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/raid1/www/Hosts/bankrupt/TCR_Public/040407.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, April 7, 2004, Vol. 8, No. 69 Headlines 252 WICHITA INC: Case Summary & 20 Largest Unsecured Creditors ADELPHIA COMMS: Has Until June 16, 2004 to Decide on Leases AGWAY INC.: Creditors' Ballots are Due on April 12, 2004 ALLEGIANCE TELECOM: FCC Approves XO Communications Acquisition AMERICANA PUBLISHING: Posts $2.5M Net Loss Despite Record Revenues AMERICAN LEGION: Case Summary & 15 Largest Unsecured Creditors AMERICA WEST AIRLINES: Reports Improved Traffic Results for March AMERICO LIFE: Fitch Withdraws Low-B Level Debt Ratings ATLANTIC COAST: Independence Air Ready for Takeoff This Summer ATLANTIC COAST: Agrees to Exit United Express Program BIDDLE-ASHLAND I: Case Summary & 5 Largest Unsecured Creditors CEDARA: Inks Supply & Services Agreement with Hitachi Medical CONGOLEUM CORP: Interest Nonpayment Spurs S&P to Cut Rating to D CROWN CASTLE: Will Hold Analyst Day Near Pittsburgh on April 15 DEVELOPERS DIVERSIFIED: Fitch Rates $535 Mil. Preferreds at BB+ DIAMOND ROAD: Section 341(a) Meeting Slated for April 27, 2004 DII IND.: Court Approves Professor Green as Futures Representative DOLPHINITE INC: Voluntary Chapter 11 Case Summary DYNABAZAAR: 2003 Audit Opinion Cites Going Concern Qualification EDISON INT'L: Fitch Comments on $1.78B Term Loan Restructuring EL PASO: Schatz & Nobel Commences Retirement Plan Investigation ENRON CORP: Asks Court to Disallow British Columbia Power Claims ENRON CORP: Objects to Hundreds of Employee Claims ENRON: Court Authorizes Final Collateral Agreement with Sierra ENTRADA NETWORKS: Q4 & FY Losses Trigger Bank Covenant Default EXIDE TECH: Confirmation Objections Must Be Filed By April 9 FARMLAND INDUSTRIES: Inks Pact Selling Agriliance Stake to CHS FEDERAL-MOGUL: Agrees to Settle UK Insurance Coverage Dispute FELCOR: Raises $107 Million from Convertible Preferred Stock Sale GRENADA MANUFACTURING: Case Summary & Largest Unsecured Creditors IMMUNE RESPONSE: Auditors Express Going Concern Qualification INNSUITES: Debt Cut by $14.7M After San Diego & Tempe Asset Sales INTEGRATED HEALTH: Rotech to Establish Corsello Claims Reserve INTERNATIONAL WIRE: Employs Weil Gotshal as Bankruptcy Counsel IPIX CORPORATION: Raises $5 Million in Private Stock Sale LAKE HAMILTON: U.S. Trustee to Meet with Creditors on May 18, 2004 METROMEDIA: Must Resolve Sr. Note Covenant Compliance by June 1 METROMEDIA INTL: Decides Not to Declare Preferred Stock Dividend MICRO BYTES INC: Case Summary & 20 Largest Unsecured Creditors MIRANT: Inks Stipulation Setting Amount Owed Under the SMUD Pact MITEK SYSTEMS: Nasdaq Delisting Hearing Scheduled for April 22 MOLECULAR DIAGNOSTICS: Bathgate Capital Invests $1.5 Million NEW CENTURY: Will Convert into a Real Estate Investment Trust NEW CENTURY: First Quarter 2004 Loan Production Tops $8.4 Billion NORTEL: SEC Orders Formal Investigation Over Results Restatement NORTH COUNTRY: Exploring Alternatives to Address Capital Needs NRG ENERGY: Rural Utilities Asserts $8.6 Million Admin. Claim OMEGA HEALTHCARE: Closes on $26 Million of New Investments OMEGA HEALTHCARE: Sells $200M Interest Rate Cap & Florida Facility OR RAMBLEWOOD LLC: Involuntary Case Summary OWENS: Wants Clearance to Implement Discounted Tax Payment Scheme OXFORD INDUSTRIES: Declares Quarterly Cash Dividend Payable May 29 PACER HEALTH: Now Owns South Cameron Memorial Hospital in La. PARMALAT: Grand Cayman Court Denies Bondi as Capital Liquidator PER-SE TECH: Filing Delay Prompts Nasdaq's Noncompliance Notice PG&E NATIONAL: Reaches Settlement to End Rockingham Claim Dispute PLAINVILLE TRUCK: Case Summary & 20 Largest Unsecured Creditors QUESTERRE: Beaver River Unit Files for CCAA Protection in Canada RURAL/METRO: Remains as Youngstown, Ohio's 911 Ambulance Provider SEGA GAMEWORKS: Look for Schedules & Statements on April 9 SK GLOBAL: Court Adjourns Sec. 304 Injunction Hearing to June 9 SMITHFIELD FOODS: Sells Schneider to Maple Leaf Foods for $378MM SPRING AIR PARTNERS: Tap Zukerman Gore as Special Corp. Counsel STOLT OFFSHORE: Signs $150 Million Contract in Nigeria SUREBEAM: Bankruptcy Court Approves Titan Settlement With Trustee TECH FABRICATIONS: Case Summary & Largest Unsecured Creditors TELETECH: Broadband Service Provider Extends Service Agreement TITANIUM: Commences Convertible Pref. Securities Exchange Offer UNDERWRITER INSURANCE: Fitch Withdraws B Financial Strength Rating UNIFAB: Losses & Strained Liquidity Prompt Going Concern Doubt UNITED AIRLINES: Opts to Work With New Regional Carriers VENUS EXPLORATION: PYR Energy to Acquire All Assets for $3,225,000 VIRAGEN INC: Entering into $20 Million Financing Agreement VIVENDI: Files Claim Against APPAC Counsel K. Canoy in Paris VULCAN ENERGY: S&P Places BB Credit & Debt Ratings on Watch Neg. WARNACO GROUP: Cheryl N. Turpin Elected to Board of Directors WESTPOINT STEVENS: American Appraisal's Retention Expands WINN-DIXIE: Will Webcast Third Quarter Results on April 30 WORLDCOM: Court Okays GITSA Amendments & GNOA Letter Agreement WORLDSPAN LP: Ratings on S&P's Watch Positive Citing Planned IPO W.R. GRACE: Expanding Deloitte's Services to Lease Consulting * Upcoming Meetings, Conferences and Seminars ********* 252 WICHITA INC: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: 252 Wichita Inc. dba Bricktown 54 9975 Creek 470 Blue Ridge, Texas 75424 Bankruptcy Case No.: 04-11613 Type of Business: The Debtor operates Bar and club. Chapter 11 Petition Date: April 1, 2004 Court: District of Kansas (Wichita) Judge: Robert E. Nugent Debtor's Counsel: Edward J. Nazar, Esq. Redmond & Nazar, LLP 900 Olive West Garvey Building 200 West Douglas Wichita, KS 67202-3089 Tel: 316-262-8361 Total Assets: $470,470 Total Debts: $1,365,255 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Williams Construction Co Inc $198,000 Oswalt Restaurant Supply Inventory, Equipment, $178,136 Appliance Southards Welding & Mfg. $127,231 Kansas Siding & Home $122,222 Data Terminals $110,737 Allstate Electrical $100,283 Contractor TechTronics Wichita Location. $98,388 Canderra paid Jayhawk Plumbing Inc. $54,705 Stonhard $50,264 E Z Electric Inc. $42,408 Kansas Dept. of Revenue Liquor Tax $41,267 Tri State Drywall Acoustic $33,650 Performance Surfaces $28,603 Morris Lightning Company $15,552 D&D Surplus Sales $15,000 Knockout Specialties Inc. $14,766 Internal Revenue Service $14,580 Internal Revenue Service $13,904 Debee Gilchrist & Lidia $12,206 Internal Revenue Service $9,532 ADELPHIA COMMS: Has Until June 16, 2004 to Decide on Leases ----------------------------------------------------------- Pursuant to Section 365(d)(4) of the Bankruptcy Code, the Adelphia Communications Debtors sought and obtained a further extension of their deadline to decide whether to assume, assume and assign, or reject unexpired non-residential real property leases to and including June 16, 2004. (Adelphia Bankruptcy News, Issue No. 55; Bankruptcy Creditors' Service, Inc., 215/945-7000) AGWAY INC.: Creditors' Ballots are Due on April 12, 2004 -------------------------------------------------------- On February 27, 2004, the U.S. Bankruptcy Court for the Northern District of New York approved the Disclosure Statement for the Joint Chapter 11 Plan of Liquidation filed by Agway Inc and its debtor-affiliates. The Court found that the Disclosure Statement contains the right kind and amount of information to enable creditors to make informed decisions whether to accept or reject the Plan. The Court has set April 12, 2004, as the deadline for creditors to vote on the Joint Plan. Ballots must be submitted not later than 4:00 p.m. Eastern Time on that day, to: Mail: Hand Delivery/Overnight Courier: Donlin, Recano & Company, Inc. Donlin, Recano & Company, Inc. Re: Agway, Inc., et al. Re: Agway, Inc., et al P.O. Box 2034 419 Park Avenue South Murray Hill Station Suite 1206 New York, NY 10156 New York, NY 10013 Attn: Voting Department Attn: Voting Department The Honorable Stephen D. Gerling will convene a confirmation hearing on April 21, 2004, at 10:oo a.m., to review the Plan's merits and any objections. Agway, Inc. is an agricultural cooperative owned by 69,000 Northeast farmer-members. On October 1, 2002, Agway, Inc. and certain of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D.N.Y. Case No. 02-65872). ALLEGIANCE TELECOM: FCC Approves XO Communications Acquisition -------------------------------------------------------------- XO Communications, Inc. (OTCBB:XOCM.OB) announced that the Federal Communications Commission has approved its acquisition of substantially all of the assets of Allegiance Telecom, Inc., which will position the company as one of the nation's largest facilities-based competitors to the regional Bell operating companies. XO expects to complete its acquisition of the Allegiance assets and obtain final state regulatory approvals during the second quarter of 2004. "The combination of XO and Allegiance will bring the type of competition to the regional Bell operating companies originally envisioned by Congress when it enacted the Telecommunications Act of 1996," said XO Communications' CEO, Carl Grivner. "With our national network footprint in more local markets across the country, XO will be able to offer businesses more choices for their local, national and end-to-end telecommunications needs." With the addition of Allegiance Telecom's assets, XO will have more nationwide connections to regional Bell operating companies' networks than any other CLEC, and double the Points of Presence (PoPs) within the 36 major metropolitan areas where both XO and Allegiance operate. With this vastly expanded network footprint, XO believes it will be better positioned to compete head to head with other companies in the nationwide local telecommunications services market. "Our integration team is moving quickly to bring together the best assets from both companies in terms people, processes and technology. We remain confident that through these efforts we will be able to achieve our goal of approximately $160 million in annual cost savings over time from the acquisition of the Allegiance assets," added Grivner. On February 13, 2004, XO Communications was selected as the winning bidder for Allegiance Telecom, which had filed for financial restructuring under Chapter 11 of the U.S. Bankruptcy Code on May 14, 2003. Under the terms of the purchase agreement, XO agreed to purchase substantially all of the assets of Allegiance Telecom and its subsidiaries except for Allegiance's customer premises equipment sales and maintenance business (operated under the name of Shared Technologies), its managed modem business, and certain other Allegiance assets and operations. About XO Communications XO Communications is a leading broadband telecommunications services provider offering a complete portfolio of telecommunications services, including: local and long distance voice, Internet access, Virtual Private Networking (VPN), Ethernet, Wavelength, Web Hosting and Integrated voice and data services. AMERICANA PUBLISHING: Posts $2.5M Net Loss Despite Record Revenues ------------------------------------------------------------------ Americana Publishing, Inc. (OTC Bulletin Board: APBH) reported record revenues for the year ended 2003. Revenues nearly doubled to $1,277,572 in 2003 compared to $640,848 in 2002. "We attribute our increased revenues to continued demand for our books on tape and CD," said George Lovato, Jr., Americana Publishing, Inc. chairman and chief executive officer. "Moreover, we continue to expand the number and variety of distribution outlets for our products." Gross profit from operations for the fiscal year ended December 31, 2003 increased to $792,690 as compared to $537,328 for the fiscal year ended December 31, 2002. "We're very excited about our forthcoming acquisition of Coreflix which will accelerate our entry into the very lucrative online, video rental field," said Lovato. "Our recent installation of in- house duplicating equipment has helped us greatly reduce our production costs and virtually eliminate excess inventory." Total loss from operations was $2,481,724 for the year ended December 31, 2003 as compared to a loss from operations of $1,724,162 for the year ended December 31, 2002, an increase of $757,562. The increase in net loss from operations was primarily due to issuance of share of common stock as compensation expense and consulting expense. During 2003 Americana reported the following highlights: * Americana released the third in a series of popular books by author Cindy Davis titled "Miriam's Healing." * The Company anticipates releasing the long-awaited book "Hiding Under The Table," by addiction guru Dennis Henning in fall of 2004. * Americana's CMG subsidiary filed a Chapter 7 voluntary bankruptcy proceeding in the Federal Eastern District Bankruptcy Court of Tennessee to dispose of a non-performing tape and CD duplication company and eliminating $2.1 million and debt from its balance sheet. * In November the Company reported that fourth quarter revenues are running ahead of projections. * Also in November the Company reported that its DVD program, to be launched in 2004, would be similar to other national DVD rental programs. * Americana launched a marketing campaign to more than 2,000 trucking companies to distribute its inventory to the truck driver through those companies. * The Company announced it has completed the groundwork for launching a CD audio book rental program in the first quarter of 2004. These rentals will be offered to the Company's existing truck stop customers as well as marketed directly to more than 2,000 trucking companies, which the Company believes represent approximately one-half million truck drivers. Subsequent to year-end the Company announced the following: * It has completed the installation of state-of-the art audio CD and tape duplication equipment. The new equipment will greatly increase efficiencies and add a new revenue source to the Company. * The Company also intends to expand its operations after finalizing the deal to acquire the online movie rental company Action Media Group, LLC D/B/A Coreflix(TM). The all-stock acquisition will consolidate overhead and increase operational efficiencies. ABOUT AMERICANA PUBLISHING, INC. Americana Publishing, Inc. is a vertically integrated multimedia publishing company whose primary business is publishing and selling audio books, print books and electronic books in a variety of genres. Sales of its products are conducted through the Internet as well as through a distribution network of more than 35,000 retail stores, libraries and truck stops. * * * GOING CONCERN UNCERTAINTY In its Form 10-KSB for the fiscal year ended December 31, 2003, Americana Publishing, Inc. states: "Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. During the years ended December 31, 2003 and 2002, we incurred losses of $2,520,972 and $2,615,518, respectively. In addition, as of December 31, 2003, our total current liabilities exceeded our total current assets by $2,895,438, and our shareholders' deficit was $2,525,828. These factors, among others, raise substantial doubt about our ability to continue as a going concern." AMERICAN LEGION: Case Summary & 15 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: American Legion Post # 59 243 Commerce South West Grand Rapids, Michigan 49503 Bankruptcy Case No.: 04-03260 Chapter 11 Petition Date: March 16, 2004 Court: Western District of Michigan (Grand Rapids) Judge: Jeffrey R. Hughes Debtor's Counsel: Jeffrey L. Hampel, Esq. Attorney at Law 2000 28th Street, South West Wyoming, MI 49509 Tel: 616-534-7522 Total Assets: $2,403,695 Total Debts: $259,794 Debtor's 15 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Accident Fund $4,958 BWUC $1,068 Ameritech $964 D&B RMS $766 Canadian Bond $399 Capital Supply $290 City of Grand Rapids $272 City Commission Chambers $219 Boston Lock $209 Consumers Energy $207 City Commission Chambers $163 ATT Long Distance $83 Comcast Cable $79 Broadcast $75 Cintas $42 AMERICA WEST AIRLINES: Reports Improved Traffic Results for March ----------------------------------------------------------------- America West Airlines (NYSE: AWA) reported traffic statistics for the month of March and year-to-date 2004. Revenue passenger miles (RPMs) for March 2004 were a record 2 billion, an increase of 6.4 percent from March 2003. Capacity for March 2004 was a record 2.6 billion available seat miles (ASMs), up 6.3 percent from March 2003. The passenger load factor for the month of March was 76.5 percent versus 76.4 percent in March 2003, while passenger load factor for the entire first quarter was a record 72.1 percent. "We were pleased that unit revenues for March were flat year-over- year despite significant growth in both utilization and stage length. In addition, this growth also helped us achieve lower than anticipated unit costs during the quarter," said Scott Kirby, executive vice president, sales and marketing. America West Airlines is the nation's second largest low-fare airline and the only carrier formed since deregulation to achieve major airline status. America West's 13,000 employees serve nearly 55,000 customers a day in 93 destinations in the U.S., Canada, Mexico and Costa Rica. * * * As previously reported, Standard & Poor's Ratings Services assigned its preliminary 'B-' secured debt rating, and preliminary 'CCC' senior unsecured and subordinated debt ratings to securities filed under America West Holdings Corp. and subsidiary America West Airlines Inc.'s $500 million SEC Rule 415 shelf registration. Existing ratings, including the 'B-' corporate credit rating on both, are affirmed. The outlook is stable. "The ratings on America West reflect risks relating to the adverse airline industry environment, a weak balance sheet, and limited financial flexibility," said Standard & Poor's credit analyst Betsy Snyder. America West Holdings' major subsidiary is America West Airlines Inc., the eighth-largest airline in the U.S, with hubs located at Phoenix and Las Vegas. America West benefits from a low cost structure, among the lowest in the industry. However, it competes at Phoenix and Las Vegas against Southwest Airlines Co., the other major low-cost, low-fare operator in the industry and financially the strongest. As a result of the competition from Southwest, as well as America West's reliance on lower-fare leisure travelers, its revenues per available seat mile also tend to be among the lowest in the industry. In addition, America West Holdings owns the Leisure Co., one of the nation's largest tour packagers. AMERICO LIFE: Fitch Withdraws Low-B Level Debt Ratings ------------------------------------------------------ Fitch Ratings has withdrawn the debt ratings of Americo Life, Inc. Americo, Life Inc. -- Long term issuer Withdrawn 'BB+'. -- Subordinated Debt Withdrawn 'BB'. ATLANTIC COAST: Independence Air Ready for Takeoff This Summer -------------------------------------------------------------- Independence Air and parent company Atlantic Coast Airlines Holdings, Inc. (Nasdaq: ACAI) announced the launch sequence for its long-awaited new low-fare service that will feature over 300 daily departures from Washington Dulles International Airport this summer -- making it the largest low-fare hub in America. In May, Independence Air will hold a nationwide satellite news conference and launch celebration from Washington, DC. This kickoff event will be broadcast live on the Internet, and will be available to media outlets across the country. On that date, Independence Air will unveil additional details of its launch plan to the public, including: * The destinations Independence Air will serve starting this summer * The low-fare pricing and simple, hassle-free travel experience * The convenient schedule of frequent departures to/from each destination * The opening of its FLYi.com reservations website for customer bookings * The exact start dates of service to the Independence Air destinations Low-fare service to Independence Air's new destinations will begin this summer based on the agreed transition schedule of its jet aircraft still in service with United Airlines. The inaugural Independence Air flights are scheduled for June 16th, and more will be added throughout July, August and September -- quickly building up to over 300 daily departures this summer. Chairman and Chief Executive Officer Kerry Skeen said, "This is it! Independence Air is ready for takeoff this summer, and we couldn't be more excited. Over the past few months, thousands of travelers in the Washington/Northern Virginia area and communities across the country have told us they are thrilled to hear about a new low-fare service that will make air travel faster and easier - - and we will finally answer that demand in May when Independence Air is officially open for business." Independence Air service will be provided using a fleet of over 110 jet aircraft fitted with new slimline leather seats, including at least 25 new 132-passenger Airbus 319s with over 20 channels of live satellite TV available at every seat. The Airbus planes -- which are scheduled to launch in November -- will allow Independence Air to offer coast-to-coast low-fare service to additional destinations in Florida, the Midwest and West Coast. The "preview" website for Independence Air is available now at http://www.FLYi.com/ Web visitors who sign up for membership to the iCLUB will receive additional information about Independence Air services, and be offered the opportunity to take advantage of special offers and promotions available only to members. Atlantic Coast Airlines (S&P, B- Corporate Credit Rating, Developing) currently operates as Delta Connection and United Express in the Eastern and Midwestern United States as well as Canada. The company has a fleet of 142 aircraft -- including a total of 120 regional jets -- and offers 800 daily departures, serving over 80 destinations. The company employs approximately 4,100 aviation professionals. For more information about Atlantic Coast Airlines Holdings, Inc., please visit its website at http://www.atlanticcoast.com/ * * * As reported in the TCR's February 23, 2004 edition, Standard & Poor's Ratings Services assigned its 'CCC' rating to Atlantic Coast Airlines Holdings Inc.'s (B-/Negative/--) $125 million convertible notes due 2034, offered under Rule 144A with registration rights. "The ratings on Atlantic Coast reflect its relatively small size within the high-risk U.S. airline industry and substantial operating lease burden, mitigated to some extent by revenue stability that has been provided by fee-per-departure contracts with major airline partners," said Standard & Poor's credit analyst Betsy Snyder. ATLANTIC COAST: Agrees to Exit United Express Program ----------------------------------------------------- Atlantic Coast Airlines Holdings, Inc. (ACA) (Nasdaq: ACAI) announced it has reached an agreement with United Airlines providing for an orderly transition and exit plan for all its United Express aircraft as a result of United's decision to reject its agreement with ACA. The transition is scheduled to begin June 4, 2004 and continue through August 5, 2004. The agreement is subject to bankruptcy court approval. A hearing will be held on April 16, 2004. This agreement clears a significant hurdle in the ongoing transition of Atlantic Coast Airlines from a fee-per-departure carrier to its new identity as Independence Air -- the low-fare airline that will serve Washington Dulles International Airport with a schedule of over 300 daily departures this summer to destinations across the U.S. The Independence Air operation at Washington Dulles will be the largest low-fare hub in America. The last date of service for the ACA aircraft in the United Express schedule is as follows: Date CRJs to Exit United Express J-41s to Exit June 3 30 17 July 6 30 - August 4 26 5 As each of the company's 50-passenger CRJ regional jets exits the United Express program, it will undergo a complete interior upgrade-including the installation of new leather slimline seating-as well as a complete exterior conversion to the new Independence Air logo and colors. They will be joined by a fleet of at least 25 Airbus A319s, which will allow Independence Air to serve destinations in Florida, the Midwest and the West Coast. The A319s also will be fitted with leather interiors in a single class configuration, and feature over 20 channels of live satellite TV in every seatback. All the J-41 turboprop aircraft will be retired as they exit the United Express program, since Independence Air will operate an all-jet fleet. The "preview" website for Independence Air is available now at http://FLYi.com/ On the day the company officially announces its destinations and low-fare pricing, customers will immediately be able to begin making reservations directly on the website. Web visitors who sign up for membership to the iCLUB will receive additional information about Independence Air services, and be offered the opportunity to take advantage of special offers and promotions that will be made available only to members. Atlantic Coast Airlines (S&P, B- Corporate Credit Rating, Developing) currently operates as Delta Connection and United Express in the Eastern and Midwestern United States as well as Canada. The company has a fleet of 142 aircraft -- including a total of 120 regional jets -- and offers 800 daily departures, serving over 80 destinations. The company employs approximately 4,100 aviation professionals. For more information about Atlantic Coast Airlines Holdings, Inc., please visit its website at http://www.atlanticcoast.com/ * * * As reported in the TCR's February 23, 2004 edition, Standard & Poor's Ratings Services assigned its 'CCC' rating to Atlantic Coast Airlines Holdings Inc.'s (B-/Negative/--) $125 million convertible notes due 2034, offered under Rule 144A with registration rights. "The ratings on Atlantic Coast reflect its relatively small size within the high-risk U.S. airline industry and substantial operating lease burden, mitigated to some extent by revenue stability that has been provided by fee-per-departure contracts with major airline partners," said Standard & Poor's credit analyst Betsy Snyder. BIDDLE-ASHLAND I: Case Summary & 5 Largest Unsecured Creditors -------------------------------------------------------------- Lead Debtor: Biddle-Ashland I, LLC 3501 East Biddle Street Baltimore, Maryland 21213 Bankruptcy Case No.: 04-17669 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Biddle-Ashland II, LLC 04-17668 Type of Business: The Debtor operates a Real Estate Rental and Development. Chapter 11 Petition Date: March 29, 2004 Court: District of Maryland (Baltimore) Judge: James F. Schneider Debtor's Counsel: Howard M. Heneson, Esq. Christman & Fascetta 810 Glen Eagles Court, Suite 301 Towson, MD 21286 Tel: 410-494-8388 Fax: 410-494-8389 Total Assets Total Debts ------------ ----------- Biddle-Ashland I, LLC $12,004,600 $6,465,800 Biddle-Ashland II, LLC $1,032,500 $6,443,000 A. Biddle-Ashland I, LLC's 3 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ BGE Utility $30,000 BGE Utility $25,000 Verizon Telephone $800 B. Biddle-Ashland II, LLC's 2 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Mathon Fund I LLC 4 +/- acre paved $6,410,000 1819 East Southern Avenue parcel Suite D-10 Secured: Mesa, AZ 85204 $1,000,000 Easy Financing Corp. 2001 Toyota Land $33,000 Cruiser Secured: $32,500 CEDARA: Inks Supply & Services Agreement with Hitachi Medical ------------------------------------------------------------- Cedara Software Corp. (TSX:CDE/OTCBB:CDSWF), a leading independent developer of medical software technologies for the global healthcare market, signed an agreement with Hitachi Medical Corporation, to supply certain of its medical imaging technologies and services