are offered publicly, while classes X-1, X-2, F, G, H, J, K, L, M, N, P, and Q are privately placed pursuant to rule 144A of the Securities Act of 1933. The certificates represent beneficial ownership interest in the trust, primary assets of which are 116 fixed-rate loans having an aggregate principal balance of approximately $1,108,470,769 as of the cutoff date. BURLINGTON: BII Trust Wants to Extend Service Date for Complaints ----------------------------------------------------------------- On November 12, 2003, the BII Distribution Trust filed Adversary Proceedings seeking, inter alia, avoidance of preferential transfers against various defendants. After filing its complaints and initiating the Adversary Proceedings, the BII Trust attempted service at the last known address for each Defendant. However, Etta Wolfe, Esq., at Richards, Layton and Finger, P.A., in Wilmington, Delaware, tells the Court that certain of the addresses appear to be no longer valid. In addition, the Defendants have either formally or informally contested service of process, have not formally acknowledged that both process and service of process were proper or have not acknowledged that they are the proper defendants. Moreover, certain Defendants are foreign corporations and additional time is necessary to serve those Defendants pursuant to the Hague Convention of 1965 on the Service Abroad of Judicial and Extra-judicial Documents in Civil or Commercial Matters or otherwise. Ms. Wolfe is concerned that if the complaints are not served timely and the Adversary Proceedings are dismissed, the BII Trust would be barred by the statute of limitations from re-filing the complaints and would not have any chance to recover on these causes of action for the benefit of the Debtors' estates. This would be unfair to those who may benefit from any recovery in the Adversary Proceedings. Ms. Wolfe points out that the granting of additional time to effect service of original process is explicitly provided for by Rule 9006(b) of the Federal Rules of Bankruptcy Procedure, which states: "When an act is required or allowed to be done at or within a specified period by these rules or by a notice given thereunder or by order of court, the court for cause shown may at any time in its discretion with or without motion or notice order the period enlarged if the request therefore is made before the expiration of the period originally prescribed or as extended by a previous order." Accordingly, the Trust asks the Court to extend by an additional 90 days, the time within which it may effect service of original process in 26 Adversary Proceedings upon the Defendants within any judicial district of the United States or foreign country, without prejudice to the Creditor Trust's right to request additional extensions. (Burlington Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., 215/945-7000) CARAUSTAR: Will Present at Lehman Brothers' Conference Tomorrow --------------------------------------------------------------- Caraustar Industries, Inc. (Nasdaq: CSAR) announces that Michael J. Keough, senior vice president and chief operating officer, and Ronald J. Domanico, vice president and chief financial officer, will be presenting an overview of the company at the Lehman Brothers High Yield Bond and Syndicated Loan Conference in Orlando, Florida on Tuesday, March 23, 2004 at 8:50 a.m. (EST). The audio portion of the presentation will be webcast live and archived for 90 days following the conference. In order to access the webcast, please go to the Caraustar website at http://www.caraustar.com/ Click on the Investor Relations icon and then the link for the webcast: http://customer.nvglb.com/LEHM002/032204a_by/default.asp?entiity=caraustar Caraustar (S&P, BB Corporate Credit Rating, Negative Outlook), a recycled packaging company, is one of the largest and most cost- effective manufacturers and converters of recycled paperboard and recycled packaging products in the United States. The company has developed its leadership position in the industry through diversification and integration from raw materials to finished products. Caraustar serves the four principal recycled paperboard product markets: tubes, cores and cans; folding carton and custom packaging; gypsum wallboard facing paper; and miscellaneous "other specialty" and converted products. CARAUSTAR: Will Raise Tube & Core Product Line Prices on Apr. 12 ---------------------------------------------------------------- Caraustar Industries, Inc. (Nasdaq: CSAR) announced that it will increase prices on all paper tube and core product lines by eight percent. The increase will become effective with shipments on April 12, 2004. This price change will help offset recent and dramatic increases in recovered fiber costs. Uncoated and coated paperboard price increases of $50 per ton were previously announced for March and April 2004, respectively. Caraustar continues to be dedicated to providing customers with superior quality products and value-added service at competitive prices. Caraustar (S&P, BB Corporate Credit Rating, Negative Outlook), a recycled packaging company, is one of the largest and most cost- effective manufacturers and converters of recycled paperboard and recycled packaging products in the United States. The company has developed its leadership position in the industry through diversification and integration from raw materials to finished products. Caraustar serves the four principal recycled paperboard product markets: tubes, cores and cans; folding carton and custom packaging; gypsum wallboard facing paper; and miscellaneous "other specialty" and converted products. CHYPS CBO: S&P Places Class A-3A & A-3B Ratings on Watch Negative ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on the class A-3A and A-3B notes issued by Chyps CBO 1999-1 Ltd., a high-yield arbitrage CBO transaction originated in January 1999, on CreditWatch with negative implications. At the same time, the ratings on the class A-1 and A-2 notes, which benefit from the enhancement provided by a Financial Security Assurance Inc. insurance policy, are affirmed. The CreditWatch placements reflect factors that have negatively affected the credit enhancement available to support the notes since the transaction was last downgraded, in January 2002. Chief among these factors is a sharp increase in the number of defaults in the collateral pool securing the notes. As a result of asset defaults and the sale of credit risk assets, the class A overcollateralization ratio has dropped significantly, and now stands at 78.5%. This contrasts with a ratio of 99.5% when the notes were last downgraded, and places them well below their minimum requirement of 115.0%. Meanwhile, the class B overcollateralization ratio went down from 89.4% to 67.6%, substantially below its 104.0% benchmark. Including defaulted securities, $81.1 million (or approximately 45.4% of the collateral pool's par value) come from obligors now rated in the 'CCC' range or lower. RATINGS PLACED ON CREDITWATCH NEGATIVE Chyps CBO 1999-1 Ltd. Rating Class To From A-3A B-/Watch Neg B- A-3B B-/Watch Neg B- RATINGS AFFIRMED Chyps CBO 1999-1 Ltd. Class Rating A-1 AAA A-2 AAA TRANSACTION INFORMATION Issuer: Chyps CBO 1999-1 Ltd. Co-issuer: Chyps CBO 1999-1 (Delaware) Corp. Manager: Delaware Investments Advisors Underwriter: Bear Stearns Cos. Inc. (The) Insurer: Financial Security Assurance Inc. Trustee: US Bank Transaction type: High-yield arbitrage CBO TRANCHE INITIAL LAST CURRENT INFORMATION REPORT ACTION ACTION Date (MM/YYYY) 05/1999 1/2002 03/2004 A-1 notes rtg. AAA AAA AAA A-2 notes rtg. AAA AAA AAA A-3A notes rtg. A- B- B-/Watch Neg A-3B notes rtg. A- B- B-/Watch Neg Class A OC ratio 118.8% 99.5% 78.5% Class A OC ratio min. 114.0% 115.0% 115.0% Class B OC ratio 107.8% 89.4% 67.6% Class A OC ratio min. 103.0% 104.0% 104.0% A-1 note bal. $83.0mm $83.0mm $48.4mm A-2 note bal. $97.0mm $97.0mm $97.0mm A-3A note bal. $41.0mm $41.0mm $41.0mm A-3B note bal. $14.9mm $14.9mm $14.9mm PORTFOLIO BENCHMARKS CURRENT S&P Wtd. Avg. Rtg. (excl. defaulted) B S&P Default Measure (excl. defaulted) 5.59% S&P Variability Measure (excl. defaulted) 3.68% Obligors rated 'BB-' and above 25.01% Obligors rated 'B+' and above 39.95% Obligors rated 'B' and above 46.67% Obligors rated 'B-' and above 54.64% Obligors rated in 'CCC' range 17.91% Obligors rated 'SD' or 'D' 27.45% S&P RATED LAST CURRENT OC (ROC) RATING ACTION RATING ACTION Class A-3A N.A. (B-) 74.78% (B-/Watch Neg) Class A-3B N.A. (B-) 74.78% (B-/Watch Neg) CINCINNATI BELL: Lenders Agree to Waive Credit Default ------------------------------------------------------ Cincinnati Bell Inc. (NYSE:CBB) has received a waiver from its lenders under its credit facility and intends to release earnings for fourth quarter and full year 2003 today, March 22, 2004. The restatement of prior financial statements that the company announced on March 15, 2004, gave rise to an event of default under the company's credit facilities and certain other indebtedness. With the receipt of this waiver the company has cured all remaining instances of default. The company intends to announce its fourth quarter and full year 2003 results and file its 2003 Form 10-K today, March 22, 2004. The company will also host a conference call discussing its results tomorrow, March 23, 2004 at 9:00 am EST, which will be webcast on the company's website at http://www.cincinnatibell.com/ A taped replay of the conference call will be available one hour after the conclusion of the teleconference until 5:00 (PST) on April 6, 2004. The dial-in number and passcode for this call will be released with the company's earnings announcement today. About Cincinnati Bell Inc. Cincinnati Bell Inc. (NYSE:CBB) is parent to one of the nation's most respected and best performing local exchange and wireless providers with a legacy of unparalleled customer service excellence. The company was recently ranked number one in customer satisfaction, for the third year in a row, by J.D. Power and Associates for residential long distance among mainstream users. Cincinnati Bell provides a wide range of telecommunications products and services to residential and business customers in Ohio, Kentucky and Indiana. Cincinnati Bell is headquartered in Cincinnati, Ohio. Visit http://www.cincinnatibell.com/for more information. COMMSCOPE: Prices $225 Million Convertible Debt Private Offering ---------------------------------------------------------------- CommScope, Inc. (NYSE: CTV) has priced a private offering of $225 million aggregate principal amount of convertible senior subordinated debentures due 2024. These convertible debentures bear an interest rate of 1.00%. In addition, the Company has granted the initial purchasers of the debentures an option to purchase up to an additional $25 million aggregate principal amount of debentures. This offering of debentures is expected to close on March 24, 2004. The debentures are convertible into CommScope common stock, under certain circumstances at the option of the holder, at an initial conversion rate of approximately 45.9770 shares per $1,000 principal amount at maturity of debentures, subject to adjustment. At the initial conversion rate, the notes will be convertible into common stock at a conversion price of approximately $21.75 per share. This represents an approximate 33% premium based on the last reported sale price of CommScope's common stock on the New York Stock Exchange of $16.35 per share. The Company plans to use the net proceeds as follows: a) to retire all of the $172.5 million aggregate principal amount of our outstanding 4% convertible subordinated notes due 2006 by redemption, at a redemption price of 101.7143% of their principal amount, plus accrued interest, and/or through privately negotiated transactions concurrent with or subsequent to this offering; b) to repay $25 million of outstanding revolving credit loans under our senior secured credit facility; and c) for other general corporate purposes. About CommScope CommScope (NYSE: CTV) (S&P, BB Corporate Credit & B+ Subordinated Debt Ratings, Stable) is a world leader in the design and manufacture of 'last mile' cable and connectivity solutions for communication networks. We are the global leader in structured cabling systems for business enterprise applications and the world's largest manufacturer of coaxial cable for Hybrid Fiber Coaxial (HFC) applications. Backed by strong research and development, CommScope combines technical expertise and proprietary technology with global manufacturing capability to provide customers with high-performance wired or wireless cabling solutions from the central office to the home. COTT CORP: Appoints John K. Sheppard as Chief Executive Officer --------------------------------------------------------------- Cott Corporation (NYSE:COT; TSX:BCB) appoints John K. Sheppard as chief executive officer, effective September 1, 2004. Sheppard currently serves as president and chief operating officer. Frank E. Weise, the company's chief executive officer since 1998, will remain chairman with an active role in assisting management in long-term strategy, customer relations and investor relations. "John's new leadership brings fresh vitality to Cott's ambitious plans for growth in the coming decade." Weise said. "His extensive experience in the beverage industry, his passion for the business and his proven performance in top management at Cott make this transfer of responsibilities both deserved and virtually seamless." Weise added, "With the company delivering record results, now is the time for John's promotion. I am enthused to move forward and to concentrate in areas that will help keep the company on the successful course that our team has driven for six years. I am personally delighted to continue working with John as he assumes the chief executive role and as he takes our great company to the next level." Sheppard joined Cott in February 2002 as president of the company's U.S. business unit. Under his direction, this unit saw accelerated sales growth while posting record earnings. In July 2003, he was named Cott president and chief operating officer and a member of the board of directors. Prior to joining Cott, he held a series of executive positions at Coca-Cola Company ranging across sales, marketing, finance, strategic planning and international operations. "Clearly, this is an exciting time in Cott's history," Sheppard said. "Thanks to Frank's leadership, we are poised for ongoing success. We have a sound strategy in place, strong relationships with our customers and, perhaps most importantly, an exceptional team of retailer-brand beverage professionals. We are ready to seize the future and to keep our momentum going." Cott's lead independent director, Serge Gouin, commented on the executive change, "We have the fullest confidence in John's ability to lead the company forward. These moves are a logical progression for the management team. Frank and John will continue to work together in fulfilling Cott's potential as the world's largest retailer-branded beverage company. Their personal partnership is a cornerstone in a very solid future for our company." Weise joined Cott in July 1998, following major management assignments at Procter & Gamble, Campbell Soup and Confab. He orchestrated and led Cott's successful turnaround by refocusing the Company on its core soft drink business in the United States, Canada and the United Kingdom. He then set a strategic growth vision that led to five consecutive years of expanded sales and profitable performance. He was named "Executive of Year" by Beverage Industry magazine in 2002 and then top CEO in Canada in 2003 by Report on Business magazine. The company also announced today that it will release its first quarter financial results before the markets open on Tuesday, April 20th. Weise, Sheppard and Raymond P. Silcock, executive vice president and chief financial officer, will host a conference call on the same date to discuss these results. First Quarter Results Conference Call Cott Corporation will host a conference call on Tuesday, April 20th at approximately 10:30 AM ET to discuss first quarter financial results. For those who wish to listen to the presentation, there is a listen-only dial-in telephone line, which can be accessed as follows: North America: (800)-814-4860 International: (416)-640-1907 Annual General Meeting Cott Corporation's annual general meeting of shareowners will take place on Tuesday, April 27, 2004 at 8:30 AM ET at the Glenn Gould Studio, CBC Building, 250 Front Street West, Toronto, Ontario. Webcast To access the conference call on April 20th and the Annual General Meeting on April 27th over the Internet, please visit Cott's website at http://www.cott.comon both dates at least fifteen minutes early to register, download, and install any necessary audio/video software. For those who are unable to access the live broadcasts, a replay will be available at Cott's website following these events until May 11th, 2004. Cott Corporation (S&P, BB Long-Term Corporate Credit and BB+ Senior Secured Debt Ratings) is the world's largest retailer brand soft drink supplier, with the leading take home carbonated soft drink market shares in this segment in its core markets of the United States, Canada and the United Kingdom. CSG SYSTEMS: S&P Affirms & Removes Low-B Ratings from Watch ----------------------------------------------------------- Standard & Poor's Ratings Services affirms its 'BB-' corporate credit and senior secured debt ratings on CSG Systems Inc. and removed them from CreditWatch, where they had been placed on Oct. 8, 2003. "The ratings affirmation follows CSG's recent announcement that it has signed a new five-year contract with Comcast Corp. (BBB/Stable/--), its largest customer, mitigating concerns that Comcast might seek to terminate its relationship with CSG," said Standard & Poor's credit analyst Ben Bubeck. The outlook is stable. As of Dec. 31, 2003, Englewood, Colo.-based CSG had operating lease-adjusted total debt of approximately $306 million. CSG provides billing solutions for converging communications markets, including cable television, direct broadcast satellite, telephony, and on-line services, through a combination of both outsourced and licensed formats. In addition to the five-year Comcast deal just completed, CSG also recently extended its contract with Echostar, its second largest customer, through March 2006. Customer concentrations are high, however, as these two customers represent about one-third of CSG's revenue base. Debt maturities, including a $30 million mandatory repayment in July 2004, should lead to steady improvement in leverage. Standard & Poor's expects CSG to generate sufficient cash from operations to meet scheduled maturities. Following the signing of the Comcast contract, CSG has no major contract renewals until 2006, which supports expectations for relatively stable revenue and cash flow generation over the near- to intermediate-term. CSK AUTO: Reports Improved Sales and Profits for Q4 & FY 2003 ------------------------------------------------------------- CSK Auto Corp. (NYSE: CAO), the parent company of CSK Auto Inc., a specialty retailer in the automotive aftermarket, reported its financial results for the fourth quarter and fiscal year ended Feb. 1, 2004. The company noted the following highlights for the fourth quarter and fiscal year: -- Net sales were $372.3 million for the quarter and a record $1,578.1 million for the full year; -- Same store sales increased by 8% for the fourth quarter and 6.0% for the full year; -- During the fourth quarter of fiscal 2003, we refinanced our debt, which is expected to provide us with pre-tax annual interest savings of between $11.0 million and $13.0 million or $0.14 to $0.17 per share; and -- Adjusted free cash flow (a non-GAAP measure described below) for fiscal 2003 was $73.7 million. Financial Results Net sales for the 13 weeks ended Feb. 1, 2004 increased $22.6 million to $372.3 million from $349.7 million for the 13 weeks ended Feb. 2, 2003. Sales for the fiscal year ended Feb. 1, 2004 increased $71.5 million to $1,578.1 million from $1,506.6 million for the fiscal year ended Feb. 2, 2003. Same store sales increased 8.0% and 6.0% for the fourth quarter and fiscal year, respectively. The higher sales are a result of our continued efforts to increase our average sale per customer and to attract new customers to our stores through our new and innovative product offerings. Gross profit increased $15 million to $187.2 million, or 50.3% of net sales for the fourth quarter of fiscal 2003 from $172.2 million or 49.2% of net sales for the fourth quarter of fiscal 2002. Gross profit increased $48.0 million to $748.2 million, or 47.4% of net sales, for fiscal 2003 from $700.2 million, or 46.5% of net sales, for fiscal 2002. As discussed previously during the year, we adopted Emerging Issues Task Force No. 02-16 ("EITF 02- 16") during the first quarter of fiscal 2003. EITF 02-16 required that certain vendor allowances previously recognized in operating and administrative costs be reflected in cost of sales. Adjusted gross profit percentages for the fourth quarter and full year of fiscal 2002 for the effect of EITF 02-16 would have been 51.8% and 47.8% of net sales, respectively. As previously stated, we have continued to offer new product offerings that carry higher dollar averages but lower gross profit margin rates. Operating profit for the fourth quarter of fiscal 2003 totaled $18.3 million (4.9% of net sales) compared to $19.8 million (5.7% of net sales) for the fourth quarter of fiscal 2002. Operating profit for fiscal 2003 totaled $116.6 million (7.4% of net sales) compared to $102.5 million (6.8% of net sales) for fiscal 2002. Operating profit was negatively impacted during fiscal 2003 as a result of charges related to our recent refinancing and a closed store reserve adjustment (see discussion below). Operating profit was favorably impacted during fiscal 2003 as a result of higher gross margin dollars and the leveraging of fixed costs over the rising net sales. On a comparable basis, operating profit for the fourth quarter of fiscal 2003 increased to $32.4 million from $30.8 million in the fourth quarter of fiscal 2002. On a comparable basis, operating profit for fiscal 2003 increased to $130.9 million from $114.6 million in fiscal 2002. GAAP net loss for the fourth quarter of fiscal 2003 was $22.6 million, or $(0.49) per diluted common share, compared to net income of $3.7 million, or $0.08 per diluted common share, for the fourth quarter of fiscal 2002. On a comparable basis, net income increased to $13.4 million, or $0.29 per diluted common share, in the fourth quarter of fiscal 2003 from $10.8 million, or $0.24 per diluted common share, in the fourth quarter of fiscal 2002. GAAP net income for fiscal 2003 was $10.8 million, or $0.23 per diluted common share, compared to GAAP net income of $21.8 million, or $0.54 per diluted common share, in fiscal 2002. On a comparable basis, net income for fiscal 2003 was $49.5 million, or $1.08 per diluted common share, compared to net income of $34.2, or $0.81 per diluted common share for fiscal 2002. Other key financial performance indicators which have shown improvement year-over-year include: (1) net cash provided by operating activities which increased by $14.7 million to $50.6 million in fiscal 2003 from $35.9 million in fiscal 2002; (2) capital expenditures increased to $16.1 million in fiscal 2003 from $9.6 million in fiscal 2002; (3) adjusted free cash flow (a non-GAAP measure defined below) increased $43.0 million to $73.7 million in fiscal 2003 from $30.7 million in fiscal 2002; and (4) net debt (a non-GAAP measure defined below) was reduced by $26.4 million in fiscal 2003 to $483.0 million from $509.4 million in fiscal 2002. In January 2004, we completed a refinancing of our debt that included the redemption of approximately 94% of our outstanding $280.0 million 12% senior notes and the issuance of $225.0 million 7% senior subordinated notes. In addition, we amended our bank credit facility, increasing our credit line by $75.0 million and reducing our interest rate spread by 50 basis points. As a result of the refinancing, we expect pre-tax annual savings of approximately $11.0 million to $13.0 million in interest expense, or $0.14 to $0.17 per share (assuming 47 million shares outstanding). In conjunction with these transactions, we incurred a loss on debt retirement during the fourth quarter of fiscal 2003 of approximately $45.2 million that included early redemption premiums, underwriting and bank fees and the write-off of certain financing fees and other costs. In addition, approximately $1.8 million of indirect costs related to these transactions were expensed as operating and administrative expenses. The refinancing completed in the fourth quarter and the ongoing improvement in our operating results have increased our cash flow and financial flexibility, enabling us to pursue an alternate strategy to reduce our current portfolio of closed stores, which includes lease buyouts and foregoing lease extensions on locations that we currently sublease at a marginal profit. This change in strategy requires us to establish a new closed store reserve based upon the guidance in Statement of Financial Accounting Standards No. 146, "Accounting for Costs Associated with Exit or Disposal Activities" (FAS 146) which became effective Jan. 1, 2003, and reverse the existing closed store reserve which was previously established under EITF 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." FAS 146 requires that costs under a lease contract for a closed store be recognized at fair value and that the amount of remaining lease payments owed be reduced by estimated sublease income (but not to an amount less than zero). This change in methodology has resulted in a fourth quarter non-cash charge of approximately $12.2 million. The charge reflects the elimination of net sublease income (leases with incremental estimated sublease income in excess of the costs of the original lease) from the reserve, partially offset by the discounting of net cash outflow. Sublease income in excess of costs associated with the lease will be recognized in future periods as it is earned. Outlook For fiscal year 2004, we are forecasting same store sales increases in the low-to-mid single digit range and we are expecting to open or relocate 45 stores. As a result of our projected sales increase and the impact of reduced interest expense resulting from our refinancing, we have revised our previous guidance of net income between $65.0 million and $69.0 to net income between $66.0 million and $69.0 million. This will result in diluted earnings per common share of between $1.42 and $1.47, assuming approximately 47.0 million diluted shares outstanding. This assumes that diluted earnings per common share for the first quarter of fiscal 2004 will be between $0.26 and $0.28. Free cash flow (as defined below) in fiscal year 2004 is expected to be between $75.0 and $85.0 million. We expect to use this excess cash primarily to reduce outstanding debt. CSK Auto Corp. (S&P, B+ Corporate Credit Rating, Stable) is the parent company of CSK Auto Inc., a specialty retailer in the automotive aftermarket. As of Feb. 1, 2004, the company operated 1,114 stores in 19 states under the brand names Checker Auto Parts, Schuck's Auto Supply and Kragen Auto Parts. DAVID ELLIS AGENCY: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Lead Debtor: David L. Ellis Agency Inc. 3552 Old Gettysburg Road, Suite 203 Camp Hill, Pennsylvania 17111 Bankruptcy Case No.: 04-01555 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- David L. Ellis 04-01556 Chapter 11 Petition Date: March 17, 2004 Court: Middle District of Pennsylvania (Harrisburg) Judge: Mary D. France Debtor's Counsel: Robert E. Chernicoff, Esq. Cunningham & Chernicoff PC 2320 North Second Street P.O. Box 60457 Harrisburg, PA 17106-0457 Tel: 717-238-6570 Fax: 717-238-4809 Estimated Assets Estimated Debts ---------------- --------------- David L. Ellis Agency Inc. $1 M to $10 M $1 M to $10 M David L. Ellis $500,000 to $1 M $500,000 to $1 M The Debtor did not file a list of its 20-largest creditors. DII INDUSTRIES: Court Okays Gelco Automotive Fleet Lease -------------------------------------------------------- Michael G. Zanic, Esq., at Kirkpatrick & Lockhart LLP, in Pittsburgh, Pennsylvania, informs the Court that historically, Kellogg Brown & Root, Inc. owned a fleet of heavy equipment and automotive units for use in construction projects through its land equipment department. The LED fleet was acquired through capital expenditures and then maintained and serviced through an in-house operation. Due to low utilization rates and return on capital on the heavy equipment, and the costs to support and maintain the automotive fleet, KBR decided to sell its heavy equipment fleet and to explore alternatives for a sale and leaseback of the automotive fleet that would allow KBR to improve its return on capital employed. KBR estimated through a net present value analysis that selling and leasing back the automotive fleet will be $1,800,000 less expensive over the life of the assets than continuing to own and internally maintain the fleet. The main driver for the savings is reduction of overhead for internally maintaining the fleet, in the areas of both maintenance and administration. As of the Petition Date, LED has a fleet of 540 automotive units consisting of sedans, SUVs, pick-up trucks, and specialized vehicles. Most of these vehicles are located on numerous project sites in several states. According to Mr. Zanic, several leasing companies were invited to bid on the opportunity to buy and lease back the Automotive Fleet and to acquire and lease new automotive units as needed. Gelco Corporation, doing business as GE Fleet Services, offered a better up-front discount on new vehicles and better payment terms compared to the other companies. Thus, negotiations commenced with GE Fleet regarding the terms of a definitive lease agreement. At the Debtors' request, the Court authorizes KBR to enter into an automotive fleet lease agreement and maintenance management agreement with GE Fleet. The pertinent terms of the Lease are: (1) Term The minimum lease term for each vehicle is 12 months beginning on the date of delivery of the vehicle to KBR. The lease term is then renewed monthly. (2) Monthly Rental The book value of the