to Hitachi. The agreement is valued at a minimum of Cdn$6.1 million. "We are pleased that Cedara has been successful in securing this major agreement with Hitachi Medical Corporation, a leading manufacturer of medical devices," said Abe Schwartz, Cedara's President and CEO. Cedara Software Corp. is a leading independent provider of medical technologies for many of the world's leading medical device and healthcare information technology companies. Cedara software is deployed in thousands of hospitals and clinics worldwide. Cedara's advanced medical imaging technologies are used in all aspects of clinical workflow including the operator consoles of numerous medical imaging devices; Picture Archiving and Communications Systems (PACS); sophisticated clinical applications that further analyze and manipulate images; and even the use of imaging in minimally-invasive surgery. Cedara is unique in that it has expertise and technologies that span all the major digital imaging modalities including magnetic resonance imaging (MRI), computed tomography (CT), digital X-ray, ultrasound, mammography, cardiology, nuclear medicine, angiography, positron emission tomography (PET) and fluoroscopy. The company's December 31, 2003, balance sheet discloses a working capital deficit of about CDN$5 million. CONGOLEUM CORP: Interest Nonpayment Spurs S&P to Cut Rating to D ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on vinyl- flooring manufacturer Congoleum Corp. to 'D' and removed them from CreditWatch. Standard & Poor's initially placed the ratings on CreditWatch with developing implications on Jan. 15, 2003, when the company announced that it was negotiating a global settlement with current asbestos plaintiffs and planned to file for bankruptcy. "The latest rating action was prompted by the company's failure to make the Feb. 1, 2004, interest payment on its $100 million 8.625% senior unsecured notes," said Standard & Poor's credit analyst Pamela Rice. As a result of the bankruptcy filing, the company is prohibited from paying interest on the senior unsecured notes. The company's prepackaged Chapter 11 plan of reorganization, which was filed on Dec. 31, 2003, provides that Congoleum's nonasbestos creditors will be unimpaired. Although the proposed plan of reorganization provides that the senior unsecured notes will be reinstated with accrued interest payable upon the effective date of the plan, Standard & Poor's is unsure as to the timing and certainty of such an event. Total debt at Dec. 31, 2003, was about $110 million. Under the terms of the plan, Congoleum will contribute certain insurance rights and a note for about $2.7 million to a trust to be formed for the benefit of asbestos personal injury claimants. If the plan is confirmed, all current and future asbestos claims against Congoleum would be channeled to the trust and Congoleum would have no further liability for such claims. In January 2004, the bankruptcy court approved debtor-in-possession financing for Congoleum and authorized the company to pay suppliers in the ordinary course of business. Congoleum, based in Mercerville, N.J., experienced a rapid escalation in the number of asbestos-related claims filed against it during the past three years. Insurance carriers had covered a substantial majority of all defense and indemnity costs incurred until August 2002, when the company was notified that it had exhausted its primary coverage (the company had purchased primary and excess insurance policies providing in excess of $1 billion coverage for general and product liability claims). The excess insurance coverage is being litigated in a separate proceeding in New Jersey State Court. CROWN CASTLE: Will Hold Analyst Day Near Pittsburgh on April 15 --------------------------------------------------------------- Crown Castle International Corp. (NYSE: CCI) has scheduled an Analyst Day at its USA headquarters near Pittsburgh on Thursday, April 15, 2004, from 10:00 a.m. until 2:00 p.m. eastern time. Crown Castle will webcast the event live over the Internet at http://www.crowncastle.com/, where it will also be archived for replay. For more information, or if you would like to attend this event, contact Vonna Newsom at 713-570-3057 or email vonna.newsom@crowncastle.com Crown Castle International Corp. (S&P, B- Corporate Credit Rating, Stable Outlook) engineers, deploys, owns and operates technologically advanced shared wireless infrastructure, including extensive networks of towers and rooftop sites as well as analog and digital audio and television broadcast transmission systems. Crown Castle offers near-universal broadcast coverage in the United Kingdom and significant wireless communications coverage in the United States, United Kingdom and Australia. The company owns, operates and manages over 15,500 wireless communication sites internationally. For more information on Crown Castle visit: http://www.crowncastle.com/ Crown Castle's December 31, 2003 balance sheet shows a working capital deficit of $20,074,000 DEVELOPERS DIVERSIFIED: Fitch Rates $535 Mil. Preferreds at BB+ --------------------------------------------------------------- Following Developers Diversified Realty's announcement to acquire a $2.3 billion retail portfolio, Fitch has affirmed the ratings at 'BBB-' for $833 million outstanding senior unsecured notes due 2004 through 2018, and 'BB+' for $535 million outstanding preferred stock for the real estate investment trust. The Rating Outlook is Stable. DDR announced that it had entered into a binding agreement to acquire the retail portfolio of Benderson Development Company, Inc, a Buffalo, NY-based privately held firm. The transaction is expected to close in the second quarter of 2004. The retail portfolio is currently 94% leased and consists of 110 community center properties encompassing 18.8 million square feet, with a majority of the assets located within New York State (79 assets) and the balance (31 assets) located throughout Florida, Kentucky, Michigan, North Carolina, New Jersey, Ohio, and Pennsylvania. The sizeable acquisition is projected to increase DDR's overall total market capitalization by approximately 30%. The acquisition is consistent with DDR's ability to execute and integrate sizeable acquisitions as evidenced by its acquisition of JDN Realty Corporation (JDN) in 2003, and Fitch anticipates integration issues to be manageable. The transaction enhances DDR's nationwide geographic presence and increases its Northeast exposure with New York State becoming its largest geographic concentration. The transaction also provides synergistic opportunities within DDR's existing tenant base, and supports an already solid credit tenant roster including Walmart/Sam's Club, Home Depot, and Dick's Sporting Goods. Although we continue to be concerned with Tops Markets (Ahold USA), DDR's well diversified tenant base and strong tenant relations help to mitigate this exposure. DDR demonstrates access to multiple forms of capital and Fitch anticipates DDR will utilize all forms including secured and unsecured financing, assets sales, equity, and expanded use of its joint venture (JV) relationships to finance the transaction. Fitch acknowledges that the use of JVs is consistent with DDR's investment strategy and the firm does have a successful history of operating joint ventures in terms of structuring and maintaining strong partner relations. Although near-term leverage levels may increase to finance the Benderson transaction, Fitch believes that DDR has the financing capacity at the 'BBB-' rating level and, consistent with its prior acquisition of JDN, anticipates that DDR will return to pre- transaction leverage levels. Fitch will continue to monitor portfolio integration and the execution risk related to the acquisition financing. The ratings continue to be supported by DDR's high quality asset base, experienced and capable management team, strong tenant relationships, and the firm's ability to maintain solid property fundamentals in terms of occupancy (currently over 95%) and rental growth in the midst of an uncertain economy. Nevertheless, Fitch's Outlook for retail remains Stable. DDR exhibits strong defensive portfolio features highlighted by a well diversified tenant base (inclusive of the Benderson assets) with its three largest tenants being Walmart (rated AA) representing 4.9% of total base revenues, Tops (Ahold USA) at 4.8%, and TJ Maxx/Marshall's at 2.3%. Other defensive features include an average lease term of seven years, representing one of the better averages among its peer group, which helps minimize its re-leasing exposure. Fitch recognizes DDR's strategic advantage of owning dominant shopping centers (over 250,000 sf) anchored with multiple nationally recognized tenants (such as Walmart, Kohl's, Target, Bed, Bath & Beyond, and TJ Maxx). The centers are typically located within highly trafficked areas with solid demographics. In addition, DDR's properties usually have excess land located within or adjacent to its assets that provide configuration flexibility, which combined with DDR's development and re-development expertise, enhances the asset's competitive positioning through expansion and re-development opportunities and out-parcel sales. Credit concerns include the near-term increase in debt to facilitate the acquisition, from an already heightened leverage ratio of 49% of un-depreciated book and debt plus preferred over un-depreciated book at 55% as of fourth-quarter 2003 (4Q'03). DDR has stated its intention to execute the financings on a leverage neutral basis and to return to pre-transaction levels. As of 4Q'03, interest and fixed charge coverage were 2.9 times (x) and 2.3x, respectively (inclusive of capitalized interest, amortization and capital expenditures), and these ratios may be pressured during the interim acquisition financing. Developers Diversified Realty Corporation (NYSE: DDR) exhibits a nationwide geographic presence and with the Benderson acquisition, DDR will own and manage over 474 operating and development retail properties throughout 44 states encompassing nearly 101.5 million square feet. Headquartered in Beachwood, Ohio, DDR is one of the largest retail REITs with a total market capitalization estimated at approximately $6.1 billion, as of 1Q'04. DIAMOND ROAD: Section 341(a) Meeting Slated for April 27, 2004 -------------------------------------------------------------- The United States Trustee will convene a meeting of Diamond Road Company LLC's creditors at 4:00 p.m., on April 27, 2004, in Room 2610, 725 South Figueroa Street, Los Angeles, California 90017. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Palos Verdes Esta, California, Diamond Road Company LLC, filed for chapter 11 protection on March 19, 2004 (Bankr. C.D. Calif. Case No. 04-16360). Mark Bradshaw, Esq., at Marshack Schulman Hodges & Bastian represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed both estimated debts and assets of over $10 million. DII IND.: Court Approves Professor Green as Futures Representative ------------------------------------------------------------------ The DII Industries, LLC and Kellogg, Brown & Root Debtors sought and obtained final Court approval to appoint Professor Eric Green as legal representative for the purpose of protecting and representing the rights of persons who might subsequently assert demands related to asbestos or silica exposure. Prof. Green is a nationally recognized mediator, arbitrator and neutral, having co-founded two leading alternative dispute resolution firms, Endispute and Resolutions, LLC, and having practiced and written about the field of alternative dispute resolution for 20 years. Prof. Green is a Professor of Law at Boston University School of Law where he teaches courses in evidence, alternative dispute resolution, and mass torts. His work in asbestos and other toxic tort litigation has been extensive. He currently serves as the court-appointed legal representative for future asbestos personal-injury tort claimants in the Babcock & Wilcox Company, et al. cases in the Eastern District of Louisiana and the Federal-Mogul Products, Inc., et al. cases and the Fuller-Austin Insulation Co. bankruptcy case in the District of Delaware. Prof. Green currently serves as the legal representative to the Fuller Austin Settlement Trust on behalf of future claimants. Prof. Green has also served as the court-appointed special master in the Ohio Asbestos Litigation (N.D. Ohio), the Connecticut Asbestos Litigation (D. Ct.), and the Massachusetts Asbestos Litigation (D. Mass.; Mass. Sup. Ct.). He mediated and arbitrated numerous cases involving asbestos personal-injury claims, asbestos property damage claims, asbestos insurance coverage claims, asbestos reinsurance and asbestos indemnification claims. He served as a special consultant to the Manville Personal Injury Settlement Trust and as guardian ad litem for the future claimants in In re Asbestos Litigation, 90 F.3d 963 (5th Cir. 1996) (Ahearn v. Fibreboard), 162 F.R.D. 505 (E.D. Tex. 1995)). As special master and guardian ad litem, Prof. Green assisted in the settlement of thousands of personal- injury asbestos claims and reviewed these settlements for their fairness, reasonableness and adequacy. The Debtors appointed Prof. Green pursuant to an engagement agreement dated October 22, 2002. Following his appointment, Prof. Green and his counsel, Young Conaway Stargatt & Taylor, LLP, were actively involved in conducting due diligence with respect to the prepetition settlement agreements and the Plan. Prof. Green also retained the investment banking firm, Dresdner Kleinwort Wasserstein, LLC, to serve as his financial advisor with respect to the Debtors' financial affairs. In addition, Prof. Green engaged Analysis Research Planning Corporation as an econometric expert to assist him in estimating the number of likely future asbestos and silica-related claims, J.W. Wilson & Associates, Inc. to provide expert economic, accounting and financial analysis, Schiff Hardin & Waite to provide general legal advice, and Doug C. Allen to provide technical services in the areas of insurance coverage and construction. Prof. Green spent significant time and resources analyzing the Debtors' assets and reviewing the status of the pending asbestos and silica claims and insurance coverage issues. Prof. Green actively negotiated the Plan Documents, including the terms of the Asbestos PI Trust and Silica PI Trust created under the Plan. Prof. Green, his counsel and other professionals undertook their responsibilities diligently and negotiated with the various parties in good faith. In connection with his prepetition services and under the terms of the Engagement Agreement, Prof. Green received a $9,000 per diem fee, paid by the Debtors, plus reimbursement of customary out-of-pocket expenses. The Debtors will compensate Prof. Green for his postpetition services at $600 per hour, plus reimbursement of customary out- of-pocket expenses. The Debtors also obtained liability insurance coverage for Prof. Green through Illinois Union Insurance Co., with a $47,700 annual premium. Prof. Green is likely to retain certain professionals as he deems appropriate to assist him in the performance of his duties. The Debtors will reimburse Prof. Green for the reasonable fees and expenses incurred by these professionals for services within the scope of his employment as allowed by the Court. The Debtors paid the fees and expenses of Prof. Green and these professionals for their work before the Petition Date. The Debtors will also indemnify and defend and hold Prof. Green harmless, as well as his partners, associates, principals, employees and professionals, from and against any losses, claims, damages, or liabilities as a result of or in connection with Prof. Green's services. 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. 9; Bankruptcy Creditors' Service, Inc., 215/945-7000) DOLPHINITE INC: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Dolphinite, Inc. 22 Avalon Drive Peabody, Massachusetts 01960 Bankruptcy Case No.: 04-12657 Type of Business: The Debtor sells and distributes marine, automotive and boat care products. See http://www.dolphinite.com/ Chapter 11 Petition Date: April 1, 2004 Court: District of Massachusetts (Boston) Judge: Joan N. Feeney Debtor's Counsel: John F. Cullen, Esq. 42 Eighth Street, Suite 1000 Charlestown Navy Yard Boston, MA 02129 Tel: 617-242-4860 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20-largest creditors. DYNABAZAAR: 2003 Audit Opinion Cites Going Concern Qualification ---------------------------------------------------------------- On March 30, 2004, Dynabazaar, Inc. (Nasdaq: FAIM) filed its Annual Report on Form 10-K for the year ended December 31, 2003 with the Securities and Exchange Commission. Included in the Form 10-K are financial statements audited by Rothstein, Kass & Company, P. C. independent auditors, as of and for the year December 31, 2003. Rothstein, Kass has issued an opinion with respect to the financial statements that includes a qualification as to the company's ability to continue as a going concern. The audit opinion states as follows: "For the year ended December 31, 2003, the company incurred a net loss of approximately $4.6 million and negative cash flows from operations of approximately $7.1 million. Subsequent to the asset purchase agreement in September 2003, the Company has not yet settled on an operating plan. These factors, amongst others, indicate that the Company may be unable to continue operations as a going concern. No adjustment has been made in the accompanying financial statements to the amounts and classification of assets and liabilities which could result should the Company be unable to continue as a going concern." Management commented that: "After the payment of $1.2 million to settle our obligations under our principal lease, the Company will have approximately $9 million in cash. Expenses are now less than $1 million per year. Management is currently pursuing a strategy that has, as its prime focus, the acquisition of an operating business." EDISON INT'L: Fitch Comments on $1.78B Term Loan Restructuring -------------------------------------------------------------- Edison International (EIX) is seeking to arrange approximately $1.7 billion of term loans and private placement debt to repay a $693 million term loan scheduled to mature in December 2004 at Edison Mission Midwest Holdings, Co., make termination payments totaling $970 million under the Collins Station lease, of which $774 million will be used to repay lease debt that also matures in December 2004 and to provide $200 million of working capital. The $1.7 billion of new debt would be secured with either first or second priority liens on all Midwest Generation, LLC-owned, coal- fired power plants. This is one piece of a broader restructuring plan designed to address Mission Energy Holding Company Group's liquidity issues in 2004 and reduce debt. Further information regarding EIX's ongoing restructuring are included in the press lease issued by Fitch on April 2, 2004 and is reproduced below. Fitch has raised the credit ratings of Edison International (EIX) and its wholly-owned utility operating subsidiary, Southern California Edison (SCE) as follows: Edison International -- Senior unsecured to 'BB' from 'B'; -- Trust preferred securities 'B+' from 'CCC'. Southern California Edison -- Senior secured debt to 'BBB+' from 'BBB-'; -- Senior unsecured debt to 'BBB' from 'BB'; -- Preferred securities to 'BBB-' from 'B+'. The notes of Edison Funding Co. (EF) have also been raised to 'BB' from 'B'. The Rating Outlook for all EIX, SCE and EF securities is Stable. The credit upgrades reflect sharply improved fundamentals at Southern California Edison and enhanced EIX parent-only holding company liquidity following a $1.17 billion dividend payment in 2003 from its utility and finance subsidiaries. Also, EIX's recently announced financial restructuring plan is consistent with past management statements that Mission Energy Holding Company (MEHC) group will have to work through its financial and operating challenges without further direct financial support from EIX. SCE's rapid financial recovery from the insolvency caused by the energy crisis of 2000-2001 was facilitated by a settlement agreement with the California Public Utilities Commission (CPUC) authorizing recovery of $3.6 billion of deferred power costs. The successful execution of the agreement and the support of the CPUC through unsuccessful court challenges to the settlement, along with the commission's recent settlement with Pacific Gas & Electric, underscore the improved regulatory/legislative environment in California. SCE's current and forecasted credit ratios are consistent with higher credit ratings, but its current ratings are constrained by weak parent/affiliate fundamentals. EF and Edison Capital are subsidiaries of EIX and are not regulated by the CPUC. Edison Capital is the sole shareholder in EF. EF and Edison Capital originate and fund financially oriented, and often tax-advantaged, investments. Together, they have investments worldwide in energy and infrastructure projects, including power generation, electric transmission and distribution, transportation, and telecommunications as well as investments in affordable housing projects located throughout the United States. At Dec. 31, 2003, Edison Capital's total investments were $3.4 billion. Edison Capital receives cash for federal and state tax benefits related to its investments utilized on EIX's tax return and as such its ratings are directly linked with the parent's. Edison Capital's rated debt was issued by EF. Although the EIX rating of 'BB' reflects exposure to ongoing financial stress at MEHC group (EIX's unregulated power generation subsidiary), the ongoing financial and fundamental operating problems at MEHC group are already fully reflected in EIX's credit rating. This view is supported by: 1) the non recourse status of MEHC group debt to EIX; 2) regulatory and corporate ring-fence provisions; 3) the absence of new investment in EIX's recently announced MEHC restructuring plan; and, 4) management focus on the core electric utility and its financial services business, Edison Capital (EC). Importantly, there are material inter-company guarantees or cross defaults among affiliates within the MEHC group, but none between EIX, SCE, and/or EC. Another exposure weighing upon the current ratings is EIX's potential tax liability for prior interest deductions relating to EC's leveraged lease portfolio. The IRS is reportedly reviewing prior years' EIX group tax returns, which may or may not lead to a significant tax assessment at the EIX level. The announcement of management's proposed financial restructuring plan for MEHC group is a constructive development that seeks to address the subsidiary's liquidity issues in 2004 and reduce debt. In December 2003, MEHC subsidiary Mission Energy Holdings International (MEHI) closed on a secured $800 million three-year loan as a bridge-to-asset-sales that is a central component of the MEHC group's restructuring plan. The credit facility is secured by a 65% equity interest in MEHI's assets, a pledge of two inter- company notes totaling $286 million (issued by MEHI to MEC Holdings and EME UK International, LLC), as well as a $499 million inter-company note (from EME Homer City Generation L.P. to Edison Mission Finance Co.) together with guarantees from certain MEHC subsidiaries. Proceeds from the loan were cross streamed to repay $781 million of debt issued by fellow MEHC subsidiary Edison Mission Midwest Holdings (EMMH) which matured in December 2003, allowing EMMH to avoid default, and to repay an MEHI coal and cap-ex facility guaranteed by Edison Mission Energy. In addition, cash on hand from asset sales and other sources were used to inject $550 million of equity into EMMH. Prospective elements of the restructuring plan that management hopes to complete this year are: 1) the potential sale of its international assets; and, 2) debt issuance to refinance maturities later this year at EMMH. Under management's restructuring plan, if successful, MEHC would emerge a much smaller company operating exclusively in the U.S. However, the financial restructuring is subject to substantial execution risk and the recurrence of severe liquidity/financial pressure and, ultimately, MEHC group insolvency, cannot be ruled out, at this juncture. Any meaningful incremental EIX investment to support MEHC's recovery would be a significant negative credit event in Fitch's view that would almost certainly result in a credit downgrade. Fitch's ratings of SCE already incorporate a reasonable worst case scenario in the outcome of its pending general rate case. Furthermore, SCE's ratings are currently constrained. EL PASO: Schatz & Nobel Commences Retirement Plan Investigation --------------------------------------------------------------- The law firm of Schatz & Nobel, P.C., which has significant experience representing employees who have lost substantial amounts in their 401(k) plans from purchases of their company's stock, is investigating claims on behalf of all present and former employees of the El Paso Corporation (NYSE: EP) who purchased stock through the El Paso Retirement Savings Plan from February 22, 2000 through February 17, 2004 inclusive. The investigation involves whether El Paso shares were purchased in the 401(k) plan when the price of the stock was artificially inflated as a result of misleading statements concerning El Paso's natural gas and oil reserves. For more information, contact Schatz & Nobel toll-free at (800) 797-5499, or by e-mail at firm@snlaw.net. Schatz & Nobel's Web site is at http://www.snlaw.net/ El Paso Corporation's purpose is to provide natural gas and related energy products in a safe, efficient, dependable manner. the company owns North America's largest natural gas pipeline system and one of North America's largest independent natural gas producers. For more information, visit http://www.elpaso.com/ * * * As previously reported, Standard & Poor's Ratings Services lowered its corporate credit rating on natural gas pipeline and production company El Paso Corp. to 'B-' from 'B' to reflect a larger-than- expected write-down of the company's oil and natural gas reserves. The outlook remains negative. ENRON CORP: Asks Court to Disallow British Columbia Power Claims ---------------------------------------------------------------- On February 20, 2002, Powerex Corporation, formerly known as British Columbia Power Exchange Corporation, filed Claim Nos. 1050 and 1051 against Enron Corporation and Claim No. 1052 against Debtor Enron Power Marketing, Inc. Claim No. 1050 and 1051 each asserts a $100,000,000 unsecured claim "plus any other amounts payable under a Guarantee with Enron and a Power Purchase and Sale Agreement with EPMI, dated November 20, 1997. Claim No. 1051 appears to be a duplicate of Claim No. 1050 and has been included in a previous omnibus objection. Powerex alleges that Claim Nos. 1050 and 1051 were based on the Guarantee. Claim No. 1052 asserts a $104,116,273 secured claim "plus any other amount payable under the Power Purchase and Sale Agreement" allegedly secured under Section 506(a) of the Bankruptcy Code by an alleged right of set-off amounting to $1,514,552 owed to EPMI from Powerex under the Western Systems Power Pool Agreement. After reviewing the Claims, the Debtors object to the assertion that Claim No. 1052 is a secured claim, secured by a right of set-off for amounts owed to EPMI by Powerex under the WSPP Agreement. At most, Claim No. 1052 is a partially secured claim, secured only up to the amount withheld by Powerex and owed to EPMI pursuant to the WSPP Agreement. The Debtors also dispute Powerex's calculations of these amounts. According to Ms. Gray, the Debtors' books and records indicate that the owed amount is no more than $15,000,000 for Claim No. 1052. Furthermore, because Claim No. 1052 is grossly overstated, Claim No. 1050 is overstated as well. Thus, the Debtors ask the Court to disallow and expunge Claim Nos. 1050 and 1052, or at a minimum, reduce the Claims prior to any allowance. (Enron Bankruptcy News, Issue No. 103; Bankruptcy Creditors' Service, Inc., 215/945-7000) ENRON CORP: Objects to Hundreds of Employee Claims -------------------------------------------------- Of the approximately 7,000 proofs of claim filed by current and former Enron Corporation employees, the Debtors determine that hundreds of Claims are objectionable because: (a) the Claimant signed a release or waiver pursuant to the Key Employee Plan, the Severance Settlement or individual negotiations; (b) their records show no amount due to the Claimant for bonuses, benefits, expenses, vacation time, severance time and holiday time; (c) the Claimant was not an employee of any Debtor; (d) the Claimant failed to provide sufficient proof to support the Claim and the Debtors' records indicate that no amount is due; (e) the Claimant failed to state an amount on the proof of claim and the Debtors' records indicate that no amount is due; and (f) the Claim was previously resolved by a separate Court order. Accordingly, the Debtors ask the Court to disallow and expunge the objected portion of: A. 223 Released Claims totaling $19,885,256, including: Claimant Claim No. Amount -------- --------- ------ Scott E. Affelt 1501702 $1,016,063 Mary N. Browning 2034605 1,174,434 Eric Gadd 1722402 4,858,231 Michael S. McConnell 1803102 1,300,000 B. 854 Compensation and Expense Claims totaling $23,834,844, among which are: Claimant Claim No. Amount -------- --------- ------ Christian V. Bailey 1492901 $590,000 Jay D. Berriman 500101 694,259 Mark V. Allen 1613400 300,000 Phillip Alan Buchanan 1141400 302,537 Avis J. Burrow 1163800 327,781 Robert L Lienemann 839400 505,518 Paul H. Racicot, Jr. 1514990 935,000 Dana A. Saucier, Jr. 1827102 1,200,000 James Walzel 646100 633,413 C. 37 Non-Debtor Employee Claims totaling $2,572,025, including: Claimant Claim No. Amount -------- --------- ------ Thomas P. Johnson 437802 $447,618 Robert Manasse 2021002 308,889 John Paskin 1155003 340,000 D. 51 Unsubstantiated Claims aggregating $10,924,980, among the largest of which are: Claimant Claim No. Amount -------- --------- ------ David Botchlett 158600 $7,376,000 Diomedes Christodqulou 2373500 2,100,000 Juanita F. West 436700 232,200 E. Seven No Amount Claims: Claimant Claim No. Amount -------- --------- ------ John K. Adamski 741300 $0 Charles E. Allcock 2331700 0 Dennis Brown 1663400 0 Jeff Forbis 2337400 0 Willie L. Harrell 1699000 0 Rebecca L. Johnson 1675500 0 Ana M. Shafer 1611600 0 F. Four Settled Claims: Claimant Claim No. Amount -------- --------- ------ OM P. Bhatia 1591204 $92,399 Xochitl Figueroa 700902 4,342 Ross P. Koller 411200 65,000 Douglas Mohr 1628203 59,180 (Enron Bankruptcy News, Issue No. 103; Bankruptcy Creditors' Service, Inc., 215/945-7000) ENRON: Court Authorizes Final Collateral Agreement with Sierra -------------------------------------------------------------- Sierra Pacific Resources (NYSE: SRP) announced that the Bankruptcy Court of the Southern District of New York authorized an agreement that has been reached between Sierra Pacific's two electric utilities and Enron regarding additional cash collateral to be placed into escrow pending an appeal of the court's previous decision involving the companies' dispute over power contracts. In a hearing before Judge Arthur Gonzalez Monday, an agreement was reached under which an additional $25 million will be placed into escrow and Enron will request no additional cash until the current appeal process involving the dispute over $336 million in terminated power contracts is resolved. Enron and Sierra Pacific's electric utilities, Nevada Power Company and Sierra Pacific Power Company, have agreed to seek expedited treatment of the appeal that is currently before the U.S. District Court for the Southern District of New York. Judge Gonzalez previously had ordered the Nevada companies to place $35 million in cash into escrow with General and Refunding bonds securing virtually all of the remaining amounts of the judgment. The cash amounts placed into escrow lower the principal amount of the General and Refunding Mortgage Bonds held in escrow by a like amount. Headquartered in Nevada, Sierra Pacific Resources is a holding company whose principal subsidiaries are Nevada Power Company, the electric utility for most of southern Nevada, and Sierra Pacific Power Company, the electric utility for most of northern Nevada and the Lake Tahoe area of California. Sierra Pacific Power Company also distributes natural gas in the Reno-Sparks area of northern Nevada. Other subsidiaries include the Tuscarora Gas Pipeline Company, which owns a 50 percent interest in an interstate natural gas transmission partnership. ENTRADA NETWORKS: Q4 & FY Losses Trigger Bank Covenant Default -------------------------------------------------------------- Entrada Networks, Inc. (OTCBB:ESAN) announced results for the fourth quarter and fiscal year ended January 31, 2004. Entrada reported revenues for the fourth quarter ended January 31, 2004 of $0.5 million, compared with the $0.9 million reported for the third quarter of fiscal year 2004 and $2.9 million for the fourth quarter of the last fiscal year 2003. The Company reported a net loss of $1.4 million, or $.10 per share, compared with a net profit of $0.4 million, or $0.03 per share, in the comparable quarter of the last fiscal year 2003. We envisage the decline in the prospects for the wide area networking products, as experienced in the last quarter, to continue. This has prompted us to reexamine inventory levels of our Rixon Networks subsidiary and take additional inventory reserves of $1.1 million in the fourth quarter of this fiscal year 2004. This charge has a significant impact on our product costs and our gross margins. For the year, the Company reported revenues of $6.2 million, or a revenue decline of 54.4% when compared with total revenues of $13.6 million for the fiscal year 2003. The Company's income from continuing operations and the net income were same at a loss of $2 million or $0.15 per share, compared with a net income from continuing operations and the net income of $1.7 million, or a profit of $0.14 per share in the prior fiscal year. As noted above, the product costs and our gross margins include an additional $1.1 million in inventory reserves added in the fourth quarter of fiscal year 2004. Due to the increased period and fiscal loss, we are no longer in compliance with our bank minimum tangible net worth covenant of $3.75 million. We are working to resolve this and have minimal borrowings under our line of credit, all of which are classified as current liabilities. Letter To The Shareholders from Dr. Kanwar J.S. Chadha, Chairman: Dear Entrada Shareholders, Fiscal year 2004, ended January 31, 2004, was marked by challenges. We encountered a significant decline in business volume starting in the second quarter and whose full impact was evident in the third and fourth quarters. This decline in revenue was the direct result of Cisco's decision to stop purchasing from our Rixon Networks subsidiary certain adapter cards, as previously explained in our filings. We mitigated the impact on our income and cash flow to the best of our capabilities by downsizing the workforce and scrutinizing every expense item in order to reduce or eliminate it. And, in order to restore some of the lost business volume, we have established relationships with new sales channels and personnel to promote our legacy as well as our new products. Today, the focal point of our development, marketing and sales endeavors is our Torrey Pines subsidiary. We have received certifications for our Silverline-CWDM product line, and are in the process of field trials with a number of potential customers. We have received good evaluations especially in enterprise broadband networks and video-on-demand applications. Designed to interconnect geographically separate data centers or extend the range of storage area networks, the Silverline-CWDM is our first fully optical, Linux based, 8-channel/4-port coarse wave division multiplexing product line that is based on our patent pending technology. Through our Rixon Networks subsidiary, we continue to manufacture and sell a line of fast and gigabit Ethernet adapter cards, as well as routers, service channel and data channel units, to large networking OEMs. And, through our Sync Research subsidiary, we continue to manufacture, sell and service a line of frame relay access devices and routers to financial institutions. You can learn more about our products and services by visiting us at http://www.entradanet.com/ Fiscal year 2004, if challenging, was also a wake-up call to redefine Entrada Networks in order to build sustainable value for our shareholders. Through our Torrey Pines subsidiary, we are embarked on a major effort to establish and build a storage centric business specializing in storage, security and information infrastructures and enterprise storage solutions. We are engaged in establishing this business organically, as well as talking to select acquisition candidates. In order to support these business development activities, we have engaged SBI USA to provide advisory services with respect to capital raising, mergers and acquisitions, and communications with the investment community. As previously announced, we have raised $500,000 of debt financing through them in February 2004 and are in the process of raising additional equity financing. As our efforts are realized, we shall be raising additional funds to support the new ventures through the course of the year. Thank you for your continued support. Sincerely, Kanwar J.S. Chadha, Ph. D. Chairman, President & CEO FINANCIAL DETAILS Revenues Total revenues for FY2004 were $6.2 million. Product revenues were $5.2 million with $1.0 million revenues from services and support. Total revenues for the fourth quarter FY2004 were $0.5 million. Product revenues, which include frame relay and fast/gigabit Ethernet and other adapter cards and routers, were $0.3 million. Services revenue was $0.2 million. The Company currently has Fortune 100 network infrastructure companies using its Ethernet products in their carrier class servers and counts many of financial institutions as its service customers for its frame relay networking products. Margins Cost of product revenues consists principally of the cost of the components and subcontract assembly, in addition to in-house system integration, quality control, final testing and configuration. Cost of services revenue consists principally of contracted support personnel. Overall gross margins for the fiscal year decreased to $1.4 million or 21.9% of revenues in FY2004. For the fourth quarter FY2004 the gross margins were $(1.0) million or (185.8)% of revenues. As indicated, for FY2004, product costs and our gross margins include an additional $1.1 million in inventory reserves. Engineering, R&D R&D consists primarily of compensation related costs for engineering personnel, facility costs, and materials used in the design, development, and support of our technologies. R&D expenses were $1.2 million, or 18.5% of revenues, for FY2004 and $0.2 million or 39.5% of revenues for the fourth quarter FY2004. Selling & Marketing Selling expenses consist primarily of employee compensation and related costs, commissions, and travel costs. Selling expenses were $0.5 million or 7.3% of revenues in FY2004 and $0.1 million or 12.5% of revenues for the fourth quarter FY2004. About Entrada Networks Entrada Networks -- http://www.entradanetworks.com/-- currently has three wholly owned subsidiaries that focus on developing and marketing products in the storage networking and network connectivity industries. Rixon Networks manufactures and sells a line of fast and gigabit Ethernet adapter cards that are purchased by large networking original equipment manufacturers as original equipment for servers, and other computer and telecommunications products. Rixon's focus is on two- and four-port cards and drivers for highly specialized applications. Sync Research manufactures and services frame relay products for some of the major financial institutions in the U.S. and abroad. The Torrey Pines subsidiary specializes in the design & development of SAN transport switching products. Entrada Networks is headquartered in Irvine, CA. EXIDE TECH: Confirmation Objections Must Be Filed By April 9 ------------------------------------------------------------ On March 17, 2004, the U.S. Bankruptcy Court for the District of Delaware approved the Disclosure Statement prepared by the Exide Technologies Debtors and the Official Committee of Unsecured Creditors appointed in their Chapter 11 cases. The Court found that the Disclosure Statement contained the right kind and amount of information to enable creditors to make informed decisions whether to accept or reject the Joint Plan. April 9, 2004, at 5:00 p.m. is the deadline for filing any objections to confirmation of the Joint Plan. Objections must be filed with the Clerk of the Bankruptcy Court and served on the Counsel for the Debtors, Counsel for the Creditors Committee, Counsel for the Prepetition Lenders, Counsel for the Equity Committee, Counsel for Smith Management, LLC, and the Office of the United States Trustee. The Court also fixed April 9, 2004, at 5:00 p.m. as the deadline for creditors to seek temporary allowance of a claim for voting purposes. 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. FARMLAND INDUSTRIES: Inks Pact Selling Agriliance Stake to CHS -------------------------------------------------------------- CHS Inc. (Nasdaq: CHSCP) has signed an agreement to purchase all of Farmland Industries ownership share of Agriliance, LLC, a leading supplier of agronomic inputs in North America. The sale is contingent upon bankruptcy court approval in the Farmland bankruptcy case. A motion to approve the sale was filed with the bankruptcy court on March 31, 2004. A bankruptcy court hearing on the matter is scheduled for April 20, 2004. The CHS Board of Directors approved the proposed purchase March 11. The proposed purchase consists of Farmland's entire interest in Agriliance, LLC. Upon completion of this transaction, CHS would own 50 percent of the economic and governance interests of Agriliance, LLC, with the remaining 50 percent owned by Land O'Lakes, Inc. of Arden Hills, Minn. CHS purchased Wilbur Ellis Company's interest in Agriliance in May 2003. "We look forward to continuing to meet the agronomic inputs needs of producers across the U.S. and Canada through Agriliance," said John D. Johnson, CHS president and chief executive officer. "Upon completion of this transaction, we expect a seamless transition for Agriliance customers and employees as we move toward a successful spring planting season." Agriliance -- http://www.agriliance.com/-- is a major supplier of crop production inputs and provider of industry-leading agronomic training for dealers across North America. A leading crop nutrients distributor, Agriliance also manufactures the AgriSolutions(TM) brand of crop protection products and is a contract formulator for major agricultural chemical companies. Agriliance was created in 2000. In 2003, it reported sales of $3.5 billion, including $1.3 billion in crop protection products, 10 million tons of crop nutrients, $809 million in retail sales and $54 million in agronomy equipment sales. CHS -- http://www.chsinc.com/-- is a diversified energy, grains and foods company committed to providing the essential resources that enrich lives. A Fortune 500 company, CHS is owned by farmers, ranchers and cooperatives from the Great Lakes to the Pacific Northwest and from the Canadian border to Texas, along with thousands of preferred stockholders. CHS provides products and services ranging from grain marketing to food processing to meet the needs of customers around the world. It also operates petroleum refineries/pipelines and, through a broad range of working partnerships, markets and distributes Cenex(R) brand energy products, along with agronomic inputs and feed to rural America. CHS is listed on the NASDAQ at CHSCP. FEDERAL-MOGUL: Agrees to Settle UK Insurance Coverage Dispute ------------------------------------------------------------- Federal-Mogul Corporation and its debtor-affiliates ask the Court to approve certain settlement agreements resolving an asbestos insurance coverage litigation in England among non-Debtor subsidiary Curzon Insurance Limited, Curzon's insurance brokers, and a reinsurance firm. In 1996, T&N Limited began its efforts to insure its asbestos liability by enlisting the services of a portion of the Sedgwick family of brokers to procure insurance for its asbestos liability. The Sedgwick insurance brokers located three reinsurance firms that were capable of insuring T&N's asbestos liability: -- Muenchener Rueckversicherungs-Gesellschaft; -- Centre Reinsurance International Company; and -- the Swiss Re Group through its subsidiary European International Reinsurance Company. Because not all of the Reinsurers were able to write direct insurance policies, as part of their transaction, T&N placed an insurance policy with Curzon wherein the Reinsurers agreed to reinsure a third of the T&N/Curzon Policy. The Reinsurance Policies and the T&N/Curzon Policy constitute the Hercules Policy. The Hercules Policy provided the T&N group with GBP500,000,000 of insurance coverage for asbestos liability above a GBP690,000,000 threshold for all personal injury asbestos claims arising from exposure to asbestos or asbestos products occurring before July 1, 1996, but excluding claims that had already been brought at that time. Each of the Reinsurers reinsured a third of Curzon's GBP500,000,000 limit of liability, or GBP166,000,000 each. The parties finalized the terms of the Hercules Policy in December 1996. The process for estimating T&N's potential asbestos liability and fixing the premium the Reinsurers would demand relating to the Hercules Policy was complex. Therefore, the Reinsurers' analysis relied on information supplied by T&N and its brokers, as well as information available to the Reinsurers from other sources. Before the Petition Date, the Reinsurers asserted that T&N failed to disclose information that might have changed their assessment of T&N's potential asbestos liabilities, or caused them to adjust their premium demands. EIRC commenced an action before the English High Court on November 22, 2001 against Curzon seeking a declaration that it was entitled to avoid its obligations under the Reinsurance Policies. EIRC alleged that Curzon failed to disclose material information that might have caused EIRC to decline to enter into the Reinsurance Policies or demand a greater premium. As a consequence, EIRC sought recission of its reinsurance obligation. The other two Reinsurers did not join the suit initiated by EIRC, having previously withdrawn their reservation of rights. In its defense, Curzon argued that EIRC was aware of the information contrary to its allegations, and even if EIRC did not know, the information would not have affected its risk assessments. In December 2003, Curzon joined a portion of the Sedgwick family of insurance brokers to the action and alleged that, if EIRC was able to avoid its obligation under the Reinsurance Policies, the Brokers were negligent in failing to insure that EIRC had access to information so as to preclude the possibility of litigation over the adequacy of T&N's disclosures. The Brokers are: -- Sedgwick Limited; -- Sedgwick OS Limited; -- Sedgwick UK Risk Services Limited; and -- Marsh USA, Inc. In June 2003, the Brokers attempted to dismiss some of Curzon's claims against three of the Brokers on the grounds that only Sedgwick Limited, the firm T&N retained to provide brokerage services, owed a duty to Curzon, and that Sedgwick Limited's potential liability was limited to GBP1,400,000 by the terms of Sedgwick Limited's retainer. The English Court rejected the Brokers' argument and ordered the claims against all four of the Brokers be determined at trial, which had then been set for October 2003. Although Curzon did not assert any claims against T&N in the pending litigation, Curzon specifically reserved its rights to contend that a successful avoidance claim by EIRC could permit Curzon to reduce or eliminate its obligations to T&N. Curzon's claim against T&N would presumably be based on Curzon's contention that it agreed to assume liability under the Hercules Policy only if it was fully reinsured. Overall Settlement Agreement Although the parties had engaged in settlement discussions, no settlement had been reached and trial commenced in October 2003. After Curzon and EIRC presented their factual testimony in the trial and the Brokers presented a portion of their factual testimony, and as a result of extended settlement negotiations, the parties agreed to a settlement in principle and signed agreements in January 2004 to document an overall settlement agreement. The particulars and documentation of the Overall Settlement Agreement are complex. The most important terms are: (a) EIRC affirms its liability under the Hercules Policy subject to a percentage reduction in its reinsurance obligation; (b) EIRC's reinsurance liability under the Reinsurance Policies is reduced to 65.5% of the 1/3 share it originally contracted to assume. EIRC's limits of liability is reduced from GBP166,000,000 to GBP109,000,000; and (c) the Brokers agree to assume an obligation equivalent to 17.25% of the original indemnity obligation EIRC would have had but for the settlement. T&N agrees to reimburse Curzon for the payments it makes under the Hercules Policy for the resulting portion of Curzon's liability that is not reinsured, including indemnity obligations of up to GBP28,750,000. Otherwise, each party's obligation remains largely unchanged. James E. O'Neill, Esq., at Pachulski, Stang, Ziehl, Young & Jones, P.C., in Wilmington, Delaware, relates that the Overall Settlement is documented in three agreements. EIRC, Curzon, and the Brokers entered into a main settlement agreement pursuant to which EIRC reduces its liability to Curzon. Thus, EIRC's maximum liability under the Reinsurance Policies will be reduced to 65.5% of its original amount, a reduction of EIRC's indemnity limits to GBP109,000,000, rather than the original GBP166,000,000. No Debtor is party to this agreement. Collateral Settlement Agreement The first of the two settlement agreements that involve any of the Debtors is the "Collateral Settlement Agreement" between Curzon, T&N, Federal-Mogul Corporation and the Brokers. Under the Collateral Settlement Agreement, the Brokers will assume, jointly and severally, obligations equivalent to 17.25% of the original amount of EIRC's indemnity liability under the Hercules Policy. The Brokers assume an obligation to Curzon equal to half of the amount by which EIRC reduced its indemnity liability to Curzon. The Brokers' maximum liability pursuant to the Collateral Settlement Agreement is GBP28,750,000. Curzon and T&N agree to provide the Brokers with an indemnity, capped at GBP28,750,000, with respect to any additional liability arising out of the allegations against the Brokers made in the litigation. In addition, T&N and Federal Mogul Corp. will release the Brokers from all claims in respect of the Hercules Policy. T&N and Federal-Mogul Corp. also agree that their obligations under the Collateral Settlement Agreement will not be varied or modified by the terms of any plan of reorganization. Curzon/T&N Settlement Agreement Curzon, T&N and Federal-Mogul Corp. also entered into another agreement, which aims to keep Curzon's position in the Overall Settlement revenue neutral. Pursuant to the Curzon/T&N Settlement Agreement, T&N agree to reimburse Curzon for payments made by Curzon that are not reinsured as a result of the main settlement agreement with EIRC and the Collateral Settlement Agreement. Although it did not assert any claims against T&N, Curzon reserves its rights against T&N to reduce its obligations if EIRC were successful in the litigation to the extent that it assumed liability under the Hercules Policy on the condition that its obligations will be fully reinsured. Therefore, as a means of effectuating the T&N repayment of the amounts not reinsured by EIRC, T&N and Curzon agree to set off their mutual obligations. Settlements Must Be Approved Although only the two Settlement Agreements involve the Debtors, Mr. O'Neill relates that, because of the interconnections between all of the Settlement Agreements, the effectiveness of all of the Settlement Agreements is dependent on the Court's approval of the Settlement Agreements involving the Debtors. Therefore, the parties are holding all of the documents comprising the Overall Settlement in escrow pending Court approval of the Settlement Agreements involving the Debtors and the Brokers. Upon Court approval, the parties will dismiss the action in the English High Court. Mr. O'Neill tells the Court that the Overall Settlement and the Settlement Agreements are results of years of protracted litigation, including in-depth discovery, and extensive negotiations between parties at arm's length. The Debtors believe that the terms of the Settlement Agreements are fair and reasonable, and that their major creditors either have given their explicit approval, or have not objected to their participation. Headquartered in Southfield, Michigan, Federal-Mogul Corporation -- http://www.federal-mogul.com/-- is one of the world's largest automotive parts companies with worldwide revenue of some $6 billion. The Company filed for chapter 11 protection on October 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan, Esq., James F. Conlan, Esq., and Kevin T. Lantry, Esq., at Sidley Austin Brown & Wood and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, they listed $ 10.15 billion in assets and $ 8.86 billion in liabilities. (Federal-Mogul Bankruptcy News, Issue No. 52; Bankruptcy Creditors' Service, Inc., 215/945-7000) FELCOR: Raises $107 Million from Convertible Preferred Stock Sale ----------------------------------------------------------------- FelCor Lodging Trust Incorporated (NYSE: FCH), the nation's second largest hotel real estate investment trust (REIT), has completed the sale of 4,600,000 shares of its $1.95 Series A Cumulative Convertible Preferred Stock. The number of shares sold reflects the exercise by the underwriters of the entire over-allotment option granted to them in the underwriting agreement. The shares were sold at a price of $23.79 per share, which included accrued dividends of $0.51 per share through April 5, 2004, resulting in proceeds to FelCor of approximately $107 million. The proceeds will be used for general corporate purposes, which may include investments in existing or additional hotel assets, the retirement of debt and/or additional liquidity. The new shares, together with FelCor's previously outstanding $1.95 Series A Cumulative Convertible Preferred Stock, are listed on the New York Stock Exchange under the symbol "FCHPRA." This offering was made through Citigroup Global Markets Inc. and Bear, Stearns & Co. Inc., acting as Joint Lead Managers and Joint Bookrunners, and with Deutsche Bank Securities Inc. and Legg Mason Wood Walker, Incorporated acting as Co-Managers. "We are very pleased with the interest in this offering of preferred stock, which enabled the underwriters to exercise their over-allotment option in full. The $107 million in proceeds provides added strength to our balance sheet," said Richard J. O'Brien, FelCor's