existing automotive fleet is $3,000,000. Total monthly lease payments on the existing fleet are expected to be $110,000 plus tax. (3) Taxes KBR will pay all citations, fees, taxes and assessments, including property, ad valorem, gross receipts, sales, rental, use, value added, withholding, franchise, and other taxes, charges, penalties, fines, or interest. (4) Return, Rental Adjustment As more specifically set forth in the Lease, following the end of the minimum lease term, KBR or GE Fleet may, upon 30 days' written notice to the other party, require the return of any vehicle to GE Fleet. After the return of any vehicle in accordance with the Lease, GE Fleet will cause the vehicle to be sold at wholesale for fair market value and the monthly rental will be adjusted depending on the amount of the "Net Sale Proceeds." (5) Insurance KBR will be responsible for insuring each leased vehicle pursuant to a policy of primary insurance satisfactory to GE Fleet. Mr. Zanic states that the Maintenance Agreement provides that GE Fleet will administer a program that provides for the purchase of maintenance for the leased vehicles. The cost for administering this program will be $3.50 per vehicle per month. As part of the agreement between the parties, the obligations due GE Fleet by KBR under the Lease and Maintenance Agreement will be guaranteed by Halliburton Co. pursuant to the terms of a Continuing Guaranty and Indemnity Agreement. KBR's management believes that the approved Lease and Maintenance Agreement constitute the best alternative available to manage the cost of the Automotive Fleet. Under the agreed structure, KBR will be able to lease the Automotive Fleet at rates that provide a better return on its assets and concentrate its resources in core competency areas. Headquartered in Houston, Texas, Kellogg, Brown & Root is engaged in the engineering and construction business, providing a wide range of services to energy and industrial customers and government entities in over 100 countries. DII has no business operations. The Company filed for chapter 11 protection on December 16, 2003 (Bankr. W.D. Pa. Case No. 02-12152). Jeffrey N. Rich, Esq., Michael G. Zanic, Esq., and Eric T. Moser, Esq., at Kirkpatrick & Lockhart LLP, represent the Debtors in their restructuring efforts. (DII & KBR Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) EDISON INT'L: Declares Quarterly Dividends Payable on April 30 -------------------------------------------------------------- The Board of Directors of Edison International declared a quarterly common stock dividend of $0.20 per share payable April 30, 2004, to shareholders of record on March 31, 2004. The Board of Directors of Southern California Edison Company (SCE) declared a quarterly dividend of $1.8075 per share on the 7.23% series of $100 cumulative preferred stock. This dividend is payable April 30, 2004, to shareholders of record on April 5, 2004. SCE also declared a quarterly dividend of $0.255 per share on the 4.08% series of cumulative preferred stock, $0.265 per share on the 4.24% series of cumulative preferred stock, and $0.29875 per share on the 4.78% series of cumulative preferred stock. Each of these dividends is payable May 31, 2004, to shareholders of record on May 5, 2004. Based in Rosemead, California, Edison International (NYSE: EIX) (S&P, BB+ Corporate Credit and Senior Unsecured Debt Ratings, Stable) is the parent company of Southern California Edison, Edison Mission Energy and Edison Capital. ENRON CORP: Court Temporarily Allows 58 Claims for Voting --------------------------------------------------------- Through Court-approved Stipulations, these claims are temporarily allowed in the "Stipulated Amount" as provided for by Rule 3018 of the Federal Rules of Bankruptcy Procedure for the limited purpose of voting on the Enron Debtors' Plan: Claimant Claim No. Voting Amount -------- --------- ------------- Brazos VPP Limited Partnership 9001 $16,326,900 American Home Assurance Company 10788 108,000,000 10789 108,000,000 Banc of America Securities LLC 11324 61,985 11325 697,390 11326 106,394 11327 613,967 12181 278,717 12183 804,662 12186 165,869 12193 56,643 12187 188,792 Mirant Americas Energy 13001 50,000,000 Marketing LP 13003 62,500,000 TXU Europe Energy Trading BV - 216,815,825 and TXU Europe Energy Trading Ltd. Bear, Stearns & Co., Inc. 12113 82,500,000 12114 82,500,000 JPMorgan Chase Bank 11225 232,000,000 Duke Companies 12548-12561 1 each 12739-12749 1 each 12934 1 12950-12959 1 each 13358-13360 1 each 12546 1 The Stipulations are not intended nor will it be construed to be: (i) an allowance of the Claims for any purpose other than voting on the Plan; (ii) a waiver by any of the Debtors or any other parties-in- interest of any right to object on any grounds to any Claims or proofs of claim filed or to be filed by the Claimants; or (iii) an agreement or consent by the Claimants to reduce or limit the Claims. (Enron Bankruptcy News, Issue No. 101; Bankruptcy Creditors' Service, Inc., 215/945-7000) ENRON CORP: Various Creditors Sell Claims Totaling $130,652,295 --------------------------------------------------------------- Pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedure, the Court received these notices of Enron claim transfers from January 26, 2004 through February 23, 2004: A. To Longacre Master Fund Ltd.: Claim Transferor No. Amount ---------- ----- ------ Kona Ltd. 11885 $289,359 Vitol S.A. and Vitol S.A., Inc. 13349 10,693,357 B. To Stonehill Institutional Partners: Claim Transferor No. Amount ---------- ----- ------ Vitro Corporativo, SA de CV 11291 $15,780,283 11292 15,780,283 C. To Contrarian Funds LLC: Claim Transferor No. Amount ---------- ----- ------ APCO Worldwide, Inc. 2301 $72,407 - 5,030 - 41,872 APCO Worldwide - Sacramento - 18,200 S/I North Creek IV, LLC 12812 2,524,967 Sierra Power Corporation 13710 91,627 Middleberg Euro - 25,000 D. To Cerberus Partners LP: Claim Transferor No. Amount ---------- ----- ------ Merrill Lunch, Pierce, Fenner & 4555 $7,105,068 Smith, Inc. 2524 7,105,068 E. To Liquidity Solutions, Inc., doing business as Revenue Management: Claim Transferor No. Amount ---------- ----- ------ James Mintz Group, Inc. - $5,067 Resource International - 7,100 Document Solutions, Inc. - 2,284 F. To Goldman Sachs Credit Partners LP: Claim Transferor No. Amount ---------- ----- ------ Australia and New Zealand Banking 12686 $41,064,226 Group Limited G. To Cargill Financial Services International, Inc.: Claim Transferor No. Amount ---------- ----- ------ Goldman Sachs Credit Partners 12686 $10,000,000 H. To Bear Stearns & Co., Inc.: Claim Transferor No. Amount ---------- ----- ------ Mizuho Global, Ltd. 10780 $20,000,000 I. To Madison Distressed Strategies LLC: Claim Transferor No. Amount ---------- ----- ------ Quantum Energy LLC - $38,147 J. To Trade-Debt.net: Claim Transferor No. Amount ---------- ----- ------ Deeco Transportation - $950 (Enron Bankruptcy News, Issue No. 101; Bankruptcy Creditors' Service, Inc., 215/945-7000) EXIDE TECH: Trade Creditors Sell 88 Claims Totaling $2.2 Million ---------------------------------------------------------------- From February 18, 2004 to March 10, 2004, the Clerk of Court recorded 88 Exide Tech. claim transfers, aggregating over $2,200,000: Transferee Original Claimant Amount ---------- ----------------- ------ Fair Harbor Capital, LLC Hach Co. $7,044 Fisher, Timothy O. 5,000 Albert Ward Contractor 5,000 A1 Limousine Service 4,044 Shoun Trucking Co. Inc. 6,832 Liebig Holdings LLC 4,800 Bistate Plumbing & Piping 4,138 Sendec Corp. 5,749 Westrock Battery 13,202 Larson-Danielson Co. 7,537 DBM 12,700 Fastnet Corp 5,754 Acme Structure LP 58,007 Allied Instrument Service 4,924 Treadwell & Rollo Inc. 30,588 May Equipment 11,771 ASAP Personal Services 5,149 Westrock Battery 22,024 Forest Corp. 80,959 Electric Materials Co. 83,289 Argo Partners J&M Schaefer, Inc. 50,197 Adair Green Advertising 71,546 Pump Pros, Inc. 11,577 ITW Foils 10,459 Crawford Construction 35,982 Aida Dayton Tech. Corp. 10,716 Ozark Warehouses 18,147 CHS Healthstrategies 33,372 Harris Metals 11,413 May Equipment 11,771 Industrial Crating Inc. 129,681 Industrial Crating Inc. 27,179 Longacre Master Fund, Ltd. Saft Power Systems Inc. 568,125 Olson Packaging Services 172,362 Manugistics Group Inc. 55,506 Baghouse & Industrial 258,948 Manugistics Group Inc. 55,506 Regenergy Inc. 45,409 Revenue Management Benefit & Compensation Consultants 6,175 TRG Inc. 1,125 Best Western-Big America 1,205 J&M Schaefer Inc. 50,197 Empire Valuation Consultants 18,750 TSG Associates LLC 12,391 Seminole Express Inc. 4,892 Save-On Fasteners 24,954 Colt Industrial Sales 1,359 Climate Svc. Inc. 1,794 Bold Technologies 1,736 Bistate Plumbing & Piping 4,138 Atlas Iron & Metal Co. 2,966 All Metals Recycling 1,618 All Metals Recycling 1,800 Acorn Electrical 3,390 Abington Lawn Care Inc. 11,069 Westrock Battery Ltd. 22,024 Dunmore Roofing & Supply 2,937 Columbus Daily Advocate 1,469 Finn & Conway 1,339 Foster Lift Trucks Inc. 2,081 Flow Solutions 2,534 Engineered Plastics Products 5,219 K&K Construction 1,850 James Eagen Sons Co. 2,446 J&L Development Inc. 9,510 Media Technology Inc. 1,269 May Equipment 11,771 Malones Mechanical 3,272 Lift Tech/Raleigh 1,215 Krayer Detective Agency 1,763 Pillar Management Assoc 3,250 NTE Electronics Inc. 5,053 New Jersey Legal Copy 8,054 New Jersey Legal Copy 8,054 Michael D Low & Assoc 1,995 Woodards Auto Center 1,625 Western Extralite Co. 7,984 W T Harvey Lumber Co. 5,325 Starling Office Products 2,195 Sparta Chem Inc. 1,648 SmallWood Locksmiths 1,191 SM Osgood Co. 2,101 Shostak Iron & Metal 4,063 Sdr Mechanical Inc. 33,272 Sallie Hamilton Personnel 2,862 Print O Tape 8,763 Reading Berks Emrgncy Shelter 4,000 Headquartered in Princeton, New Jersey, Exide Technologies is the world-wide leading manufacturer and distributor of lead acid batteries and other related electrical energy storage products. The Company filed for chapter 11 protection on April 14, 2002 (Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. On April 14, 2002, the Debtors listed $2,073,238,000 in assets and $2,524,448,000 in debts. (Exide Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service, Inc., 215/945-7000) EXTENDICARE: Signs-Up Philip Small as Chief Operating Officer ------------------------------------------------------------- Extendicare Health Services, Inc. (EHSI). The Board of Directors of EHSI is pleased to announce the appointment of Philip Small as Executive Vice President and Chief Operating Officer of Extendicare Health Services, Inc. EHSI is a wholly owned subsidiary of Extendicare Inc. (TSX: EXE and EXE.A; NYSE: EXE.A). Mr. Small began his career with Extendicare and EHSI in June 2001 as the Senior Vice-President Strategic Planning and Development. "Since joining Extendicare Phil has had tremendous success implementing the strategic turnaround of EHSI, demonstrating both leadership and a strong commitment towards helping the Company achieve its growth objectives," said Mel Rhinelander, Chief Executive Officer. "His experience exemplifies the bench strength that characterizes Extendicare's management team." Mr. Small's past experience includes Executive Vice President, Strategic Planning and Operations Support and acting Chief Financial Officer, Beverley Enterprises. Prior to that, he was Senior Vice President, Finance. His prior experience also includes serving as Director, Reimbursement for HCA Management Company of Atlanta, Georgia. Mr. Small began his career at Ernst and Young. He is a Certified Public Accountant and holds a Bachelor of Science degree in accounting from Virginia Polytechnic Institute. Extendicare Health Services, Inc. of Milwaukee, Wisconsin is a wholly owned subsidiary of Extendicare Inc. Through its subsidiaries, Extendicare Inc. operates 275 long-term care facilities across North America, with capacity for over 28,900 residents. As well, through its operations in the United States, Extendicare offers medical specialty services such as subacute care and rehabilitative therapy services, while home health care services are provided in Canada. The Company employs 35,800 people in the United States and Canada. The September 30, 2004, balance sheet discloses a working capital deficit of about CDN$2.4 million. FALCON PRODUCTS: S&P Junks Rating over Lower-than-Expected Profits ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on furniture manufacturer Falcon Products Inc. to 'CCC' from 'B-', and lowered its subordinated debt rating on the company to 'CC' from 'CCC'. The outlook is negative. Total debt outstanding at Jan. 31, 2004, was $178.3 million. "The downgrade on St. Louis, Missouri-based Falcon Products Inc. reflects the lower than expected profitability resulting from the continued softness within the furniture segments the company serves, as well as the company's breach of certain bank covenants," said Standard & Poor's credit analyst Martin S. Kounitz. Falcon is a vertically integrated furniture manufacturer serving the hotel, office, and food service sectors. Its products include hospitality seating, training and classroom furniture, and food service products such as tables, bases, and millwork. With the company's acquisition of Shelby-Williams in 1999, significant portions of its revenue are now derived from furniture sold to hotels to refurbish existing facilities. Demand continues to be weak, particularly in the hospitality furniture market. The relocation of manufacturing facilities has also reduced profitability. The gross margin for the first quarter ended Jan. 31, 2004, declined by 48% from the same period in 2003, and EBITDA was negative. As a result, the company breached the minimum EBITDA covenant on its recently refinanced bank debt, and though it was granted a waiver, this bank debt is now recorded as a current obligation. Of additional concern to Standard & Poor's is the recent resignation of the firm's chief financial officer during this period of distress. Falcon continues to take steps to reduce its cost structure, most recently closing and consolidating manufacturing facilities, shifting production to lower cost plants, and converting its defined benefit plan into a 401(k) plan. Standard & Poor's expects higher steel costs to be mitigated by the company's manufacturing efficiencies. Management also intends to streamline its supply chain. Total savings from these actions are expected to be about $8 million to $10 million in 2004. FAST FORWARD INC: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Fast Forward, Inc. Foster Plaza 5, Suite 300 651 Holiday Drive Pittsburgh, Pennsylvania 15220 Bankruptcy Case No.: 04-23429 Type of Business: The Debtor is a marketing technology company that helps client organizations automate and consolidate customer communications. Chapter 11 Petition Date: March 16, 2004 Court: Western District of Pennsylvania (Pittsburgh) Judge: Judith K. Fitzgerald Debtor's Counsel: Anthony W. Moses, Esq. Pepper Hamilton LLP 1 Mellon Center 50th Floor 500 Grant Street Pittsburgh, PA 15219 Tel: 412-454-5059 Total Assets: $1,114,421 Total Debts: $2,077,798 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Tele Danmark $86,464 Divine, Inc. $74,280 Akamal $52,796 Brodeur Worldwide $49,538 Hewlett Packard Fin. Svcs. Co. $46,039 Gateway Partnership $34,539 BTB Mallflight Limited $20,460 Global Crossing Telecom $14,611 VeriSign $13,529 Inflow $13,183 Imation $10,481 Dell Account $6,740 All Systems $5,535 Hoover's Inc. $4,995 MPO Disque Compact $4,594 CTC $4,378 Wire Card AG $4,331 Rand McNally $4,308 New Tech Infosystem, Inc. $3,052 Logitech, Inc. $2,979 FOOTSTAR INC: Taps Hilco Merchant Resources as Liquidation Agent ---------------------------------------------------------------- Footstar, Inc. announced that, in conjunction with the actions it is taking to strengthen and refocus its operations as part of its Chapter 11 reorganization, the Company is beginning inventory clearance sales at 163 underperforming locations that it previously announced it intended to close. These include its 88 Just For Feet stores and 75 of its 428 Footaction stores. Footstar has appointed Hilco Merchant Resources as liquidation agent. The Company also reported that it is taking additional steps to refocus its resources around a profitable core business base. Subject to bankruptcy court approval, these include plans to close its three Uprise stores and its nine Shoe Zone stores located in the United States. Uprise and U.S. Shoe Zone were launched in 2002 as test concepts, and the Company has decided that it no longer will support these start-up businesses that have been operating at a loss. Uprise features footwear, apparel and selected additional merchandise for the action sports market. U.S. Shoe Zone, a family footwear retail store that focuses on the Hispanic customer, is an extension of the 30-store Shoe Zone chain that the Company operates in Puerto Rico and the Virgin Islands. In addition, the Company is relocating and consolidating its Consumer Direct division based in Wisconsin, which was created in 2002 to expand the Company's Internet and catalog sales. Going forward, the Company's e-commerce initiatives will be handled from its Footaction and Meldisco subsidiaries, and the Company will discontinue its catalogs. Dale Hilpert, Chairman, President and Chief Executive Officer, commented, "We are continuing to move forward with our plans to create a financially stronger Company centered around our core businesses. The closing of underperforming stores and operations is an important part of this process. Unfortunately, these actions will have an impact on certain associates, and we are communicating directly with those affected." As previously announced, Footstar expects the store closings to be completed by summer. Affected associates will be paid as normal until their locations close. A list of the 163 closing stores is available at http://www.footstar.com/in the Restructuring Information section. In order to effect an operational and financial restructuring, Footstar and substantially all of its subsidiaries filed voluntary petitions on March 2, 2004 with the U.S. Bankruptcy Court for the Southern District of New York in White Plains for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Footstar Background Footstar, Inc., with annual revenues of approximately $2.0 billion and 14,000 associates, is a leading footwear retailer. The Company offers a broad assortment of branded athletic footwear and apparel through its two athletic concepts, Footaction and Just For Feet and their websites -- http://www.footaction.com/and http://www.justforfeet.com/-- and discount and family footwear through licensed footwear departments operated by Meldisco. As of March 1, 2004, the Company operated 428 Footaction stores in 40 states and Puerto Rico, 88 Just For Feet superstores located predominantly in the Southern half of the country, and 2,496 Meldisco licensed footwear departments and 39 Shoe Zone stores. The Company also distributes its own Thom McAn brand of quality leather footwear through Kmart, Wal-Mart and Shoe Zone stores. FOOTSTAR: Liquidating 88 Just for Feet & 75 Footaction USA Stores ----------------------------------------------------------------- Going out of business sales began Friday, March 19, at all 88 Just for Feet superstores and on the same date store closing sales began at 75 of 428 Footaction USA stores as part of the bankruptcy restructuring plan of parent, Footstar Corporation. Athletic and casual footwear, apparel and accessory inventory valued at nearly $150 million will be discounted from 20% to 50% off original retail prices, offering consumers tremendous savings in every department on leading brand names, including Nike, Reebok, New Balance, adidas, K-Swiss and Timberland. A broad assortment of the hottest and most popular styles and sizes for men, women and children is available in every store. Just for Feet, the world's largest athletic footwear store, has superstores complete with video walls, basketball courts and thousands of athletic footwear styles. Shoppers will find outstanding values on performance running, basketball and tennis shoes, hiking boots, men's and women's casual shoes and a huge selection for kids. Jackets, jerseys, warm-up suits and team licensed apparel will also be deeply discounted. Footaction USA shoppers will find a similar selection plus many exclusive styles from the leading brand manufacturers, available only at Footaction USA. Hilco Merchant Resources has been selected to manage the inventory liquidation sales at all 163 locations. Michael Keefe, President of Hilco Merchant Resources stated, "This is an outstanding opportunity for consumers to realize unprecedented savings on a remarkable selection of the best brand names in athletic footwear, apparel and accessories. This is sure to be a very popular sale, and with brands like Nike, Reebok, New Balance and adidas being offered at very significant discounts, the selection won't last long." Based in Northbrook, Illinois, Hilco Merchant Resources -- http://www.hilcomerchantresources.com/-- provides high-yield strategic retail inventory liquidation and store closing services. Over the years, Hilco principals have disposed of assets valued in excess of $30 billion. Hilco Merchant Resources is part of the Hilco Organization, a provider of asset valuation, acquisition, disposition and financing services to an international marketplace through nine specialized business units. Here's a complete list of stores being closed: Just For Feet Name Address City State ---- ------- ---- ----- Galleria 3460 Galleria Circle Birmingham AL Riverchase 2000 Riverchase Birmingham AL Galleria, Ste. 158-A River Ridge 4604 Highway 280 Birmingham AL Huntsville 5850-D University Huntsville AL Drive Montgomery 4003 Eastern Blvd. Montgomery AL Little Rock 912 South Bowman Road Little Rock AR Market Plaza 4201 East McClain North Little AR Blvd. Rock Glendale-Arrowhead 7650 West Bell Road Glendale AZ Metro Center 10219 North Metro Phoenix AZ Parkway W. Tatum 4740 East Shea Phoenix AZ Boulevard Desert Sky 7537 West Thomas Road Phoenix AZ Desert Ridge 21001 N. Tatum Blvd. Phoenix AZ Marketplace Arizona Mills 5000 Arizona Mills Tempe AZ Circle, Suite 485 Tucson 4848 North Old Oracle Tucson AZ Road Tucson 2 5566 East Broadway Tucson AZ Mission Viejo 5080 Mission Center San Diego CA Road San Ysidro 4250 Caminode La San Ysidro CA Plaza, Unit L Vista 1861 University Drive Vista CA Colorado Springs 1545 Briargate Blvd. Colorado CO Springs University 2770 South Colorado Denver CO Blvd. Stapleton-Quebec 7306 East 36th Street, Denver CO Square #201 Englewood-Centennial 9607 East County Line Englewood CO Road Golden-Lakewood 14363 West Colfax Golden CO Avenue, Ste L Littleton-Park 8601 West Cross Drive Littleton CO Meadows #4 Orlando (Altamonte) 218 East Altamonte Altamonte FL Drive Springs Aventura 19275 Biscayne Aventura FL Boulevard Daytona Beach 1610 West Int'l Daytona FL Speedway Boulevard Beach Cypress Creek 6215 North Andrews Fort FL Avenue Lauderdale Fort Myers 4971 South Cleveland Fort Myers FL Avenue Hialeah 1734 West 49th Street Hialeah FL Hollywood 3300 Oakwood Boulevard Hollywood FL Dadeland 7240 Southwest 88th Miami FL Street Florida Mall 1401 Florida Mall Orlando FL Avenue Colonade 2712 East Colonial Orlando FL Drive Pembroke Pines 11960 Pines Blvd. Pembroke FL Pines Seminole 500 Towne Center Sanford FL Circle Sawgrass 13001 West Sunrise Sunrise FL Blvd West Palm Beach 4354 Okeechobee West Palm FL Boulevard Beach Alpharetta 6110 North Point Alpharetta GA Parkway Augusta 254 Robert C Daniel Augusta GA Parkway East-West Shopping 1757 East-West Austell GA Center Connector, Suite 460 Gwinnett 3510 Mall Boulevard Duluth GA Fayette Pavilion 400 Pavilion Parkway Fayetteville GA Towncenter 2636 George Busbee Kennesaw GA Parkway, Suite A Stonecrest 7230 Stonecrest Lithonia GA Parkway Southlake 1929 Mount Zion Road Morrow GA Savannah 7505 Abercorn Street Savannah GA Overland Park 6700 W. 119th Street Overland KS Park Cortana 9802 Cortana Place Baton Rouge LA Covington 782 North Highway 190 Covington LA Lafayette 5702 Johnston Street Lafayette LA New Orleans 3520 Veterans Metarie LA Boulevard Shreveport 1509 E. Bert Kouns Shreveport LA Industrial Loop Independence 3911 Bolgar Drive Independence MO Bannister 9110 Hillcrest Road Kansas City MO Springfield 1610 East Battlefield Springfield MO Road Jackson 1061 East County Line Jackson MS Road Cotton 10030 Coors Blvd NW Albuquerque NM Pavilion 4600 Cutler Avenue Albuquerque NM Las Vegas 2 4500 West Sahara Las Vegas NV Avenue Galleria Pavillion 611 Mall Ring Circle Las Vegas NV Norman 3030 William Pereira Norman OK Drive Quail 2300 west Memorial Oklahoma OK Road City Tulsa 1 9404 East 71st Street Tulsa OK South Tulsa 2 4933 East 41st Street Tulsa OK Allentown (Whitehall) 2621 MacArthur Whitehall PA Boulevard Chattanooga 2100 Hamilton Place Chattanooga TN Blvd. Knoxville 215 Pereginne Lane Knoxville TN Knoxville 3240 Eat Towne Mall Knoxville TN Circle Wolfcreek 2825 Germantown Memphis TN Parkway Arlington 1104 West Arbrook Arlington TX Boulevard Austin 9333 Research Blvd., Austin TX Bldg D, Ste300 Sunrise Commons 2451 Pablo Kisel, Brownsville TX Suite F North Park 9390 North Central Dallas TX Expressway El Paso 5994 Montana Avenue, El Paso TX Bassett Center Westheimer 8373 Westheimer Houston TX Willowbrook 17780 Tomball Parkway Houston TX Almeda 900 Almeda Mall Houston TX Sharpstown 6900 Southwest Freeway Houston TX Hurst 891 Northeast Mall Hurst TX Blvd. Laredo 7901 San Dario Avenue Laredo TX Lewisville 490 Oak Bend Road Lewisville TX Live Oak 8215 Agora Parkway Live Oak TX McAllen 2201 South 10th Street McAllen TX Mesquite 18600 LBJ Freeway Mesquite TX Plano Park Central 3304 North Central Plano TX San Antonio 1 5127 NW Loop 410 San Antonio TX San Antonio 2 13103 San Pedro Avenue San Antonio TX Foot Action Name Address City State ---- ------- ---- ----- Regency Square Mall 301 Cox Creek Parkway, Florence AL Sp. #1110 Montgomery Mall 2951 Montgomery Mall Montgomery AL Montgomery 4005 Eastern Blvd. Montgomery AL Topanga Plaza 6600 Topanga Canyon Canoga Park CA #84A Studio Village S/C 10970 Jefferson Blvd. Culver City CA North County Fair 272 E. Via Rancho Pkwy Escondido CA Great Mall / Bay Area 564 Great Mall Drive, Milpitas CA Sp. #195 Montclair Plaza 2058 Montclair Plaza Montclair CA Lane Oakridge Mall 825 Blossom Hill Road San Jose CA Greeley Mall 2017 Greely Mall #9 Greeley CO Edison Mall 4125 Cleveland Ave. Ft. Myers FL #130 B Eagle Ridge Mall 725 Eagle Ridge Dr., Lake Wales FL Sp 308 Cordova Mall 5100 N. 9th Ave., Sp. Pensacola FL A-105 Gulf View Square 9409 US Highway 19, Port Richey FL Sp#665 Governor S Square 1500 Apalachee Pkwy Tallahassee FL Mall #1055 Georgia Square Mall 3700 Atlanta Hwy. - Athens GA Ste 212 Fox Valley Center 1080 Fox Valley, Sp. Aurora IL G-10 & G-11 Grand Boulevard 5401 South Wentworth Chicago IL Chicago Ridge Mall 444 Chicago Ridge Mall Chicago IL Ridge Hickory Point Mall US 51 North Forsyth IL Spring Hill Mall Rts 72 & 31 West Dundee IL West Ridge Mall 1801 SW Wanamaker B17A Topeka KS Oxmore Center 7900 Shelbyville Rd., Louisville KY Sp E-4 Lafayette 5702 Johnston Street Lafayette LA Holyoke Ml/Ingleside 50 Holyoke Street Holyoke MA Searstown Mall Commercial Road Leominster MA Soloman Pond Mall Rts 290 & 495 Marlborough MA Natick Mall 1245 Worcester Road - Natick MA Sp. 1186 Swansea Mall Route 1118 Swansea MA Greenmont Avenue 3228 Greenmont Ave., Baltimore MD Space #3228 Shops @ Jefferson E. Jefferson Ave., Detroit MI Village SpC400 Woodland Mall 3195 28th Street SW Grand Rapids MI Ridgedale Shopping 12521 Wyzata Blvd. Minnetonka MN Center Biltmore Square Mall 800 Brevard Rd., Sp. Asheville NC 830 Pheasant Lane Mall 310 Daniel Webster Nashua NH Hwy, Sp. 105 Livingston Mall 112 Eisenhower Pkwy. Livingston NJ Rockaway Town Square Rt 80 & Mt. Pope Ave. Rockaway NJ #1039 Coronado Center 6600 Menaul N.E. Albuquerque NM Cottonwood Mall 10000 Coors Bypass Albuquerque NM Galleria At Sunset 1271 Sunrise Hwy. Henderson NV Belden Village Mall 4315 Belden Village Canton OH Mall Eastgate Mall 4601 Eastgate, Sp. 232 Cincinatti OH Lee Harvard Shopping 4071 Lee Road, Suite Cleveland OH Center 110 Midway Mall 3151 Midway Mall, Sp. Elyria Oh OH G-28 Great Northern 554 Great Northern No. Olmsted OH Shopping Center Blvd. Fort Steuben Mall 100 Mall Drive, Sp. Steubenville OH C10 Southwyck Shopping 2040 S. Reynolds Rd., Toledo OH Center Sp. B13 & 14 Colonial Park Mall Rt. 22 & Colonial Road Harrisburg PA Park City 650 Park City Center Lancaster PA Beaver Valley Mall Unit 660 Monaca PA Cheltenham Square 2385 Cheltenham Ave., Philadelphia PA Sp. 1039 Philadelphia 9111 Roosevelt Blvd. Philadelphia PA Space #35 Ross Park Mall 1000 Ross Park Mall, Pittsburgh PA Sp. H3/H4 Coventry Mall Rt 724 & Rt. 100, Sp. Pottstown PA E-3 Susquehanna Valley Rt. 11 & Rt. 15, Space Selinsgrove PA D-7 Plaza Carolina Lower Level, Sp. #164 Carolina PR Plaza Las Americas 525 Franklin D. San Juan PR Roosevelt Ave. Ponce De Leon Ave 1206 Ponce De Leon Santurce PR Avenue Governor S Square 2801 Guthrie Road Clarksville TN Mall Bradley Square 200 Paul Huff Highway, Cleveland TN Suite 5 Raleigh Springs 3459 Austin Peay Hwy Memphis TN Golden Triangle Mall 2201 I-35E South Denton TX Sunland Park Mall 750 Sunland Park Dr., El Paso TX Sp L-04B Bassett Center 6101 Gateway West El Paso TX Valle Vista Mall 2000 S. Expressway 83 Harligen TX Mall Del Norte 5300 San Dario - Sp Laredo TX #813-E Vista Ridge 2400 South Stemmons Lewisville TX Collin Creek 811 N. Central Expwy. Plano TX - p. 2148 Sunset Mall 1031 Sunset Mall, 4001 San Angelo TX Southwest Blvd. Broadway Mall 4601 S. Broadway, Sp. Tyler TX #B-1 Sikes Center 3111 Midwestern Pkwy., Wichita TX Sp. 350 Falls Cloverleaf Mall 7201 Midlothian Richmond VA Turnpike Supermall Of G.N.W. 1101 Supermall Way Auburn WA 1149 Alderwood Mall 3000 184 St. SW, Sp. Lynnwood WA 654 Capital Mall Capital Mall Drive Olympia WA GARDEN RIDGE: Retains Andrews & Kurth as Real Estate Attorneys -------------------------------------------------------------- Garden Ridge Corporation and its debtor-affiliates want to employ Andrews & Kurth LLP as their Special Real Estate Counsel, nunc pro tunc to February 2, 2004. The Debtors report that Andrews & Kurth began working with them shortly before the Petition Date. Due to Andrews & Kurth's recognized expertise in real estate law, the Debtors believe that it is uniquely qualified to assist them with many of the legal issues that are likely to arise in connection with the real estate aspects of their businesses. The Debtors expect Andrews & Kurth to: a. perform legal services and advice relating to real estate law; b. provide general real estate advice concerning the Debtors' numerous leases; c. work with the Debtors and their landlords with respect to assuming, rejecting and/or renegotiating the terms of the Debtors' leases and documenting such modifications; and d. perform all other legal services, as requested by the Debtors, which may be necessary and proper in furtherance of the foregoing duties. Andrews & Kurth will work closely with the Debtors' other attorneys to ensure that there is no duplication of services performed for or charged to the estates. The Debtors will pay Andrews & Kurth its customary hourly rates: Business Transaction/Real Estate: Name of Professional Position Billing Rate -------------------- -------- ------------ Brigitte G. Kimichik Partner $390 per hour Jong Kim Associate $315 per hour Allen Dickey Associate $265 per hour Bankruptcy: Name of Professional Position Billing Rate -------------------- -------- ------------ Jason S. Brookner Partner $420 per hour Mike Coffman Associate $180 per hour Headquartered in Houston, Texas, Garden Ridge Corporation -- http://gardenridge.com/-- is a megastore home decor retailer that offers decorating accessories like baskets, candles, crafts, home accents, housewares, party supplies, pictures and frames, pottery, seasonal items, and silk and dried flowers. The company filed for chapter 11 protection on February 2, 2004 (Bankr. Del. Case No. 04-10324). Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor LLP represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts and assets of over $100 million each. GEO SPECIALTY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: GEO Specialty Chemicals, Inc. First & Essex Streets Harrison, New Jersey 07029 Bankruptcy Case No.: 04-19148 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- GEO Specialty Chemicals Limited 04-19149 Type of Business: The Debtor develops, manufactures and markets a wide variety of specialty chemicals, including over 300 products sold to major industrial customers for various end-use applications including water treatment, wire and cable, industrial rubber, oil and gas production, coatings, construction, and electronics. See http://www.geosc.com/ Chapter 11 Petition Date: March 18, 2004 Court: District of New Jersey (Newark) Judge: Morris Stern Debtors' Counsels: Howard S. Greenberg, Esq. Morris S. Bauer, Esq. Stephen Ravin, Esq. Ravin Greenberg, PC 101 Eisenhower Parkway Roseland, NJ 07068 Tel: 973-226-1500 Total Assets: $264,142,000 at September 30, 2003 Total Debts: $215,447,000 at September 30, 2003 Debtors' 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ JP Morgan Trust Co., Nat'l Unsecured Bonds $125,000,000 Assoc. Institutional Trust Service 250 West Huron Road, Ste 220 Cleveland, OH 44113 Airlee Opportunity Fund, LP Unsecured Bonds $22,000,000 Attn: Mr. Adam 115 East Putnam Avenue Greenwich, CT 06830 Merrill Lynch Investment Unsecured Bonds $21,000,000 Man., LP Attn: David Clayton 800 Scudders Mill Road Plainsboro, NJ 08536 Deutsche Banc Asset Unsecured Bonds $12,544,000 Management Mr. Mike Brown 150 S. Independence Square West, Suite 726 Philadelphia, PA 19106 White Box Advisors Unsecured Bonds $6,551,000 Attn: Mr. Nick Swenson 3033 Excelsior Blvd, Ste 300 Minneapolis, MN 55416 Oppenheimer & Company Unsecured Bonds $5,000,000 Attn: Mr. Cary Holcomb 125 Broad Street New York, NY 10004 GEO Gallium SA Trade Payable $573,360 17 Rue Marbeuf 75008 Paris, France, Harwick Standard Trade Payable $499,950 60 S. Seiberling Street Akron, OH 44305 McGeorge Contracting Co., Trade Payable $337,404 Inc. 1425 Shamburger Little Rock, AR 72206 Norfalco LLC Trade Payable $291,501 6755 Mississauga, Suite 340 ONT CANADA L5N7Y2 CE Minerals Trade Payable $283,017 49 South Andersonville, GA 31711 COGNIS Corporation Trade Payable $281,919 5051 Estecreek Drive Cincinnati, OH 45232-1446 C-Koe Metals Trade Payable $224,491 ProChem Chemicals Inc. Trade Payable $200,853 Hercules Incorporated Trade Payable $176,944 South Jersey Gas Trade Payable $175,697 The DOW Chemical Company Trade Payable $168,891 Arrmaz Custom Chemicals Inc. Trade Payable $162,750 Degussa Initiators, LLC Trade Payable $148,553 Constellation NewEnergy Inc. Trade Payable $129,563 G+G RETAIL: S&P Lowers Ratings to D After Debt Restructuring ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on G+G Retail Inc. to 'D' from 'CC'. The downgrade follows G+G's announcement that it has completed a debt restructuring transaction in which all of the company's outstanding 11% senior notes due 2006 and outstanding preferred stock of G&G Holdings were exchanged for new common stock of the company. "Standard & Poor's views the debt restructuring transaction as detrimental to debtholders because terms of the exchange call for bondholders to receive patently less than par value," said credit analyst Ana Lai. As of Nov. 1, 2003, G+G had about $111 million of funded debt outstanding. G+G Retail Inc. is a national mall-based retailer of popular priced female junior and preteen apparel, with about 585 stores. HAVENS STEEL CO: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Havens Steel Company 7219 East 17th Street Kansas City, Missouri 64126 Bankruptcy Case No.: 04-41574 Type of Business: The Debtor provides design-build services from engineering to fabrication and erection to steel management systems and on-site project management. It began as a structural steel fabricator for small commercial and industrial projects in 1919. The company operates globally. See http://www.havenssteel.com/ Chapter 11 Petition Date: March 18, 2004 Court: Western District of Missouri (Kansas City) Judge: Jerry W. Venters Debtor's Counsel: Jonathan A. Margolies, Esq. R. Pete Smith, Esq. McDowell, Rice, Smith & Buchanan 605 West 47th Street Suite 350 Kansas City, MO 64112-1905 Tel: 816-753-5400 Fax: 816-753-9996 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Commerce Bank $11,700,000 1000 Walnut Kansas City, MO 64106-3686 Adams & Smith, Inc. $1,573,236 P.O. Box 70 Oram, UT 84059 Nucor Yamato Steel Co $949,607 P.O. Box 101418 Atlanta, GA 30392 Alberici Constructors $829,503 2150 Kienlen Avenue St. Louis, MO 63121 Area Erectors, Inc. $641,965 35028 Eagle Way Chicago, IL 60678-1350 Hillsdale Fabricators $596,060 P.O. Box 211169 St. Louis, MO 63121-9169 Multi-Phase, Inc. and Sky Bank $536,347 173 Old Beaver Grade Road Coraopolis, PA 15108 Laramie - NRE $461,856 P.O. Box 27170 Detroit, MI 48227 Samuel Grossi & Sons, Inc. $460,677 2526 State Road Bensalem, PA 19020 Nicholas J. Bouras, Inc. $407,634 P.O. Box 662 Summit, NJ 07902-0662 Vulcraft South Carolina $380,970 P.O. BOX 75156 Charlotte, NC 28275 Merrill Iron & Steel Inc. $376,543 P.O. BOX 110 Schofield, WI 54476 Southeastern Const. & Maint. $305,410 P.O. Box 1055 Mulberry, FL 33860 Continental Const., Inc. and $282,813 Derr Steel Erection 729 15th St. N.W., 5th Floor Washington, D.C. 20005 United Rentals Credit Office - NRE $281,104 P.O. Box 846394 Dallas, TX 75284-6394 Lohr Structural Fasteners $260,976 2355 Wilson Rd. Humble, TX 77396 PKM Steel Services Inc. $254,592 P.O. Box 920 Salina, KS 67402-0920 Worldwide Logistic Partners Wire Info $248,099 Shaw SSS Fabricators Inc. $246,755 D.K.G. & Associates Ltd. $238,401 HYTEK MICRO: Expects Going Concern Qualification in 2004 Audit -------------------------------------------------------------- Hytek Microsystems, Inc. (OTC Bulletin Board: HYTK) announced fiscal 2003 fourth quarter and full year financial results. Net revenues for the fourth quarter ended January 3, 2004 increased approximately 39% to $2,566,000 from $1,846,000 for the fourth quarter ended December 28, 2002. For the year ended January 3, 2004, the Company's net revenues decreased approximately 10% to $10,181,000 compared to $11,283,000 for fiscal year 2002. The change in revenue year over year and for the fourth quarter ended December 28, 2002 compared to the fourth quarter ended January 3, 2004, is the result of timing and mix of scheduled deliveries and the increase was not concentrated in any one customer. The Company's net loss for the fourth quarter ended January 3, 2004 was $581,000, or a loss of $0.18 per share, compared to a net loss of $594,000, or a loss of $0.18 per share, for the fourth quarter of 2002. For the year ended January 3, 2004, the Company's net loss was $970,000, or a loss of $0.30 per share, compared to a net loss of $654,000, or a loss of $0.20 per share, for the prior year ended December 28, 2002. The Company's fiscal 2003 operating loss included approximately $310,000 for severance to the former President and Chief Financial Officer which is an increase of $200,000 in severance cost over the prior fiscal year. Additionally, there were increased fees for legal, accounting and consultation services totaling approximately $148,000 for the year ended January 3, 2004. Of the aforementioned severance costs, $97,000 was accrued during the fourth quarter ended January 3, 2004. The auditors' report on Hytek's 2003 financial statements included a "going concern" qualification, and it is anticipated that the 2004 audit report will also be subject to that qualification. "Although we are disappointed with our reported results for the fourth quarter and year, we believe we are solidly positioned to implement our turnaround strategy in 2004," noted John Cole, Hytek's President and CEO. "We have added significant depth to our management team and believe we have in place a viable business plan to execute against during the current fiscal year. We have identified additional market opportunities and are focused on improved internal metrics." Founded in 1974 and headquartered in Carson City, Nevada, Hytek specializes in hybrid microelectronic circuits that are used in military applications, geophysical exploration, medical instrumentation, satellite systems, industrial electronics, opto- electronics and other OEM applications. IMC HOME EQUITY: Moody's Takes Rating Actions on 4 Loan Trusts -------------------------------------------------------------- Moody's Investors Service lowered its ratings on subordinate classes of certificates issued by four IMC Home Equity Loan Trusts in 1997 and 1998 due to poor performance of the underlying loans, according to Dana Skelton, Moody's analyst. The securities are backed by fixed-rate, first-lien subprime mortgage loans acquired by the Industry Mortgage Company. The High levels of losses completely eroded the overcollateralization of Series 1997-3 and 1997-5 which incurred cumulative losses of 8.4% and 8.6% respectively. In effect, the most subordinate Class B certificates have already encountered substantial write-downs. Moreover, there will be a high rate of expected losses over the next two years indicated by seriously delinquent loans and loans in foreclosure and REO Although the Series 1998-1 and 1998-5, with cumulative losses of 6.6% and 5.4% respectively, are performing slightly better, the current credit enhancement levels for the Class B and Class M-2 certificates are still low. Moody's downgraded the certificates to: Baa3 - Series 1997-3: $20,272,942, Class M-2 Ca - Series 1997-3: $9,812,507, Class B Baa2 - Series 1997-5: $24,216,886, Class M-2 Ca - Series 1997-5: $14,237,770, Class B Baa2 - Series 1998-1: $16,854,352, Class M-2 Ca - Series 1998-1: $18,778,196, Class B Baa1 - Series 1998-5: $8,243,762, Class M-2 B2 - Series 1998-5: $8,842,542, Class B Issuer: IMC Home Equity Loan Trust Depositor: IMC Securities Inc. The primary servicer of the loans of the four transactions is the Fairbanks Capital Corp and JPMorgan Chase Bank is the trustee. INDUSTRY MORTGAGE: Fitch Ratchets Class B Notes Rating to CCC ------------------------------------------------------------- Fitch Ratings has taken rating actions on the following Industry Mortgage Company issue: Series 1998-1: --Class A-5 affirmed at 'AAA'; --Class A-6 affirmed at 'AAA'; --Class M-1 affirmed at 'AA+'; --Class M-2 affirmed at 'BBB-'; --Class B downgraded to 'CCC' from 'B-'. The negative rating action on class B is due to the level of losses incurred and the high delinquencies in relation to the applicable credit support levels as of the February 2004 distribution. The affirmations on the remaining classes reflect credit enhancement consistent with future loss expectations. INDYMAC ABS: Fitch Takes Rating Actions on Ser. SPMD 2001-A Notes ----------------------------------------------------------------- Fitch Ratings has taken rating actions on the following IndyMac ABS, Inc., Home Equity issue: Series SPMD 2001-A Group 1: --Class AF-4 - AF-6, AF-IO, R affirmed at 'AAA'; --Class MF-1 affirmed at 'BBB-'; --Class MF-2 downgraded to 'CCC' from 'B-'; --Class BF remains at 'CC'. The negative rating action on Class MF-2 is the result of adverse collateral performance and the deterioration of asset quality outside of Fitch's original expectations. Indymac SPMD 2001-A Group 1 contained 9.55% of MH collateral at closing, and as of January 2004, the percentage of MH increased to 21%. To date, MH loans have exhibited very high historical loss severities, causing Fitch to have concerns over the available enhancement in this deal. This deal was structured with mortgage insurance (MI) policies provided by both the lender and the borrower on approximately 94.6% of the mortgage pool. Series 2001-A Group 1 has had no OC since the May 2003 distribution, and class BF has taken further write-downs, with an ending balance of $67,071.53 as of the February 2004 distribution. The 12-month average monthly loss for this deal is approximately $165,000. The structure in the 2001-A transaction is not cross- collateralized, so excess spread cannot be shared by the groups. This deal is also structured such that bonds that were written down due to losses can be written back up. Fitch will continue to closely monitor this deal. INTERNATIONAL PAPER: Redeeming 8-1/8 Percent Notes on April 19 -------------------------------------------------------------- International Paper (NYSE: IP) has notified the Bank of New York, as trustee, that it has elected to redeem on April 19, 2004, all of the outstanding International Paper Company 8 1/8 percent Notes due July 8, 2005, at a make-whole redemption price calculated to the redemption date in accordance with the terms of the indenture covering the notes, plus accrued interest thereon to the date of redemption. International Paper also announced that it has successfully completed the previously announced offering of $1 billion aggregate principal amount senior notes. International Paper -- http://www.internationalpaper.com/-- is the world's largest paper and forest products company. Businesses include paper, packaging, and forest products. As one of the largest private forest landowners in the world, the company manages its forests under the principles of the Sustainable Forestry Initiative(R) program, a system that ensures the perpetual planting, growing and harvesting of trees while protecting wildlife, plants, soil, air and water quality. Headquartered in the United States, International Paper has operations in over 40 countries and sells its products in more than 120 nations. As previously reported, Standard & Poor's Ratings Services assigned its 'BB+' preferred stock ratings to International Paper Co.'s $6 billion mixed shelf registration. IVACO INC: Canadian Court Ends Truckers' Boycott of Services ------------------------------------------------------------ Ivaco Inc. obtained an Order from Mr. Justice Farley of the Ontario Superior Court of Justice requiring three trucking companies which supply services to Ivaco to continue to supply such services in accordance with their normal practices. On March 17, these companies, together with other trucking companies, announced a boycott of Ivaco in order to obtain payment of amounts owing to them prior to the date on which Ivaco Inc. obtained court protection under the Companies' Creditors Arrangement Act. Ivaco immediately sought confirmation from the Court that such conduct would not be condoned. As a result of this Order, trucking services to Ivaco have resumed. KAISER ALUMINUM: Selling Parcels 2A & 2B in Va. to Harley Douglas ----------------------------------------------------------------- Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in Wilmington, Delaware, notifies the Court that the Kaiser Aluminum Debtors have found a purchaser for Parcel 2B located in Mead, Washington. The Debtors will sell Parcel 2B to Harley C. Douglas, pursuant to a Purchase and Sale Agreement dated March 1, 2004. "As Is, Where Is" The Debtors will sell Parcel 2B in an "as is, where is" condition "with all faults," without any warranties, representations or guarantees, either express or implied as to its condition, fitness for any particular purpose, merchantability, or any other warranty of any kind. $550,000 Purchase Price Mr. Douglas will purchase Parcel 2B for $550,000 through: (a) Earnest Money Before the execution date and delivery of the Douglas Sale Agreement, Mr. Douglas will deposit $50,000 to Spokane County Title Company, as the Escrow Agent, in immediately available funds. The Earnest Money will be invested with a federally insured interest-bearing instrument with any interest accruing to be deemed as part of the Earnest Money. Mr. Douglas will provide its federal taxpayer identification number to Spokane Title Company upon opening of escrow. The Earnest Money will be held and disbursed by Spokane Title Company in accordance to the Sale Agreement. (b) Cash Balance Mr. Douglas will pay the Purchase Price less the Earnest Money and all interest earned by cash or certified check, bank cashier's check, or wire transfer of funds -- so long as the form of payment is recognized as immediately available funds -- to Spokane Title Company no later than: * 11:00 a.m. Spokane, Washington time on the first business day that is 10 days after the date the sale of the Parcel 2B is: (i) approved by the Court; or (ii) deemed approved pursuant to the "Miscellaneous Assets Sales Order," issued by the Court on April 22, 2002; or * an earlier date and time as the parties may mutually agree. Confidential Documents The Debtors will provide Mr. Douglas, upon request, documents relating to Parcel 2B. On his end, Mr. Douglas will hold in confidence, all the information furnished to him by the Debtors. If any exist, the documents to be provided are: (a) environmental reports; (b) leases, easements, deeds, restrictive covenants and other documents of every kind affecting or encumbering Parcel 2B; and (c) existing surveys. Ms. Newmarch assures the Court that Mr. Douglas has performed all due diligence and that no further due diligence is permitted or required. Mr. Douglas will be permitted to enter upon the Parcel 2B premises at any reasonable time before the closing of the sale, provided that Mr. Douglas notifies the Debtors 12 hours before the visit. Ms. Newmarch relates that, if the Sale Agreement is terminated for any reason, Mr. Douglas will return to the Debtors, within five days after termination, the confidential documents related to Parcel 2B in his possession. The parties may, at any time before the Closing Date, terminate the transaction, provided that a party delivers prior written notice to the other party. Indemnification Provisions Furthermore, Mr. Douglas will indemnify, defend and hold the Debtors, including their affiliates and officers, harmless from and against all claims and expenses incurred by any of the indemnified parties in connection with any activities of Mr. Douglas relating to Parcel 2B. In the event that Parcel 2B is disturbed or altered in any way, Mr. Douglas will promptly restore the property to its original condition. In addition, Mr. Douglas will maintain and cause any of his employees, consultants, contractors and other agents entering the property to maintain and have in effect commercial general liability insurance with: (a) all risk coverage; (b) waiver of subrogation; and (c) limits of not less than $1,000,000 for personal injury, including bodily injury and death, and property damage. Mr. Douglas will name the Debtors as an additional insured party. According to Ms. Newmarch, in addition to each party's obligations, the consummation of the Sale Agreement will be contingent upon each party's correct representations, performance of obligations, Court approval, and absence of any pending action before any court or administrative agency. Access to Parcel 2 Mr. Douglas acknowledges and agrees that the Debtors require access to and across Parcel 2B for purposes of entering onto the adjacent parcel known as Parcel 2 and conveyed to Hanson Industries, Inc. on December 31, 2003, and for operating, removing or otherwise handling or disposing of certain property that is currently located on Parcel 2. Mr. Douglas will grant the Debtors, from the Closing Date through December 31, 2004, a license for ingress and egress on, over and across Parcel 2B. $16,500 Break-up Fee In the event of an auction, if Parcel 2B is sold to a party other than Mr. Douglas, due to no fault of Mr. Douglas, the Debtors are obligated to pay Mr. Douglas a $16,500 break-up fee. The Break- up Fee is equal to 3% of the Purchase Price. The Break-up Fee will be payable promptly upon the closing date of a sale to another party, together with the prompt return of the Earnest Money -- and all accrued interest -- to Mr. Douglas. Accordingly, the Debtors ask the Court to approve the Sale Agreement and, when warranted, the payment of the Break-up Fee. Headquartered in Houston, Texas, Kaiser Aluminum Corporation operates in all principal aspects of the aluminum industry, including mining bauxite; refining bauxite into alumina; production of primary aluminum from alumina; and manufacturing fabricated and semi-fabricated aluminum products. The Company filed for chapter 11 protection on February 12, 2002 (Bankr. Del. Case No. 02-10429). Corinne Ball, Esq., at Jones, Day, Reavis & Pogue, represent the Debtors in their restructuring efforts. On September 30, 2001, the Company listed $3,364,300,000 in assets and $3,129,400,000 in debts. (Kaiser Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., 215/945-7000) KCS ENERGY: S&P Assigns Low-B Level Credit & Debt Ratings --------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to KCS Energy Inc. and its 'B-' rating to KCS's proposed $150 million senior unsecured notes due 2012. The outlook is stable. As of Dec. 31, 2003, the Houston, Texas- based company had $142 million of debt outstanding. The notes are being offered under Rule 144a with registration rights. Proceeds from the note offering will be used to redeem the company's existing $125 million subordinated notes due 2006, any outstanding bank debt, and other general corporate purposes. "The ratings on KCS reflect the company's small geographically concentrated reserve base and high financial leverage," said Standard & Poor's credit analyst Brian Janiak. "These significant weaknesses are somewhat tempered by the company's significant percentage of company-operated properties (78%) that require modest future development and its moderate reserve life of about 9.6 years, which provides the company some operational flexibility," added Mr. Janiak. The stable outlook reflects Standard & Poor's expectations that capital expenditures to further expand the company's reserves and production will be primarily funded through cash flow generation and minimal bank borrowings. Any future acquisitions would be financed through a balanced mix of equity and debt Failure to adhere to moderate financial policies to expand its reserves and production growth could warrant an outlook revision and/or lower ratings. KMART HOLDING: Profitable Since Reorganization, Says Report ----------------------------------------------------------- March 18, 2004 / PR Newswire Kmart Holding Corporation (Nasdaq: KMRT) reported net income of $276 million for the fourth quarter of fiscal 2003. The company also announced that it was profitable for the 39-week period ended January 28, 2004. Fiscal Fourth Quarter Results For the 13 weeks ended January 28, 2004, Kmart Holding Corporation (Kmart or the Successor Company) reported net income of $276 million, or $2.78 per diluted share. Kmart Corporation (the Predecessor Company) reported a net loss of $1.1 billion for the same period in the prior year. Income before interest expense, reorganization items, income taxes and discontinued operations for the 13 weeks ended January 28, 2004 was $503 million, which includes gains on real estate transactions of $86 million. Same-store sales and total sales for the period declined 13.5% and 25.8%, respectively. Julian C. Day, President and Chief Executive Officer of Kmart, said: "The men and women of the new Kmart are focused on managing our business to restore profitability. By giving careful thought to the processes of sourcing, logistics, pricing, inventory management and in-store presentation, we have significantly improved the profitability of our market basket. Our store associates and store managers are committed to continuous improvement of customer service. Likewise, our employees based at headquarters are dedicated to supporting improvements in the store experience. Offering our customers superior products supported with value, convenience and service in a way that allows Kmart to generate profitable sales, will support the continued investment in our business to better serve customers in the future." Day added, "Kmart's inventory investment has been prudently managed throughout the year, ending the fiscal year at a level below $3.3 billion, a reduction of over 25% relative to the prior year on a comparable store basis. Our improved inventory management, along with cash flow from operations and receipts from sales of surplus real estate, has significantly strengthened our cash position." As of January 28, 2004, Kmart had approximately $2.1 billion in cash and cash equivalents, which exceeded expectations, due to a profitable month of January and incremental inventory reduction. Additionally, the Company had borrowing availability of approximately $1.1 billion on its $1.5 billion credit facility, net of outstanding letters of credit. Kmart has not borrowed under its credit facility other than for letters of credit. 