Executive Vice President and Chief Financial Officer. FelCor is the nation's second largest hotel REIT and the largest owner of full service, all-suite hotels. FelCor's consolidated portfolio is comprised of 158 hotels, located in 33 states and Canada. FelCor owns 71 upscale, all- suite hotels, and is the owner of the largest number of Embassy Suites Hotels(R) and Doubletree Guest Suites(R) hotels in the U.S. FelCor's portfolio also includes 75 hotels in the upscale and full service segments. FelCor has a current market capitalization of approximately $3 billion. Additional information can be found on the Company's Web site at http://www.felcor.com/ As reported in the Troubled Company Reporter's March 31, 2004 edition, Standard & Poor's Ratings Services assigned its 'CCC' rating to hotel owner FelCor Lodging Trust Inc.'s proposed $100 million series A cumulative convertible preferred stock. Concurrently, Standard & Poor's affirmed its ratings, including its 'B' corporate credit rating, on FelCor Lodging Trust Inc., a sole general partner and owner of 95% partnership interest in FelCor Lodging Limited Partnership (jointly FelCor). The outlook is stable. Approximately $2.2 billion in debt was outstanding on Dec. 31, 2003. "The ratings for FelCor reflect the company's high debt leverage and ownership of several under-performing hotels," said Standard & Poor's credit analyst Sherry Cai. "These factors are offset by its adequate liquidity position, sizable hotel portfolio, and management's ongoing effort to sell non-strategic and/or under- performing hotels." GRENADA MANUFACTURING: Case Summary & Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Grenada Manufacturing, LLC 635 Highway 332 Grenada, Mississippi 38901 Bankruptcy Case No.: 04-12077 Chapter 11 Petition Date: April 5, 2004 Court: Northern District of Mississippi (Aberdeen) Judge: David W. Houston III Debtor's Counsel: Craig M. Geno, Esq. Harris & Geno PLLC P.O. Box 3380 Ridgeland, MS 39158-3380 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Textron Automotive $78,327 Kilburn's Plating Company, Inc. $61,530 Camcar Division of Textron, Inc. $26,526 CMS Manufacturing Systems, Inc. $25,913 Great West Life & Annuity Insurance Co. $25,433 CitiCapital $24,494 Hughes Parker Industries, LLC $19,400 Mississippi Box, Inc. $19,212 Rick Stanford $19,041 CBA Trucking $17,750 Press Shoppe Inc. $15,081 SouthGroup-WWI $14,831 Tobutsu America Corp. $14,154 GE Capital Small Business $13,518 Clayton Metals $12,244 Michael McCord-Kurz $12,380 Sudderth & Associates $11,416 Pratt Industries Converting Division $10,310 Jackson Wayne Taylor $10,139 Milan Express Co. Inc. $10,024 IMMUNE RESPONSE: Auditors Express Going Concern Qualification ------------------------------------------------------------- The Immune Response Corporation (Nasdaq: IMNR), a biopharmaceutical company developing immune- based therapies (IBT) for HIV and select other diseases, announced that in its 2003 financial statements included in the Company's Form 10-K filed last week, the audit opinion of BDO Seidman, LLP contained a going-concern qualification. Nasdaq's rules require Nasdaq-listed companies to publicly announce whenever a Form 10-K includes an audit opinion containing a going-concern qualification. About The Immune Response Corporation The Immune Response Corporation (Nasdaq: IMNR) is developing immune-based therapies (IBT) for HIV and select other diseases. The Company's HIV products are based on its patented whole-killed virus technology, co-invented by Company founder, Dr. Jonas Salk, to stimulate broad and potent HIV immune responses. REMUNE(R), currently in Phase II, is being developed as a first line treatment for people with early-stage HIV. The Company has initiated development of a new IBT, IR103, which incorporates a state-of-the-art immune system booster. The Immune Response Corporation is also developing an IBT for Multiple Sclerosis (MS), NeuroVax(TM), which is currently in Phase II and has shown potential therapeutic value for this difficult- to-treat disease. Visit The Immune Response Corporation on the World Wide Web at http://www.imnr.com/ INNSUITES: Debt Cut by $14.7M After San Diego & Tempe Asset Sales ----------------------------------------------------------------- InnSuites Hospitality Trust (Amex: IHT) sold its San Diego, California 131 unit hotel property for a net price of $9.7 million on April 1, 2004. The Trust received $4.5 million in cash after the satisfaction of its $4.8 million mortgage note on the property, in addition to $335,000 received prior to closing. This transaction resulted in a gain on sale of $4.7 million, of which approximately $2.6 million is attributable to Shares of Beneficial Interest, which will be reported in the Trust's earnings for the first fiscal quarter ending April 30, 2004 and for the fiscal year ending January 31, 2005. The Trust sold its Tempe, Arizona 160 unit hotel property for a net price of $6.8 million, its approximate book value and appraised value, on March 25, 2004 to an affiliate of James Wirth, Chairman and CEO of the Trust. The buyer satisfied the purchase price by assuming the $1.7 million mortgage note on the property and assuming $5.1 million of notes payable to affiliates of Mr. Wirth. This reduction in related party notes will result in annual interest savings of approximately $360,000. The recent sales of the Buena Park and San Diego, California, and Tempe, Arizona properties have reduced the Trust's debt by $14.7 million, significantly strengthening the Trust's financial position. With improved economic conditions, combined with the sale of the underperforming Scottsdale and Flagstaff properties as well as gains on asset sales, the Trust projects it will report a profit in fiscal year 2005 for the first time in five years. The Trust has continued its efforts to upgrade its product during the economic challenges of the prior three years. Funds provided by recent hotel sales will allow the Trust to continue selective upgrades to enhance the profitability of the six "core" hotel properties remaining in the Trust's portfolio. Your Suite Choice(R) - Value Concept InnSuites Hospitality Trust -- whose October 31, 2003 balance sheet shows a total shareholders' equity deficit of about $2.8 million -- is a mid-market value studio and two-room suite hospitality real estate investment trust with 6 moderate service and full service hotels containing 940 hotel suites located in Arizona, New Mexico and Southern California. For more information, visit http://www.innsuites.com/ INTEGRATED HEALTH: Rotech to Establish Corsello Claims Reserve -------------------------------------------------------------- Kirk S. Corsello was an employee of Rotech Medical Corporation, an affiliate of Integrated Health Services, Inc., for three months in 1999. Prior to his employment at Rotech, Rotech competitor, Lincare, Inc., also employed Mr. Corsello. On August 29, 2000, Mr. Corsello filed Claim Nos. 10898 to 10910 in these cases, each in an unliquidated amount. The Corsello Claims are alleged in a civil action commenced by Mr. Corsello on January 22, 1998, before the United States District Court for Northern District of Georgia. The original complaint asserted "relator" claims against Rotech, Lincare and multiple individuals for Medicare fraud violations under the Federal False Claims Act. After a series of Court dismissals, Mr. Corsello amended his complaint four times. The Fourth Amended Complaint alleges retaliatory discharge claims against Lincare and Rotech. Both entities were alleged to have terminated Mr. Corsello's employment upon learning that he was pursuing a "qui tam" action against them. The Georgia Court dismissed the fraud claims. Mr. Corsello intends to appeal the dismissal but has been unable to do so because the Fourth Amended Complaint is the subject of a pending motion to dismiss by Lincare. The Debtors do not expect the Corsello Action to be resolved at any time in the near future. After the Rotech Plan became effective, the Reorganized Rotech Debtors endeavored to resolve or litigate all unresolved contingent and unliquidated claims, or in the alternative, seek a consensual estimation of the claims. According to Joseph M. Barry, Esq., at Young Conway Stargatt & Taylor, in Wilmington, Delaware, the Reorganized Rotech Debtors were successful in this regard with respect to all contingent and unliquidated claims except for the Corsello Claims. As a result of the still contingent and unliquidated status of the Corsello Claims, the Reorganized Rotech Debtors have been unable to make an initial distribution to the holders of Allowed General Unsecured Claims as contemplated by the Rotech Plan. Given that the Corsello Claims were filed in unliquidated amounts and are delaying the distributions that would otherwise have been made to Allowed General Unsecured Claimholders, the Reorganized Rotech Debtors repeatedly asked Mr. Corsello to quantify his claims. As of March 4, 2004, Mr. Corsello has not quantified his claims. Accordingly, the Reorganized Rotech Debtors sought and obtained the Court's authority to treat the Corsello Claims collectively as one Disputed General Unsecured Claim for $1,000,000 for the purpose of establishing a reserve. Mr. Barry adds that the Reorganized Rotech Debtors continue to dispute the Corsello Claims in their entirety. The Reorganized Rotech Debtors reserve their rights to object to the allowance or classification of the Corsello Claims on any and all factual or legal grounds, including disallowance and reclassification. Headquartered in Owings Mills, Maryland, Integrated Health Services, Inc. -- http://www.ihs-inc.com/-- IHS operates local and regional networks that provide post-acute care from 1,500 locations in 47 states. The Company filed for chapter 11 protection on February 2, 2000 (Bankr. Del. Case No. 00-00389). Michael J. Crames, Esq., Arthur Steinberg, Esq., and Mark D. Rosenberg, Esq., at Kaye, Scholer, Fierman, Hays & Handler, LLP, represent the Debtors in their restructuring efforts. On September 30, 1999, the Debtors listed $3,595,614,000 in consolidated assets and $4,123,876,000 in consolidated debts. (Integrated Health Bankruptcy News, Issue No. 73; Bankruptcy Creditors' Service, Inc., 215/945-7000) INTERNATIONAL WIRE: Employs Weil Gotshal as Bankruptcy Counsel -------------------------------------------------------------- International Wire Group, Inc., and its debtor-affiliates sought and obtained approval from the U.S. Bankruptcy Court for the Southern District of New York, to employ employ Weil, Gotshal & Manges LLP as their attorneys. The Debtors anticipate that Weil Gotshal will: a) take all necessary action to protect and preserve the estates of the Debtors, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors' estates; b) prepare on behalf of the Debtors, as debtors in possession, all necessary motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtors' estates; c) negotiate and prepare on behalf of the Debtors a plan of reorganization and all related documents; and d) perform all other necessary legal services in connection with the prosecution of these chapter 11 cases. Weil Gotshal's hourly rates range from: Designation Billing Rate ----------- ------------ Members and Counsel $475 to $775 per hour Associates $240 to $505 per hour Paraprofessionals $130 to $225 per hour Headquartered in Saint Louis, Missouri, International Wire Group, Inc., designs, manufactures and markets bare and tin-plated copper wire and insulated copper wire products for other wire suppliers and original equipment manufacturers. The Company filed for chapter 11 protection on March 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11991). Alan B. Miller, Esq., at Weil, Gotshal & Manges, LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $393,000,000 in total assets and $488,000,000 in total debts. IPIX CORPORATION: Raises $5 Million in Private Stock Sale --------------------------------------------------------- IPIX Corporation (Nasdaq: IPIX) has entered into a private stock purchase agreement to sell common stock to certain institutional investors raising net proceeds of approximately $5 million. The agreement includes an additional investment option and is subject to customary closing conditions. "As previously announced, all three of our business units are launching significant new products in 2004," said Don Strickland, President and CEO of IPIX. "The proceeds will provide additional support to our efforts to market, sell and develop our core technologies and products." The proceeds are in exchange for 909,090 shares of the Company's unregistered common stock and an additional investment right to purchase 888,180 shares. The shares were sold at $5.50 per share. The additional investment rights have an exercise price of $6.05 per share. The additional investment rights are immediately exercisable and expire 90 trading days after a registration statement relating to the resale of the shares has been declared effective by the SEC. If exercised fully, the additional investment rights would provide the Company with approximately an additional $5.3 million in proceeds. About IPIX IPIX Corporation is a leader in mission-critical imaging solutions for three core markets: 360-degree panoramic photography and movies; government and commercial video security; and self service on-line and off-line advertising. IPIX's extensive intellectual property covers patents for immersive imaging, video and surveillance applications. IPIX is headquartered in Oak Ridge, Tennessee, with co-headquarters in San Ramon, California. http://www.ipix.com/ * * * As reported in the Troubled Company Reporter's April 2, 2004 edition, IPIX Corp.'s independent auditor expressed its opinion with respect to the Company's 2003 financial statements in the 10K and included an explanatory paragraph expressing its concern about the Company's ability to continue as a going concern. Management's plans for 2004 to address the going concern issue and associated risks are described further in the Management's Discussion and Analysis section of its Form 10K, in Footnote 3 to the 2003 financial statements and elsewhere in the 10K. LAKE HAMILTON: U.S. Trustee to Meet with Creditors on May 18, 2004 ------------------------------------------------------------------ The United States Trustee will convene a meeting of Lake Hamilton Resort, Inc.'s creditors at 1:30 p.m., on May 18, 2004, in Room 324 at U.S. Post Office & Courthouse, Reserve & Broadway, Hot Springs, Arkansas 71901. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Hot Springs, Arkansas, Lake Hamilton Resort, Inc., operates a hotel with amenities including indoor atrium pool, hot tub, sauna, outdoor pool, tennis court, marina, boat slips, private sandy beach, and nature trail. The Company filed for chapter 11 protection on March 22, 2004 (Bankr. W.D. Ark. Case No. 04-72002). James F. Dowden, Esq., represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $4,468,461 in total assets and $6,384,881 in total debts. METROMEDIA: Must Resolve Sr. Note Covenant Compliance by June 1 --------------------------------------------------------------- Metromedia International Group, Inc. (MIG) (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 it had received notification from the trustee of its Series A and B 10 1/2 % Senior Discount Notes Due 2007 concerning non- compliance with certain covenants in the indenture governing the Senior Notes. The trustee reported that it had not received the following documents from the Company: -- The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2003 as required pursuant to Section 4.3 of the Indenture; -- The Company's Officers' Certificate required pursuant to Section 4.4 (a) of the Indenture; and -- The CPA statement required pursuant to Section 4.4 (b) of the Indenture. The trustee reported that, under the terms of the Indenture, the Company must resolve these compliance matter no later than June 1, 2004, the sixtieth day following the receipt of the trustee's letter in order to avoid an event of default. If such default were declared, the trustee or holders of at least 25% aggregate principal value of Senior Notes outstanding could demand all Senior Notes to be due and payable immediately. On April 2, 2004, the trustee reported these Indenture compliance items to the United States Securities and Exchange Commission and holders of the Senior Notes as part of the trustee's annual reporting duty required by Section 7.6 of the Indenture. In making this announcement, Ernie Pyle, Executive Vice President Finance and Chief Financial Officer of MIG, commented, "At this time and although no assurances can be given, we do not anticipate that there will be any compliance items outstanding with respect to the Indenture by the end of the 60 day time period set out by the trustee. The delay by the Company in filing its 2003 Annual Report with the SEC is regrettable and an unfortunate side-effect of the significant restructuring that the Company has undertaken over the past year. However, we are fully committed to filing the 2003 Form 10-K as promptly as possible and apologize for any difficulties this delay might cause our investors." 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 nineteen radio businesses operating in Finland, Hungary, Bulgaria, Estonia, Latvia and the Czech Republic and one cable television network in Lithuania. 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. METROMEDIA INTL: Decides Not to Declare Preferred Stock Dividend ---------------------------------------------------------------- Metromedia International Group, Inc. (MIG) (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 it elected not to declare a dividend on its 7 1/4% cumulative convertible preferred stock for the quarterly dividend period ending on March 15, 2004. As of the March 31, 2004, aggregated dividends in arrears are $50.4 million. In making this announcement, Ernie Pyle, Executive Vice President Finance and Chief Financial Officer of MIG, commented, "At this time and although no assurances can be given, we do not anticipate that there will be any compliance items outstanding with respect to the Indenture by the end of the 60 day time period set out by the trustee. The delay by the Company in filing its 2003 Annual Report with the SEC is regrettable and an unfortunate side-effect of the significant restructuring that the Company has undertaken over the past year. However, we are fully committed to filing the 2003 Form 10-K as promptly as possible and apologize for any difficulties this delay might cause our investors." Ernie Pyle, Executive Vice President Finance and Chief Financial Officer of MIG, commented, "The decision to not declare a dividend on the Company's 7 1/4% cumulative convertible preferred stock for the quarterly dividend period ending on March 15, 2004, is attributable to corporate cash conservation measures. The Company desires to maintain sufficient cash liquidity reserves to enable further business development of our core businesses and provide opportunities for a potential restructuring of the Company's balance sheet." 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 nineteen radio businesses operating in Finland, Hungary, Bulgaria, Estonia, Latvia and the Czech Republic and one cable television network in Lithuania. 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. MICRO BYTES INC: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Micro Bytes, Inc. 4709 "F" Street Omaha, Nebraska 68117 Bankruptcy Case No.: 04-81055 Type of Business: The Debtor is a nationally oriented software marketing and fulfillment service provider. See http://www.mbiweblink.com/ Chapter 11 Petition Date: March 29, 2004 Court: District of Nebraska (Omaha Office) Judge: Timothy J. Mahoney Debtor's Counsel: Robert V. Ginn, Esq. Brashear & Ginn 711 North 108th Court Omaha, NE 68154 Tel: 402-348-1000 Fax: 402-348-1111 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ D.E.M. $304,027 P.O. Box 1070 Charlotte, NC 28201-1070 JVB Printing & Forms $95,602 AKOT International $83,775 MCOM $43,663 Lui & DB Enterprises, Inc. $38,918 Madell Corporation $38,133 I O S Capital $29,172 Saturn Solutions $27,960 IKON Office Solutions $26,034 D & R Realty $23,671 LSI Staffing Solutions $21,288 U.P.S. $17,755 Commonwealth Press $17,626 Winn Cassette Sales $15,116 Greystone Graphics $14,953 Auriga Aurex $14,169 Heinrich Envelope LLC $13,306 Data Bank $12,083 Dwain $11,665 Gedar Graphics $10,844 MIRANT: Inks Stipulation Setting Amount Owed Under the SMUD Pact ---------------------------------------------------------------- As of the Petition Date, Mirant Americas Energy Marketing LP and Sacramento Municipal Utility District were parties to the SMUD Master Natural Gas Purchase Agreement No. H-554, dated June 3, 1998. Pursuant to the SMUD Agreement, Sacramento agreed to purchase natural gas from MAEM through a series of transaction, each for an amount and quantity to be determined later. Sacramento would periodically submit a Confirmation Letter to MAEM setting forth the material terms of the Transaction. MAEM would then deliver the gas pursuant to the terms of the relevant Confirmation Letter. Thereafter, at the end of each monthly billing cycle, MAEM would submit to Sacramento a monthly bill detailing the total charges for gas delivered pursuant to that month's aggregate Transactions. From October 1, 2003 through December 30, 2003, MAEM delivered an aggregate 572,785 Dth of natural gas to Sacramento under various Confirmation Letters. Pursuant to the terms of the relevant Confirmation Letters, MAEM delivered gas to Sacramento consisting of $1,677,592 for Transactions in October and $329,895 for Transactions in November, which aggregates to $2,007,488 -- the Postpetition Gas Claim. On October 22, 2003, MAEM sought to reject the SMUD Agreement and its Confirmation Letters. Since Sacramento did not object to the rejection, the Agreements were rejected effective November 6, 2003 pursuant to the Rejection Procedures Order dated August 14, 2003. Sacramento alleges that, as a result of the rejection, it has rejection damages against MAEM totaling $2,812,684. To date, Sacramento still has to remit the Postpetition Gas Claim to MAEM, alleging that it has a valid right of recoupment against the SMUD Rejection Claims. MAEM alleges that Sacramento is not entitled to recoup the SMUD Rejection Claim from the Postpetition Gas Claim. To provisionally resolve the Recoupment Dispute, the parties believe that Sacramento's payment of the Postpetition Gas Claim, in exchange for the Debtors' acknowledgment and agreement that Sacramento will be entitled to an administrative claim, in an amount that will not exceed the lesser of the Postpetition Gas Claim or the SMUD Rejection Claim, in the event that the Court determines that Sacramento possesses a valid right of recoupment, subject to that term and conditions they agreed on, is in the best interest of the parties. By the parties' agreement, Judge Lynn rules that: * Sacrament must immediately pay an amount equal to the Postpetition Gas Claim to MAEM; * In the event the Court determines that Sacramento would have been entitled to exercise the equitable remedy of recoupment against the Postpetition Gas Claim, it will be entitled to administrative priority pursuant to Section 503(b) of the Bankruptcy Code in an amount not to exceed the lesser of the Postpetition Gas Claim or the SMUD Rejection Claim; and * Sacramento is entitled, without first seeking relief from the automatic stay provisions of Section 362 of the Bankruptcy Code, to bring a declaratory action in the Court to determine whether it would have been entitled to the equitable remedy of recoupment with respect to its SMUD Rejection Claim. 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. 27; Bankruptcy Creditors' Service, Inc., 215/945-7000) MITEK SYSTEMS: Nasdaq Delisting Hearing Scheduled for April 22 -------------------------------------------------------------- Mitek Systems, Inc. (Nasdaq: MITK), announced that a date has been set for a hearing with Nasdaq to review issues that relate to the Company's non-compliance with Nasdaq's minimum stockholders' equity requirements. The hearing, which will be conducted before a Nasdaq Listing Qualifications Panel, has been scheduled for April 22, 2004. As a result of the scheduled hearing, the automatic delisting of the Company's common stock from Nasdaq -- required under current exchange rules -- has been stayed pending the outcome of the hearing. About Mitek Systems Mitek Systems is a premier provider of check fraud protection solutions and check imaging software for the banking industry, and an established global supplier of embedded software recognition engines. Mitek develops recognition technology using advanced neural networking techniques and deploys this expertise in fraud prevention, check, financial document and forms processing applications. These applications automatically process over 8 billion documents per year for a variety of OEMs, reseller partners and end users. For more information about Mitek Systems, contact the company at 14145 Danielson Street, Suite B, Poway, CA 92064; 858-513-4600 or visit http://www.miteksys.com/ * * * In its Form 10-Q for the quarterly period ended December 31, 2003, Mitek Systems, Inc. reports: "The Company's working capital and current ratio were $1,445,000 and 1.67, respectively, at December 31, 2003, and $2,341,000 and 1.87, respectively, at September 30, 2003. At December 31, 2003, total liabilities to equity ratio was 1.53 to 1 compared to 1.19 to 1 at September 30, 2003. As of December 31, 2003, total liabilities were $588,000 less than on September 30, 2003. "The Company currently has a working capital line of credit. This line requires interest to be paid at prime plus 1 percentage point, but is subject to a limit on available borrowings of $750,000. The Company had no borrowings under the working capital line of credit on December 31, 2003 or on September 30, 2003. This credit line is subject to a net worth covenant whereby the Company must maintain a net worth of $2,000,000 in order to use the credit line. Though the Company had no borrowings under the credit line as of December 31, 2003, at such time the Company's net worth was $1,621,000. "The existing credit line expires on February 28, 2004. The loss sustained during the quarter ended December 31, 2003 caused the Company's net worth to fall to $1,621,000. Though the Company had no borrowings under the credit line as of December 31, 2003, the Company was no longer in compliance with the aforementioned net worth covenant. The Company is currently negotiating with its lender regarding a new credit line. No assurance can be made that the Company will be able to obtain a new credit line on favorable terms, or at all. The inability to obtain a favorable credit line would have a detrimental impact on the Company's liquidity and could have a material adverse effect on its business, results of operations and financial position. "The operations from Fiscal 2003 and the quarter ended December 31, 2003 have resulted in significant operating losses. Should additional losses occur, the Company may need to raise significant additional funds to continue its activities. In the absence of positive cash flows from operations, the Company may be dependent on its ability to secure additional funding through the issuance of debt or equity instruments. If adequate funds are not available, the Company may be forced to significantly curtail its operations or to obtain funds through entering into collaborative agreements or other arrangements that may be on unfavorable terms. The Company's failure to raise sufficient additional funds on favorable terms, or at all, would have a material adverse effect on its business, results of operations and financial position." MOLECULAR DIAGNOSTICS: Bathgate Capital Invests $1.5 Million ------------------------------------------------------------ Molecular Diagnostics, Inc. (OTCBB:MCDG) (MDI) announced that it has received a $1.5 million investment transacted by Bathgate Capital Partners, LLC of Denver, Colorado. This is the second component of funding that is earmarked for the restructuring being undertaken by the company. The majority of the investment was directed specifically for the retirement of a $1 million senior secured obligation collateralized by the Company's intellectual property. The balance of the investment is committed as capital to be used for the restructuring. According to Denis M. O'Donnell M.D., MDI's CEO, "We are pleased to be able to announce this financing, and retirement of this senior note holder's debt. We can now focus on raising the additional capital required for the restructuring of our balance sheet and the completion of our clinical trial of the InPath System" Dr. O'Donnell added. "The continued support of our existing shareholders, as well as the obvious level of confidence in our success as indicated by Bathgate Capital Partner's investors, is another testament to the soundness of our business strategy, and the performance of the InPath System." About Molecular Diagnostics, Inc. Molecular Diagnostics -- whose September 30, 2003 balance sheet shows a total stockholders' equity deficit of $8,122,000 -- develops cost-effective cancer screening systems, which can be utilized in a laboratory or at the point-of-care, to assist in the early detection of cervical, gastrointestinal, and other cancers. The InPath System is being developed to provide medical practitioners with a highly accurate, low-cost, cervical cancer screening system that can be integrated into existing medical models or at the point-of-care. More information is available at http://www.Molecular-Dx.com/ * * * Going Concern Uncertainty In its Form 10-QSB For the quarterly period ended September 30, 2003, Molecular Diagnostics Inc. states: "Our operations have been, and will continue to be, dependent upon management's ability to raise operating capital in the form of debt or equity. We have incurred significant operating losses since the inception of our business. We expect that significant ongoing operating expenditures will be necessary to successfully implement our business plan and develop, manufacture and market our products. As a result of capital and liquidity constraints, we significantly reduced our staff and all other operating expenditures beginning in the last quarter of 2002 and continuing through most of the second quarter of 2003. We began to reestablish our operations at the end of the second quarter of 2003. These circumstances raise substantial doubt about our ability to continue as a going concern. There can be no assurance that we will be able to obtain additional capital to meet our current operating needs or to complete pending or contemplated licenses or acquisitions of technologies. If we are unable to raise sufficient adequate additional capital or generate profitable sales revenues, we may be forced to continue our operations at a reduced level, substantially delaying product research and development, clinical trials, market introduction of some of our products and other activities and may even be forced to cease operations." NEW CENTURY: Will Convert into a Real Estate Investment Trust ------------------------------------------------------------- New Century Financial Corporation (Nasdaq: NCEN), one of the nation's largest mortgage finance companies, announced that, after careful review, its Board of Directors voted in favor of converting the company to a Real Estate Investment Trust (REIT), subject to final Board approval of relevant legal, accounting and financial matters and shareholder approval. New Century's management and Board of Directors weighed the merits of both a REIT restructuring and maintaining its current corporate structure. The decision to convert to a REIT was based on several factors, including the potential for increased shareholder return, tax efficiency and ability to achieve growth objectives. New Century is finalizing the structural issues relating to the REIT conversion and exploring various financing alternatives, in consultation with its financial and legal advisors. "Our company is committed to delivering performance, growth and long-term shareholder return," said Robert K. Cole, chairman and chief executive officer. "We believe that by converting to a REIT we will be in a better position to achieve our long-term growth objectives and continue to increase shareholder value." About New Century New Century Financial Corporation (Nasdaq: NCEN) (S&P, BB- Long- Term Counterparty Credit and B+ Convertible Senior Notes Ratings) is one of the nation's largest specialty mortgage companies, providing first and second mortgage products to borrowers nationwide through its operating subsidiaries. New Century is committed to serving the communities in which it operates with fair and responsible lending practices. To find out more about New Century, visit http://www.ncen.com/ NEW CENTURY: First Quarter 2004 Loan Production Tops $8.4 Billion ----------------------------------------------------------------- New Century Financial Corporation (Nasdaq: NCEN), one of the nation's largest mortgage finance companies, announced loan production volume for the three months ended March 31, 2004, its dividend payment for the second quarter of 2004, and the timing for its first quarter earnings announcement and its 2004 stockholder meeting. First Quarter 2004 Loan Production $'s in billions 2004 2003 ---- ---- Average Average Funding Daily Funding Daily $ Vol. Days $ Vol. $ Vol. Days $ Vol. ------ ------- ------- ------ ------- ------- January $2.5 20 $0.125 $1.5 21 $0.071 February 2.5 19 0.132 1.4 19 0.074 March 3.4 23 0.148 1.8 21 0.086 ------ ------- ------- ------ ------- ------- Fiscal Year $8.4 62 $0.135 $4.7 61 $0.077 % Change % Change in Vol. in Average Daily Vol. --------- ------------ January 67% 76% February 79% 78% March 89% 72% --------- ------------ Fiscal Year 79% 75% "We are pleased with the strong results we achieved for the first three months of 2004," said Brad A. Morrice, vice chairman, president and chief operating officer. "We are on track to exceed our $30 billion 2004 production goal." Second Quarter 2004 Dividend New Century's Board of Directors approved the second quarter 2004 cash dividend payment to its common stockholders. The Board increased the dividend payment from $0.16 to $0.20 per share. New Century will pay the quarterly dividend on April 30, 2004 to stockholders of record at the close of business on April 15, 2004. The declaration of any future dividends will be subject to New Century's earnings, financial position, capital requirements, contractual restrictions and other relevant factors. First Quarter Earnings Announcement New Century will report its first quarter financial results on Wednesday, April 21, 2004, after the close of market. New Century will host a management conference call on Thursday, April 22, 2004, at 8:00 a.m. PDT. The call and an accompanying slide presentation will also be broadcast simultaneously over the Internet at http://www.ncen.com/ A replay of the conference call will be available from 11:00 a.m. PDT on April 22, 2004 through 12:00 a.m. PDT on April 29, 2004. The replay number is (888) 286-8010 and the conference call ID number is 95107908. Those individuals wishing to participate on the conference call should contact Rachel Coultas in Investor Relations at (949) 862- 7725 to receive details regarding the call. Annual Meeting As a result of these announcements, New Century has postponed its 2004 annual meeting of stockholders, originally scheduled for May 5, 2004. New Century intends to hold a stockholder meeting as soon as practicable to cover both general annual meeting matters and the REIT conversion and related proposals. New Century will release details relating to the stockholder meeting at a future date. About New Century New Century Financial Corporation (Nasdaq: NCEN) (S&P, BB- Long- Term Counterparty Credit and B+ Convertible Senior Notes Ratings) is one of the nation's largest specialty mortgage companies, providing first and second mortgage products to borrowers nationwide through its operating subsidiaries. New Century is committed to serving the communities in which it operates with fair and responsible lending practices. To find out more about New Century, visit http://www.ncen.com/ NORTEL: SEC Orders Formal Investigation Over Results Restatement ---------------------------------------------------------------- Nortel Networks Corporation (NYSE:NT)(TSX:NT) announced that the Securities and Exchange Commission has issued a formal order of investigation in connection with the Company's previous restatement of its financial results for certain periods, as announced in October 2003, and the Company's announcements in March 2004 regarding the likely need to further revise certain previously announced results and restate previously filed financial results for one or more earlier periods. The matter has been the subject of an informal SEC inquiry. As previously announced, an independent review is also being undertaken by the Nortel Networks Audit Committee. Nortel Networks has been fully cooperating with the SEC and will continue to do so in order to bring the inquiry to a conclusion as promptly as possible. 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. NORTH COUNTRY: Exploring Alternatives to Address Capital Needs -------------------------------------------------------------- North Country Financial Corporation (NASDAQ: NCFC), the holding company for North Country Bank and Trust, received a "qualified opinion" on its consolidated financial statements for the year ended December 31, 2003. A qualified opinion was also received last year on the financial statements for the year ended December 31, 2002. These qualified opinions were issued concerning the Corporation's ability to continue as a going concern. Management of the Corporation addressed this concern in footnote 26 of the consolidated financial statements of the Corporation for 2003. In the footnote, reference is made to the requirement of the Bank to maintain certain capital levels under the Cease and Desist Order entered into with federal and state banking regulators. As of December 31, 2003 the Bank did not meet the capital requirements of the Order. C. James Bess, President and Chief Executive Officer of North Country Financial Corporation commented that, "Substantial progress has been made in most areas of concern addressed by the Order, except capital. The Corporation is actively pursuing alternatives in the effort to address its capital needs and requirements." The Corporation is reducing the size of the Bank via sale, closure, and consolidation of its branches, soliciting additional capital and/or an acquirer, reviewing operating expenses for reduction opportunities, and selling segments of the Bank's problem and non-performing loan portfolio. The sale of $25 million of primarily nonperforming loans was consummated as of March 31, 2004. Headquartered in Manistique, Michigan, North Country Financial Corporation is a financial services company providing commercial, consumer, and mortgage banking services to a client base in northern Michigan. North Country Bank and Trust, its primary subsidiary, currently has 22 branch locations located in Michigan's Upper Peninsula and northern Lower Michigan. NRG ENERGY: Rural Utilities Asserts $8.6 Million Admin. Claim ------------------------------------------------------------- The Rural Utilities Service, United States Department of Agriculture, was a creditor in the Chapter 11 proceeding of Cajun Electric Cooperative, Case No. 94-11474 (Bankr. W.D. La), in which a determination was made to sell substantially all Cajun's assets. Of the several bidders seeking to purchase Cajun's electric generation and transmission assets, Debtor Louisiana Generating LLC emerged as the successful bidder for Cajun's assets. Consequently, Ralph R. Mabey, the Cajun Trustee, and Louisiana Generating entered into a Fifth Amended and Restated Asset Purchase and Reorganization Agreement in September 1999, which became the basis of the Second Amended and Restated Creditors' Plan of Reorganization in the Cajun case. Under the Asset Purchase Agreement and the Plan, Louisiana Generating became the successor under and the assignee of virtually all of Cajun's executory contracts and unexpired leases. In 1983, Cajun entered into TBT Agreements with Eastman Kodak Company and The Clorox Company pursuant to which Cajun transferred to Kodak and Clorox certain tax benefits. To support Cajun's obligations under the TBT Agreements and provide Kodak and Clorox with recourse in the event of a default by Cajun, Cajun and CoBank, ACB entered into a Letter of Credit and Reimbursement Agreement. Pursuant to the Letter of Credit and Reimbursement Agreement, in the event of Cajun's default, Kodak and Clorox could draw down the letters of credit issued by CoBank. Cajun was required to post security in favor of CoBank in the form of cash deposits and a Pledge of "CoBank Class E Stock" owned by Cajun but held by CoBank. In the event Cajun was required to pay under the letters of credit, CoBank would reimburse itself from the Cajun cash and Class E stock, which CoBank held. CoBank's exposure under the letters of credit decreases with the passage of time and, accordingly, the amount of security it holds similarly decreases. When CoBank has no further exposure under letters of credit, the remaining security it holds will be remitted to the Rural Utilities Service pursuant to the terms of the Plan. The value anticipated to be available for remittance to the Rural Utilities Service exceeds $10,000,000. However, in light of Louisiana Generating's Chapter 11 petition, CoBank has refused to periodically remit to the Rural Utilities Service any excess security. As of February 5, 2004, the Rural Utilities Service is unaware of any default under the TBT Agreements which would give rise to a draw on the letters of credit by Kodak and Clorox and, subsequently, would give CoBank cause to resort to the cash and stock security it holds. However, if by virtue of (i) Louisiana Generating's bankruptcy filing, (ii) acts taken by it in Chapter 11, or (iii) provisions or implementation of Louisiana Generating's plan of reorganization or otherwise, a default has occurred under the TBT Agreements, the Rural Utilities Service may stand to lose several millions of dollars in cash and stock currently held as security by CoBank. In that instance, the Rural Utilities Service would have a substantial administrative claim against Louisiana Generating. Based on the best information currently available, Rural Utilities Service estimates its administrative claim to be $8,679,750, depending on the default date and the TBT Agreement liability at that date. The precise amount of the claim is subject to further refinement and revision. By this motion, the Rural Utilities Service asks the Court to allow it an administrative expense claim for $8,679,750. (NRG Energy Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service, Inc., 215/945-7000) OMEGA HEALTHCARE: Closes on $26 Million of New Investments ---------------------------------------------------------- Omega Healthcare Investors, Inc. (NYSE:OHI) announced it has closed on $26 million of new investments. The Company closed the purchase of three skilled nursing facilities on April 1, 2004, representing 399 beds for a total investment of $26 million. Two of the facilities are located in Vermont, with the third located in Connecticut. The facilities were combined into an existing master lease with a current operator. Rent under the master lease was increased by approximately $2.7 million for the first lease year commencing April 1, 2004, with annual increases thereafter. The term of the master lease had been increased to 10 years on January 1, 2004 and runs through December 31, 2013, followed by two 10 year renewal options. The Company received a security deposit equivalent to three months of the incremental rent. This marks the Company's first new real estate investment in approximately five years, and follows two months of capital restructuring activity during which Omega issued its 8.375% Series D preferred stock, completed a secondary offering of 18.1 million shares and a primary offering of 2.7 million shares of its common stock, issued $200 million of 7% senior notes due in 2014, and refinanced and replaced its $225 million credit and acquisition lines, as well as redeemed its 10% Convertible Series C preferred stock and announced the redemption of its 9.25% Series A preferred stock. During this same period, Omega's preferred stock and debt also received upgrades from Moody's and Standard & Poors, as previously announced by the respective rating agencies. Omega Healthcare Investors, Inc. (NYSE: OHI) is an approximate $850 million (as measured by undepreciated book capital) equity REIT that owns or holds mortgages on 211 skilled nursing and assisted living facilities with approximately 21,500 beds located in 28 states and operated by 39 third-party healthcare operating companies. Standard & Poor's Ratings Services assigned its 'BB-' rating to Omega Healthcare Investors Inc.'s recently issued $200 million 7% senior notes due April 2014. Concurrently, the senior unsecured debt rating is raised to 'BB-' from 'B' and removed from CreditWatch positive, where it was placed March 5, 2004. Additionally, the rating on the preferred stock is raised to 'B' from 'B-' and removed from CreditWatch positive, where it was also placed March 5, 2004. The rating actions affect $526 million of rated securities. The outlook is stable. OMEGA HEALTHCARE: Sells $200M Interest Rate Cap & Florida Facility ------------------------------------------------------------------ Omega Healthcare Investors, Inc. (NYSE:OHI) announced the sale of its $200 million interest rate cap and the sale of a closed, skilled nursing facility in Florida. In connection with the Company's previously announced refinancing of its $225 million LIBOR based credit facilities, the Company sold its $200 million interest rate cap on March 31, 2004. Net proceeds from the sale totaled approximately $3.5 million and resulted in a one-time accounting loss of approximately $6.5 million, which will be taken in the first quarter of 2004. Also, on March 31, 2004, the Company sold one closed skilled nursing facility located in Florida for net proceeds of approximately $44,000, resulting in a loss of approximately $357,000. At the time of this press release, the Company has four remaining closed facilities with a total net book value of approximately $2 million. Omega Healthcare Investors, Inc. (NYSE: OHI) is an approximate $850 million (as measured by undepreciated book capital) equity REIT that owns or holds mortgages on 211 skilled nursing and assisted living facilities with approximately 21,500 beds located in 28 states and operated by 39 third-party healthcare operating companies. Standard & Poor's Ratings Services assigned its 'BB-' rating to Omega Healthcare Investors Inc.'s recently issued $200 million 7% senior notes due April 2014. Concurrently, the senior unsecured debt rating is raised to 'BB-' from 'B' and removed from CreditWatch positive, where it was placed March 5, 2004. Additionally, the rating on the preferred stock is raised to 'B' from 'B-' and removed from CreditWatch positive, where it was also placed March 5, 2004. The rating actions affect $526 million of rated securities. The outlook is stable. OR RAMBLEWOOD LLC: Involuntary Case Summary ------------------------------------------- Alleged Debtor: OR Ramblewood, LLC 615 Kensington Avenue, Suite B-1 Severna Park, Maryland 21146 Involuntary Petition Date: March 31, 2004 Case Number: 04-17917 Chapter: 11 Court: District of Maryland (Baltimore) Judge: E. Stephen Derby Petitioner's Counsel: Thomas McCarthy, Sr., Esq. 79 Franklin Street Annapolis, MD 21401 Petitioner: David H. Ready c/o Thomas McCarthy, Sr. 79 Franklin Street Annapolis, MD 21401 Amount of Claim: $9,162,937 OWENS: Wants Clearance to Implement Discounted Tax Payment Scheme ----------------------------------------------------------------- Due to the timing of their bankruptcy filings, the Owens Corning Debtors are delinquent on prepetition taxes owed to 120 to 150 local and municipal taxing authorities. For the most part, these taxes consist of real and personal property taxes incurred with respect to various Debtor facilities across the country. Based on the Debtors' review, the amount of taxes owed to Local and Municipal Taxing Authorities that are entitled to "priority" status under Section 507(a)(8) of the Bankruptcy Code and "secured" status under applicable state law, total $8,650,000. Based on overtures received from several Local and Municipal Taxing Authorities, the Debtors believe that they may have an opportunity to compromise some or all of the Local and Municipal Priority and Secured Taxes -- which must be paid in full under any confirmed plan of reorganization -- at a significant discount, if the agreed-upon, and discounted, amount of taxes can be paid now, rather than pursuant to a confirmed plan. To take advantage of this potential opportunity, the Debtors prepared a tax payment program. The key elements of the Discounted Tax Payment Program are: (1) The Debtors would, at their discretion, contact Local and Municipal Taxing Authorities to which they owe Local and Municipal Priority and Secured Taxes; (2) The Debtors would negotiate the payment of the Local and Municipal Priority and Secured Taxes in an amount that is discounted by no less than the specified minimum percentage; (3) The Debtors would enter into a letter agreement with each Local and Municipal Taxing Authority setting forth the terms of the payment of the Local and Municipal Priority and Secured Tax; (4) The Debtors would pay the agreed-upon amount of Local and Municipal Priority and Secured Tax; and (5) Each Local and Municipal Taxing Authority receiving payment pursuant to the Discounted Tax Payment Program would amend its proof of claim to reflect its agreement with the Debtors and receipt of the agreed-upon payment. The Discounted Tax Payment Program will reduce the amount of Local and Municipal Priority and Secured Taxes due and owing. By this motion, the Debtors seek the Court's authority to implement the Discounted Tax Program. Norman L. Pernick, Esq., at Saul Ewing LLP, in Wilmington, Delaware, tells Judge Fitzgerald that the early payment of the Local and Municipal Taxes will allow the Debtors to realize significant savings from the Discounted Tax Payment Program as a result of negotiated discounts, in an amount at least equal to the Minimum Discount. Because the Local and Municipal Taxes are entitled either to priority or to secured status, the Debtors' payment of the taxes affects only the timing of the payments, not whether they will be made. Thus, other creditors and parties-in- interest will not be prejudiced, and will actually benefit, if the relief sought is granted. Permitting the Debtors to resolve the Local and Municipal Taxes now will also help them realize other benefits like the reduction of administrative burdens associated with paying Priority and Secured Taxes under a confirmed plan. 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. 71; Bankruptcy Creditors' Service, Inc., 215/945-7000) OXFORD INDUSTRIES: Declares Quarterly Cash Dividend Payable May 29 ------------------------------------------------------------------ The Board of Directors of Oxford Industries, Inc. (NYSE: OXM) declared a cash dividend of $0.12 per share on common stock payable May 29, 2004 to shareholders of record on May 17, 2004. This is the 176th consecutive quarterly cash dividend since Oxford became publicly-owned in 1960. Oxford Industries, Inc. (S&P, BB- Long-Term Corporate Credit Rating, Stable) is a leading producer and marketer of branded and private label apparel for men, women and children. Oxford provides retailers and consumers with a wide variety of apparel products and services to suit their individual needs. Oxford's brands include Tommy Bahama(R), Indigo Palms(TM), Island Soft(TM), Ely & Walker(R) and Oxford Golf(R). The Company also holds exclusive licenses to produce and sell certain product categories under the Tommy Hilfiger(R), Nautica(R), Geoffrey Beene(R), Slates(R), Dockers(R) and Oscar de la Renta(R) labels. Oxford's customers are found in every major channel of distribution including national chains, specialty catalogs, mass merchants, department stores, specialty stores and Internet retailers. The Company's common stock has traded on the NYSE since 1964 under the symbol OXM. For more information, visit its Web site at http://www.oxfordinc.com/ PACER HEALTH: Now Owns South Cameron Memorial Hospital in La. ------------------------------------------------------------- Pacer Health Corporation (OTCBB:PHLH), a Miami-based owner- operator of medical treatment centers and acute care facilities, announced that it has completed the acquisition of South Cameron Memorial Hospital in Louisiana. Pacer Health now fully owns the hospital, which is comprised of an acute care campus in Creole, Louisiana, and a geriatric behavioral health unit in Lake Charles, Louisiana. Pacer Health entered into a letter of intent with Camelot Specialty Hospital of Cameron, LLC, a subsidiary of Revival Healthcare, Inc., to purchase the hospital in December 2003 and executed a management and acquisition agreement in February to assume hospital operations. The company is currently conducting a financial and marketing restructure of the hospital. "The completion of this acquisition demonstrates that Pacer Health is effectively executing its business model," said Pacer Health CEO Rainier Gonzalez. South Cameron Memorial Hospital serves the residents of Cameron Parish and Lake Charles, Louisiana, in addition to the area's several thousand oil and gas exploration personnel, commercial and recreational fishermen. The hospital maintains sole community provider status in Cameron Parish. About Pacer Health Corporation Pacer Health Corporation is an owner-operator of medical treatment centers and acute care facilities, primarily serving the growing senior citizen population and low-to-moderate income individuals. Shareholders are encouraged to visit the company's web site at http://www.pacerhealth.com/ As reported in the Troubled Company reporter's February 27, 2004 edition, Pacer Health Corporation dismissed Bagell Josephs & Co. as its independent certified public accountants effective February 10, 2004. Bagell Josephs' report on the Company's financial statements for the past two fiscal years expressed substantial doubt about Pacer Health's ability to continue as a going concern. On February 10, 2004, Pacer Health Corporation engaged Ahern Jasco & Company, P.A., as its principal accountant to audit its financial statements. PARMALAT: Grand Cayman Court Denies Bondi as Capital Liquidator --------------------------------------------------------------- The Grand Court of the Cayman Island denies Dr. Bondi's request to dismiss Ernst & Young and assume the role of Provisional Liquidator for Parmalat Capital Finance Ltd., through PricewaterhouseCoopers and BDO Cayman. In a 23-page decision, Judge Henderson expresses significant concerns that Dr. Bondi's obligations to the Italian Government are not fully compatible with the obligations he would assume as Parmalat Capital Liquidator. Judge Henderson explains that a Provisional Liquidator is an officer of the Grand Court. He is expected to report to the Grand Court in a timely fashion and apply for directions on controversial or troubling issues arising in the course of the liquidation. He has fiduciary obligation to the creditors, in whose ultimate interest he is acting, and a personal obligation to the Grand Court, which is charged with his supervision and control. A Liquidator must be, and be seen by the creditors to be, independent. A Liquidator cannot owe any duty to anyone, which is incompatible with his obligations to the creditors and the Court. Judge Henderson explains that Dr. Bondi is the appointee of the Italian government. His mandate is broad -- to rescue the Parmalat Group and keep it functioning as a going concern, in the interests not only of the creditors but also of the 35,000 Parmalat employees. His operational base is in Italy. He reports to the Italian government and the Court of Parma. His focus is the Parmalat Group as a whole and not the liquidation of Parmalat Capital. He is also exceedingly busy. Judge Henderson notes that Dr. Bondi failed to attend hearings before the Grand Court and resisted to be cross-examined on his affidavits. Additionally, the Grand Court rejects the four considerations advanced by Gabriel Moss, Q.C., at Turner & Roulstone, in George Town, Cayman Islands, on behalf of Dr. Bondi. Mr. Moss asked the Grand Court to consider: -- the demands of comity; -- the views of creditors; -- the need to avoid wasted cost; and -- the funding and cooperation available to Dr. Bondi from the Parmalat Group. The JPLs have yet to secure the funding they need for future investigations. Mr. Moss argued that intercompany creditors, representing 93% of Parmalat Capital liabilities, favor the appointment Dr. Bondi. Mr. Moss alleged that Parmalat Capital owes $4.733 billion in intercompany debts to Parmalat Finance Corporation BV, Parmalat Participacoes do Brasil Ltda, Olex SA, Parmalat Netherlands BV, Parmalat SpA and Parmalat SOPARFI SA. Parmalat Capital also owes $5.2 billion to other members of the Parmalat Group. Judge Henderson holds that the views of creditors who are also shareholders or connected to the former management of a company are given less weight. Judge Henderson cites that in In re Southard and C.L. Ltd. [1979] 1 WLR 546, the Grand Court indicated that: ". . . [an intercompany] creditor is prima facie morally responsible for the insolvency and large indebtedness of the company, unless and until the contrary is shown * * * The insolvency of the company and its considerable indebtedness could be the result of mismanagement or lack of control by its parent company. . . . [I]n the absence of evidence to the contrary . . . the [intercompany] creditor had in its power to control the activities of the company which is now bankrupt. . . ." Judge Henderson observes that Parmalat SpA and the other intercompany creditors appear to have contributed to Parmalat Capital's insolvency by fraudulent dealings and appear to be insolvent themselves. In addition, there is uncertainty over the veracity and magnitude of intercompany claims, in light of the fraudulent documents that have been created. The reliability of the Parmalat Group's accounting records and procedures is questionable. Accordingly, Judge Henderson favors the views of independent, third party creditors, which prefer Messrs. Cleaver and MacRae. The Grand Court also holds that, while comity is an important factor to take into account, it is not a demand that must be satisfied at any cost. The views of creditors and the suitability of the candidates for appointment as Liquidators are also highly material. The Grand Court further believes that the specter of wasted cost is not a major factor. The costs to recover Parmalat Capital documents in Malta pale into insignificance when viewed against the magnitude of creditor claims filed against Parmalat Capital. Funding is also not an issue. The Grand Court notes that Messrs. Cleaver and MacRae have secured some funding and are in discussions with independent creditors for more. The Grand Court also believes that the Noteholders may find it in their own commercial best interest to finance the provisional liquidation. Other independent creditors may also be willing to contribute. 