39-Week Results In accordance with generally accepted accounting principles, the reported historical financial statements of the Predecessor Company for periods prior to May 1, 2003 cannot be added to those of Kmart. As such, this press release references the 39-week Successor Company period, instead of a 52-week fiscal year. For the 39 weeks ended January 28, 2004, Kmart reported net income of $248 million, or $2.52 per diluted share. The Predecessor Company reported a net loss of $1.8 billion for the 39 weeks ended January 29, 2003. Same-store sales and total sales decreased 9.5% and 23%, respectively, for the 39 weeks ended January 28, 2004, compared to the 39 weeks ended January 29, 2003. The decrease in same-store sales is due primarily to several Company-wide promotional events occurring in the prior year, along with a reduction in advertising, including the frequency of mid-week circulars in the current year. The decrease in total sales is attributable to the decrease in same-store sales and the closure of 316 stores during the first quarter of 2003. Gross margin increased $140 million to $4 billion, for the 39 weeks ended January 28, 2004, from $3.8 billion for the comparable period a year ago. Gross margin, as a percentage of sales, increased to 23.4% for the 39 weeks ended January 28, 2004, from 17.4% for the comparable period a year ago. Impacting the gross margin rate in the prior period are inventory markdowns of $498 million, primarily related to our fiscal 2003 store closings. The markdowns were charged to Cost of sales, buying and occupancy in the fourth quarter of fiscal 2002 when the decision to close the stores was made. Also impacting gross margin is a decrease in distribution costs, lower depreciation expense resulting from impairment charges taken last year and the write-off of long-lived assets in conjunction with the application of Fresh-Start accounting, lower inventory shrinkage, supplier cost reductions and an improved sales mix as a result of a decrease in promotional activity, as referenced in the sales summary above. Gross margin also benefited from the reclassification of co-op advertising recoveries recorded in cost of sales, buying and occupancy in 2003. These improvements in the gross margin rate were partially offset by greater clearance markdowns. SG&A (Selling, General & Administrative expenses), which includes advertising costs (net of co-op recoveries of $199 million in 2002) decreased $995 million for the 39 weeks ended January 28, 2004, to $3.6 billion, or 21.0% of sales, from $4.6 billion, or 20.6% of sales, for the 39 weeks ended January 29, 2003. The decrease in SG&A is primarily due to the reduction of our store base after closing 316 stores during the first quarter of 2003, as well as a decrease in payroll and other related expenses from corporate headquarters' cost reduction initiatives. In addition, lower depreciation expense resulting from impairment charges taken while operating in bankruptcy and the write-off of long-lived assets in conjunction with Fresh-Start accounting combined with a decrease in advertising expense contributed to the improvement in SG&A expenses. Collectively, these reductions were partially offset by the impact of the reclassification of co-op advertising recoveries, as discussed above. Discussion of Non-GAAP Financial Information Year-to-date Adjusted EBITDA Year-to-date Adjusted EBITDA (Year-to-date earnings before interest, taxes, depreciation, amortization, reorganization costs, fresh start valuation charges, restructuring, impairment and other charges and other bankruptcy- related items) is a non-GAAP financial measure. Year-to-date Adjusted EBITDA is not the same as EBITDA defined in Kmart's credit facility. Year-to-date Adjusted EBITDA is a Company-defined metric used solely by Kmart's management for the administration of the Company's incentive compensation program for eligible employees. Year-to-date Adjusted EBITDA is not a measure or indicator of the overall financial condition or performance of Kmart and should not be used by investors as a basis for formulating investment decisions as it excludes a number of important cash and non-cash recurring items. Management compensates for this limitation by using GAAP measures, as well, in managing the business. Year-to-date Adjusted EBITDA was $605 million as compared to the previously disclosed annual incentive compensation target of $375 million. Disclosure of Year-to-date Adjusted EBITDA is being made solely for purposes of communicating to employees year-to-date performance results as compared to the performance goals outlined in the Company's incentive compensation program. About Kmart Holding Corporation Kmart Holding Corporation (Nasdaq: KMRT) and its subsidiaries is a mass merchandising company that offers customers quality products through a portfolio of exclusive brands that include THALIA SODI, JACLYN SMITH, JOE BOXER, KATHY IRELAND, MARTHA STEWART EVERYDAY, ROUTE 66 and SESAME STREET. Kmart operates more than 1,500 stores in 49 states and is one of the largest employers in the country with approximately 158,000 associates. For more information visit the Company's website at http://www.kmart.com/ KMART: Featured in Schaeffer's Street Chatter --------------------------------------------- "Street Chatter" from Schaeffer's Investment Research focuses on Kmart (Nasdaq:KMRT). "Street Chatter" is a report that analyzes 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 Discount retailer Kmart (Nasdaq:KMRT) said this morning that fourth-quarter income totaled $2.78 per share, a welcome change from the $1.61-per-share loss suffered last year when the firm was in bankruptcy. Additionally, KMRT officials said that as of January 28, the company had $2.1 billion in cash reserves, which exceeded expectations. Total fourth-quarter sales numbers were a dark cloud over the earnings report, as they dropped 26 percent in the reporting period, thanks in large part to a decrease in in- store promotions this year. Finally, in other news, the company said it can't yet offer a prediction of future sales of its Martha Stewart Living Omnimedia household products. KMRT shares gapped higher on heavy volume, reaching a new all-time peak since trading began on the equity last April. On the sentiment front, Schaeffer's put/call open interest ratio (SOIR) for KMRT currently stands at 0.68, meaning there are just 68 open put positions among near-term options for every 100 open call positions. After tomorrow's clearing out of front-month (March series) options, however, this indicator could spike higher. According to research from our quantitative analysis department, the combined SOIR reading for the back two-months' worth of options (April and June) weighs in at 1.50, with puts clearly outweighing calls by a margin of three-to-two among these two series. Additional pessimism on the equity is evidenced by the 9.8 million KMRT shares sold short. This represents 26 percent of the public float, which is the amount of open shares available for trading. What's more, this equals a short-interest ratio of 16.5 times the stock's average daily volume. If these bearish players begin to repurchase their shorted shares in an attempt to stave off additional losses, it could take more than 16 trading days to fully cover these positions. This activity could provide additional strength for the underlying equity. Click the following link to see the Daily Chart of KMRT Since December 2003 With 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=9704 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 Web site -- 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. LUIGINO'S INC.: S&P Rates Proposed Sr. Sec. Bank Facility at B+ --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' rating to frozen entr�e manufacturer Luigino's Inc.'s proposed $205 million senior secured bank facility. The credit facility, which has been assigned a recovery rating of '3', consists of a $30 million revolving credit facility and a $175 million senior secured term loan. At the same time, Standard & Poor's affirmed its 'B+' corporate credit rating on Luigino's. The outlook is stable. Duluth, Minnesota-based Luigino's Inc. will have about $232 million of total debt outstanding at closing. Proceeds from the offering will be used for a recapitalization, in which the company will repay about $27.5 million of existing term bank debt and $100 million of subordinated notes. The proceeds will also be used to fund normal ongoing working capital requirements. The rating on the credit facility is based on preliminary offering statements and is subject to review upon final documentation. "The ratings on Luigino's continue to reflect its moderately high debt levels, narrow product portfolio, and the highly competitive frozen entr�e category in which the company competes," said Standard & Poor's credit analyst Ronald Neysmith. "These challenges are mitigated by the company's well-established position in the category in North America as well as the company's appropriate liquidity." Luigino's products are sold under the Michelina's and Budget Gourmet brand names. The company is a leader in the value segment of the frozen-entr�e category, selling non-diet entr�es priced below $2.00, and has a market share of about 54% by volume. Although the company's competitive position is somewhat defendable given its brand positioning, it competes with several larger, financially stronger companies whose initiatives could hurt its pricing flexibility. Management expects to continue building the business by increasing brand awareness, increasing product penetration, and introducing new products. These initiatives are expected to require increased spending for items such as slotting fees and advertising, areas in which Luigino's has not spent much in the past. Although Standard & Poor's believes that such investments should benefit Luigino's sales in the future, the magnitude of the benefit remains uncertain. MARINER: Discloses Risks Relating to Substantial Indebtedness ------------------------------------------------------------- In a regulatory filing dated March 15, 2004, with the Securities and Exchange Commission, Mariner Healthcare, Inc. discloses that the Company's substantial level of indebtedness could adversely affect their financial condition. Mariner has a substantial amount of debt requiring significant interest payments. On December 31, 2003, the Company has a total debt of $389.6 million, of which $135.0 million consisted of borrowings under a Senior Credit Facility with a syndicate of lenders. Mariner also has $90.0 million in available borrowings under the Revolving Credit Facility component of the Senior Credit Facility although $34.6 million of borrowing capacity under the Revolving Credit Facility was utilized for letters of credit outstanding as of December 31, 2003. Mariner also has outstanding senior subordinated debt consisting of $175 million aggregate principal amount 8-1/4% Senior Subordinated Notes due December 15, 2013. Stockholders' equity is at $256.2 million on December 31, 2003. The indenture governing the Notes and the Senior Credit Facility contain financial and other restrictive covenants limiting the Company's ability to engage in activities that may be in their long-term best interests. Mariner's failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of some or all of the debts. Mariner may also be able to incur substantial additional indebtedness in the future. The terms of its indenture governing the Notes and the credit agreement governing the Senior Credit Facility do not completely prohibit the Company or its subsidiaries from incurring additional indebtedness. Mariner is permitted to incur additional indebtedness of up to $65.0 million under the Senior Credit Facility, or by the issuance of additional notes under the indenture governing the Notes or through a mortgage loan transaction with one or more other lenders to optionally refinance the $59.7 million mortgage loan from Omega Healthcare Investors, Inc. Mariner relates that any refinancing of the Omega Loan might cause Professional Health Care Management, Inc., a wholly owned subsidiary, and its subsidiaries to become guarantor subsidiaries under the Senior Credit Facility. If additional borrowings under the Senior Credit Facility were used to refinance the Omega Loan pursuant to this arrangement, they would rank senior to the Notes and the subsidiary guarantees of the Notes. To service its indebtedness, Mariner will require a significant amount of cash, the availability of which depends on many factors beyond its control. Mariner's ability to make payments on and to refinance its indebtedness, including the Senior Credit Facility and the Notes, and to fund planned capital expenditures, will depend on its ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond its control. Mariner cannot assure that its business will generate sufficient cash flow from operations, that anticipated revenue growth and improvement of operating efficiencies will be realized or that future borrowings will be available under the Senior Credit Facility in an amount sufficient to enable the Company to service its indebtedness or to fund other liquidity needs. Mariner may need to refinance all or a portion of its indebtedness on or before maturity, sell assets, curtail discretionary capital expenditures or file for bankruptcy. In connection with the incurrence of indebtedness under the Senior Credit Facility, Mariner relates that the lenders under the facility received a pledge of all of the capital stock of the existing domestic subsidiaries and any future domestic subsidiaries. Additionally, the lenders generally will have a lien on substantially all of the domestic assets, including existing and future accounts receivable, cash, general intangibles, investment property, equipment and real property. As a result of the pledges and liens, if Mariner fails to meet the payment or other obligations under the Senior Credit Facility, the lenders under the Senior Credit Facility would be entitled to foreclose on substantially all of the assets and liquidate them. Mariner points out that the indenture for the Notes and the Senior Credit Facility, among other things, impose significant operating and financial restrictions. The restrictions, among other things, limit the Company's ability to: (i) incur or guarantee additional indebtedness; (ii) issue preferred stock; (iii) pay dividends or make other distributions to its shareholders; (iv) repurchase or redeem its stock; (v) make other restricted payments and investments; (vi) create liens; (vii) incur restrictions on Mariner's or its subsidiaries' ability to pay dividends or other payments; (viii) sell or otherwise dispose of certain assets; (ix) consolidate, merge or sell assets; (x) enter into sale leaseback transactions; (xi) prepay, redeem or repurchase subordinated debt; (xii) enter into transactions with affiliates; and (xiii) engage in certain business activities. In addition, the Senior Credit Facility requires Mariner to maintain specified financial ratios and satisfy other financial tests. The Company cannot assure that the covenants will not adversely affect its ability to finance the future operations or capital needs or to pursue available business opportunities. The covenants may also limit Mariner's ability to plan for or react to market conditions, meet capital needs and may otherwise restrict its activities and business plans. (Mariner Bankruptcy News, Issue No. 56; Bankruptcy Creditors' Service, Inc., 215/945- 7000) MEDCOMSOFT: Completes Private Placement Equity Financing -------------------------------------------------------- MedcomSoft Inc. (TSX - MSF) closed the second and final tranche of its private placement equity financing originally announced on February 19, 2004. This closing consists of the issue of an additional 458,321 units for gross proceeds of approximately $252,000 in cash. Including the equity private placement closed on February 19, 2004, the total units issued were 2,633,813 for gross proceeds of approximately $1,449,000. Each unit was issued at $0.55 per unit and consisted of one common share and one-third of one common share purchase warrant. Each whole warrant is exercisable at $0.65 per share for a period of two years from the respective closing dates. All of the securities issued in connection with these private placements have a four-month hold period from the respective closing dates. MedcomSoft Inc. designs, develops and markets cutting-edge software solutions to the healthcare industry. MedcomSoft has pioneered the use of codified point of care medical terminologies and intelligent pen-based data capture systems to create a new generation of electronic medical records (EMR). As a result of MedcomSoft innovations, physicians and managed care organizations can now securely build and exchange complete, structured and homogeneous electronic patient records. MedcomSoft applications are written with the latest Microsoft tools to run on the Windows platform (Windows 2000 & XP), operate with MS SQL Server 2000(TM), support MS Terminal Server and fully integrate with MS Office 2003, Exchange and Outlook(R). MedcomSoft applications are fully compatible with Tablet PCs and wireless technology. The company's Dec. 31, 2003, balance sheet discloses a net capital deficit of about $1.7 million. MEDMIRA: Raises Additional $350,000 Through Debenture Financing --------------------------------------------------------------- MedMira Inc. (TSX Venture: MIR) closed an additional $350,000 from 7 private investors, of the debenture financing announced on February 17, 2004. This brings the total amount raised to date to $850,000. The debentures feature a 15% interest rate with a royalty on sales bringing the total return to 25%. The debentures have a 1-year term and are convertible into common shares of MedMira at $0.85 per share. Stephen Sham, MedMira chairman and CEO, said, "We're quite happy to close this second round of our financing, as it shows good network of investor support for the company. We fully expect that we will complete the debenture financing by the end of March, as originally planned." MedMira -- http://www.medmira.com/-- is a commercial biotechnology company that develops, manufactures and markets qualitative, in vitro diagnostic tests for the detection of antibodies to certain diseases, such as HIV, in human serum, plasma or whole blood. The United States FDA and the SFDA in the People's Republic of China have approved MedMira's Reveal(TM) and MiraWell(TM) Rapid HIV Tests, respectively. All of MedMira's diagnostic tests are based on the same flow- through technology platform, thus facilitating the development of future products. MedMira's technology provides a quick (under 3 minutes), accurate, portable, safe and cost-effective alternative to conventional laboratory testing. At October 31, 2003, the Company's balance sheet shows a total shareholders' equity deficit of about C$3 million. METROMEDIA: Russian Unit Buys 80% Stake in Pskov Telephone Network ------------------------------------------------------------------ Metromedia International Group, Inc. (currently traded as: OTCPK:MTRM - Common Stock and OTCPK:MTRMP - Preferred Stock), the owner of interests in various communications and media businesses in Russia, Eastern Europe and the Republic of Georgia, announced that its Russian telephony subsidiary, PeterStar, has entered into transactions permitting it to acquire 80% of the outstanding shares of Pskov City Telephone Network ("PGTS"), an incumbent local exchange carrier in North-West Russia. PGTS, established in 1901, is one of Russia's oldest telecommunications operators and is a Russian public company. Peterstar, which is a 71% subsidiary of the Company, is the leading competitive local exchange carrier in St. Petersburg, Russia. The Pskov district is located in the North-West Region of Russia and borders the Baltic States and Belarus. PeterStar has entered into several share purchase agreements which in the aggregate will allow it to acquire 80% of the shares of PGTS and 90% of the shares of Pskovinterkom, a smaller local exchange carrier in Pskov and a sister company of PGTS. The share purchase agreements for PGTS and Pskovinterkom shares are subject to additional due diligence by PeterStar and Russian regulatory approvals. PeterStar is currently anticipating that the share purchase transactions will be completed in the next two months. As part of the transaction, PeterStar has extended to PGTS a secured loan of $2.58 million. The full consideration for this transaction will be financed directly by PeterStar. PGTS services approximately 56,500 active telephone lines and controls over 80% of local numbering capacity in the city of Pskov (population 206,000). PGTS' network exceeds 1,200 km and in 2003, PGTS revenues were over $3.5 million. In making this announcement, Victor Koresh, General Director of PeterStar and MIG's Vice President of Russian Operations, commented: "This acquisition reflects our commitment to expand operations throughout Russia's North-West region. With the acquisition of a controlling stake in PGTS, PeterStar makes another important step towards its goal of being one of Russia's leading communications service providers. In 2002, PeterStar opened a node and point of presence in Moscow. Since then PeterStar has established a presence in other international locations, including London and New York." Mr. Koresh further commented: "The acquisition of PGTS will enable us to provide expanded services to our key corporate customers many of whom are operating outside St Petersburg. Acquiring PGTS also provides PeterStar with an already established modern network and highly professional staff. This move significantly strengthens our competitive positioning in markets that now stretch well beyond our original core St Petersburg market." Mark Hauf, Chairman and Chief Executive Officer of the Company, commented further: "The steady expansion of PeterStar, our core telephony business in Russia, has been a key priority of our overall corporate development program. Victor Koresch and the PeterStar team are doing an excellent job of positioning PeterStar as a significant regional and international operator. This impending acquisition of PGTS is just the most recent step in this continuing expansion of PeterStar's market reach. The transaction also reflects our principal corporate strategy of focused investment in development of the Company's core communications businesses in Russia and Georgia." About Metromedia International Group Through its wholly owned subsidiaries, the Company owns communications and media businesses in Russia, Eastern Europe and the Republic of Georgia. These include mobile and fixed line telephony businesses, wireless and wired cable television networks and radio broadcast stations. The Company has focused its principal attentions on continued development of its core telephony businesses in Russia and the Republic of Georgia, while undertaking a program of gradual divestiture of its non-core media businesses. The Company's remaining non-core media businesses consist of three cable television networks, including operations in Russia, Belarus and Lithuania. The Company also presently owns interests in nineteen radio businesses operating in Finland, Hungary, Bulgaria, Estonia, Latvia and the Czech Republic. The Company's core telephony businesses include PeterStar, the leading competitive local exchange carrier in St. Petersburg, Russia, and Magticom, the leading mobile telephony operator in the Republic of Georgia. Corporate Liquidity As of September 30, 2003 and January 30, 2004, Metromedia International Group had $24.1 million and $23.3 million, respectively, of unrestricted cash at its headquarters level. The $24.1 million of cash at September 30, 2003 reflects cash held at headquarters subsequent to the Company's $8.0 million semi-annual interest payment, which was due on September 30, 2003, on its Senior Discount Notes, with a current outstanding principal balance (fully accreted) of $152 million. The Company projects that its current corporate cash reserves, anticipated cash proceeds of non-core business sales and anticipated continuing dividends from core business operations will be sufficient for the Company to meet its future operating and debt service obligations on a timely basis. If the Company does not realize the cash proceeds it currently anticipates on the future sale of its non-core businesses and does not receive the amount of dividends from the core business operations that it currently anticipates, the Company does not believe that it will be able to fund its planned operating, investing and financing cash flows through September 30, 2004, the due date of an $8 million semi-annual interest payment on the Company's Senior Discount Notes. However, even assuming no proceeds from further sale of non-core businesses and no further dividends from core business operations, the Company projects that its cash flow and existing capital resources will permit it to pay the $8 million semi-annual interest payment due on March 30, 2004 on its Senior Discount Notes. If the Company is not able to satisfactorily manage these liquidity issues, the Company may have to resort to certain other measures, including ultimately seeking the protection afforded under the U.S. Bankruptcy Code. The Company cannot provide any assurance at this time that it will be successful in avoiding such measures. Additionally, the Company currently has a stockholders deficit and has historically suffered recurring net operating cash deficiencies. METROPOLITAN MORTGAGE: Fitch Affirms & Downgrades 3 Debt Issues --------------------------------------------------------------- Fitch Ratings has taken rating actions on the following Metropolitan Mortgage issues: Series 1998-B --Classes A5, X affirmed at 'AAA'; --Class M1 affirmed at 'AA'; --Class M2 affirmed at 'A'; --Class B1 downgraded to 'B' from 'BB-'; --Class B2 downgraded to 'C' from 'CC'. Series 1999-A --Classes A4, A5, X affirmed at 'AAA'; --Class M1 affirmed at 'AA'; --Class M2 affirmed at 'A'; --Class B1 downgraded to 'B' from 'BB'; --Class B2 remains at 'C'. Series 2000-B --Classes A1A, A1F affirmed at 'AAA'; --Class M-1 affirmed at 'AA'; --Class M-2 affirmed at 'A'; --Class B-1 downgraded to 'BB' from 'BBB' and removed from Rating Watch Negative. The negative rating actions taken reflect the poor performance of the underlying collateral in the transaction. The level of losses incurred has increased significantly and has resulted in the depletion of overcollateralization. As of the February 2004 distribution, series 2000-B has an OC amount of $2,191,329.4 remaining, compared to $3,015,796.99 in the November 2003 distribution when this deal was first placed on Rating Watch Negative. Series 1998-B has had no OC since the November 2003 distribution, and class B2 has taken further write- downs, with an ending balance of $1,418,744.09 as of the February 2004 distribution. The 12-month average monthly loss for this deal is approximately $118,000. Series 1999-A has had no OC since the November 2003 distribution, and class B2 has taken further write- downs, with an ending balance of $974,245.14 as of the February 2004 distribution. The 12-month average monthly loss for this deal is approximately $98,000. These deals are structured such that there is the ability in future periods for the bonds that were written down due to losses to be written back up. MIRANT CORP: Court Clears Compromise Agreement with Insurers ------------------------------------------------------------ Prior to the Petition Date, the Mirant Corp. Debtors engaged in the construction of an electrical power generating facility at 425 Fairview Road in Zeeland, Michigan. Understanding the risks associated with the construction of the Zeeland Plant, the Debtors procured insurance to protect them against what is known as "builder's risk" or rather the risk that certain materials or equipment will be damaged during construction. Accordingly, on July 1, 2000, the Insurers -- Cox Power Services, Xchanging Claims Services Limited, on behalf of Certain Underwriting Members of Lloyds and XL Europe Insurance -- issued to the Debtors an insurance policy to cover any losses associated with the construction of the Zeeland Plant. Ian Peck, Esq., at Haynes and Boone LLP, in Dallas, Texas, related that as part of the construction process, Mirant Zeeland LLC contracted with General Electric for the installation of an EX2000 exciter cabinet. On May 21, 2002, an electrical fault in the Cabinet caused a fire, which rendered the Cabinet completely unusable. Although the exact cause of the fire was never determined, GE agreed to replace the Cabinet at a discounted price of $733,333 -- the Loss Amount. Upon notification of the damage to the Cabinet and the Loss Amount, the Insurers agreed to compensate the Debtors for the Loss Amount less the $250,000 deductible set forth in the Policy, thereby reimbursing the Debtors $483,333 in exchange for a waiver of any additional claims relating to the damage to the Cabinet. To effectuate the agreement between the Debtors and the Insurers, on January 23, 2004, the Debtors and the Insurers entered into a Settlement Agreement. The salient terms of the Settlement Agreement are: (a) The Insurers will promptly pay to Mirant Zeeland $483,333 as full payment of its obligations relating to Loss under the Policy. The application of the Deductible to the Loss Amount will satisfy any and all claims by the Insurers against the Debtors for any damages and costs arising from the Loss; (b) The Insurers will release the Debtors from any and all claims, demands, actions or causes of action, which the Insurers had, or may now, or may in the future have, own, or hold for relief, compensation, damages, losses or remedy of any kind or character, relating to or arising from the Loss; and (c) The Debtors will release the Insurers from any and all claims, demands, actions or causes of action which the Debtors had, or may now, or may in the future have, own, or hold for relief, compensation, damages, losses or remedy of any kind or character, relating to or arising from the Loss. Accordingly, pursuant to Rule 9019(a) of the Federal Rules of Bankruptcy Procedure, the Debtors sought and obtained Court approval for their Settlement Agreement with the Insurers. 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. 26; Bankruptcy Creditors' Service, Inc., 215/945-7000) MIRANT: CDC Globeleq Sells Back Stake in Philippines Power Station ------------------------------------------------------------------ CDC Globeleq, the emerging markets power company, had completed the sale of its 2.94 per cent minority investment in Sual, a 1,200 megawatt coal-fired power generation plant in the Philippines. The shares were sold back to the majority owner and operator of the plant, Mirant Philippines Corporation, a wholly owned subsidiary of Mirant Corporation (MIRKQ). Net proceeds from the transaction were approximately US$21 million. "Divesting this minority investment is consistent with our strategy and business plan," said Robert C. Hart, President and CEO of CDC Globeleq. "As an operating power company we seek majority ownership or operational control of the power assets in which we invest. Sual was a successful financial investment, but did not fit our strategy. We were very pleased with our partnership with Mirant's Philippine operations on this project." CDC Group plc, the sole shareholder of CDC Globeleq, invested in the Sual power project in 1997. A loan from CDC Group to the Sual project company remains unaffected by this transaction. In June 2003, CDC Group divested its minority stake in Mirant's Pagbilao generating plant. CDC Globeleq is the fastest growing power company in the emerging markets. In 2002 and 2003 the company acquired controlling ownership of more than 1,800 megawatts of generation capacity, reaching a total of over 2,300 megawatts in 22 projects in 17 countries. CDC Globeleq is actively pursuing additional acquisitions in Africa, the Americas and Asia. Mirant Philippines Corporation, a wholly owned subsidiary of Atlanta-based Mirant Corporation, owns more than 2,000 megawatts of installed generating capacity throughout the Philippines. It also owns a stake in the natural gas- fired 1,200-megawatt Ilijan generating plant located in the Quezon region of the Philippines. Mirant's operations in the Philippines and the Caribbean were excluded from Chapter 11 filings of Mirant Corporation and most of its subsidiaries. MLEA INC: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: MLEA Inc. aka Main Line Engineering Associates aka Engineered Gas Systems, LLP 211 Welsh Pool Road, Suite 120 Exton, Pennsylvania 19341 Bankruptcy Case No.: 04-13574 Type of Business: The Debtor is a multidisciplinary firm engineering that provides, designs and CAD/CAE services for utilities and commercial industry. See http://www.mlea.com/ Chapter 11 Petition Date: March 12, 2004 Court: Eastern District of Pennsylvania (Philadelphia) Judge: Diane W. Sigmund Debtor's Counsel: Robert M. Bovarnick, Esq. Two Penn Center Plaza 1500 JFK Boulevard, Suite 1310 Philadelphia, PA 19102 Tel: 215-568-4480 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20-largest creditors. NATIONAL CENTURY: Selling Lincoln Center to Promise Hospital ------------------------------------------------------------ The National Century Debtors want to sell Lincoln Hospital Medical Center located in Los Angeles, California to Promise Hospital of East Los Angeles, LP, free and clear of all liens, claims, encumbrances and other interests other than the liens that would be expressly satisfied or assumed by Promise Hospital under the terms of an agreement for the sale of the Hospital Property. Charles M. Oellermann, Esq., at Jones Day Reavis & Pogue, in Columbus, Ohio, relates that Debtor Memorial Drive Office Complex, LLC is the owner of the Hospital Property. On March 22, 2000, MDOC, as landlord, and Millennium Health Group, Inc., as tenant, entered into a lease with respect to both the Hospital Property and another property in Los Angeles, California that is being used to operate a medical clinic. Since then, Millennium subleased the Hospital Property to Lincoln Hospital Medical Center, Inc. However, since October 2002, Millennium failed to pay any of the rent under the Lease. Subsequently, Millennium and MDOC agreed to terminate the Lease on the earlier of the sale of the Hospital Property, or April 30, 2004. Since the Petition Date, given Lincoln's poor financial performance and the multiple liens on the property, the Debtors pursued the difficult task of seeking to obtain some value for these estates from the sale of the Hospital Property. After an extensive, seven-month marketing process, the only party that submitted a formal offer on the Hospital Property was Promise Hospital. The Debtors intend to sell the Hospital Property to Promise Hospital on these terms and conditions: A. Assets Sold * The real property associated with the Hospital Property, including buildings, fixtures and other improvements * All privileges, rights, and easements appurtenant to the Real Property * All water rights * Certain mineral rights * Rights to ingress and egress * All other rights to use or develop the Hospital Property B. Purchase Price The consideration for the Property will be an amount equal to: (a) an amount necessary to satisfy delinquent real property taxes and assessments due as of the close of escrow -- approximately $33,686 as of October 31, 2003; (b) the amount acknowledged by UNB in writing to cure and reinstate the indebtedness secured by the UNB Deed of Trust, approximately $104,635 as of January 31, 2004, which amount will be payable to UNB, and the assumption of that indebtedness -- $800,000; and (c) the sum of $100,000 payable to NCFE. C. Deposit by Promise Hospital Promise Hospital will deposit $25,000 into escrow. No later than one day before the closing date, Promise Hospital will deposit into escrow the remainder of the amounts payable at closing plus certain expenses required by the escrow holder. D. Deposit by MDOC On or before the closing date, MDOC will deposit into escrow the quitclaim deed, a non-foreign status affidavit and all other documents required by the escrow holder. E. Closing The closing of the purchase and sale of the Hospital Property will take place within three business days after the date of satisfaction or waiver of the express conditions contained within the Purchase Agreement, including the Court's order authorizing the sale of the Hospital Property to Promise Hospital becoming final and non-appealable. F. Costs of Closing As of the Closing Date, Promise Hospital will bear all title, escrow and other closing costs as: (a) all costs and expenses of preparing, acknowledging and recording the Quitclaim Deed; (b) all of the premium for the Title Policy and escrow fees; (c) all costs and fees incurred in connection with the ALTA survey, if any; (d) all documentary and transfer taxes due, if any, on the transfer of the Hospital Property; and (e) all real property taxes and assessments assessed against the Hospital Property. G. Liquidated Damages and Waiver In the event of a default by Promise Hospital, MDOC may retain the $25,000 deposit as liquidated damages. Mr. Oellermann admits that Promise Hospital's offer will result in only a limited recovery on NCFE's lien against the Hospital Property and in no proceeds to MDOC's estate. However, in light of the ongoing losses of Lincoln, the physical decay of the Hospital Property and other issues regarding the property, the Debtors concluded that the sale of the Hospital Property to Promise Hospital is the best available alternative for this asset. Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- is the market leader in healthcare finance focused on providing medical accounts receivable financing to middle market healthcare providers. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. D. Ohio Case No. 02-65235). Paul E. Harner, Esq., Jones, Day, Reavis & Pogue represents the Debtors in their restructuring efforts. (National Century Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., 215/945-7000) NATIONSRENT: Creditor Trustee Wants 2 Duplicate Claims Disallowed ----------------------------------------------------------------- Perry Mandarino, as the Creditor Trustee for NationsRent Inc. Debtors' Chapter 11 cases, asks Judge Walsh to disallow and expunge these two Duplicate Claims filed in the Debtors' cases: Remaining Duplicate Claimant Claim Claims Amount -------- --------- --------- ------ Cypress/NR I, LP 2025 2026 $595,469 Rich, Francis P Sr. & Catherine L 2941 2942 unliquidated Deficient Documentation Claims The Creditor Trustee also discovered 17 claims that failed to attach sufficient material supporting documents. Among them are: Claimant Claim No. Amount -------- --------- ------- Castrol Heavy Duty Lubricant, Inc. 2974 $174,766 Dugat, Greg 2751 262,500 Holt Machinery Company 2572 1,203,050 Holt Machinery Company of NY, Inc. 2573 2,346,065 Insight Capital Investments 2927 91,864 Mortellaro, William and Deborah 2700 216,000 Ramos, Ruben 532 262,500 Raterman, Charles J. 403 329,712 Renzulli, Lance 158 128,220 Yager, Robert M. 3077 136,688 According to Ashley B. Stitzer, Esq., at The Bayard Firm, in Wilmington, Delaware, the Deficient Documentation Claimants failed to carry their initial burden of establishing a prima facie case with respect to the Deficient Documentation Claims. Thus, the Creditor Trustee asks the Court to disallow and expunge the Deficient Documentation Claims in their entirety. Overstated Liability Claims The Creditor Trustee identified 14 claims as Overstated Liability Claims: Claimant Claim No. Amount -------- ----------- ------- 2700 Properties, Inc. 2719 $9,232 Cypress/NR I, LP 2025 595,469 Cypress/NR I, LP 2026 3,757,152 Garzarelli Investments Co., LLC 2479 1,796,147 GSR Enterprises, Inc. 1761 12,264 J.R. Holding, Inc. 2536 266,000 Mortellaro, William and Deborah 2700 216,000 Pennington, Randy 2165 534,000 Rich, Francis P Sr. & Catherine 2941 unliquidated Rich, Francis P Sr. & Catherine 2942 unliquidated Samco Enterprise, LLC 3049 2,823 Westervelt, Ronald/Russel, Ramona 811 107,938 Yager, Robert M. 3077 136,688 Ziegler, James L. & R. Nancy 3048 9,120 Some of the Overstated Liability Claims, Ms. Stitzer relates, are claims of parties to unexpired non-residential real property leases or executory contracts, which the Debtors assumed. By virtue of the assumption or assignment of the agreements pursuant to the Plan, these claims have been or should have been paid. The Overstated Liability Claims also include claims for damages in connection with the rejection of real property leases or executory contracts. These claims are generally overstated because they do not comply with state law requirements to mitigate or do not comply with the statutory caps on damages pursuant to Section 502 of the Bankruptcy Code. Accordingly, the Creditor Trustee asks Judge Walsh to reduce or disallow and expunge the Overstated Liability Claims in their entirety. (NationsRent Bankruptcy News, Issue No. 45; Bankruptcy Creditors' Service, Inc., 215/945-7000) NATIONAL WASTE: Seeks Nod to Pay Vendors' Prepetition Claims ------------------------------------------------------------ National Waste Services of Virginia, Inc., asks approval from the U.S. Bankruptcy Court for the District of Delaware to pay the prepetition services of its critical vendors to preserve prepetition business relationships with them. The Debtor estimates that the maximum aggregate value of Critical Vendor Claims that it seeks to pay will not exceed $100,000. The Critical Vendor provide materials, goods and services, with whom the Debtor continues to do business and whose materials, goods and services are essential to its operations. The Debtor points out that paying the Critical Vendors is necessary to continue operations, preserve the enterprise value and successfully reorganize or consummate a sale of the business in a manner that will maximize value for the estate, creditors and other stakeholders. The materials, goods and services to be provided by the Critical Vendors are utilized in all segments of the Debtor's operations. The Debtor believes that absent payment of the Critical Vendor Claims in the ordinary course of business, such Critical Vendors may cease doing business with the Debtor. Accordingly, the Debtor submits that unless it is authorized to pay the Critical Vendor Claims, the business operations may be severely damaged and its prospects for successfully reorganizing or accomplishing a sale as a going concern of its business maybe severely diminished. Generally, the Debtor's Critical Vendors are: (a) the sole source of supply for certain materials, goods and/or services; (b) the sole vendor able to supply the Debtor with adequate amounts or quantities of certain materials or goods; and/or (c) possess unique knowledge of the Debtor's business operations or equipment. Headquartered in Little Creek, Delaware, National Waste Services of Virginia, Inc. -- http://www.natwaste.com/-- collects, processes and disposes solid non-hazardous waste and recycling materials. The Company filed for chapter 11 protection on March 4, 2004 (Bankr. Del. Case No. 04-10709). Michael Gregory Wilson, Esq., at Hunton & Williams represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts and assets of over $10 million each. NORTEL NETWORKS: Featured in Schaeffer's Street Chatter ------------------------------------------------------- "Street Chatter" from Schaeffer's Investment Research focuses on Nortel Networks (NYSE:NT). "Street Chatter" is a report that analyzes 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 Nortel Networks (NYSE:NT) was in the news as a class-action lawsuit was filed against the telecommunications firm due to its recent warning of an earnings restatement. Named in the suit are all investors who purchased NT shares between January 7 and March 15 of this year. Just recently, the company suffered more bad news, as Wachovia lowered its opinion of the stock to a "market perform" from an "outperform." After stair-stepping higher throughout most of 2003, fundamental challenges over the past two weeks have sent NT sharply lower. The stock has now endured a weekly close beneath its 20-week moving average, the first such close in over a year. Short sellers missed out on a bearish opportunity with NT. Last reporting period, the number of shorted NT shares dropped 21 percent to 53.8 million, the lowest level since mid-2001. The resultant short-interest ratio is less than one times the equity's average daily trading volume. On another sentiment front, Wall Street is currently mixed on the equity. Of the 27 analysts currently rating the security, 14 have named it a "buy" or better, with 12 "hold" ratings and one outright "sell." Click the following link to see the Weekly Chart of NT Since March 2003 With 10-Week and 20-Week Moving Averages: http://www.schaeffersresearch.com/wire?ID=9704 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 Web site -- 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 About Nortel Networks Nortel Networks is an industry leader and innovator focused on transforming how the world communicates and exchanges information. The Company is supplying its service provider and enterprise customers with communications technology and infrastructure to enable value-added IP data, voice and multimedia services spanning Wireless Networks, Wireline Networks, Enterprise Networks, and Optical Networks. As a global company, Nortel Networks does business in more than 150 countries. More information about Nortel Networks can be found on the Web at http://www.nortelnetworks.com/ * * * Standard & Poor's Rating Services placed its 'B' long-term corporate credit, senior secured debt, and other ratings on telecom equipment supplier, Brampton, Ontario-based Nortel Networks Ltd. on CreditWatch with negative implications. "The CreditWatch placement follows the announcement by parent Nortel Networks Corp. that it, and Nortel Networks Ltd. (collectively Nortel Networks), will need to delay the filing of its Form 10-K for the year-ended Dec. 31, 2003, with the U.S. Securities and Exchange Commission," said Standard & Poor's credit analyst Joe Morin. In addition, Nortel Networks will likely have to revise its previously reported unaudited results for the year- ended Dec. 31, 2003, and might have to restate previously filed financial results. As a result, Nortel Networks will not likely be in compliance with the requirements under its public indentures, Export Development Canada (EDC) support facility, and its credit facilities to deliver their SEC filings. The inability of Nortel Networks to meet these requirements results in near-term uncertainties. Failure to meet SEC filings within the allowable cure periods under the indentures or credit facilities could result in a lowering of the ratings. Inability to obtain a temporary waiver from EDC could result in additional uncertainties, which in turn could result in a lowering of the ratings. Finally, the ratings could also be lowered if Nortel Networks further revises, or restates financials results, which result in a materially weakened financial profile. NET PERCEPTIONS: Obsidian Enterprises Increases Stock Offer ----------------------------------------------------------- Obsidian Enterprises, Inc. (OTC Bulletin Board: OBDE), a holding company headquartered in Indianapolis, said it will increase its offer to provide shareholders of Net Perceptions, Inc. (Nasdaq: NETP) the opportunity to receive twenty-five cents ($0.25) per share in cash and three one-hundredths (3/100) share of Obsidian common stock for each share of Net Perceptions common stock. The new offer represents an increase in the cash consideration of five cents ($0.05) per share over the existing offer. Commenting on these developments, Timothy S. Durham, CEO of Obsidian stated "We believe Net Perceptions' Board of Directors and management are out of touch with their shareholder base as reflected by Net Perceptions' inability to get a quorum at its recently scheduled special meeting more than 150 days after announcing its intentions to pursue a Plan of Liquidation. Net Perceptions' directors and management have obviously not offered a compelling alternative and continue to refuse to let the owners of Net Perceptions make the ultimate decision of ownership -- the decision to sell." Obsidian also announced that it has extended its exchange offer until 5:00 p.m., New York City time, on Wednesday, April 7, 2004. In connection with the extension, Obsidian announced that one condition to the exchange offer, that Net Perceptions not take further action in connection with its proposed plan of liquidation, has been waived, but only to the extent of actions taken to date. Other terms and conditions of the exchange offer remain unchanged. Obsidian commenced its offer on December 15, 2004. Obsidian currently does not own any of the outstanding shares of Net Perceptions. The offer was scheduled to expire at 5:00 p.m., New York City time, on March 17, 2004. As of the close of business on March 17, 2004, based on information received from the exchange agent, approximately 1,135,149 Net Perceptions shares had been deposited. 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; * Obsidian be 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. Obsidian filed a Registration Statement on Form S-4 and a Tender Offer Statement related to the current offer with the Securities and Exchange Commission on December 15, 2003 and filed amendments to each on December 17, 2003 and March 11, 2004. Obsidian intends to promptly file with the SEC amendments to these documents embodying these terms and incorporating Obsidian's financial information for the quarter ended January 31, 2004, included in its Quarterly Report on Form 10-Q. 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. You may contact Innisfree M&A, toll-free, at (888) 750-5834 if you have additional questions about the proposed transaction. 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. OREGON ARENA: U.S. Trustee Fails to Form Creditors Committee ------------------------------------------------------------ Ilene J. Lashinsky, the United States Trustee for Region 18 reports that she was unable to appoint a committee of unsecured creditors in Oregon Arena Corporation's chapter 11 case. Ms. Lashinsky tells the U.S. Bankruptcy Court that despite her efforts to form a committee, eligible creditors have not expressed willingness to serve on one. Headquartered in Portland, Oregon, Oregon Arena Corporation, owns Portland's Rose Garden, one of the city's entertainment arenas and home of the NBA's Portland Trail Blazers. The company filed for chapter 11 protection on February 27, 2004 (Bankr. D. Oreg. Case No. 04-31605). Paul B. George, Esq., at Foster Pepper Tooze LLP and R. Michael Farquhar, Esq., at Winstead Sechrest & Minick P.C., represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed an estimated assets of more than $10 million and estimated debts of more than $100 million. OWENS: Obtains Go-Ahead to Buy Jackson, Tenn. Facility Equipment ---------------------------------------------------------------- Among the facilities the Owens Corning Debtors own and operate is a facility in Jackson, Tennessee. The Jackson Facility consists of 199 acres, at which the Debtors manufacture a fiberglass underlayment product -- the wet chop -- which is a critical component in the production of roofing shingles. The Jackson Facility is the Debtors' primary facility for the production of wet chop, and is one of the largest wet chop manufacturers in the United States. Although a portion of the wet chop manufactured at the Jackson Facility is sold to third parties, the Debtors use most of it for their own production of roofing shingles. Taking into account this internal usage, the Jackson Facility is a highly profitable facility. Norman L. Pernick, Esq., at Saul Ewing LLP, in Wilmington, Delaware, related that the Debtors operate the Jackson Facility through a series of agreements. Pursuant to these agreements, the underlying real estate and certain improvements located thereon are leased to Owens Corning by the Industrial Development Board of the City of Jackson through a Master Industrial Development Lease Agreement dated as of December 14, 1993. The Board holds legal title to the Real Estate. According to Mr. Pernick, the Board also holds legal title to certain of the equipment and machinery located at the Jackson Facility, together with a solid waste disposal and recycling facility. The Equipment is leased to Owens Corning through a series of agreements: (1) a December 15, 1993 Head Lease, by the Board, as lessor, and U.S. Bank, as trustee, as successor to State Street Bank and Trust Company of Connecticut, as lessee, as amended and supplemented by the certain Qualifying Addition Supplement to Head Lease Agreement dated as of December 23, 1996; and (2) a December 15, 1993 Sublease Agreement between U.S. Bank, as lessor, and Owens Corning, as lessee, as amended and supplemented by that certain Qualifying Addition Supplement to Sublease Agreement dated as of December 23, 1996. Pursuant to these agreements, the Board leased the Equipment to U.S. Bank, which then subleased the Equipment to Owens Corning. Owens Corning sought and obtained the Court's authority to assume the Real Estate Lease and the Sublease and to exercise its purchase options, pursuant to Section 363(b)(1) of the Bankruptcy Code. The Jackson Transactions The Real Estate Lease and the Sublease are key parts of a series of transactions by which a mothballed manufacturing facility on the Real Estate was renovated and improved in 1993 and 1996. Among other things, these transactions: (1) provided for Owens Corning's transfer of legal title of the Real Estate to the Board, and the lease back of the Real Estate to Owens Corning pursuant to the terms of the Real Estate Lease, in connection with a payment-in-lieu of taxes program, which provided for certain property tax benefits to the Debtor; and (2) provided for the purchase and installation of the Equipment on the Real Estate, to be owned by the Board, leased to U.S. Bank pursuant to the Head Lease and subleased to Owens Corning pursuant to the Sublease. The funds used for the procurement and installation of the Equipment were obtained from these sources: (1) $26,551,000 of IDB Series A Secured Notes due March 31, 2004; (2) $4,692,450 of IDB Series B Secured Notes due March 31, 2004; (3) $8,750,000 of IDB Solid Waste Disposal Revenue Bonds Series 1993; (4) $32,200,000 of IDB Series C Secured Notes due March 31, 2004; and (5) $9,030,000 of third-party "equity investments." To secure these obligations, HSBC Bank US, as indenture trustee for the Notes and Bonds, and U.S. Bank, as trustee for the "equity investments," received, among other things, assignments of the various parties' rights under the Real Estate Lease, the Head Lease and the Sublease, first and second mortgages on the Real Estate and security interests in the Equipment. Inasmuch as the Real Estate Lease and the Sublease are due to expire on March 31, 2004, and because of the overall importance and value of the Jackson Facility to the Debtors' operations and profitability, Owens Corning seeks to exercise its rights under the Real Estate Lease and Sublease to purchase the assets: (1) The Equipment. Owens Corning has the right to purchase and obtain title to the Equipment for specified amounts, which, as of March 31, 2004, will be $24,300,000, plus certain fees and related charges and a $5,280,000 final semi-annual rent payment; and (2) The Real Estate Lease. Owens Corning has the right to purchase the Real Estate for $1 plus, inter alia, certain related fees, taxes, expenses and other amounts on March 31, 2004. Upon information and belief, these "cure" amounts are due and owing with respect to those agreements: (1) Sublease -- $117,664; and (2) Real Estate Lease -- $0. Owens Corning will exercise the Purchase Options, pay the Purchase Amounts and the Cure Amounts and obtain title to the Real Estate and the Equipment. Various claims asserted in connection with the Jackson Facility and the financing will be satisfied, and will be removed from the claims docket. These claims include: (1) HSBC's Claim No. 8844 for $44,772,763; (2) The Prudential Insurance Company of America's Claim No. 7490 in an unliquidated amount; (3) PRUCO Life Insurance Company's Claim No. 7460 in an unliquidated amount; and (4) BTM Capital Corporation's Claim No. 7269 for $10,926,512. Judge Fitzgerald also requires the four Claimants to file amended claims for $0, subsequent to the payment of the Cure Amounts and Purchase Amounts and exercise of the Purchase Options. 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 Jun 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: Fitch Expects to Rate $6.7B Secured Debt at BBB ------------------------------------------------------------ Fitch Ratings expects to assign a 'BBB' rating to Pacific Gas & Electric Company's (PG&E) proposed $6.7 billion issuance of secured bonds. The proceeds from the offering along with cash on hand are expected to be used to repay all of PG&E's outstanding pre-petition debt obligations. Fitch currently rates PG&E's senior secured and preferred securities 'BB-' and 'DDD', respectively, and plans to withdraw the ratings upon their redemption shortly after PG&E's reorganization and emergence from bankruptcy protection around mid-April 2004. PG&E is a subsidiary of PG&E Corporation (PCG). The Rating Outlook is Positive. The new senior secured debt rating and Positive Rating Outlook reflect the reasonable capital structure at the time of reorganization and anticipated sharp improvement in PG&E's financial profile thereafter. The ratings also reflect the significantly improved legislative/regulatory environment that has evolved in California since 2002. In December 2003, the California Public Utilities Commission (CPUC) approved a settlement agreement that adopted a new plan of reorganization that superseded competing plans of reorganization then before the bankruptcy court. The new plan of reorganization, supported by the CPUC, PG&E and PG&E Corp. was confirmed by the bankruptcy court in December 2003 and will be subject to bankruptcy court jurisdiction for the nine-year duration of the plan. CPUC approval of the plan provides support for the restoration of an 'A-' rating over time, because the plan precludes the CPUC from adjusting the utility's authorized return on equity and capital structure targets until that rating level is achieved. In addition, the plan provides an $800 million rate reduction and environmental benefits for customers. Key aspects of the settlement agreement are as follows: -- PG&E and its parent will abandon efforts to disaggregate the utility and agree to keep the utility vertically integrated and subject to CPUC jurisdiction. -- The settlement agreement reduces retail rates approximately $800 million (retroactive to Jan. 1, 2004), resolves pending filed rates doctrine litigation and establishes a $2.21 billion (after tax) regulatory asset to be recovered over nine-years. -- After emerging from bankruptcy, PG&E is to seek to refinance up to $3 billion of the regulatory asset and the associated taxes through a securitized dedicated rate component (DRC), pending the enactment of supporting state legislation, suitable to TURN, the CPUC and PG&E, authorizing the creation of the DRC. -- Any refunds or awards resulting from claims against power suppliers will be used to reduce the $2.21 billion regulatory asset. -- PG&E will drop all litigation claims against the CPUC stemming from the energy crisis. -- The settlement is designed to produce an investment grade credit profile and is contingent upon receipt of investment grade credit ratings. -- The authorized ROE will be 11.22% and the equity component of capital will be 48.6%-52% in 2004 and 2005 and no lower than 52% thereafter until Moody's and S&P have established issuer ratings equivalent to not less than 'A-'. -- The CPUC will not adjust the company's return on equity and equity component of capitalization until a rating equivalent to 'A-' is assigned by one of S&P or Moody's. -- Rates are no longer frozen and return to a cost of service model. -- The settlement is enforceable by the bankruptcy court. -- Generation rate bas is deemed to be just and reasonable. Strong ring-fencing provisions included in the PG&E plan of reorganization and in CPUC regulations mandate a meaningful degree of separation between PG&E and its parent, PCG. However, PG&E is not totally isolated from potential credit and bankruptcy risk that, while not currently anticipated, could develop at its parent. Under PG&E's plan of reorganization, PG&E cannot pay dividends to its parent until mid-2004, at the earliest. However, Fitch believes that PG&E is unlikely to resume dividend payments until its equity ratio reaches 52%, which is estimated to occur in the second half of 2005. Adequate liquidity exists at the parent-only level, with cash as of Dec. 31, 2003 approximating $1.04 billion. Parent debt of $880 million is scheduled to mature in 2008 ($600 million) and 2010 ($280 million). In a reasonable worst case scenario in which tax allocation issues require PCG to payout roughly $415 million, PCG's net cash would approximate $625 million. Under this scenario, PCG would have ample resources to meet its liquidity needs through 2005, when cash flows from utility dividends are expected to commence. The terms of the new senior secured notes contain a fall-away provision that, in Fitch's opinion, could be triggered within two years. The bonds' first mortgage lien upon PG&E's property will be released when the utility's senior unsecured debt ratings from Standard & Poor's and Moody's are equal to or higher than the initial ratings on the senior secured bonds (i.e., BBB). Fitch expects PG&E to have robust cash flow from operations and that the utility's credit metrics will improve rapidly and remain strong for the duration of its nine-year regulatory settlement. As a result, it is unlikely that the lien will remain in place for the long term. After the release, these bonds will be senior unsecured notes, subordinate to a limited amount of permitted secured claims against the utility. The amount of debt that can be issued subsequent to the proposed offering which could be senior to the debt upon release of the lien is limited by the indenture's negative pledge and, in Fitch's view, is not a significant concern. The City of Palo Alto and two CPUC commissioners did not support the plan of reorganization and appealed the bankruptcy court's confirmation order in U.S. district court, following bankruptcy court's rejection of their motions for appeal and stay. In Fitch's view, appeals of the plan of reorganization have an extremely low probability of success. PARMALAT GROUP: US Debtors Tap BSI as Claims & Noticing Agent ------------------------------------------------------------- The U.S. Parmalat Debtors sought and obtained the Court's authority to employ Bankruptcy Services LLC as official claims and noticing agent. BSI will: (a) notify all potential creditors of the filing of the bankruptcy petition and the setting of the first meeting of creditors pursuant to Section 341(a) of the Bankruptcy Code, under the proper provisions of the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure; (b) maintain an official copy of the Debtors' schedules of assets and liabilities and statement of financial affairs, listing the Debtors' known creditors and the amounts owed; (c) notify all potential creditors of the existence and amount of their claims as evidenced by the Debtors' books and records and set forth in the Schedules; (d) furnish a form for the filing of a proof of claim, after the notice and form are approved by the Court; (e) file with the Clerk a copy of the notice, a list of persons to whom it was mailed, and the date the notice was mailed, within 10 days of service; (f) docket all claims received, maintaining the official claims registers for each Debtor on behalf of the Clerk, and provide the Clerk with certified duplicate unofficial Claims Registers on a monthly basis, unless otherwise directed; (g) specify in the applicable Claims Register, these information for each claim docketed: (i) the claim number assigned; (ii) the date received; (iii) the name and address of the claimant and agent, if applicable, who filed the claim; and (iv) the classification of the claim -- e.g., secured, unsecured, priority, etc.; (h) relocate, not less than weekly, by messenger, all of the actual proofs of claim filed from the Bankruptcy Court to BSI's offices; (i) record all transfers of claims and providing any notices of the transfers required by Bankruptcy Rule 3001; (j) make changes in the Claims Registers pursuant to Court Order; (k) upon completion of the docketing process for all claims received to date by the Clerk's office, turn over to the Clerk copies of the Claims Registers for the Clerk's review; (l) maintain the official mailing list for each Debtor of all entities that have filed a proof of claim, which list will be available upon request by a party-in-interest or the Clerk; and (m) assist with, among other things, the solicitation and the calculation of votes and the distribution as required in furtherance of confirmation of a reorganization plan. BSI specializes in providing consulting and data processing services to Chapter 11 debtors in connection with the administration, reconciliation and negotiation of claims and solicitation of votes to accept or reject plans of reorganization. BSI also specializes and has expertise in serving as an outside claims agent to the United States Bankruptcy Court with respect to all aspects of claims administration, including docketing and storage of claims, maintenance of claims registers and related noticing services. The Debtors estimate that there are in excess of 7,000 creditors and parties-in-interest in their Chapter 11 cases, many of which are expected to file proofs of claim. The Debtors believe that BSI's employment as the Bankruptcy Court's outside agent will free the Court from the time-consuming and burdensome task of noticing and receiving, docketing and maintaining the proofs of claim. Section 156(c) of the Judiciary Procedures, which governs the staffing and expenses of the Bankruptcy Court, authorizes the Court to use facilities other than those of the Clerk's Office for the administration of bankruptcy cases: "Any court may utilize facilities or services, either on or off the court's premises, which pertain to the provision of notices, dockets, calendars, and other administrative information to parties in [Chapter 11] cases . . . where the costs of such facilities or services are paid for out of the assets of the estates and are not charged to the United States." BSI has vast experience in noticing and claims administration in Chapter 11 cases. BSI acted as claims and noticing agent in the Chapter 11 cases of WorldCom, Inc., Enron Corporation, Adelphia Business Solutions, Inc., and Bethlehem Steel Corp. The Debtors also obtained the Court's permission to compensate and reimburse BSI for all services rendered and expenses incurred. The hourly rates of BSI's professionals are: Kathy Gerber $210 Senior consultants 185 Programmer 130 - 160 Associate 135 Data Entry/Clerical 40 - 60 Schedule Preparation 225 Ron Jacobs, President of BSI, assures the Court that neither BSI nor any of its members or employees hold or represent any interest adverse to the Debtors' estates or creditors. 