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. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000) PER-SE TECH: Filing Delay Prompts Nasdaq's Noncompliance Notice --------------------------------------------------------------- Per-Se Technologies, Inc. (Nasdaq: PSTI) has received a notification from the Nasdaq Listing Qualifications Department that states that the Company is not in compliance with NASD Marketplace Rule 4310(c)(14). The Company expected to receive the notification because of the delay in filing its 2003 annual report on Form 10-K with the U.S. Securities and Exchange Commission (SEC). The notification begins a process that includes an avenue for appeals, which the Company will follow. The notification states that unless the Company requests an appeals hearing on the matter before a Nasdaq Listing Qualification Panel (the Panel) the Company's shares will be delisted from The Nasdaq National Market (Nasdaq) at the opening of business on April 13, 2004. The Company is in the process of requesting the hearing. Under NASD Marketplace Rules, the hearing request will stay the delisting process pending the Panel's decision. During this process, the Company's shares will continue to trade on Nasdaq but its trading symbol will change from PSTI to PSTIE as of the opening of trading on April 5, 2004. The Company's delay in filing its Form 10-K is the only listing deficiency cited in the notification. Once the Company's 2003 annual report on Form 10-K is filed with the SEC, the Company expects to be compliant with Nasdaq listing standards. About Per-Se Technologies Atlanta, Ga.-based Per-Se Technologies (Nasdaq: PSTI) is the leader in Connective Healthcare. Connective Healthcare solutions from Per-Se enable physicians and hospitals to achieve their income potential by creating an environment that streamlines and simplifies the complex administrative burden of providing healthcare. Per-Se's Connective Healthcare solutions help reduce administrative expenses, increase revenue and accelerate the movement of funds to benefit providers, payers and patients. More information is available at http://www.per-se.com/ As reported in the Troubled Company reporter's March 31, 2004 edition, Standard & Poor's Ratings Services placed its 'B+' corporate credit and other ratings on Per-Se Technologies Inc. on CreditWatch with negative implications following the company's announcement it will not file its 10-K by the March 30, 2004, extension deadline. On March 16, 2004, Per-Se filed for an automatic 15-day extension to file its 10-K so that the company's outside accountant could complete additional audit procedures as a part of Per-Se's year- end 2003 audit. Per-Se's outside accountant has advised Per-Se and its audit committee that additional audit procedures are necessary in connection with allegations made in early November 2003 of improper accounting and business activities. Per-Se is unable to predict at this time when the company's outside accountant will complete its review or when Per-Se will file its 10-K. PG&E NATIONAL: Reaches Settlement to End Rockingham Claim Dispute ----------------------------------------------------------------- Debtor USGen New England, Inc. operates a series of six generating facilities that comprise the Connecticut River System. Traveling south on the Connecticut River System, USGen's hydroelectric project known as the Bellows Falls Project is the fifth facility on the river, which is located in both New Hampshire and Vermont. The powerhouse and a portion of the dam are located in the town of Rockingham, Vermont in the village of Bellows Falls. Most of the dam and reservoir are located in the State of New Hampshire. The Bellows Falls Project, including all of the property, land and facilities, is licensed as Project No. 1855 under the terms of a license issued by Federal Energy Regulatory Commission on August 3, 1979 pursuant to the Federal Power Act. USGen is the sole licensee under the FERC license. The Bellows Falls Project, on average, generates 226,000 MWH of electricity per year. The average annual consumption -- load -- of electricity within Rockingham is in the range of 36,000 MWH, or only 16% of the electricity generated by the project. As a result, Rockingham will, by necessity, sell 84% of the electricity generated by the project. On November 21, 2003, the Selectmen of the Town of Rockingham, pursuant to a vote taken on November 18, 2003, notified USGen of the commencement of condemnation proceedings, pursuant to, inter alia, Section 2910 of Chapter 79 of Title 30 of the Vermont Statutes, for the purpose of taking the Bellows Falls Project by eminent domain. The Condemnation Notice states that it is the intention of the Selectmen to take the Bellows Falls Project for the purpose of conducting Rockingham's municipal electric utility operations pursuant to Chapter 79. The Eminent Domain Proceeding is not before a court or neutral decision maker. Rockingham is purporting to act solely through its own select board to determine whether to proceed with the taking and to establish the purchase price. That is, the would- be buyer is claiming the right to set the purchase price unilaterally, subject only to USGen's appeal rights. USGen asked the Court to declare that the automatic stay imposed by Section 362(a) of the Bankruptcy Code applies to the Eminent Domain Proceeding and that Rockingham's continued prosecution of the Eminent Domain Proceeding is in violation of the automatic stay. Moreover, USGen asks the Court to enjoin Rockingham from prosecuting the Eminent Domain Proceeding. * * * John Lucian, Esq., at Blank Rome, LLP, in Baltimore, Maryland, relates that, rather than litigate further the issues presented in the Adversary Proceeding, USGen, Rockingham, and the Official Committee of Unsecured Creditors negotiated a settlement embodied in a term sheet. Mr. Lucian explains that the Term Sheet is not binding and its provisions are expressly subject to the preparation of, and will be memorialized in, definitive agreements. The agreements include: (a) an Option Agreement for Rockingham to purchase the Bellows Fall Project; (b) an Operating Agreement, pursuant to which USGen or its successor will operate the Bellows Falls Project; and (c) other agreements as may be necessary for the continued functioning of the Bellows Falls Project, adjacent transmission facilities, and other upstream and downstream hydroelectric facilities. Thus, USGen asks the Court to approve the Option Agreement and the Operating Agreement pursuant to a consent decree by and among the parties. In the event Rockingham exercises its Option, USGen also asks the Court to approve the Other Agreements. The salient terms of the Term Sheet are: Grant of Option USGen will grant to Rockingham the Option to purchase the Bellows Falls Project, which Option must be exercised by November 1, 2004, or the Option Agreement terminates. Project Covered The Bellows Falls Project consists of real and personal property with respect to the hydroelectric project described in Federal Energy Regulatory Commission License No. 1855. Condition of Project Sale is on "as is, where is" basis Purchase Price $72,046,000 Escrow The full Purchase Price is to be escrowed within seven days after Rockingham exercises its Option. Headwaters Benefits The Purchase Price contains within it a single payment, made for perpetuity, for any claim for headwaters benefits. USGen agrees that if it transfers any upstream project, the owner of which may otherwise assess the Project headwaters benefits, the documents of conveyance respecting such transfer will include a provision acknowledging that, in light of the Purchase Price, no further headwater benefits fee will be paid by Rockingham. Operating Agreement The Town will enter into an Operating Agreement providing that upon the closing of the transaction USGen or its successor or assign will operate the Bellows Falls Project for a fee to be agreed upon, consonant with the fees paid for operation of similar projects, and reimbursement of costs, for a term through April 30, 2018. Regulatory Approvals Within two weeks after the Purchase Price is delivered to the escrow agent, USGen and Rockingham will jointly apply to the FERC for the transfer of the License and to the Vermont Public Service Board for authority with respect to the transfer of the Bellows Falls Project to Rockingham, to the extent that the VPSB has not previously authorized the transfer and purchase of the Bellows Falls Project. Condemnation In consideration of the Option Agreement, Rockingham will agree for a period of 10 years following the effective date of the Option Agreement not to condemn the Bellows Falls Project without the express consent of the Project owner or to acquire the Project by any other means. In addition, Rockingham will not oppose, in any proceedings before the FERC, the VPSB or the Court, or any other forum, a sale or transfer of the Bellows Falls Project or any other assets of USGen provided that the Option Agreement is duly executed and recorded on the applicable land records, and the sale or transfer of the Project contains provisions incorporating all aspects of the Option Agreement. Mr. Lucian states that in the event Rockingham exercises its Option, USGen and the Creditors Committee believe that the Purchase Price for the Bellows Falls Project is fair and reasonable. Conversely, if Rockingham does not exercise its Option, Rockingham's agreement not to seek to condemn the Bellows Falls Project or to acquire the Project by any other means for a 10-year period removes a significant cloud on the Project in the context of USGen's marketing and possible sale of the Project. Mr. Lucian notes that either way, the Option and Operation Agreements restore certainty to and remove any "chilling effect" on USGen's reorganization process. Furthermore, the Option and Operation Agreements avoid the expense and delay associated with, and the attendant risks of, further litigation, the cost of which would be borne by USGen's estate. The Consent Decree The Consent Decree as negotiated by USGen, the Creditors Committee, and Rockingham in relation to the settlement of the Adversary Proceeding and USGen's entry into the Option and Operating Agreements provide that: (a) To bring certainty to the process of reorganization, enforce the applicability of the automatic stay, and facilitate the ability of USGen to propose a Plan on which all participants in the proceedings may rely as a reasonably reliable commitment by USGen to future actions, Rockingham will not seek to acquire the Project or any part of it by any means including, but not limited to, the exercise of its right of eminent domain, for 10-year period from the date of the Consent Decree and the execution of the Option Agreement and the Operating Agreement; (b) Rockingham's commitment is intended, and is a mandatory, enforceable obligation, designed to implement the terms of the settlement reached by the parties to resolve the Adversary Proceeding, fully enforceable by continuing injunctive relief, under Sections 362, 105, 1141 of the Bankruptcy Code and Rule 7065 of the Federal Rules of Bankruptcy Procedure, as may from time to time be applicable, and under the inherent power of the Court to enforce its own orders; (c) USGen is authorized to enter into the Option Agreement and the Operating Agreement; (d) In the event Rockingham exercises its Option, USGen is authorized to enter into the Other Agreements as may be necessary for the continued functioning of the Project, adjacent transmission facilities, and other upstream and downstream hydroelectric facilities, upon notice to parties-in-interest; (e) In exchange for Rockingham's agreement to enter into the Consent Decree and the Other Agreements, USGen and the Creditors Committee will support Rockingham in its efforts under state law to purchase the Project by exercise of the Option; (f) To the extent applicable, the automatic stay of Section 362 will not apply to any of Rockingham's efforts in seeking to exercise the Option, including any efforts under the eminent domain procedures of the states of Vermont or New Hampshire; (g) USGen is authorized to take any actions as may be necessary to implement the terms of the Consent Decree without the need for further Court-authorization; (h) Rockingham consents to the continuing jurisdiction of the Court to enforce the Consent Decree; (i) The Adversary Proceeding and all other proceedings before the Court between the parties are dismissed; and (j) The Consent Decree will be binding on the successors and assigns of USGen and Rockingham including, without limitation, any Chapter 7 trustee or successor to USGen and any future "Selectboard" of Rockingham, and its terms will not be modified by any Plan or subsequent Court order without the consent of Rockingham and USGen. 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. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000) PLAINVILLE TRUCK: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Plainville Truck Stop, Inc. aka Plainville Travel Plaza, LLC aka Truckside Cafe, Inc. 116 Washington Street Plainville, Massachusetts 02762 Bankruptcy Case No.: 04-12449 Type of Business: The Debtor runs a truck stop with customary facilities in Plainville, Massachusetts. Chapter 11 Petition Date: March 26, 2004 Court: District of Massachusetts (Boston) Judge: William C. Hillman Debtor's Counsel: Frank D. Kirby, Esq. 314 West 2nd Street South Boston, MA 02127 Tel: 617-269-0011 Total Assets: $2,000,000 Total Debts: $2,250,000 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Concord Oil of Newport $1,700,000 147 Lowell Road Concord, MA 01742 Flynn Petroleum LLC $145,510 Sears Burner Service, Inc. $142,863 Perry Boudreau $55,500 One Beacon Insurance $24,655 Massachusetts Electric $17,077 Keegan, Werlin & Pabian, LLC $14,306 David Jenkins $13,000 Pine State Trading $8,592 Plainville Water Sewer $6,977 Liberty Mutual Insurance $6,212 Interstate Scales $4,947 Trendar Merchant Services $4,234 Waste Management of Rhode Island $3,111 Select Energy $1,852 Continental Fuel Systems $1,485 TV News Sales Company, Inc. $1,202 B & A Advertising $774 Energy USA Propane $530 Byron L. Taylor, Esq. $440 QUESTERRE: Beaver River Unit Files for CCAA Protection in Canada ---------------------------------------------------------------- Questerre Energy Corporation (QEC:TSX) reported the recent developments with its projects in Quebec and British Columbia. St. Lawrence Lowlands, Quebec Questerre's first well in the St. Lawrence Lowlands, the St. Sophie #1 well, is on schedule to spud by the end of May 2004. Lease construction is complete and the site has been inspected by local government personnel. The Nabors #9ETD drilling rig and all associated service equipment will be released early next week and mobilized to location in May following spring breakup. The St. Sophie #1 well is the first well in a proposed multi-well exploration program planned for Questerre's extensive acreage in the St. Lawrence Lowlands. The primary play in the Lowlands is a hydrothermal dolomite sequence known regionally as the Trenton- Black River. Recently the Trenton-Black River play has been responsible for some of the largest discoveries in the Appalachian Basin in the United States. It remains one of the most prolific plays here and forms the basis for Talisman Energy's new core area in this Basin. Prompted by the success of this play in the Appalachian Basin, Questerre has entered into discussions with several industry partners, including an integrated utility company regarding their participation in the St. Sophie #1 well. The St. Sophie #1 well is targeting an undrilled structure known as Becancour prospective for the Trenton-Black River formation. On an unrisked basis, the structure could contain recoverable reserves of up to 650 Bcf, with up to an estimated 1 Tcf of gas in place. Beaver River Field, British Columbia Over the last month Questerre's wholly owned subsidiary, Questerre Beaver River Inc., has focused on tying-in the A-5 well drilled earlier this winter and incorporating the results from this well into the current field interpretation. A-5 well and restructuring of QBRI The tie-in of the A-5 well to the production facilities and the field gathering system was completed on schedule late last month. Stabilized production from this well will be determined by a long-term production test that is expected to commence shortly. Cost overruns associated with the A-5 re-entry are currently estimated at $12.7 million, or nearly 2-1/2 times the original cost estimate of $5.3 million. As a result of these overruns, trade creditors are presently owed approximately $8.3 million by QBRI. In light of its current situation, a Special Committee of the Board of Questerre was recently formed to evaluate strategic and restructuring alternatives for QBRI. On the recommendation of the Special Committee, to facilitate an orderly restructuring of the financial affairs of QBRI, QBRI has applied for and was granted protection from proceedings by creditors under the Companies Creditors Arrangement Act by an Order of the Court of Queen's Bench of Alberta issued under the CCAA. Unless extended by a further Order of the Court, the protection provided by the initial order will expire on April 30, 2004. Ernst & Young Inc. has been appointed as an officer of the Court of Queen's Bench of Alberta to monitor the business and affairs of QBRI while it remains under CCAA protection. QBRI intends to formulate a plan of arrangement for the consideration of its creditors and other stakeholders in the near future. QBRI anticipates that the future plan of arrangement will be accepted by the creditors, allowing for the continued development of the Beaver River Field. Evaluation of A-5 results and future field development The absence of up-dip reservoir structure targeted by the A-5 re-entry indicated a major discrepancy with the existing 3-D seismic interpretation around the A-5 wellbore. To resolve this discrepancy, a detailed review of the seismic data and the resulting interpretation is underway. The review has suggested possible inconsistencies in the processing of the seismic data. To resolve these inconsistencies and better image the reservoir, the seismic data processing is being redone and a revised interpretation will be developed over the next two months. A preliminary review of the updated seismic data continues to provide strong support for the theory of compartmentalization in the Beaver River Field. Drilling locations for undrilled compartments will be determined by the revised field interpretation. Subject to financing, QBRI anticipates spudding a well to test for these new compartments. Questerre Energy Corporation is a Calgary-based independent resource company actively engaged in the exploration for and development, production and acquisition of large-scale natural gas projects in Canada. RURAL/METRO: Remains as Youngstown, Ohio's 911 Ambulance Provider ----------------------------------------------------------------- Rural/Metro Corporation (Nasdaq: RURL), a leading national provider of ambulance and fire protection services, has been awarded a one-year contract extension to continue as the exclusive provider of 911 emergency ambulance services in Youngstown, Ohio. The term began March 1, 2004 and is valued at approximately $1.3 million. Jack Brucker, President and Chief Executive Officer, said, "We are very pleased to extend our services for another year in Youngstown. We have served this community for more than 30 years and believe that significant growth potential remains as we continue to enhance our base of operations in the region." Rural/Metro provides emergency and non-emergency ambulance transportation services in the communities of Youngstown, Boardman Township, and Poland Township in Mahoning County, and the cities of Niles, Hubbard, Girard, and Warren, as well as Hubbard Township in Trumbull County. The company also is the exclusive contracted provider to Forum Health Hospital System, which includes two main hospital campuses as well as medical centers, ambulatory campuses, home-care agencies and other clinical services. The company's employees respond to more than 30,000 requests for service in the area each year, with 9,500 of those transports provided within the City of Youngstown. Todd Walker, President of Rural/Metro's Mid-Atlantic/Northeast Emergency Services Group, said, "Our team remains committed to the health and safety of the citizens of Youngstown and the surrounding communities by providing excellent and innovative patient care and customer service." As an example, the company recently launched a DriveCam(TM) test program, which integrates in-vehicle video technology with driving performance management software. Walker continued, "Our objective is to create the safest driving environment possible for our employees and for the citizens we serve. We view this as an important investment back into community." Rural/Metro Corporation -- whose December 31, 2003 balance sheet shows a total stockholders' equity deficit of $210,080,000 -- provides emergency and non-emergency medical transportation, fire protection, and other safety services in 24 states and more than 400 communities throughout the United States. For more information, visit http://www.ruralmetro.com/ SEGA GAMEWORKS: Look for Schedules & Statements on April 9 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California, gave SEGA Gameworks, LLC more time to file their schedules of assets and liabilities, statements of financial affairs and lists of executory contracts and unexpired leases required under 11 U.S.C. Sec. 521(1). The Debtor has until April 9, 2004 to file their Schedules of Assets and Liabilities and Statement of Financial Affairs. Headquartered in Glendale, California, SEGA Gameworks LLC -- http://www.gameworks.com/-- operates 16 video arcades in 11 US states, Canada, Guam, and Kuwait. The Company filed for chapter 11 protection on March 9, 2004 (Bankr. C.D. Calif. Case No. 04- 15404). Ron Bender, Esq., at Levene Neale Bender Rankin & Brill represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed both estimated debts and assets of over $10 million. SK GLOBAL: Court Adjourns Sec. 304 Injunction Hearing to June 9 --------------------------------------------------------------- Judge Blackshear will continue the hearing with respect Hana Bank's request for a preliminary injunction under Section 304(a) of the Bankruptcy Code on June 9, 2004, at 2:00 p.m. Hana Bank, as foreign representative of SK Networks Co. Ltd., formerly known as SK Global Co., Ltd., filed a Section 304 petition with the U.S. Bankruptcy Court on April 10, 2003, to prevent lenders from grabbing SK Network's U.S. assets. (SK Global Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000) SMITHFIELD FOODS: Sells Schneider to Maple Leaf Foods for $378MM ---------------------------------------------------------------- Smithfield Foods, Inc. (NYSE: SFD) announced the closing of the sale of its wholly-owned Canadian subsidiary, Schneider Corporation, to Maple Leaf Foods, Inc. (Toronto: MFI) for approximately $378 million, subject to closing adjustments, including the assumption of the company's outstanding debt. Smithfield will use the net proceeds to repay the bridge loan used to finance the acquisition of Farmland Foods in October 2003. With annualized sales of $9 billion, Smithfield Foods (S&P, BB+ Corporate Credit Rating, Negative) is the leading processor and marketer of fresh pork and processed meats in the United States, as well as the largest producer of hogs. For more information, please visit http://www.smithfieldfoods.com/ SPRING AIR PARTNERS: Tap Zukerman Gore as Special Corp. Counsel --------------------------------------------------------------- Spring Air Partners - North America, Inc., and its debtor- affiliates seek to employ the services of Zukerman Gore & Brandeis, LLP as its special corporate counsel as of the Petition Date. Zukerman Gore will continue to: a. help conduct Board meetings, take and prepare minutes, and provide general corporate advice to the Board; b. work with management to negotiate and document various supply agreements, employment agreements, license agreements, leases, and other agreements that the Debtors customarily enter into in the ordinary course of business; c. assist the Debtors in maintaining their stock books and records; d. assist the Debtors in maintaining their corporate structure with respect to its various subsidies; and e. prepare, circulate and effect the execution of necessary Board and, when appropriate, stockholder resolutions with respect to all matters pertaining to the Debtors and their subsidiaries. The attorneys presently designated to represent the Debtors and their current standard hourly rates are: Professional's Name Billing Rate ------------------- ------------ Clifford A. Brandeis $450 per hour John K. Crossman $425 per hour Howard M. Berkower $375 per hour Clem Turner $275 per hour John Kukulski $200 per hour The Debtors assure the U.S. Bankruptcy Court for the Southern District of New York that Zukerman Gore is a "disinterested person" as that phrase is defined in the Bankruptcy Code. Headquartered in New York, New York, Spring Air Partners - North America, Inc., -- http://www.springair.com/-- is a bedding manufacturer in the United States, manufacturing mattresses and box springs under multiple brand names: Back Supporter(R), ComfortFlex(R), Four Seasons(R), Chattam and Wells(R), Posture Comfort(R) and Nature's Rest(R), for sale to local, regional and national retailers in the United States and Canada. The Company filed for chapter 11 protection on March 22, 2004 (Bankr. S.D.N.Y. Case No. 04-11915). Mark A. Broude, Esq., at Latham & Watkins represents the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed estimated assets of more than $10 million and estimated debts of over $50 million. STOLT OFFSHORE: Signs $150 Million Contract in Nigeria ------------------------------------------------------ Stolt Offshore S.A. (Nasdaq: SOSA; Oslo Stock Exchange: STO), announced the signing of an interim agreement for the second phase of the Amenam project in Nigeria. The contract, once finalised, is valued at approximately $150 million. It calls for the engineering, procurement, fabrication, installation and commissioning of a 640 tonne water injection platform with 550 tonne topsides at the Stolt Offshore Globestar fabrication yard at Warri in Nigeria. A 60 kilometre, 24-inch diameter gas export line will be installed together with a two kilometre 18-inch diameter pipeline that will link the new water injection platform to a process platform. The offshore installation programme will be in 2005. JP Capron, Vice President, Africa and Mediterranean Region said, "The award of this significant fabrication and pipelay project follows on from a similar package of work on the first phase of the Amenam development that we completed successfully in 2002. It also recognises both the excellent quality of work that our yard in Warri is known to produce and our experience of this type of project." 