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. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) PARMALAT: Gets Interim Nod to Amend Receivables Purchase Pact ------------------------------------------------------------- Before the Petition Date, the U.S. Parmalat Debtors relied, among other things, on the sale of certain receivable interests to Eureka Securitisation Plc and Citibank, N.A., London Branch, under a Receivables Purchase Agreement dated November 2, 2000, to meet their cash needs. Under the Receivables Purchase Agreement, Eureka may purchase from Debtors Farmland Dairies, LLC and Milk Products of Alabama, LLC from time to time an undivided percentage ownership interest in the rights, title, and interest in and to a certain pool of trade receivables of Farmland and Milk Products. On December 11, 2003, Eureka sold and assigned to Citibank all of its rights and interest in, and under, the Receivable Interests and the Receivables Purchase Agreement. Since December 2003, the aggregate Capital in respect of Receivable Interests purchased from Farmland and Milk Products under the Receivables Purchase Agreement has remained constant at $48,990,000. The Capital has remained constant, notwithstanding that the collections on the sold Receivable Interests have been received, as Citibank has agreed that the collections may be reinvested in additional Receivable Interests. The Receivables Purchase Agreement provides for certain purchase price and related formulas based on a number of factors, including, without limitation, certain purchase eligibility standards. From time to time as a result of the formulas, Citibank may have overpaid for Receivable Interests purchased from Farmland and Milk Products. As of the Petition Date: (i) the aggregate Capital in respect of the Receivable Interests purchased from Farmland and Milk Products under the Receivables Purchase Agreement is $48,990,000; (ii) the gross amount of receivables of Farmland and Milk Products, including ineligible receivables, which Citibank may collect and apply against the outstanding aggregate Capital, is $53,000,000; (iii) the aggregate Purchase Price Overpayment is $2,900,000. On December 26, 2003, the U.S. Debtors received a notice from Citibank that a default may have occurred under the Receivables Purchase Agreement. As a result, Citibank is entitled to discontinue purchasing the Receivable Interests under the Receivables Purchase Agreement and reinvesting the Collections. Consequently, the U.S. Debtors and Citibank discussed the terms of a possible amendment to the Receivables Purchase Agreement so the Debtors can continue to tap on the Purchase Agreement for their liquidity needs. After arm's-length negotiations, the parties agree that the Debtors will continue selling Receivable Interests to Citibank. However, the Debtors are required to immediately pay $1,400,000 of the proceeds of the GE Capital DIP Facility to Citibank to reduce the amount of the Purchase Price Overpayments to $1,500,000. Thereafter, the Debtors will be required to pay Citibank any new Purchase Price Overpayments in accordance with the terms of the Amended Receivables Purchase Agreement, so that the aggregate amount of the Purchase Price Overpayments do not exceed $1,500,000. To the extent that the Purchase Price Overpayments exceed $1,500,000, the payments will be deemed the equivalent of a postpetition loan and will be repaid by cash collateral. Citibank will be granted a first priority security interest -- shared with the Postpetition Lenders under the GE Capital DIP Facility -- in the Postpetition Collateral, to secure the Debtors' obligations to Citibank with respect to any Purchase Price Overpayments but only to the extent of the lesser of: * $3,000,000; and * the portion of the aggregate amount of the Purchase Price Overpayment that exceeds $1,500,000. The U.S. Debtors will deliver to Citibank a weekly report that includes a calculation of the Receivable Interests and the allocation of Collections. The Debtors will also pay to Citibank's account, as agent under the Receivables Purchase Agreement, any excess Collections to be applied on account of any Obligations then due and owing. Farmland and Milk Products will also deliver to Citibank an accounts receivable aging. The Debtors failure to submit the reports will constitute a Trigger Event. The parties agree to additional Trigger Events: (a) The sale of all or a substantial portion of the assets or business of any of the Debtors other than as effected under the Receivables Purchase Agreement or, without Citibank's prior written consent, any of the Debtors entering into a contract for any such sale; and (b) Any of the Debtors, GE Capital or any other person will challenge in writing the true sale nature of any of the transactions contemplated by the Receivables Purchase Agreement, and the relief requested in the challenge is granted in an order that is not stayed pending appeal. The parties also agree to additional covenants: -- Farmland and Milk Products will furnish to Citibank copies of all material pleadings, motions, applications, plans, disclosure statements, schedules, reports, financial information and other materials and documents filed in connection with their Chapter 11 cases; -- Farmland and Milk Products will immediately notify Citibank in writing of an event of default under the DIP Loan Facility and of a Termination Event under the DIP Loan Facility; -- Neither Farmland nor Milk Products will petition the Bankruptcy Court for authority to take any action prohibited under the Receivables Purchase Agreement; and -- Farmland and Milk Products will not at any time seek, consent to or suffer to exist any modification, stay, vacation or amendment of either the Interim Order or the Final Order approving the Amendments to the Receivables Purchase Agreement except for modifications and amendments agreed to in writing by Citibank. 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. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) PEABODY ENERGY: Fitch Rates New Senior Unsecured Notes at BB ------------------------------------------------------------ Fitch Ratings has assigned a 'BB' rating to Peabody Energy's (BTU) new $250 million senior unsecured notes due 2016. At the same time Fitch affirms Peabody's 'BB+' rating on the revolving credit facility and bank term loan and the 'BB' rating on its $450 million senior unsecured notes due 2013. The Rating Outlook remains Positive. The proceeds from the new note issuance, in conjunction with a $282 million equity offering, will be used to finance the acquisition of three coal mines from RAG Coal International AG. Going forward, Fitch expects Peabody to have a Debt/EBITDA at the end of FY2004 of approximately 2.6 times (x) and an EBITDA/Interest of over 4x. Fitch expects internally generated funds will be used for further debt reduction and capital expenditures over the near term. The ratings also incorporate the likelihood of tuck-in acquisitions as the industry continues to consolidate. Peabody's legacy postretirement health care and pension liabilities are significant but Fitch feels that these are manageable. Fitch maintains a Positive Outlook as Peabody's current statistics are expected to continue to improve as the up cycle in coal continues globally and the company benefits from the revenues from the new mines. Peabody has benefited from modest steady growth, increased productivity and limited viable alternatives to base load coal-fired power plants. Spot prices as well as contract prices continue to improve in all regions. There is a huge hunger for coal, particularly from electricity generators in the U.S. and China. According to the EIA annual electricity demand is projected to grow by about 2% in '04 and '05. To meet that increase in demand coal production is expected to increase by 3.6% in 2004 and about 1.5% in 2005. Also, Fitch does not expect prices to decrease significantly over the near to intermediate term as natural gas prices continue to remain robust. Coal has a definite cost advantage over natural gas. Peabody is the world's largest coal company with approximately 9.1 billion tons in proven and probable reserves as of December 31, 2003 located in four primary operating regions: Powder River Basin, Southwestern, Appalachia and Midwest. The company continues to implement its strategy of shifting from high sulfur, high cost operations to low-sulfur, low-cost operations. Future capital expenditures, estimated at approximately $220 million per year, will be concentrated in the company's low cost operations. PENTHOUSE: Rolling Stone Magazine Features Founder Robert Guccione ------------------------------------------------------------------ Penthouse International (OTC Bulletin Board: PHSL), a diversified holding company with operating subsidiaries in adult entertainment and real estate, announced that the Company's founder Robert Guccione was featured in an in-depth interview in the April 1, 2004 issue of Rolling Stone magazine in an article entitled "The Twilight of Bob Guccione" by John Colapinto. The 10-page layout chronicled the life history of Bob Guccione in his building of Penthouse Magazine over the past 38 years. From a start-up company in London in 1965, to a still-standing, all-time newsstand sales record, to "making the Forbes 400 list of the country's wealthiest people with a personal fortune of around $500 million (the equivalent of a few billion today)," and, more recently, the ongoing restructuring of his companies, Rolling Stone gave an account of much of the life of Guccione. "The fact that Rolling Stone magazine, a renowned publication about popular culture and music, would feature a 10-page layout of Bob Guccione and Penthouse, is indicative of the iconic status Penthouse and Bob have reached globally," commented Claude Bertin, Executive Vice President of Penthouse International. During his career, Mr. Guccione dedicated the hundreds of millions in Penthouse Magazine profits to bankroll numerous other business ventures, including an ill-fated Atlantic City casino venture and financing the science magazine OMNI. "Altogether, by the mid- Eighties, Guccione's losses in Atlantic City totaled $145 million," stated Rolling Stone. Despite Penthouse Magazine maintaining positive cash flow even today, the accumulated investment losses in unrelated business projects contributed to the reorganization of the company. Penthouse recently received a fresh $24 million in capital and commitments from its main shareholder for up to an additional $50 million. Penthouse expects to minimize risk by focusing on its core business investments. About Penthouse International, Inc. Penthouse International, Inc., through its subsidiaries General Media, Inc., Del Sol Investments LLC and PH Realty Associates LLC, is a brand-driven global entertainment business founded in 1965 by Robert C. Guccione. General Media's flagship PENTHOUSE brand is one of the most recognized consumer brands in the world and is widely identified with premium entertainment for adult audiences. General Media caters to men's interests through various trademarked publications, movies, the Internet, location-based live entertainment clubs and consumer product licenses. General Media licenses the PENTHOUSE trademarks to third parties worldwide in exchange for recurring royalty payments. Penthouse International, Inc.'s September 30, 2003 balance sheet shows a total shareholders' equity deficit of about $70 million. PG&E NATIONAL: USGen Permits JPMorgan to File Consolidated Claims ----------------------------------------------------------------- Before the Petition Date, USGen New England obtained financing pursuant to a Credit Agreement, dated as of September 1, 1998 with JPMorgan Chase Bank, as Competitive Advance Facility Agent and as Administrative Agent, and a consortium of bank lenders. USGen is indebted to the Lenders, among other things, pursuant to the Credit Agreement for the payment of the principal on the loans made, together with accrued and unpaid interest, fees, and costs and expenses including, the fees and disbursements of attorneys and other advisors. Consequently, JPMorgan is required to file numerous claims on behalf of the Lenders. At the request of the Lenders and JPMorgan, USGen agrees that JPMorgan will file consolidated proofs of claim in connection with the Credit Agreement. In a Court-approved Stipulation and Consent Order, JPMorgan, on the Lenders' behalf, and USGen agree that: (a) JPMorgan would permitted file one or more consolidated proofs of claim on behalf of itself and the Lenders against USGen. The Stipulation, however, will not affect the right of each Lender to vote separately the amount of its claim with regard to any reorganization plan for which solicitation of acceptances will be sought; (b) JPMorgan will not be required to file with any proof of claim, any instruments, agreements or other documents evidencing the obligations or the security interests and liens, if any, of JPMorgan or the Lenders, provided that upon USGen's request, the Documents will be made available; and (c) The Consent Order is for procedural purposes only, and will not be interpreted or construed so as to substantively affect USGen's right, claim or defense in respect of any proofs of claim filed by JPMorgan or the Lenders. 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) POLAROID: Settles False Claims Act Suit, Reports U.S. Attorney -------------------------------------------------------------- United States Attorney Michael J. Sullivan; Joseph Dziczek, Assistant Regional Inspector General for Investigations; and Joseph Leland, Regional Inspector General for Audits of the General Services Administration's Office of the Inspector General, announced that the United States has settled a civil suit brought against the former POLAROID CORPORATION for violations of the federal False Claims Act. The False Claims Act makes it unlawful to knowingly submit a false or fraudulent claim for payment to the United States. As part of the settlement, POLAROID agreed that the United States' Proof of Claim filed in POLAROID's bankruptcy proceedings will be allowed for $3.2 million. The amount of funds the United States will actually recover will be determined by the United States Bankruptcy Court when it distributes assets to all general unsecured creditors. This settlement resolves allegations set forth in a Civil Complaint filed in United States District Court. The Complaint alleged that from 1990 to 1997, POLAROID provided false pricing information and certifications during the negotiation and award of two Multiple Award Schedule contracts by the General Services Administration (GSA) for the purchase of instant film; and that POLAROID failed to report discounts it had given to non-government customers through the course of the two contracts - despite being required to do so. The government further alleged that POLAROID was required to provide current, accurate, and complete pricing and price reduction information to GSA contract negotiators on both contracts. As required by law, POLAROID expressly certified for both contracts that its pricing information was current, accurate, and complete and that it had disclosed all discounts given to its customers. POLAROID also certified that it would report all price reduction information during the performance of the GSA contracts. The Complaint alleged that POLAROID nonetheless failed to disclose price reduction information, including a wide-spread practice of giving end-of-quarter discounts to non-government customers. It was alleged that as a result of these omissions and misrepresentations, POLAROID, knowingly submitted false claims, which included inflated prices and which were paid by the government. A portion of this settlement will be paid to George Brouder, a former POLAROID employee, who initially filed suit under the provisions of the False Claims Act. In appropriate circumstances, the False Claims Act provides that whistleblowers can share between 15% and 25% of the government's recoveries. The case was investigated by the General Services Administration's Office of Inspector General. It was handled by Assistant U.S. Attorneys Eugenia M. Carris and Thomas Kanwit in Sullivan's Civil Division and Alan S. Gale, a Trial Attorney with the Department of Justice's Civil Division in Washington, DC. POTLATCH CORP: Fitch Affirms Ratings & Revises Outlook to Stable ---------------------------------------------------------------- Fitch Ratings has affirmed Potlatch Corporation's debt ratings of senior secured at 'BBB-', senior unsecured at 'BB+', senior subordinated at 'BB', and commercial paper at 'B.' The Rating Outlook for Potlatch has been revised to Stable from Negative. Potlatch had $619 million of debt at last year-end. For the full year 2003, the company reported earnings of $51 million due to significantly higher earnings for Potlatch's Wood Products segment and improved results for its Pulp and Paperboard segment. Wood Products had a very strong fourth quarter with earnings of $55 million compared to an ($18 million) loss in the prior year. This was driven primarily by very strong structural panel markets and higher oriented strand board selling prices. Continuing on a streak that began in the third quarter, OSB realizations jumped an average $57/Mft2 in the fourth quarter; a benchmark mean index rose $115/Mft2 year over year. Plywood was up $30-$35/Mft2 on average in the fourth quarter and $87/Mft2 ahead of 2002 averages, all due to a robust demand for housing. Potlatch's leverage and interest coverage for the year-ended December 31, 2003, has improved to 2.8 times and 4.3x from 6.7x and 1.7x, respectively at the end of 2002. The company is banking cash and continues to remain focused on rebuilding its balance sheet. Fitch anticipates improving credit statistics in 2004. RESIDENTIAL ASSET: Fitch Slashes Class B Notes Rating to CCC ------------------------------------------------------------ Fitch Ratings has taken rating actions on the following Residential Asset Mortgage Products, Inc. issue: RAMP Home Equity Mortgage Asset-Backed Pass-Through Certificates, Series 2001-RZ2 Groups I & II: --Class A-I-5 affirmed at 'AAA'; --Class M-1 affirmed at 'AA+'; --Class M-2 affirmed at 'A'; --Class M-3 affirmed at 'BBB'; --Class B downgraded to 'CCC' from 'BB' and removed from Rating Watch Negative. The affirmation of these classes reflects credit enhancement consistent with future loss expectations. The negative rating action on the B class of the above series is due to the decline in enhancement relative to the applicable credit support levels. RIGGS NATIONAL: Fitch Places Low-B Ratings on Watch Negative ------------------------------------------------------------ Fitch Ratings places the ratings of Riggs National Corporation ('BB+/B') and its rated subsidiaries on Rating Watch Negative. The Negative Rating Watch reflects Fitch's concerns regarding RIGS' outstanding Bank Secrecy Act (BSA) issues with the OCC and the Financial Crimes Enforcement Network (FINCen) of the United States Department of the Treasury. In its 10K report released earlier this month, RIGS indicated that the OCC informed the firm that it expects to designate the bank as being in 'troubled condition'. Fitch's concerns center on the company's ability to comply with regulatory requirements and the potential ramifications associated with a 'troubled condition' designation. Each could have material negative implications on profitability, which for RIGS is already an area of comparative weakness. Background: During July 2003, Riggs entered into a Consent Order with the OCC, which required the bank to take various actions to ensure compliance and improve oversight processes and procedures related to BSA and related rules and regulations. Since that time, RIGS hired a specialist to facilitate the compliance process and appeared to be making progress. However, RIGS indicated recently that both the OCC and FINCen advised RIGS that they were considering whether to institute civil money penalties against RIGS', as well as subject the bank to increased regulatory supervision and operational requirements. The OCC alleges that the bank violated the BSA and related rules and regulations, failed to comply with the Consent Order and failed to implement adequate controls to ensure that the bank operates in a safe and sound manner with respect to BSA matters. Per RIGS, FINCen categorizes its concerns as 1) failure to establish and implement an adequate anti-money laundering program, 2) failure to properly prepare and file suspicious activity reports and 3) failure to file accurate transaction reports. During the next few weeks, RIGS will provide the OCC and FINCen with additional supporting information which could mitigate both organizations' concerns. However, RIGS could face financial penalties which can not be quantified at this time. Also, a 'troubled condition' designation would place significant restrictions on RIGS. For example, RIGS would need prior consent from the OCC to perform such normal operating activities as approving new directors and executive officers, and would be prohibited from certain actions such as making severance payments to employees, management and directors under FDIC's golden parachute rules. Although RIGS' has high relative levels of capital and liquidity, and problem asset levels are quite low, RIGS' profitability suffers from a lack of significant earnings diversity, and cost levels are quite high relative to revenues. Monetary fines would clearly hamper profitability while business restrictions would potentially cause a rise in costs and/or the loss of certain customer deposits. Ratings Placed on Rating Watch Negative: Riggs National Corporation --Short-term debt, 'B'; --Long-term Senior, 'BB+'; --Subordinated Debt, 'BB'; --Individual, 'C/D'; Riggs Bank National Association --Short-term, 'B'; --Long-term Senior, 'BB+'; --Long-term Deposits, 'BBB-'; --Short-term Deposits, 'F3'; --Individual, 'C/D'; Riggs Capital --Preferred Stock, 'BB'; Riggs Capital II --Preferred Stock, 'BB'. ROCKFORD PROPERTIES: Case Summary & Largest Unsecured Creditors --------------------------------------------------------------- Lead Debtor: Rockford Properties Inc. 906 West State Street Rockford, IL 61102 Bankruptcy Case No.: 04-71434 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Jerry Flaming and Carolyn Flaming 04-71434 Type of Business: Chapter 11 Petition Date: March 17, 2004 Court: Northern District of Illinois (Rockford) Judge: Manuel Barbosa Debtors' Counsel: Kenneth F. Ritz, Esq. Ritz & Laughlin 728 N Court Street Rockford, Illinois 61103 Total Assets Total Debts ------------ ----------- Rockford Properties Inc. $3,918,200 $2,060,879 Jerry Flaming and Carolyn Flaming $1,732,215 $1,076,020 A. Rockford Properties Inc.'s 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service Federal tax $110,000 RSM Gladrey Services $29,044 Nicor Gas Utility $28,000 Auto Owners Insurance Trade debt $18,242 City of Rockford Utility $18,000 Union Savings Bank Mortgage loan $14,096 ILL Dept Emp. Socecurity W-tax $13,339 Rock River Water Reclamation Utility $12,000 Bank One Value of Collateral: $9,000 $13,500 Northwestern Mutual Trade debt $7,688 Insurance Co. Winnebago County Sheriff Services $5,000 Office Depot Trade debt $4,113 Tobin & Ramon Legal services $4,008 Commonersith Edidon Utility $3,000 Illinois Dept. of Revenue State tax $2,659 Lindstrom, Sorenson & Assoc. Services $2,640 Schieueter, Ecklund Attys. Legal services $2,055 Altamore, Alberto Legal services $2,025 Nextel Trade debt $1,899 Purchase Power Trade debt $1,539 B. Jerry and Carolyn Flaming's 4 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service $14,000 Amoco Credit card $1,032 Cavalry Portfolio Service Credit card $134 Phillipe 66 Petroleum Credit card $14 ROGERS CABLE: Michael Adams is New CFO Effective April 20, 2004 --------------------------------------------------------------- Rogers Cable Inc. announced the addition of Michael Adams to its senior leadership team as Executive Vice President and Chief Operating Officer effective April 20, 2004. With over 20 years of North American and European experience in the cable television and competitive local telecommunications industries, Adams will assume responsibility for engineering, network operations, customer operations, information technology, and implementation of Rogers Cable's local telephony initiative. An engineering graduate from the Massachusetts Institute of Technology, Adams has been with RCN Corporation, a New Jersey based provider of cable television, high-speed Internet and competitive local telecommunications services in many of the largest markets in the U.S., since 1997. With RCN, Adams served in a number of senior executive capacities responsible for operations, networks, technology, and strategy. Prior to RCN, Adams' expertise in the design, construction and operation of state-of-the-art networks was developed in a variety of leadership positions at companies which include C-TEC, Kiewit International, MFS, and McCourt Cable Systems. Rogers Cable Inc. is a wholly owned subsidiary of Rogers Communications Inc. (TSX: RCI.A and RCI.B; NYSE: RG). Rogers Cable passes 3.2 million homes in Ontario, New Brunswick and Newfoundland & Labrador, with 71% basic penetration of its homes passed. Rogers Cable pioneered high-speed Internet access with the first commercial launch in North America in 1995 and now approximately 25% of homes passed are Internet customers. With 99% of its network digital ready, Rogers Cable offers an extensive array of High Definition TV, a suite of Rogers On Demand services (including Video On Demand, Personal Video Recorders and Time- shifting channels) as well as a large line-up of digital, ethnic and sports programming. Approximately one quarter of Rogers basic subscribers are also digital customers and over 35% are Rogers Hi- Speed residential and business customers. Rogers Cable also owns and operates 279 Rogers Video Stores. Rogers Communications Inc. (TSX: RCI.A and RCI.B; NYSE: RG) is Canada's national communications company engaged in cable television, high-speed Internet access and video retailing through Rogers Cable Inc., cellular, digital PCS, paging and data communications through Rogers Wireless Communications Inc., and in radio and television broadcasting, tele-shopping, publishing and new media businesses through Rogers Media Inc. Additional information on Rogers is available at http://www.rogers.com/ * * * As reported in the March 10, 2004, issue of the Standard & Poor's Rating Services assigned its 'BBB-' senior secured debt rating to Rogers Cable Inc.'s proposed senior secured second priority notes due 2014. At the same time, Standard & Poor's affirmed the 'BB+' long-term corporate credit rating on Rogers Cable Inc., Canada's largest cable operator, and its parent Rogers Communications Inc. Proceeds will be used to refinance existing debt at Rogers Cable, fund the company's telephony business plan, and for general corporate purposes. The outlook is negative. SEALY CORP: S&P Rates $490 Million Sr. Sub. Notes at B- ------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' rating to Sealy Mattress Co.'s $490 million senior subordinated notes due 2014, issued under Rule 144A with registration rights. Standard & Poor's also assigned its 'B+' senior secured bank loan rating and '3' recovery rating to Sealy's proposed $685 million senior secured credit facility due 2012, and affirmed the company's 'B+' corporate credit and 'B-' subordinated debt ratings. Issue proceeds will be used as part of a refinancing in connection with the company's acquisition by