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. SUREBEAM: Bankruptcy Court Approves Titan Settlement With Trustee ----------------------------------------------------------------- The Titan Corporation (NYSE: TTN) announced that the United States Bankruptcy Court for the Southern District of California approved the settlement agreement the company had entered into with the bankruptcy trustee of SureBeam Corporation and SB Operating Co LLC (SureBeam). This settlement provides for Titan to have immediate access to, and can take legal title to, all of the SureBeam assets, with the exception of a few selected assets that will remain in the bankruptcy estate. These assets include all equipment and inventory, patents, intellectual property, certain customer receivables, and leased and subleased properties. The excluded items are cash and two customer receivables. Titan -- as the senior secured creditor -- intends to sell or otherwise dispose of the assets that it chooses to take title to, which is expected to partially satisfy the $25 million senior secured note owed to Titan by SureBeam, and Titan's guarantees of SureBeam facilities leases. The court-approved settlement agreement grants access to Titan of substantially all of SureBeam's assets, which is consistent with the assumption used in the related after-tax impairment charge of up to $10 million previously announced by Titan. Headquartered in San Diego, The Titan Corporation is a leading provider of comprehensive information and communications systems solutions and services to the Department of Defense, intelligence agencies, and other federal government customers. As a provider of national security solutions, the company has approximately 12,000 employees and current annualized sales of approximately $2.0 billion. TECH FABRICATIONS: Case Summary & Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Technical Fabrications, Inc. 4 Malcolm Hoyt Drive Newburyport, Massachusetts 01950 Bankruptcy Case No.: 04-12564 Chapter 11 Petition Date: March 29, 2004 Court: District of Massachusetts (Boston) Judge: Carol J. Kenner Debtor's Counsel: Donald H. Adler, Esq. Finneran & Nicholson, P.C. 44 Merrimac Street Newburyport, MA 01950 Tel: 978-462-1514 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ A&A Machinery $2,063 Aerodyne Ulbrich Goods $8,139 Agentry Services $7,541 AISI Goods $5,089 Blue Cross Blue Shield Insurance $10,407 CitiCorp Vendor Finance Equipment Deficiency $80,218 CNC Techniques Services $188 GMAC Vehicle Lease $2,100 Haas Factory Outlet Services $3,722 Hanover Insurance Insurance $2,786 High Speed Technologies Services $3,549 Hooven-Bodycote Services $2,965 Lehigh Armstrong Goods $1,420 Newcourt Financial Equipment Deficiency $136,606 Penn, Alan Comm. for Services $37,672 Portland Press Herald Services $1,485 Prime Surface Technology Services $852 Tufts Insurance $6,980 Waste Management Services $453 Yarde Metals Goods $5,763 TELETECH: Broadband Service Provider Extends Service Agreement -------------------------------------------------------------- TeleTech Holdings, Inc. (Nasdaq: TTEC), a leading global provider of customer solutions, announced its renewal of a multiyear agreement with a U.S.-based broadband service provider that offers a complete selection of DSL and dedicated Internet access services for residential consumers and businesses. Under terms of the agreement, TeleTech will continue to provide comprehensive business solutions for the client's dial-up and DSL customers. TeleTech has consistently demonstrated its breadth of capabilities and strong understanding of the client's business objectives over the course of their four-year partnership. This synergy helps TeleTech identify the client's specific goals and implement the right solution to grow the client's business. By deploying advanced technology and industry-specific solutions, TeleTech is able to expand customer options and convenience while lowering overall interaction costs. "Through our collaborative efforts with the client we have built an exceptional brand by creating the optimum customer experience," said William S. Beans, Jr., TeleTech's president, communications and media. "Looking ahead, we will build upon that excellence to expand the client's customer base." ABOUT TELETECH TeleTech is a global leader of integrated customer solutions designed to help clients acquire, grow, and retain profitable relationships with their customers. TeleTech has built a worldwide capability supported by more than 33,000 professionals in North America, Latin America, Asia-Pacific and Europe. For additional information, visit http://www.teletech.com/ * * * LIQUIDITY AND CAPITAL RESOURCES Historically, capital expenditures have been, and future capital expenditures are anticipated to be, primarily for the development of customer interaction centers, technology deployment and systems integrations. The level of capital expenditures incurred in 2003 will be dependent upon new client contracts obtained by the Company and the corresponding need for additional capacity. In addition, if the Company's future growth is generated through facilities management contracts, the anticipated level of capital expenditures could be reduced. The Company currently expects total capital expenditures in 2003 to be approximately $40.0 million to $50.0 million, excluding the purchase of its corporate headquarters building. The Company expects its capital expenditures will be used primarily to open several new non-U.S. customer interaction centers, maintenance capital for existing centers and internal technology projects. Such expenditures are expected to be financed with internally generated funds, existing cash balances and borrowings under the Revolver. The Company's Revolver is with a syndicate of five banks. Under the terms of the Revolver, the Company may borrow up to $85.0 million with the ability to increase the borrowing limit by an additional $50.0 million (subject to bank approval) within three years from the closing date of the Revolver (October 2002). The Revolver matures on December 28, 2006 at which time a balloon payment for the principal amount is due, however, there is no penalty for early prepayment. The Revolver bears interest at a variable rate based on LIBOR. The interest rate will also vary based on the Company leverage ratios (as defined in the agreement). At June 30, 2003 the interest rate was 2.5% per annum. The Revolver is unsecured but is guaranteed by all of the Company's domestic subsidiaries. At June 30, 2003, $39.0 million was drawn under the Revolver. A significant restrictive covenant under the Revolver requires the Company to maintain a minimum fixed charge coverage ratio as defined in the agreement. The Company also has $75 million of Senior Notes which bear interest at rates ranging from 7.0% to 7.4% per annum. Interest on the Senior Notes is payable semi-annually and principal payments commence in October 2004 with final maturity in October 2011. A significant restrictive covenant under the Senior Notes requires the Company to maintain a minimum fixed charge coverage ratio. Additionally, in the event the Senior Notes were to be repaid in full prior to maturity, the Company would have to remit a "make whole" payment to the holders of the Senior Notes. As of June 30, 2003, the make whole payment is approximately $11.9 million. During the second quarter of 2003, the Company was not in compliance with the minimum fixed charge coverage ratio and minimum consolidated net worth covenants under the Revolver and the fixed charge coverage ratio and consolidated adjusted net worth covenants under the Senior Notes. The Company has worked with the lenders to successfully amend both agreements bringing the Company back into compliance. While the Revolver and Senior Notes had subsidiary guarantees, they were not secured by the Company's assets. In connection with obtaining the amendments, the Company has agreed to securitize the Revolver and Senior Notes with a majority of the Company's domestic assets. As part of the securitization process, the two lending groups need to execute an intercreditor agreement. If an intercreditor agreement is not in place by September 30, 2003, the lenders could declare the Revolver and Senior Notes in default. The lenders and the Company believe they will be able to execute the intercreditor agreement by September 30, 2003. However, no assurance can be given that the parties will be successful in these efforts. Additionally, the interest rates that the Company pays under the Revolver and Senior Notes will increase as well under the amended agreements. The Company believes that annual interest expense will increase by approximately $2.0 million a year from current levels under the Revolver and Senior Notes as amended. The Company believes that based on the amended agreements it will be able to maintain compliance with the financial covenants. However, there is no assurance that the Company will maintain compliance with financial covenants in the future and, in the event of a default, no assurance that the Company will be successful in obtaining waivers or future amendments. From time to time, the Company engages in discussions regarding restructurings, dispositions, mergers, acquisitions and other similar transactions. Any such transaction could include, among other things, the transfer, sale or acquisition of significant assets, businesses or interests, including joint ventures, or the incurrence, assumption or refinancing of indebtedness, and could be material to the financial condition and results of operations of the Company. There is no assurance that any such discussions will result in the consummation of any such transaction. Any transaction that results in the Company entering into a sales leaseback transaction on its corporate headquarters building would result in the Company recognizing a loss on the sale of the property (as management believes that the current fair market value is less than book value) and would result in the settlement of the related interest rate swap agreement (which would require a cash payment and charge to operations of $4.7 million). TITANIUM: Commences Convertible Pref. Securities Exchange Offer --------------------------------------------------------------- Titanium Metals Corporation (TIMET)(NYSE: TIE) announced that its Board of Directors has approved an exchange offer pursuant to which the Company would exchange 4,024,820 shares of a newly created 6.75% Series A Convertible Preferred Stock to be issued by the Company for all of the outstanding 4,024,820 6.625% Convertible Preferred Securities, Beneficial Unsecured Convertible Securities, liquidation preference $50 per security, including the associated guarantee (the "BUCS") issued by TIMET Capital Trust I. The exchange of BUCS for shares of Series A Preferred Stock will, among other things, improve the Company's consolidated balance sheet by reducing outstanding indebtedness and increasing stockholders' equity. Subject to the preferential rights of the holders of any class or series of our capital stock ranking senior to the Series A Preferred Stock as to dividends, the holders of shares of the Series A Preferred Stock will be entitled to receive, when, as, and if declared by our Board of Directors out of funds of TIMET legally available for the payment of dividends, cumulative cash dividends at the rate of 6.75% of the liquidation preference per annum per share (equivalent to $3.375 per annum per share). Each share of Series A Preferred Stock will be convertible, in whole or in part, at any time, at the option of the holder thereof, into 0.2 share of TIMET common stock, subject to adjustment in certain events. Assuming the consummation of the proposed five-for-one stock split previously announced on March 24, 2004, each share of Series A Preferred Stock will be convertible, in whole or in part, at any time, at the option of the holder thereof, into one share of TIMET common stock, subject to adjustment in certain events. The exchange offer will be subject to the satisfaction or waiver of several conditions, including approval by our stockholders of the exchange offer and of an amendment to our certificate of incorporation to increase the number of shares that we are authorized to issue. The exchange offer is also conditioned on the effectiveness of a registration statement and prospectus on Form S-4 to be filed with the United States Securities and Exchange Commission (the "SEC") and the consent of the lender under our current U.S. bank credit facility to, or the amendment of such instrument to permit, the issuance of the Series A Preferred Stock. The Company filed with the SEC a preliminary proxy statement including, among other proposals for which common stockholder approval is being solicited, a proposal regarding the exchange offer and issuance of Series A Preferred Stock. These matters will be voted upon at the Company's 2004 Annual Meeting of Stockholders, currently scheduled for May 21, 2004. Further details regarding the exchange offer proposal can be found in the preliminary proxy statement. TIMET and its directors and executive officers and other members of its management and employees, may be deemed to be participants in the solicitation of proxies from the stockholders of TIMET in connection with the approval of the exchange offer. Information about the directors and executive officers of TIMET and their ownership of TIMET stock is set forth in the proxy statement filed with SEC. TIMET, headquartered in Denver, Colorado, is a leading worldwide producer of titanium metal products. Information on TIMET is available on the internet at http://www.timet.com/. * * * As previously reported, Standard & Poor's Ratings Services lowered its preferred stock rating on Titanium Metals Corp. to 'D' from 'C' after the company deferred dividend payments on its preferred securities. Standard & Poor's affirmed its 'B-' corporate credit rating on the company and revised its outlook on to stable from negative. Meanwhile, Moody's rates the 6-5/8% Convertible Preferred Securities issued by Timet Capital Trust I at Caa2. UNDERWRITER INSURANCE: Fitch Withdraws B Financial Strength Rating ------------------------------------------------------------------ Fitch Ratings, the international rating agency downgraded The Underwriter Insurance Company's Insurer Financial Strength rating to 'B' from 'BB+' and simultaneously withdrawn the rating. Fitch will no longer provide ratings or analytical coverage of this company. The downgrade reflects further significant reserve deterioration of GBP11.7m in 2003, contributing to a continued erosion of the capital base. This deterioration follows substantial reserve increases of GBP6.4 million and GBP16m being required during 2001 and 2002 respectively. The Underwriter's rating reflects the uncertainties that persist on reserving adequacy and risks to the capital base if assets prove not to be fully recoverable. The existing capital base is considered to be weak relative to the risks that have still to run-off. As a result of the reserve strengthening and costs associated with ceasing to write new insurance contracts in July of 2003, the capital base has weakened to GBP14.9m at end-2003 from GBP35.1m in the final audited 2002 accounts. Fitch is concerned that this level of capital represents a relatively small buffer given the uncertainty over reserves and the risk associated with the recoverability of certain (particularly reinsurance) assets. Fitch notes that The Underwriter has included a provision in the 2003 accounts against all projected future costs of the run-off net of all anticipated investment income. As a result of this net provision of GBP1.2m, the capital base of The Underwriter would not be expected to deteriorate further if the company's reserving, operating expense and investment income assumptions prove correct. However, the agency believes that further reserve deterioration remains a possibility given the expected duration of the run-off. The run-off administration period is expected to last until 2012 with upwards of 50% of the run-off expected to be complete by the end of 2006. The liquidity of investments remains good with the majority of investments held in cash deposits and the remainder in listed debt securities. The agency also notes that the 2003 results have been aided by exchange gains (GBP3.4m) in respect of mainly the Euro and Aus dollar although foreign exchange holdings have now been matched to ensure that exchange risks are hedged. However, Fitch believes that the uncertainty over reserves and the full recoverability of assets, particularly given the low capital base, leave the company in a weak position. Insurers rated in the 'B' category are viewed as weak with a poor capacity to meet policyholder and contract obligations. Risk factors are very high, and the impact of any adverse business and economic factors is expected to be very significant. UNIFAB: Losses & Strained Liquidity Prompt Going Concern Doubt -------------------------------------------------------------- UNIFAB International, Inc. (NASDAQ: UFAB) reports, as required by Nasdaq Marketplace Rule 4350(b), that the Company's independent auditor issued its audit report on the Company's financial statements for the year ended December 31, 2003. The report includes a "going concern qualification," which is an explanatory paragraph relating to the Company's ability to continue as a going concern, and states that the Company's recurring losses from operations, negative working capital position, and difficulties in meeting its financial obligations and funding its operations raise substantial doubt about the Company's ability to continue as a going concern. The qualification is due, in part, to the Company's dependence upon Midland Fabricators and Process Systems, LLC, its majority shareholder, for its working capital requirements. Under an informal arrangement with the Company, Midland has agreed to provide financial support and funding for working capital or other needs at Midland's discretion, from time to time. During the year ended December 31, 2003, Midland advanced $5.9 million to the Company for working capital, which is classified as a current liability at December 31, 2003. If Midland does not make available such additional funding to the Company when needed in the future, the Company could be unable to satisfy its working capital requirements and meet its obligations in the ordinary course of business. The Company further reported revenue for the year ended December 31, 2003 of $55.8 million compared to $33.3 million for the year ended December 31, 2002, an increase of 68%. Revenue increased for the Company's platform fabrication segment and drilling rig fabrication segment in the current year, compared to last year. This overall increase was partially offset by decreased revenue in the process systems segment. Cost of revenue was $60.6 million and exceeded revenue by $4.8 million for the year ended December 31, 2003. Cost of revenue was $39.3 million and exceeded revenue by $6.0 million for the year ended December 31, 2002. Cost of revenue in the year ended December 31, 2003 includes cost in excess of revenue of $2.2 million on a contract to fabricate buoyancy cans and $1.4 million related to a contract to fabricate drilling rig components. Additionally, underutilization at the Company's process systems manufacturing facility and costs related to start up operations at the Company's drilling rig fabrication facility increased costs per manhour, which could not be recovered at the current pricing levels. Net loss for the year ended December 31, 2003 was $11.8 million ($1.44 per share) compared to $20.5 million ($5.59 per share) in the year ended December 31, 2003. Backlog was approximately $7.6 million and $22.5 million at December 31, 2003 and 2002, respectively. UNIFAB International, Inc. is a custom fabricator of topside facilities, equipment modules and other structures used in the development and production of oil and gas reserves. In addition, the Company designs and manufactures specialized process systems, refurbishes and retrofits existing jackets and decks, and provides design, repair, refurbishment and conversion services for oil and gas drilling rigs. UNITED AIRLINES: Opts to Work With New Regional Carriers -------------------------------------------------------- United Airlines (OTC Bulletin Board: UALAQ) announced that it has decided to work with a new group of regional air carriers to fly ongoing United Express Service out of Washington Dulles and Chicago O'Hare. In connection with this decision, United is ending its relationship with Atlantic Coast Airlines (ACA), which had been operating a portion of the company's United Express Service out of Dulles and Chicago O'Hare. United and ACA have reached agreement on a transition of aircraft that begins June 3 and will be completed August 4. Chautauqua Airlines, Republic Airlines and Shuttle America, which are newly-announced partners in United Express, will operate United Express service out of Dulles and O'Hare. Existing partners Air Wisconsin, Trans States and Mesa will also serve O'Hare and Dulles, with SkyWest serving O'Hare as well. "United is committed to its full schedule of flights at Dulles -- a key hub for the company -- and to offering customers competitive fares and superior service. United will provide high-quality service to all of the markets currently served by United Express using ACA now and in the future," said Doug Hacker, executive vice president-Strategy. In addition to extensive flight options, customers traveling on any United Express flight earn Mileage Plus(R) miles and have access in many locations to United's full suite of Easy products. Already, passengers traveling to or from Dulles are able to enjoy easier connections to United Express directly from the main United terminal and beginning this summer, from our newly constructed United Express facility with easy access to United, Ted and Star Alliance flights. "The new and existing partners who will serve Dulles and O'Hare bring to United Express experience and excellent reputations for service and performance," said Pete McDonald, executive vice president-Operations. "We now have the opportunity to improve the flight experience with United Express for our passengers." "United employees and management are committed to Dulles, to being the best at what we do and to continuing to serve the needs of our customers in all United and United Express markets," McDonald added. "We will work hard every day to offer our customers the best possible travel experience." The transition agreement is subject to approval by the U.S. Bankruptcy Court and is expected to be heard during the regularly scheduled April 16 hearing. 