Kohlberg Kravis Roberts & Co. (KKR) for $1.5 billion, a deal announced in March 2004. Pro forma for the refinancing, Standard & Poor's expects total debt outstanding to be about $1.1 billion. The outlook is stable. "The ratings on Sealy Corp. are based on the company's highly leveraged financial profile, partially mitigated by the company's leading position in the stable, though highly competitive, bedding market and by its steady cash flow," said Standard & Poor's credit analyst Martin S. Kounitz. Trinity, North Carolina-based Sealy is the largest U.S. bedding manufacturer. The company's average business profile is supported by its strong brands (including Sealy, Posturepedic, and Stearns & Foster), its top market share, and the stable nature of demand for mattresses. In fiscal 2003 ended Nov. 30, Sealy retained the No. 1 market position in the U.S. mattress industry, with a 21.7% share, though this figure has fallen from 23.1% in 2002. The company also has the top market share in Canada and Mexico. Despite a highly competitive operating environment, Sealy has defended its top domestic market share for many years. Standard & Poor's expects that the company's profitability will improve after the launch of its new Posturepedic line, introduced at the April 2003 High Point, North Carolina. furniture show. Sealy is currently rolling out its UniCase Stearns & Foster line, which should enhance profitability as well. The company, however, faces the challenge of competing with Simmons, which launched its no- flip line about two years ago. SEITEL INC: Bankruptcy Court Confirms Amended Reorganization Plan ----------------------------------------------------------------- Seitel, Inc. (OTC Bulletin Board: SEIEQ; Toronto: OSL) announced that the United States Bankruptcy Court, District of Delaware, has confirmed Seitel's Chapter 11 plan of reorganization. As previously reported, Seitel's amended plan, which was filed with the bankruptcy court on February 6, 2004, was supported by Seitel's Official Committee of Equity Security Holders, as well as Berkshire Hathaway Inc. and Ranch Capital LLC, Seitel's largest creditors. In addition to Berkshire and Ranch, the plan was accepted by the holders of more than 99.6% of the shares of common stock who voted for the plan. Although there can be no assurance, Seitel anticipates that the plan will become effective prior to April 30, 2004 and that all payments to creditors under the plan will be made by approximately mid-June 2004. Bruce Galloway, managing partner of Galloway Capital Management and chairman of the Official Committee of Equity Security Holders, said, "We believe this plan is in the best interests of the company's constituents and improves the viability of the company." "We are very pleased that our reorganization plan was confirmed by the bankruptcy court just six weeks after we filed our third amended plan. The speed of these recent proceedings has enabled us to maintain the support of our major customers, creditors, stockholders, and employees," said Fred S. Zeidman, Chairman of the Board of Directors. "Six months ago, when our plan was first being formulated, the Board and our executive management team focused on returning Seitel to a leadership position in the seismic data industry. We believe that we are now well-positioned to do so." As previously reported, the plan provides for the cash payment of 100% of Seitel's allowed pre-petition creditors' claims, together with all post- petition, non-default rate interest. The plan further provides that each of Seitel's common stockholders, as of a record date expected to be five days prior to the effective date of the plan, will receive on the effective date shares of reorganized Seitel's common stock and warrants to purchase additional shares of reorganized common stock which, if exercised in full, will enable each holder to retain a percentage interest in reorganized Seitel substantially equivalent to such holder's percentage interest in Seitel immediately prior to the plan effective date. Each warrant will represent 4.93 shares at an exercise price of 60 cents per share, if exercised in full, will result in aggregate gross proceeds to Seitel of $75 million, which will be used to partially fund creditor payments under the plan. The Company intends that the warrants will be freely transferable and exercisable until the 30th day after a registration statement relating to the exercise of the warrants and the sale of underlying shares has been declared effective by the Securities and Exchange Commission. A registration statement covering these transactions was filed by Seitel with the SEC on March 10, 2004. The warrants will not be issued unless and until the registration statement is declared effective by the SEC. Each equity holder who does not exercise its warrants, in full, will suffer approximately 83.13% dilution in its percentage equity ownership of reorganized Seitel. HBV, for itself and on behalf of certain affiliated funds and managed accounts, has agreed to act as standby purchaser of up to $75 million worth of reorganized Seitel's common stock not purchased by stockholders upon the exercise of their warrants. HBV beneficially owns approximately 9.28% of Seitel's outstanding common stock. As compensation for its standby purchase agreement, HBV will receive additional warrants to purchase up to 9.10% of reorganized Seitel's fully diluted common stock, subject to dilution upon the issuance of shares under reorganized Seitel's 2004 omnibus stock option program contemplated by the plan. The exercise price of HBV's compensation warrants will be 72 cents per share and will expire seven years after their issuance. HBV's standby guaranty assures that Seitel will receive $75 million in new equity capital proceeds, before deducting certain expenses payable by Seitel. Mellon HBV has reserved the right to designate a limited number of large institutional participants in the standby guaranty. "If all shareholders exercise their warrants, they will retain their percentage ownership in reorganized Seitel, subject to limited dilution," Zeidman said. "Clearly our plan is to provide our shareholders, who have remained loyal to the company throughout our reorganization process, an opportunity to retain their percentage equity ownership and participate in the future growth and earnings potential of the reorganized company," Zeidman said. Payments to creditors under the plan will be funded utilizing (i) the net proceeds from the exercise of the reorganized common stock purchase warrants and/or the sale of shares under the standby purchase agreement, (ii) net proceeds of not less than $180 million from our anticipated institutional offering of new 10-year senior unsecured notes, and (iii) available cash and equivalents of not less than $35 million. Working capital will be funded with existing cash and a new revolving credit facility which presently is being negotiated with Wells Fargo Foothill, Inc. and is expected to provide a $30 million maximum commitment, subject to certain borrowing base sublimits. "When Seitel emerges from chapter 11 which we expect to occur in June 2004, we believe we will be a stronger and more focused company," Zeidman said. About Seitel Seitel is a leading provider of seismic data and related geophysical services to the oil and gas industry. Seitel's products and services are used by oil and gas companies to assist in the exploration, development and management of oil and gas reserves. Seitel has ownership in an extensive library of proprietary onshore and offshore seismic data that it has accumulated since 1982 and which it offers for license to a wide range of oil and gas companies. Seitel has a diversified customer base, which includes marketing to more than 1,300 customers and license agreements with more than 1,000 customers. Seitel's library of 3D seismic data is one of the largest available for licensing in the U.S. and Canada. The company owns approximately 31,800 square miles of 3D seismic data, primarily located in major North American oil and gas producing regions. Seitel's customers utilize this data, in part, to assist their identification of new geographical areas where subsurface conditions are favorable for oil and gas exploration, to determine the size, depth and geophysical structure of previously identified oil and gas fields and to optimize the development and production of oil and gas reserves. SHELBOURNE: Entering Into a Liquidating Trust Pact on April 16 -------------------------------------------------------------- Shelbourne Properties III, Inc. (Amex: HXF) announced that, in accordance with the Plan of Liquidation previously approved by the Company's stockholders, the Company intends to enter into a liquidating trust agreement on or about April 16, 2004, for the purpose of winding up the Company's affairs and liquidating its assets. It is currently anticipated that, on or about April 16, 2004, the Company will transfer its then remaining assets to the Trustee the Shelbourne III Liquidating Trust. The Liquidating Trust will also assume the Company's then remaining liabilities. April 15, 2004 will be the last day of trading of the Company's common stock on the American Stock Exchange, and the Company's stock transfer books will be closed as of the close of business on such date. The transfer of assets by the Company, and the assumption of liabilities by the Liquidating Trust, will not cover the Company's interest in a group of properties net leased to an affiliate of Accor S.A. since the Company has no economic interest in these properties. Under the terms of the proposed Trust Agreement, on April 16, 2004, each stockholder of the Company on the Record Date (each, a "beneficiary") automatically will become the holder of one unit of beneficial interest in the Liquidating Trust for each share of the Company's common stock then held of record by such stockholder. In addition, the holder of Class B Units in the Company's operating partnership will receive 15% of the aggregate Units in the Liquidating Trust in lieu of such holder's current entitlement, pursuant to the Company's Plan of Liquidation, to 15% of all distributions made by the Company. After April 16, 2004, all outstanding shares of the Company's common stock will be deemed cancelled, and the rights of beneficiaries in their Units will not be represented by any form of certificate or other instrument. Stockholders of the Company on the Record Date will not be required to take any action to receive their Units. The Trustee will maintain a record of the name and address of each beneficiary and such beneficiary's aggregate Units in the Liquidating Trust. Subject to certain exceptions related to transfer by will, intestate succession or operation of law, the Units will not be transferable, nor will a beneficiary have authority or power to sell or in any other manner dispose of any Units. It is currently contemplated that the initial trustee of the Liquidating Trust will be Arthur N. Queler. Successor trustees may be appointed to administer the Liquidating Trust in accordance with the terms of the Liquidating Trust Agreement. It is expected that from time to time the Liquidating Trust will make distributions of its assets to beneficiaries, but only to the extent that such assets will not be needed to provide for the liabilities (including contingent liabilities) assumed by the Liquidating Trust. No assurances can be given as to the amount or timing of any distributions by the Liquidating Trust. For federal income tax purposes, on April 16, 2004, each stockholder of the Company on the Record Date will be deemed to have received a pro rata share of the assets of the Company to be transferred to the Liquidating Trust, subject to such stockholder's pro rata share of the liabilities of the Company assumed by the Liquidating Trust. Accordingly, on April 16, 2004 each stockholder will recognize gain or loss in an amount equal to the difference between (x) the fair market value of such stockholder's pro rata share of the assets of the Company that are transferred to the Liquidating Trust, subject to such stockholder's pro rata share of the liabilities of the Company that are assumed by the Liquidating Trust, and (y) such stockholder's adjusted tax basis in the shares of the Company's common stock held by such stockholder on the Record Date. The Liquidating Trust is intended to qualify as a "liquidating trust" for federal income tax purposes. As such, the Liquidating Trust will be a complete pass-through entity for federal income tax purposes and, accordingly, will not itself be subject to federal income tax. Instead, each beneficiary will take into account in computing its taxable income, its pro rata share of each item of income, gain, loss and deduction of the Liquidating Trust, regardless of the amount or timing of distributions made by the Liquidating Trust to beneficiaries. Distributions, if any, by the Liquidating Trust to beneficiaries generally will not be taxable to such beneficiaries. The Trustee will furnish to beneficiaries of the Liquidating Trust a statement of their pro rata share of the assets transferred by the Company to the Liquidating Trust, less their pro rata share of the Company's liabilities assumed by the Liquidating Trust. On a yearly basis, the Trustee also will furnish to beneficiaries a statement of their pro rata share of the items of income, gain, loss, deduction and credit (if any) of the Liquidating Trust to be included on their tax returns. Stockholders of the Company are urged to consult with their tax advisers as to the tax consequences to them of the establishment and operation of, and distributions, if any, by, the Liquidating Trust. SHERWOOD HD: Case Summary & 11 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Sherwood H.D., LLC 1881 South West Naito Parkway #100 Portland, Oregon 97239 Bankruptcy Case No.: 04-31989 Chapter 11 Petition Date: March 9, 2004 Court: District of Oregon (Portland) Judge: Trish M Brown Debtor's Counsel: Albert N. Kennedy, Esq. 888 South West 5th Avenue #1600 Portland, OR 97204 Tel: 503-221-1440 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million Debtor's 11 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Langer, Clarence Claims Partnership $620,000 15585 SW Tualatin Sherwood Rd. Sherwood, OR 97140 Polygon North West, Inc. Legal Fees $502,000 c/o Sarah Ryan, Esq. 101 SW Main St., #1100 Portland, OR 97204 Home Depot USA $390,914 c/o Karen Polyakov 3800 W Chapman Ave Orange, CA 92868 Travelers Insurance Insurance $297,503 c/o Office Manager One Tower Sq., 3PB Hartford, CT 06183 Hoffman Hart & Wagner LLP Legal Fees $24,147 Keating, Estelle T. $4,546 Bittener & Hahs, PC $808 Barran Liebman LLP $532 Rapid Service Trade debt $174 Moore & Kehoe, LLP Legal Fees $135 Bridge City Legal Trade debt $15 SOLECTRON CORP: Second Quarter Net Loss Reduces to $90 Million -------------------------------------------------------------- Solectron Corporation (NYSE:SLR), a leading provider of electronics manufacturing and integrated supply chain services, reported sales of $2.9 billion in the second quarter of fiscal 2004, up 7.1 percent from $2.7 billion in the first quarter, and up 22.4 percent from $2.4 billion in the second quarter of last year. The company reported a GAAP net loss from continuing operations in the second quarter of $90 million, or 11 cents per diluted share, compared with a GAAP net loss from continuing operations of $104 million, or 13 cents per diluted share, in the year-earlier quarter. Excluding $74 million in restructuring and impairment charges, Solectron had a pro forma net loss from continuing operations of $16 million, or 2 cents per diluted share, in the second quarter of fiscal 2004. "We are very pleased with the strong growth in several of our end- markets, including communications, networking and consumer," said Mike Cannon, president and chief executive officer. "The consumer market revenue growth was driven by the continued ramp-up of our 3G mobile handset program. Overall, our business reflects strength across most end-markets, resulting in growth from eight of our 10 largest customers. "During the quarter, we continued to lower the break-even point of the company by driving operating expenses down to 3.8 percent of sales. Our gross margins decreased marginally to 4.5 percent, primarily related to the increase in our consumer business during the quarter. We continue to execute on a number of initiatives to improve our gross margins," he said. "Our entire organization remains focused on driving the changes necessary to generate value and return Solectron to sustained profitability. We expect to make further progress in the second half of the fiscal year," Cannon said. During the quarter, the company continued to execute its previously announced plan to divest seven businesses that are not central to its business strategy. The company completed the sale of Dy 4 Systems and it signed a definitive agreement to sell SMART Modular Technologies. The company also continued to improve its balance sheet and strengthen its liquidity through the successful sale of $450 million of convertible securities. The company ended the quarter with a strong cash position of $1.8 billion. Third-Quarter Guidance Fiscal third-quarter guidance is for sales of $2.9 billion to $3.2 billion, and for pro forma EPS from continuing operations, excluding restructuring and impairment and other unusual items, to range from a 2-cent loss to a 1-cent profit. Pro Forma Information In addition to disclosing results determined in accordance with generally accepted accounting principles (GAAP), Solectron also discloses non-GAAP results of operations that exclude certain items. By disclosing this pro forma information, management intends to provide investors with additional information to further analyze the company's performance, core results and underlying trends. Management utilizes a measure of net income and earnings per share on a pro forma basis that excludes certain charges to better assess operating performance. Each excluded item is considered to be of a non-operational nature in the applicable period. Earnings guidance is provided only on a pro forma basis due to the inherent difficulty in forecasting. Consistent with industry practice, management has historically applied these measures when discussing earnings or earnings guidance and intends to continue doing so. Pro forma information is not determined using GAAP; therefore, the information is not necessarily comparable to other companies and should not be used to compare the company's performance over different periods. Pro forma information should not be viewed as a substitute for, or superior to, net income or other data prepared in accordance with GAAP as measures of our profitability or liquidity. Users of this financial information should consider the types of events and transactions for which adjustments have been made. About Solectron Solectron -- http://www.solectron.com/-- (S&P, B+ Corporate Credit Rating Stable Outlook) provides a full range of global manufacturing and integrated supply chain management services to the world's premier high-tech electronics companies. Solectron's offerings include new-product design and introduction services, 1materials management, product manufacturing, and product repair and end-of-life support. The company is based in Milpitas, Calif., and had sales from continuing operations of $9.8 billion in fiscal 2003. SOUTHWEST RECREATIONAL: Kaye Scholer Retained as Special Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Georgia, Rome Division, gave its nod of approval for Southwest Recreational Industries, Inc., to employ Kaye Scholer LLP as its special counsel. The Debtors reports that for several years prior to the Petition Date, Kaye Scholer served as general corporate counsel for the Debtors. Beginning in December 2003, when the Company began to experience serious financial difficulties, Kaye Scholer served as its restructuring and bankruptcy counsel and performed substantial services in connection therewith, including but not limited to the preparation and substantial completion of draft chapter 11 petitions and "first day" pleadings. The Debtors determined that, in view of the fact that the cases would be filed in Georgia, it was appropriate to engage the Atlanta, Georgia-based firm of Alston & Bird LLP as their primary bankruptcy counsel, with Kaye Scholer providing limited advisory services in order to efficiently transition its work product, knowledge and responsibilities to Alston & Bird. Kaye Scholer, as special counsel will perform limited corporate, financing, bankruptcy advisory services to the Debtors as may be required to effectively and efficiently assist Alston & Bird. The services to be performed by Kaye Scholer will not be duplicative of the functions being performed by Alston & Bird. Andrew A. Kress, Esq., reports that Kaye Scholer's current standard hourly rates for the attorneys and paraprofessionals presently designated to represent the Debtors are: Position Billing Rate -------- ------------ Partners $475 - $750 per hour Associates $235 - $490 per hour Paraprofessionals $105 - $195 per hour Headquartered in Leander, Texas, Southwest Recreational Industries, Inc. -- http://www.srisports.com/-- designs, manufactures, builds and installs stadium and arena running tracks for schools, colleges, universities, and sport centers. The company filed for chapter 11 protection on February 13, 2004 (Bankr. N.D. Ga. Case No. 04-40656). Jennifer Meir Meyerowitz, Esq., Mark I. Duedall, Esq., and Matthew W. Levin, Esq., at Alston & Bird, LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, they listed $101,919,000 in total assets and $88,052,000 in total debts. SPECTRASITE INC: CFO to Speak at Lehman Brothers' Conference Today ------------------------------------------------------------------ SpectraSite, Inc. (NYSE: SSI) announced that David P. Tomick, its Chief Financial Officer, will speak at the Lehman Brothers 2004 High Yield Bond & Syndicated Loan Conference in Orlando, Florida, today, March 22, 2004, at 3:15 p.m. Eastern Time. The live webcast link and presentation slides will be available at customer.nvglb.com/LEHM002/032204a_by/default.asp?entity=spectrasi te. Presentation slides will also be available on the Company's website, http://www.spectrasite.com/ About SpectraSite, Inc. SpectraSite, Inc. -- http://www.spectrasite.com/-- based in Cary, North Carolina, is one of the largest wireless tower operators in the United States. At December 31, 2003, SpectraSite owned or operated approximately 10,000 revenue producing sites, including 7,577 towers and in-building sites primarily in the top 100 markets in the United States. SpectraSite's customers are leading wireless communications providers, including AT&T Wireless, Cingular, Nextel, Sprint PCS, T-Mobile and Verizon Wireless. * * * As reported in the Troubled Company Reporter's January 16, 2004 edition, Standard & Poor's Ratings Services revised the outlook on Cary, N.C.-based wireless tower operator SpectraSite Inc. to positive from stable. At the same time, Standard & Poor's affirmed its ratings on the company, including the 'B' corporate credit rating. As of Sept. 30, 2003, the company had about $640 million in total debt outstanding. STOLT OFFSHORE: Settles European Patent Dispute Out of Court ------------------------------------------------------------ Stolt Offshore S.A. (Nasdaq: SOSA; Oslo Stock Exchange: STO), announced that its long running UK litigation with a competitor regarding a European patent covering technology related to the laying of flexible pipes, has been settled out of court. The settlement involves a cash payment by Stolt Offshore in respect of past patent infringements and the granting of a licence under the disputed patent covering the North Sea area. The settlement will not have a material impact on the Company's results for 2004. Tom Ehret, Chief Executive Officer of Stolt Offshore, said, "The satisfactory resolution of the this patent infringement action marks significant progress in our settlement of long outstanding disputes." Stolt Offshore is a leading offshore contractor to the oil and gas industry, specialising in technologically sophisticated deepwater engineering, flowline and pipeline lay, construction, inspection and maintenance services. The Company operates in Europe, the Middle East, West Africa, Asia Pacific, and the Americas * * * As reported in Troubled Company Reporter's January 2, 2004 edition, Stolt Offshore S.A. obtained an extension from December 15, 2003 until April 30, 2004 of the waiver of banking covenants. Stolt Offshore continues discussions with its lenders towards a long-term agreement. SUPERIOR ESSEX: Buying Belden's Comm. Cable Assets for $95 Million ------------------------------------------------------------------ Belden Inc. (NYSE: BWC) has entered into a definitive agreement under which Superior Essex Inc. (OTC Bulletin Board: SESX) will purchase certain assets of Belden's North American communications cable business. Superior Essex will buy selected inventories, machinery and equipment, and will assume certain customer contracts related to Belden's North American telecommunications wire and cable business. The total purchase price, which is subject to adjustment based upon inventory levels at closing, will not exceed $95 million, including a $10 million contingent payment based on successful transition of the business under certain customer contracts. The signed agreement is subject to certain closing conditions, including approval under United States antitrust laws. Belden contemplates closing the Phoenix manufacturing operation, subject to discussions with the employee bargaining unit of the plant. C. Baker Cunningham, Chairman, President and Chief Executive Officer of Belden, said, "Given the lower level of demand that has characterized the telecommunications market in the United States for the past two years, we have been unable to maintain profitability in the North American communications business, despite aggressive cost reductions and the best efforts of our people. We are confident that we will be able to smoothly transition the business to Superior Essex without interruption for our customers. Going forward, we will focus on the electronics and data networking markets, where we are able to add value through differentiating our product offering and further developing our customer and distributor relationships, and on the execution of our planned merger with Cable Design Technologies Corporation." On February 5, 2004, Belden announced plans to join with Cable Design Technologies Corp. (NYSE: CDT) in a merger of equals, which the companies expect to complete during the second quarter of 2004. Belden will account for the North American communications business as a discontinued operation. The Company expects that its earnings from continuing operations for the first quarter ending March 31, 2004 will be about $0.05 per share. Belden does not expect a material gain or loss on the sale of the assets but expects to continue to incur operating losses, severance charges, and other closure costs with respect to this business until the divestiture is completed. If the Company proceeds to close the Phoenix operation as contemplated, the liquidation of retained working capital, real estate and other remaining assets is expected to approximately offset the cash costs of winding down the business. The North American operations of the Communications Segment had revenue of $202.4 million in 2003 and an operating loss of $109.4 million pretax, including an impairment charge of $92.4 million and income of $3.0 million under a minimum requirements contract. About Belden Belden is linking people and technology by designing, manufacturing, and marketing electronic cable products for the worldwide broadcasting, industrial, data networking and communications markets. Visit Belden's website at www.belden.com . About Superior Essex Superior Essex Inc. is one of the largest North American wire and cable manufacturers and among the largest wire and cable manufacturers in the world. Superior Essex manufactures a broad portfolio of wire and cable products with primary applications in the communications, magnet wire, and related distribution markets. The Company is a leading manufacturer and supplier of copper and fiber optic communications wire and cable products to telephone companies, distributors and system integrators; a leading manufacturer and supplier of magnet wire and fabricated insulation products to major original equipment manufacturers (OEM) for use in motors, transformers, generators and electrical controls; and a distributor of magnet wire, insulation, and related products to smaller OEMs and motor repair facilities. Additional information can be found on its web site at http://www.superioressex.com/ Debt, Capital Structure and Liquidity The Company reported total debt at December 31, 2003 of $200 million, a reduction of nearly $1 billion as compared to Superior TeleCom's total debt at December 31, 2002. Total stockholders' equity at December 31, 2003 was $163.9 million. The Company's total debt at December 31, 2003 included $145 million in 9.5% Senior Notes (due in 2008), $42 million drawn on its $120 million revolving credit facility (due in 2007) and $13 million in other debt. In January 2004 the Company received ratings from Standard & Poors and Moody's on its corporate debt, achieving a credit rating of BB/B1 on the revolving credit facility and B+/B2 on the Senior Notes. At December 31, 2003, the Company had $74 million in cash and available liquidity under its revolving credit facility. TEEKAY SHIPPING: Increased Debt Leverage Spurs S&P's Neg. Watch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'BB+' corporate credit rating, on Teekay Shipping Corp. on CreditWatch with negative implications. "The CreditWatch placement reflects increased debt leverage associated with the company's acquisition of unrated Naviera F. Tapias S.A., an independent operator of liquefied natural gas (LNG) carriers and Suezmax oil tankers in Spain," said Standard & Poor's credit analyst Kenneth L. Farer. Tapias will be acquired for a combination of cash and assumed debt totaling $810 million, plus future commitments on upcoming vessel deliveries. Tapias' fleet consists of two LNG tankers and six Suezmax tankers, with deliveries of two additional LNG tankers and three Suezmax tankers in 2004 and 2005. Future vessel commitments total $540 million and are expected to be debt financed. Including the $810 million of debt incurred to purchase Tapias, Teekay has about $2.5 billion of lease-adjusted debt. Tapias' LNG carriers have long-term employment contracts with high-quality charterers, which will provide stable cash flow during the life of the contract. This allows for a more predictable revenue stream, which is viewed as positive from a rating standpoint. Following the acquisition, which should be completed by April 30, 2004, Teekay is expected to have a satisfactory credit profile. Standard & Poor's will review the acquisition and near- to intermediate-term financial prospects of the company to resolve the CreditWatch. The corporate credit rating on Teekay reflects the company's favorable business position as the leading midsize Aframax crude- oil tanker operator in the Indo-Pacific Basin, its strong market share in the Atlantic-Aframax and North-Sea shuttle tanker markets, and its fairly conservative financial policies. These factors are offset by significant, but carefully managed, exposure to the volatile tanker spot markets and active construction and acquisition programs. Several of the company's directors supervise Resolute Investments Inc., which controls about 40% of the company's common stock through trusts. At Dec. 31, 2003, Teekay's fleet consisted of 138 vessels, with 12 ships under construction as part of the company's continued vessel replacement and growth program. The company's Aframax and shuttle tanker fleets, comprised of 66 and 43 vessels, respectively, are significantly larger than those of the next comparable competitors. In the second half of 2003, Teekay invested approximately $65 million to purchase 50% of Skaugen PetroTrans and 2.9 million shares of A/S Dampskibsselskabet TORM. These investments in lightering (the ship-to-ship transfer of oil) companies expand the company's reach to a broader portion of the petroleum distribution channel. THOMPSON PRINTING: Taps Booker Rabinowitz as Bankruptcy Counsel --------------------------------------------------------------- Thompson Printing Co., Inc., is seeking permission from the U.S. Bankruptcy Court for the District of New Jersey to employ Booker, Rabinowitz, Trenk, Lubetkin, Tully, Dipasquale & Webster, P.C., as its counsel. The professional services that Booker Rabinowitz will render to the Debtor in this chapter 11 case, include: a. advising the Debtor with respect to the power and duties in the continued management of its properties and financial affairs as debtor, including the rights and remedies of the Debtor with respect to its assets and with respect to the claims of creditors; b. advising the Debtor with respect to preparing and obtaining approval of a Disclosure Statement and Plan, if appropriate; c. preparing on behalf of the Debtor, as debtor-in- possession, necessary applications, motions, complaints, answers, orders, reports and other pleadings and documents; d. appearing before this Court and other officials and tribunals, if necessary, and protecting the interests of the Debtor in federal, state and foreign jurisdictions and administrative proceedings; e. negotiating and preparing documents relating to the disposition of assets, as requested by the Debtor; f. advising the Debtor concerning the day-to-day operations of its business and the administration of its estate as debtor-in-possession; and g. performing such other legal services for the Debtor, as debtor-in-possession, as may be necessary and appropriate herein. The professionals who will be responsible in this retention are: Name of Professional Billing Rate -------------------- ------------ Cory A. Booker $325 per hour Jonathan I. Rabinowitz $425 per hour Richard D. Trenk $400 per hour Jay L. Lubetkin $375 per hour Mary Ellen Tully $345 per hour Joseph J. DiPasquale $325 per hour Elnardo J. Webster II $325 per hour Henry M. Karwowski $290 per hour Joshua H. Raymond $275 per hour Barry J. Roy $250 per hour Gina R. Orosz $250 per hour Shoshana Schiff $215 per hour Joni Noble McDonnell $190 per hour Paul J. Labov $175 per hour Other professionals' rates are: Law Clerk $135 per hour Paralegal $115 per hour Headquartered in West Caldwell, New Jersey, Thompson Printing Co., Inc., is in the business of printing high end brochures for Fortune 500 companies, among others. The Company filed for chapter 11 protection on March 4, 2004 (Bankr. N.J. Case No. 04- 17330). Richard Trenk, Esq., at Booker, Rabinowitz, Trenk, Lubetkin, Tully, DiPasquale & Webster, P.C., represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $603,508 in assets and $6,467,533 in debts. TOTAL CONTAINMENT: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Total Containment, Inc. 422 Business Center Oaks, Pennsylvania 19456 Bankruptcy Case No.: 04-13144 Type of Business: The Debtor offers a complete line of systems and products for primary and secondary containment of petroleum and alcohol-based motor fuels, some of it which it manufactures, and some of which it distributes for other manufacturers. Chapter 11 Petition Date: March 4, 2004 Court: Eastern District of Pennsylvania (Philadelphia) Judge: Bruce I. Fox Debtor's Counsel: Matthew A. Hamermesh, Esq. Hangley Aronchick Segal & Pudlin One Logan Square, 27th Floor Philadelphia, PA 19103-6933 Tel: 215-496-7054 Estimated Assets: $1 Million to $10 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Murphy Oil USA, Inc. $4,000,000 200 Peach Street El Dorado, AK 71730 Pieces by OPW, Inc $1,408,340 9393 Princeton-Glendale Rd. PO Box 405003 Cincinnati, OH 452540-5003 Schnader Harrison Segal & Trade $172,948 Lewis Remcon Plastics Trade $110,518 Stevens & Lee PC Trade $106,449 Suburban Management Co. Trade $93,500 PECO Maria Flick Trade $88,350 Ashland Chemical Inc. Trade $87,264 Volpe and Koenig, P.C. Trade $82,143 Dupont Dow Elastomers L.L. Trade $64,783 Honeywell International Inc. Trade $63,307 Burr & Forman LLP Trade $61,794 Ticona LLC Trade $59,192 Spartech Corporation Trade $45,792 Pro-Manufactured Products Trade $45,076 Custom Rubber Technologies, Trade $40,381 LLC AP Products Trade $35,234 Manchester Molding & Mfg. Co Trade $34,464 Overnite Transportation Co. Trade $33,568 Brandywine Valley Fabricators Trade $30,257 UAL CORP: Examiner Sides with Airline on Retiree Benefits Issue --------------------------------------------------------------- An independent examiner Thursday found that United Airlines (OTC Bulletin Board: UALAQ) told the truth when the company said it had not made a decision to seek changes to retiree medical benefits before July 1, contrary to allegations made by certain labor leaders. "I conclude that United's decision to seek section 1114 relief was not made before July 1, 2003," the Examiner wrote in his report. He also said, "I found no evidence to support the suggestion that United had a financial incentive to induce flight attendants to retire between May 1 and July 1, 2003." "This makes clear what we said all along -- we told the truth," said Peter D. McDonald, executive vice president - operations. "The allegations from the Association of Flight Attendants were a distraction that led to a colossal waste of time and resources, and the examiner's report is an emphatic repudiation of those baseless claims." The proposed modifications United is seeking are designed to bring the medical benefits of those who retired prior to July 1, 2003, more in line with future retirees and with the marketplace. The company is beginning negotiations with retirees' authorized representatives on necessary modifications to benefits, and looks forward to moving ahead toward consensual agreements with retirees. About United Airlines United, United Express and Ted operate more than 3,400 flights a day on a route network that spans the globe. News releases and other information about United may be found at the company's Web site at http://www.united.com/ US AIRWAYS: Reaches Pact Resolving Four DFO Partnership Claims -------------------------------------------------------------- DFO Partnership, the successor to Ford Motor Credit Company, filed four proofs of claim in unliquidated amounts asserting various tax indemnity claims relating to various aircraft. To settle the claims, the Reorganized US Airways Group Debtors and DFP agree to allow the tax indemnity claims as general unsecured Class USAI-7 claims with respect to these aircraft: Claim No. Tail No. Amount --------- -------- ------ 5513 N404US $3,172,572 5514 N405US 3,172,572 5523 N417US 3,172,572 5524 N418US 3,172,572 ----------- TOTAL $12,690,288 =========== All other general unsecured claims by the DFO Partnership relating to these aircraft are disallowed. (US Airways Bankruptcy News, Issue No. 50; Bankruptcy Creditors' Service, Inc., 215/945- 7000) WORKFLOW MGT: Int'l Shareholder Urges Clients to Vote For Merger ---------------------------------------------------------------- Workflow Management, Inc. (Nasdaq:WORK) announced that Institutional Shareholder Services, Inc. ("ISS"), a leading provider of proxy advisory services to over 700 institutional investors, mutual funds and other fiduciaries has recommended to its clients that they vote FOR the agreement and plan of merger between Workflow Management, Inc. and WF Holdings, Inc., an entity formed and controlled by Perseus, L.L.C. and The Renaissance Group, LLC. Gerald F. Mahoney, Chairman and Interim CEO of Workflow stated, "We are gratified to hear that ISS, the influential shareholder advisory firm, has issued a report urging our stockholders to vote FOR the merger. They recognize the lengthy and exhaustive process undertaken by the Board of Directors to arrive at an offer that is in the best interests of our stockholders and note that the cash consideration is at a 29% premium to the stock price at the time of the Company's announcement that we were seeking strategic alternatives." The ISS report noted, "The proposed transaction is the result of an auction process conducted by the board. There is no evidence indicating that the board did not fulfill its fiduciary duty in the sale process. Nevertheless, the merger consideration is at the low end of the valuation ranges provided by the advisor, reflecting the company's debt burden and the difficulty in securing refinancing. Ultimately, there is significant bankruptcy risk posed in case the merger is not completed. Therefore, we recommend that shareholders vote in favor of the merger." Mr. Mahoney continued, "The special meeting of stockholders convenes on March 30, 2004 and time is now very short. We urge all stockholders who have not yet done so to vote FOR the merger transaction today." If stockholders need help in voting their shares, they may call proxy solicitor, MacKenzie Partners, Inc. toll-free at (800) 322- 2885 or collect at (212) 929-5500. About Workflow Management, Inc. Workflow Management, a leading provider of end-to-end print solutions with consolidated revenues of $622.7 million for its fiscal year ended April 30, 2003, employs approximately 2,700 persons and operates throughout the United States, Canada and Puerto Rico with 52 sales offices, 12 manufacturing facilities, and 14 warehouses and distribution centers. Company management believes that the Company's services, from production of logo- imprinted promotional items to multi-color annual reports, have a reputation for reliability and innovation. Workflow's complete set of solutions includes document design and production consulting; full-service print manufacturing; warehousing and fulfillment; and one of the industry's most comprehensive e-procurement, management and logistics systems. Through custom combinations of these services, the Company can deliver substantial savings to customers - eliminating much of the hidden cost in the print supply chain. By outsourcing print-related business processes to Workflow Management, customers may streamline their operations and focus on their core business objectives. For more information, go to the Company's Web site at http://www.workflowmanagement.com/ WORLDCOM INC: Reaches AT&T Dispute Settlement & Compromise ---------------------------------------------------------- To reconcile competing contractual claims and debts as well as legal disputes, Judge Gonzalez approves the Worldcom Debtors' settlement agreement with AT&T Corporation. Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP, in Houston, Texas, recounts that the Debtors and AT&T were involved in significant commercial and legal disputes. The commercial disputes include certain executory contracts pursuant to which the parties provide services and furnish facilities to one another, including agreements and arrangements for the provision of switched access service to the other. There is also a significant contractual dispute between AT&T and the Debtors arising over the provision of switched access relating to certain "UNE-P" services before January 26, 2004. On account of the Executory Contracts, the Debtors owe AT&T $100,000,000, and AT&T owes the Debtors $220,000,000. The parties dispute most of these amounts. The parties' legal disputes arose from an action filed by AT&T asserting racketeering and fraud claims against MCI and others, seeking monetary damages and injunctive relief, before the U. S. District Court for the Eastern District of Virginia. The Debtors sought sanctions against AT&T for contempt. The Debtors asserted that: (a) the commencement of the Virginia Action is proscribed by the automatic stay imposed by Section 362(a) of the Bankruptcy Code; (b) the allegations in the Virginia Action are based on primarily prepetition actions; and (c) AT&T was required to seek the permission of the Bankruptcy Court before filing the Virginia Action. On October 30, 2003, the Bankruptcy Court stayed the Virginia Action pending further consideration. Aside from these disputes, the Debtors also have potential preference actions and claims against AT&T. The Debtors and AT&T have diligently and in good faith resolved the disputes on these terms and conditions: A. The Parties exchange mutual releases: (a) AT&T releases the Debtors from any claims including contract and lease rejection damages under any legal theory, including without limitation the Virginia Action; and (b) The Debtors release AT&T from any Claims, including any claims arising from the Contempt Motion. However, nothing will release, remise or discharge any of the Debtors' or AT&T's Claims arising under the Settlement Agreement. Any Claims for services that were not invoiced as of October 10, 2003, which would be invoiced after October 10, 2003 in the ordinary course of business, are not released and will be invoiced and paid in the ordinary course as if the Settlement Agreement and plan of reorganization had not occurred. Nothing releases any Claims that AT&T collects solely in its capacity as agent for non-affiliated third parties; B. AT&T agrees and acknowledges that no cure payment is due on account of any Executory Contract assumed or to be assumed by the Debtors; C. Each of the Debtors, on behalf of itself and its estates in bankruptcy, will be deemed to have released, remised and forever discharged any and all Claims against AT&T under Chapter 5 of the Bankruptcy Code, including without limitation any and all Claims arising under Sections 542, 544, 545, 547, 548, 549, 550 or 553 for turnover or to avoid or recover any transfers or obligations; D. AT&T will dismiss the Virginia Action with prejudice; E. The Debtors will dismiss with prejudice the Contempt Motion. The discretionary stay imposed by the Bankruptcy Court will terminate; and F. To reconcile and resolve the "UNE-P" Dispute, the Parties agreed that: (a) For invoices rendered during the period October 10, 2003 through February 10, 2004, all "UNE-P" delivered switched access will be charged and paid in accordance with the contract rates contained in the National Services Agreement, as amended, between MCI Metro Access Transmission Services, Inc. and AT&T Communications, Inc. dated November 1, 1996 or the Switched Access Services Agreement, as amended, between AT&T Corp. and MCI WorldCom Network Services, Inc. dated July 23, 1998. To the extent the switched access services were provided for the period October 10, 2003 through February 10, 2004 but were not invoiced during that period, the services will be invoiced and paid at the rates contained in the 2004 Contracts; (b) Any overpayment or over-billing from October 10, 2003 through February 10, 2004 by either party in connection with switched access services delivered by UNE-P access lines -- where the billings or payments were made at per minute of use rates exceeding the rates stated in the NSA or the SASA -- a credit in the amount of the overpayment will be issued as soon as practicable. To the extent the switched access services were provided for the period October 10, 2003 through February 10, 2004 but were not invoiced during that period, these services will be invoiced and paid at the rates set forth in the 2004 Contracts; (c) The Debtors and AT&T will enter into new 2-year bilateral switched access contracts which will become effective as of January 27, 2004; (d) In connection with the 2004 Contracts, AT&T will pay the Debtors a one-time non-recurring charge of $3,000,000; and (e) All switched access relating to "UNE-P" services provided after January 26, 2004 will be invoiced and billed in accordance with the rates in the 2004 Contracts. Judge Gonzalez modifies the automatic stay to allow the Debtors and AT&T to make the payments and effectuate the set-offs provided for in the Settlement Agreement. Headquarterd in Clinton, Mississippi, WorldCom, Inc., -- http://www.worldcom.com-- is a pre-eminent global communications provider, operating in more than 65 countries and maintaining one of the most expansive IP networks in the world. The Company filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the Debtors listed $103,803,000,000 in assets and $45,897,000,000 in debts. (Worldcom Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service, Inc., 215/945-7000) W.R. GRACE: Neutocrete Wants to Defend Grace Lawsuit ---------------------------------------------------- On October 17, 2002, W.R. Grace & Co. filed a complaint before the Superior Court of the State of Connecticut, Judicial District of Litchfield, against Neutocrete Products, Inc., seeking $112,636.70 in damages because of Neutocrete's alleged failure to pay for the product provided to it by Grace under a written agreement for the period from January 23, 2002 to June 4, 2002. Neutocrete believes that it has defenses to all claims alleged by Grace as well as a counterclaim against Grace. Due to the imposition of the automatic stay, Neutocrete has been unable to defend and assert its counterclaim against Grace in the state court action. Accordingly, Neutocrete asks Judge Fitzgerald to lift the automatic stay so it may assert defenses and counterclaims in the forum chosen by Grace to litigate its claim. Neutocrete alleges that the batches of the product it bought between 1999 and 2002 from Grace were deficient in the amount of product contained in each bag and in the mixture used to make the product. As a result of the deficiencies, Neutocrete and its related entities are entitled to damages arising from the shortage of materials, fraud, violation of the Connecticut Unfair Trade Practices Act, indemnification for repairs and lost sales, and loss of reputation and good will. Neutocrete asserts $2,857,803 in total damages. Debtors Object On the Debtors' behalf, David W. Carickhoff, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub PC in Wilmington, Delaware, relates that the Debtors supplied Neutocrete with a lightweight concrete product to Neutocrete's specifications. Neutocrete reported problems that allegedly arose during its application of the product, and the Debtors attempted to provide technical assistance regarding the proper use of the product. It's All Neutocrete's Fault Mr. Carickhoff asserts that Neutocrete did not follow the Debtors' instructions and continued to report problems with the product. Neutocrete then stopped the payment on checks they had tendered to the Debtors in exchange for the product that had already been supplied. In response to Neutocrete's failure to make timely payments, the Debtors threatened to stop supplying Neutocrete with additional product until they were fully paid. At that time, Neutocrete assured the Debtors that they would be paid in full for the delivered product, and gave the Debtors a check for $60,000 -- a check on which Neutocrete subsequently stopped the payment. The Debtors eventually stopped doing business with Neutocrete and referred Neutocrete's delinquent account to NCO Financial Services, Inc., their collection agent, to recover the delinquent payments. In October 2002, NCO Financial Services commenced the state court action on the Debtors' behalf to recover the unpaid, postpetition invoices totaling $112,637. According to Mr. Carickhoff, NCO Financial Services was simply trying to collect unpaid invoices and had no reason to believe that Neutocrete would assert extensive counterclaims. NCO Financial Services is not trained in the nuances of bankruptcy law and did not realize that the state court action might give Neutocrete cause to assert prepetition claims against the Debtors in a forum outside of their Chapter 11 cases. Debtors Withdraw Complaint Mr. Carickhoff advises Judge Fitzgerald that the Debtors are not in a position at this time to expend resources that would be required to adequately defend themselves against Neutocrete's claims. Therefore, the Debtors have decided not to pursue their collection action at this time. The Debtors withdraw their complaint in the state court. Since Neutocrete has not alleged any reason -- other than the need to assert prepetition counterclaims in their defense of the Debtors' collection action -- why the Debtors should be forced to defend against its counterclaims, the stay should remain in force. By filing proofs of claim in the Debtors' Chapter 11 cases, Mr. Carickhoff says that Neutocrete has already pursued the appropriate course for the preservation and resolution of its alleged claims against the Debtors. The Debtors are currently examining the proofs of claim that were filed against their bankruptcy estates, and will be prepared to raise any potential objection to Neutocrete's claims in the near future. As a result, the Debtors ask Judge Fitzgerald to deny Neutocrete's request and allow them to address Neutocrete's claims in the context of their claims resolution process. (W.R. Grace Bankruptcy News, Issue No. 57; Bankruptcy Creditors' Service, Inc., 215/945-7000) * Susan Kohlmann Joins Pillsbury's NY Office as Managing Partner ---------------------------------------------------------------- Pillsbury Winthrop LLP has elected a new four-person management committee at its New York office, led by Susan Kohlmann as managing partner. A litigator with significant experience in intellectual property matters, Kohlmann, 46, takes over from Donald Kilpatrick, who resumes his active corporate practice as head of the corporate & securities department in New York and firmwide head of the M&A team. Joining Kohlmann in overseeing operations and growth in New York are partners Andrew Bernstein, 41 (employment), Robin Spear, 48 (corporate) and Kenneth Taber, 47 (litigation). The appointments come as the firm is settling into new high-tech offices in New York, having relocated in January from Battery Park to Times Square. Pillsbury Winthrop, whose history in New York dates to 1868, now occupies seven floors and 180,000 square feet at the Bertelsmann Building located at 1540 Broadway. The firm has leased sufficient space to greatly expand the size of the New York office following the most profitable year in the history of both the New York office and the firm. "This is an exciting period for our New York practice, which has opened a prominent new home in the heart of Times Square, with substantial room to grow," says Chair Mary Cranston. "We have a strong management team who bring broad-based practice skills and proven leadership to their new roles. Their appointment promises strong stewardship at a time when New York's corporate base and financial markets are again undergoing a major resurgence." Cranston notes that several of Pillsbury Winthrop's firmwide practice sections are chaired or co-chaired by New York partners: corporate & securities (David Falck, co-chair); employment and labor (Richard Block, co-chair); executive compensation and benefits (Susan Serota, chair); finance (Michael Schumaecker, chair); individual client services (Elizabeth Fry, co-chair); insolvency, creditors rights and bankruptcy (Leo Crowley, co- chair); and litigation (John Pritchard, chair). "We are excited about opening this new chapter in our 135-year history. We look forward to another century of working at the center of the world's financial and media markets," says Kohlmann, who has been with the firm since 1982. "While Pillsbury Winthrop is an international firm, it remains very much a New York law firm as well -- our practice and our attorneys are rooted in the city's economic and cultural life. We feel we have a terrific base from which to continue building what is already a top-tier, multi- practice office," she adds. Through its predecessor firms, Pillsbury Winthrop has had an historic relationship with New York City, including the development of Wall Street as a financial center. The firm opened its first office at the base of lower Manhattan in 1868. Among the well-known political and judicial figures who practiced at the firm were U.S. Senator and Secretary of State Elihu Root, U.S. Secretary of War and Secretary of State Henry L. Stimson, and U.S. Supreme Court Justice Felix Frankfurter. Five Pillsbury Winthrop partners have served as President of the Association of the Bar of the City of New York, including current City Bar president, the Honorable E. Leo Milonas. Milonas spent 16 years as Associate Justice of the Appellate Division of the Supreme Court of the State of New York, First Department and as Chief Administrative Judge of the State of New York. Since coming to Pillsbury in 1999, he has concentrated on complex civil litigation and appeals, as well as alternative dispute resolution. The New York office has a number of vibrant areas of practice, including capital markets and finance, litigation, employment and labor, executive compensation and benefits, insolvency, restructuring and bankruptcy, individual client services, real estate and tax. Its clients range from key players in the financial services and global energy sectors to technology companies and private equity firms. The New York white collar group includes three former Assistant U.S. Attorneys from the Southern District of New York -- Philip Douglas, Maria Galeno and Mark Hellerer. Hellerer served as chief of the Major Crimes Unit. Another recent addition to the securities litigation group is Janet Broeckel, formerly senior counsel in the Enforcement Division of the Securities and Exchange Commission. "We have a tremendous roster of talent in our office, and we are hoping to be a very active recruiter at both the partner and associate levels as the economy continues to improve," according to Kohlmann. The move to managing partner adds to Kohlmann's resume of leadership roles at Pillsbury Winthrop. She has previously served as co-chair of the firm's global intellectual property section and has been active in associate development matters on a Firm-wide level. She has directed complex class actions and securities litigation and has handled trademark, copyright, trade secret and e-commerce matters. Among her many litigation matters, Kohlmann has represented the estate of a major twentieth century artist; helped direct a multi-hundred million dollar case against a nuclear power plant supplier; and prosecuted claims on behalf of the largest purchaser of WPPSS bonds. Kohlmann received her J.D. from Columbia University School of Law (1982) where she was the recipient of the Jane Marks Murphy Prize and was Casenote/Comment Editor for the Columbia Journal of Transnational Law. She earned her B.A. from Yale University (1979). She has been published widely on IP issues, also writing frequently on various aspects of cyberlaw. Pillsbury Winthrop LLP is an international law firm with core practice areas in capital markets, financial services, litigation, intellectual property, global energy, real estate and technology. The firm has 16 offices worldwide. For further information please visit http://www.pillsburywinthrop.com/ * BOND PRICING: For the week of March 22 - 26, 2004 --------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- Adelphia Communications 3.250% 05/01/21 40 Adelphia Communications 6.000% 02/15/06 41 American & Foreign Power 5.000% 03/01/30 70 Best Buy 0.684% 06/27/21 72 Burlington Northern 3.200% 01/01/45 59 Calpine Corp. 7.750% 04/15/09 71 Calpine Corp. 7.875% 04/01/08 73 Calpine Corp. 8.500% 02/15/11 73 Calpine Corp. 8.625% 08/15/10 73 Comcast Corp. 2.000% 10/15/29 40 Cummins Engine 5.650% 03/01/98 75 Cox Communications Inc. 2.000% 11/15/29 37 Delta Air Lines 7.900% 12/15/09 66 Delta Air Lines 8.000% 06/03/23 73 Delta Air Lines 8.300% 12/15/29 57 Delta Air Lines 9.000% 05/15/16 60 Delta Air Lines 9.250% 03/15/22 59 Delta Air Lines 9.750% 05/15/21 60 Delta Air Lines 10.000% 08/15/08 73 Delta Air Lines 10.125% 05/15/10 69 Delta Air Lines 10.375% 02/01/11 74 Delta Air Lines 10.375% 12/15/22 62 Elwood Energy 8.159% 07/05/26 70 Exide Corp. 2.900% 12/15/05 3 Federal-Mogul 7.500% 01/15/09 26 Fibermark Inc. 10.750% 04/15/11 55 Finova Group 7.500% 11/15/09 62 Foamex L.P. 9.875% 06/15/07 69 General Physics 6.000% 06/30/04 52 Goodyear Tire 7.000% 03/15/28 75 Inland Fiber 9.625% 11/15/07 57 Level 3 Communications 6.000% 09/15/09 61 Levi Strauss 7.000% 11/01/06 75 Levi Strauss 12.250% 12/15/12 75 Liberty Media 3.750% 02/15/30 71 Lucent Technologies 6.450% 03/15/29 74 Mirant Americas 7.200% 10/01/08 72 Mirant Americas 7.625% 05/01/06 72 Mirant Americas 8.300% 05/01/11 71 Mirant Americas 9.125% 05/01/31 72 Northern Pacific Railway 3.000% 01/01/47 57 Oakwood Homes 7.875% 03/01/04 40 Oakwood Homes 8.125% 03/01/09 49 Osprey Trust 7.797% 01/15/03 37 Select Notes 5.700% 06/15/33 75 Universal Health Services 0.426% 06/23/20 60 Werner Holdings 10.000% 11/15/07 75 ********* 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 ***