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/ VENUS EXPLORATION: PYR Energy to Acquire All Assets for $3,225,000 ------------------------------------------------------------------ PYR Energy Corporation (Amex: PYR) has agreed to acquire substantially all the assets of Venus Exploration, Inc., which is currently under the supervision of the United States Bankruptcy Court in the Eastern District of Texas. The Court will soon issue the final Order of Sale and the acquisition will close on or before May 3, 2004, with an effective date of January 1, 2004. PYR and Venus have signed a definitive Purchase and Sale Agreement, and the total purchase price is $3,225,000, subject to final adjustments at closing. The purchase provides for a net profits interest payable to the Venus Exploration Trust. The net profits interest, which applies only to the exploration and exploitation projects on the Venus acreage being acquired, varies from 25% to 50% with respect to different Venus exploration and exploitation project areas, and decreases by one-half of its original amount after a total of $3,300,000 in proceeds has been paid to the Trust. Assets in the acquisition include producing oil and gas properties, exploitation and exploration drilling projects, and exploration acreage. Producing assets include both operated and non-operated properties. Current net production from the acquired properties is approximately 980 Mcfe per day, with estimated 'Total Proved' reserves of 4.667 Bcfe and estimated PV-10 of $5,819,000 based on the Company's consulting engineering estimates using flat pricing of $28/bbl and $4.50/mcf. Acquired reserves are approximately 65% oil by volume. Given the final estimated purchase price, total 'Proved' reserves were purchased at $0.68/mcfe and the total 'Proved Developed' reserves were purchased at $1.02/mcfe. A total of seven leased natural gas exploration and exploitation proposed projects are included in the asset acquisition. Of this total, three projects are pre-sold to industry partners and are scheduled to begin drilling operations within the next 45 days. These projects include the Tortuga Grande Prospect in Smith County, Texas, and the Nome and Madison Prospects in Jefferson County, Texas. PYR will have no capital costs associated with the initial testing of each of these three projects. The Tortuga Grande prospect is a test of the potential in the Cotton Valley Sand in a large structure in East Texas. The project involves the re-entry of a well drilled in the mid-1980's that encountered gas shows and non-commercial production from a thick sand section in the Cotton Valley, but was never fracture stimulated. A multi-stage fracture stimulation treatment is planned to evaluate the productive potential of the feature. If the fracture treatment proves successful, of which there is no assurance, multiple additional development locations would be available to the Company. PYR will have a 10% carried interest through the tanks, with an additional 10% working interest after well payout on the initial test well. In any additional locations within the project Area of Mutual Interest, PYR will participate with a cost bearing 20% working interest. PYR currently controls approximately 5900 gross and net acres of leasehold in the project. Both the Nome and Madison prospects are located within the expanded Yegua fairway along the Gulf Coast of Texas. The Nome Field was discovered in 1994, and our interpretation of subsequently acquired 3D seismic over the field indicates the presence of numerous undeveloped fault blocks. Multiple structural closures and associated bright spot locations have been identified at Nome based on the 3D seismic, and PYR will be carried for an 8.33% working interest, after project payout, in the project. At Madison, PYR owns a 0.5% overriding royalty interest that converts to a 12.5% working interest in the project after payout of the initial test well. This exploitation project in the northern portion of the Constitution Field will test multiple intervals within the expanded Yegua sand section, structurally high to existing field production. Scott Singdahlsen, PYR Energy Chief Executive Officer, stated: "We are extremely pleased with the Venus asset purchase. We believe that it gives us a solid production base while providing additional upside reserve and cash flow potential in its exploitation and exploration portfolio. San Antonio based Venus has a long history in East Texas and the Gulf Coast. The Venus technical team has been together for more than 20 years, and provides us with a solid presence in the Gulf Coast and interior Texas basins. Based on the significant exploitation and exploration experience of the Venus team as well as their data base of ongoing geologic ideas, I am confident in my belief that the Venus acquisition will accomplish one of our main corporate strategic goals of providing diversification to our overall program risk profile, complementing our ongoing high impact exploration program." Denver based PYR Energy is an independent oil and gas company primarily engaged in the exploration for and the development and production of natural gas and crude oil. PYR's activities are focused in select areas of the Rocky Mountain region as well as continued involvement San Joaquin Basin of California. Additional information about PYR Energy Corporation can be accessed via the Company's web site at http://www.pyrenergy.com/ VIRAGEN INC: Entering into $20 Million Financing Agreement ---------------------------------------------------------- Viragen, Inc. (Amex: VRA) has entered into purchase agreements for the issuance and sale of $20 million in convertible promissory notes and common stock purchase warrants. The notes, which will be convertible at market price upon their issuance, were placed with a group of new and returning institutional investors. The $20 million purchase price for the notes and warrants has been placed in escrow pending satisfaction of all conditions precedent to closing, including receipt of stockholder approval for the sale of the notes and warrants, as well as for a reverse split of Viragen's common stock. The proceeds will be used to progress the research, development, and commercialization of Viragen's portfolio of healthcare products and technologies, including an allocation to fund clinical studies for the purpose of seeking FDA approval for Multiferon(TM), its natural human alpha interferon which is currently approved for sale in certain international markets. The Board of Directors has authorized the Company to call a Special Meeting of Stockholders in order to solicit the required stockholder approvals. The reverse stock split, which is expected to be at the rate of 1:10, would affect all shares of common stock outstanding, including those underlying stock options and warrants, immediately prior to the effective time of the reverse split. Viragen intends to disseminate a proxy statement for use in connection with the Special Meeting of Stockholders following receipt of regulatory clearance to do so. Closing of the sale of notes and warrants, at which the notes and warrants will be issued and the purchase price delivered to Viragen, is expected to take place shortly after stockholder approval is obtained. "This significant investment in Viragen would provide us with the financial flexibility and strength necessary to support organizational growth as we move forward with our mission to build stockholder value," stated Viragen's Chairman, Mr. Carl N. Singer. "With this opportunity to add stability to our balance sheet, we are recommending a reverse stock split because we believe our stockholders would benefit from an improved capital structure that should appeal to institutional fund managers, research analysts and the professional investment community in general. With longer- term secured funding, a capital restructuring and the advent of expected commercial and scientific milestone achievements, we believe that the Company will be better positioned to create stockholder value." After placement agent fees and expenses, the Company expects to receive approximately $19 million in net proceeds. Viragen's President and CEO, Mr. Charles A. Rice, added, "It is our immediate priority to enhance and broaden our international marketing activities in order to increase sales of Multiferon as we develop a strategy that targets its introduction into the United States. This funding would allow us to move forward with these initiatives, as well as support our important research projects." The purchase agreements provide that Viragen pay interest on the escrowed purchase price at the rate of 10% per annum until the date the stockholders approve the sale of the notes and the reverse stock split, at which time, the interest rate on the escrowed funds will be reduced to 7% per annum. The notes will be convertible into shares of Viragen common stock at market price, subject to adjustment depending upon the market price of Viragen common stock following the reverse split. Warrant coverage will be provided at 120% of the conversion price of the notes. The complete terms of the financing will be detailed in a Current Report on Form 8-K to be filed with the SEC. "With the proceeds of this transaction added to our current cash balance, we will have approximately $27 million in working capital on hand," reported Viragen's Chief Financial Officer, Mr. Dennis W. Healey. "It is gratifying that we were able to obtain significant financing under such favorable terms including the notes being convertible at market and the warrants having a strike price above market. We believe that based on the positive developments of the Company and our growth prospects, we have been able to structure a transaction that is mutually beneficial to the Company and our investors." About Viragen, Inc. Viragen is a biotechnology company specializing in the research, development and commercialization of natural and recombinant protein-based drugs designed to treat a broad range of viral and malignant diseases. These protein-based drugs include natural human alpha interferon, monoclonal antibodies, peptide drugs and therapeutic vaccines. Viragen's strategy also includes the development of Avian Transgenic Technology for the large-scale, cost-effective manufacturing of its portfolio of protein-based drugs, as well as offering Contract Manufacturing for the biopharmaceutical industry. * * * In its Form 10-Q for the quarter ended December 31, 2003, Viragen Inc states: "We have experienced losses and a negative cash flow from operations since inception. During the three and six months ended December 31, 2003, we incurred losses of approximately $7,338,000 and $11,241,000, respectively. For the fiscal years ended June 30, 2003, 2002 and 2001 we incurred losses of approximately $17,349,000, $11,089,000, and $11,008,000, respectively. At December 31, 2003 we had an accumulated deficit of approximately $113,533,000. Management anticipates additional future losses as it commercializes its natural human alpha interferon product and conducts additional research activities and clinical trials to obtain additional regulatory approvals. Management believes we have enough cash to support operations through December 31, 2004. However, we will require substantial additional funding to support our operations subsequent to December 31, 2004. Management's plans include obtaining additional capital through equity and debt financings. No assurance can be given that additional capital will be available when required or upon terms acceptable to us. "Our future capital requirements are dependent upon many factors, including: revenue generated from the sale of our natural human alpha interferon product, progress with future and ongoing clinical trials; the costs associated with obtaining regulatory approvals; the costs involved in patent applications; competing technologies and market developments; and our ability to establish collaborative arrangements and effective commercialization activities. For all of fiscal 2004, we anticipate the need of approximately $9.0 to $10.0 million for operating activities, $1.5 million for investing activities and $1.0 million to service our financing obligations. "Manufacturing of our natural human alpha interferon at our leased facility in Umea, Sweden, has been suspended since March 31, 2003. This planned break in routine manufacturing was necessary to allow for certain steps of the production process to be segregated and transferred to our owned facility, which is also located in Umea, Sweden, which is in the process of being renovated. Renovation of this facility commenced in 2003 and is in line with our plan to expand our productive capacity of our natural human alpha interferon. The estimated total cost of this initial phase is $1.2 million and it is scheduled to be completed during 2004. As of December 31, 2003, we have invested approximately $775,000 on the renovation of this facility and the project is proceeding according to plan. We believe that our current inventory levels are sufficient to meet our current sales forecasts during the period in which routine production is planned to be suspended. We plan to expand the use of our owned facility in phases based on product demand and available financing. Maximum expansion, if warranted, could cost up to an additional $10 million." VIVENDI: Files Claim Against APPAC Counsel K. Canoy in Paris ------------------------------------------------------------ Vivendi Universal (Paris Bourse: EX FP; NYSE: V) (S&P, BB Long- Term and B Short-Term Corporate Credit Ratings, Positive), has filed a claim with the senior judge of the Paris trial court (Tribunal de Grande Instance) against Mr. Karel Canoy, the attorney representing individual shareholders' association APPAC, following the offensive and potentially libelous statements published in the Aujourd'hui/Le Parisien newspaper on April 5, 2004. The accusations made are entirely unfounded and highly damaging to the company's integrity. VULCAN ENERGY: S&P Places BB Credit & Debt Ratings on Watch Neg. ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB' corporate credit rating on Vulcan Energy Corp. and its 'BB' rating on the company's $175 million senior secured term loan due 2010 on CreditWatch with negative implications. The loan proceeds are expected to be used to partially fund Vulcan Energy's proposed purchase of Plains Resources Inc. The CreditWatch listing on Washington State-based Vulcan Energy's term loan reflects its reliance entirely on quarterly distributions from Plains All American Pipeline L.P. (PAA; BBB- /Watch Neg/--) to support its debt service and administrative expenses. On April 1, 2004, Standard & Poor's placed its ratings on Plains All PAA on CreditWatch with negative implications. The CreditWatch listing on PAA followed the company's announcement that it is acquiring the North American crude oil and pipeline operations of Link Energy LLC for total consideration of about $330 million. Along with the acquisition, PAA intends to issue $197 million of equity, $100 million of which is expected to be issued through a private placement shortly after the close of the Link transaction. Of concern to Standard & Poor's is PAA's announcement that the SEC is conducting a review of its 10-K filing dated March 1, 2004. Although the review is being conducted as a routine review of a Fortune 500 company as per SEC policy, it indefinitely delays PAA's plan to issue the remainder of its common units to permanently fund the acquisition. As a result, PAA will borrow under a new $200 million 364-day bank facility until it is able to issue the units. Proceeds from the unit issuance will be applied to reduce outstanding amounts under this facility. In the interim, debt to EBITDA is expected to increase to 4x. Standard & Poor's will resolve the CreditWatch listings soon after the SEC concludes its review. If the SEC review is cursory and concludes in 120 days, and PAA issues the remainder of its announced equity immediately thereafter, Standard & Poor's would likely affirm the ratings on PAA and Vulcan's term loan. If the SEC review extends beyond 120 days, Standard & Poor's will meet with PAA's management to assess the status and nature of the review. WARNACO GROUP: Cheryl N. Turpin Elected to Board of Directors ------------------------------------------------------------- The Warnaco Group, Inc. (Nasdaq: WRNC) announced the election of Cheryl N. Turpin to its Board of Directors, increasing the current number of Directors to seven. Ms. Turpin, 56, was formerly the President of Limited Stores, a division of Limited Brands, Inc. During her tenure with Limited Brands, Inc. she also served as President & Chief Executive Officer of Lane Bryant, Inc. Previously, with Zell/Chilmark Fund L.P., Ms. Turpin held executive positions at Weinstock's as well as the Broadway Department Stores. Ms. Turpin holds a Bachelor of Arts from the University of Michigan. Charles Perrin, Non-Executive Chairman of the Board of Directors, said, "The election of Cheryl further strengthens the range of experience of Warnaco's Board. We are pleased to welcome Cheryl and look forward to her contributions." Joe Gromek, Warnaco's President and Chief Executive Officer, commented, "I am delighted to welcome Cheryl to Warnaco's Board. Her significant industry experience and leadership skills complement the expertise of our current board members. I look forward to her counsel as we advance Warnaco's position as a leader in the apparel industry." About The Warnaco Group, Inc. The Warnaco Group, Inc., headquartered in New York, is a leading apparel company engaged in the business of designing, marketing and selling intimate apparel, menswear, jeanswear, swimwear, men's and women's sportswear and accessories under such owned and licensed brands as Warner's(R), Olga(R), Lejaby(R), Body Nancy Ganz(TM), JLO by Jennifer Lopez(R) lingerie, Chaps(R), Calvin Klein(R) men's and women's underwear, men's accessories, men's, women's, junior women's and children's jeans and women's and juniors swimwear, Speedo(R) men's, women's and children's swimwear, sportswear and swimwear accessories, Anne Cole Collection(R), Cole of California(R), Catalina(R) and Nautica(R) swimwear. WESTPOINT STEVENS: American Appraisal's Retention Expands --------------------------------------------------------- WestPoint Stevens Inc. and its debtor-affiliates sought and obtained the Court's authority to expand American Appraisal Associates' scope of services as Asset Valuation Consultants. Pursuant to Section 1129(a)(7) of the Bankruptcy Code, prior to the confirmation of a reorganization plan, a debtor must prepare a liquidation analysis of its personal property, real estate and intangible assets. Although the Debtors previously employed Ernst & Young Corporate, LLC as their restructuring advisors in their Chapter 11 cases, the Debtors are prevented from using Ernst & Young Corporate to complete the liquidation analysis because its parent, Ernst & Young LLP, is the Debtors' tax auditor. Accordingly, the Debtors contemplated that it was necessary to expand American Appraisal's employment to include the Liquidation Analysis and the development of a liquidation values report. The liquidation values will be used by the Debtors' financial advisors in connection with the confirmation of a plan. American Appraisal estimates that the fees for the Liquidation Analysis will be $140,000 plus expenses. When added to their current estimate of $487,000 for the Valuation Services, the total estimated fees to be paid to American Appraisal in connection with their employment will be $627,000 plus expenses. (WestPoint Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000) WINN-DIXIE: Will Webcast Third Quarter Results on April 30 ---------------------------------------------------------- In conjunction with Winn-Dixie's (NYSE: WIN) third quarter earnings release, you are invited to listen to the company's conference call that will be broadcast live over the Internet on Friday, April 30 at 8:30 a.m. EDT with Winn-Dixie President and CEO, Frank Lazaran, and Senior Vice President and CFO, Bennett Nussbaum. What: Winn-Dixie Third Quarter Earnings Conference Call When: Friday, April 30 at 8:30 a.m. EDT Where: http://www.firstcallevents.com/service/ajwz402267448gf12.html How: Live over the Internet -- Simply log on to the web at the address above Contact: Kathy Lussier of Winn-Dixie, +1-904-370-6025, x 3 or kathylussier@winn-dixie.com If you are unable to participate during the live Web cast, the call will be archived on the Web site http://www.winn-dixie.com. To access the replay, under About Winn-Dixie/Investor Information, click on "Third Quarter Conference Call." Winn-Dixie Stores, Inc. (NYSE: WIN) is one of the largest food retailers in the nation and ranks 149 on the FORTUNE 500(R) list. Founded in 1925, the company is headquartered in Jacksonville, FL, and operates more than 1,070 stores in 12 states and the Bahamas. Frank Lazaran serves as President and Chief Executive Officer. For more information, visit http://www.winn-dixie.com/ As previously reported, Standard & Poor's lowered Winn-Dixie's corporate debt rating from BB to B and placed the ratings on Credit Watch with negative implications. Moody's also lowered the Company's senior implied rating to Ba3 from Ba1 and placed the ratings on negative outlook. WORLDCOM: Court Okays GITSA Amendments & GNOA Letter Agreement -------------------------------------------------------------- In 1999, the Worldcom Inc. Debtors and Electronic Data Systems Corporation and EDS Information Systems, LLC contemplated a relationship that would be governed by three agreements: -- an agreement whereby EDS would outsource telecommunications services to the Debtors; -- an agreement whereby the Debtors would outsource information technology services to EDS; and -- a joint marketing agreement. The GNOA On October 22, 1999, the Debtors and EDS executed a Global Network Outsourcing Agreement, an 11-year outsourcing agreement. Pursuant to the GNOA, the Debtors agreed to supply to EDS various telecommunication services and EDS outsourced its internal and customer networking needs to them. The GNOA required the transition of all employees, equipment, and other assets associated with EDS' telecommunications business. The GNOA also required EDS to purchase a minimum amount of telecommunications services in each year of the agreement. The GNOA, as amended by the parties, remains in effect. The GNOA established the rates that will be charged by the Debtors to EDS for the telecommunications services. It contains both the initial rates that the Debtors charged EDS and a procedure by which those prices may be adjusted at specified times during the duration of the agreement. The GNOA contains benchmarking provisions that provide that EDS will obtain both a "most favored nations" rate and a "commercially competitive" rate. The GITSA On October 29, 1999, the Debtors and EDS executed a Global Information Technology Services Agreement, an 11-year, $5,000,000,000 agreement in which the Debtors agreed to outsource information technology services to EDS, and EDS agreed to perform those services at specified rates. Under the GITSA, the Debtors outsourced to EDS all mainframe operations and support, all document services center support, some mid-range hardware and software operational support, applications development for selected systems, and all assets and personnel needed to perform these functions. The GITSA requires the Debtors to purchase a minimum amount of services from EDS during each year of the GITSA. The Debtors are required to make a shortfall payment each year they do not meet their Minimum obligation. The GITSA established the rates that will be charged by EDS to the Debtors for the information technology services. It contains both the initial rates that EDS charged the Debtors and a procedure by which those prices may be adjusted at specified times during the duration of the agreement. The GITSA likewise contains benchmarking provisions, which provide that the Debtors will obtain both a "most favored nations" rate and a "commercially competitive" rate. The Debtors commenced under the GITSA on February 1, 2000. Between February 1, 2000 and February 1, 2003, the Debtors spent $600,000,000 a year under the GITSA. As of March 12, 2004, the Debtors have paid EDS over $2,000,000,000 pursuant to the GITSA. EDS asserts that, as of July 21, 2002, the Debtors' unpaid GITSA invoices totaled $113,668,965. By Court-approved agreement in December 2002, EDS agreed to reduce the amount of its claim for the GITSA by $15,000,000. On January 16, 2003, EDS filed a $98,668,965 Claim for the GITSA. The Debtors and EDS never executed the joint marketing agreement. The 7th Amendment to the GITSA On April 28, 2003, Eric B. Miller, Esq., at Piper Rudnick LLP, in Baltimore, Maryland, relates that the parties executed a Seventh Amendment to the GITSA, whereby the Debtors agreed to assume the GITSA and pay EDS $98,627,276. In exchange for the accelerated payment of its prepetition claim under the GITSA, EDS made several concessions. In particular, EDS agreed to withdraw its Claim relating to the GITSA and release the Debtors from all prepetition claims arising out of the GITSA during any prepetition period. EDS also agreed to a substantial reduction in the pricing under the GITSA, which saves the Debtors $83,000,000 a year. The Seventh Amendment also reduced the Debtors' Minimums obligations. After the Seventh Amendment, the only minimums that apply for the remainder of the GITSA's term are IT Revenue Minimums. These minimums will be $600,000,000 a year for three years. All IT Revenue Minimum obligations under the GITSA were to be completed by January 31, 2006. In the Seventh Amendment, the Debtors agreed to refrain from issuing any service discontinuance notices under the GITSA for the next two years, absent a material breach by EDS. This provision was designed to assure EDS that the Debtors would keep its core business with EDS in the short term. On June 4, 2003, the Court authorized the Debtors to assume the GITSA, as amended by the Seventh Amendment. The 8th Amendment to the GITSA Under Contract Year 4 of the GITSA, covering the period from February 1, 2003 to January 31, 2004, the Debtors failed to generate $600,000,000 in IT Revenues as required. Accordingly, the Debtors owe EDS a $49,630,000 shortfall payment for Contract Year 4. To address this payment obligation to EDS, the Debtors executed an eighth amendment to the GITSA on March 13, 2004. The principal terms of the Eighth Amendment are: -- There will be no Annual Committed IT Revenue for Contract Year 4. As a result, the Debtors are no longer obligated to make any shortfall payment to EDS for Contract Year 4; -- EDS will reduce the Annual Committed IT Revenue from $600,000,000 a year to: Contract Year Contract Period Reduced Amount ------------- --------------- -------------- 5 02/1/04 - 01/31/05 $540,000,000 6 02/1/05 - 01/31/06 545,000,000 7 02/1/06 - 01/31/07 500,000,000 8 02/1/07 - 01/31/08 495,000,000 -- At the end of each of Contract Years 5, 6, 7, and 8, the Debtors will pay EDS 100% of the amount by which the Annual Committed IT Revenue for the Contract Year exceeds 100% of the actual cumulative IT Revenues the Debtors generated during the Contract Year. In the event that the Debtors generate an amount of IT Revenues in excess of the Annual Committed IT Revenue in Contract Year 5, 6 and 7, the excess amount will be added to the calculation of IT Revenues for the following Contract Year for purposes of determining whether the Debtors have achieved the Annual Committed IT Revenues for the following Contract Year; -- EDS will pay the Debtors $20,800,000 as a prepayment for the amounts EDS may owe to the Debtors upon conclusion of the True-up Process described in the Sun Server Service Request, which was part of the Seventh Amendment; and -- For those Services being provided by EDS under the GITSA as of March 25, 2004, the Amendment Effective Date, including additional volumes of those same Services utilized by the Debtors after the Amendment Effective Date, the Debtors agree that it will not issue any Discontinuance Notice before June 7, 2006. The GNOA Letter Agreement In conjunction with the Eight Amendment, the Debtors and EDS executed a letter agreement with respect to the GNOA. The principal terms of the GNOA Letter Agreement are: -- The Debtors will grant EDS three credits of $5,000,000 each for the months of January, February and March, 2004; -- Beginning April 10, 2004 and the 10th day of each calendar month thereafter during Contract Year 5, the Debtors will grant EDS a $5,000,000 credit under the GNOA if the Pre- Credit Network Revenue generated by EDS for the Credit Determination Month is at least $33,000,000. The "Credit Determination Month" is the month that is three months prior to a given month; -- In the event EDS is not entitled to receive the credits for April 2004 or any other calendar month during Contract Year 5, the Debtors will nonetheless grant to EDS a $5,000,000 credit under the GNOA, on or before the 10th day of the month, if the Average Monthly Pre-Credit Network Revenue is at least $33,000,000; -- In the event EDS does not receive the $5,000,000 credit for April 2004 or any other calendar month thereafter during Contract Year 5, the Debtors will nonetheless grant EDS a $5,000,000 credit under the GNOA for each Missed Month if, at any time following the Missed Month, the Average Monthly Pre-Credit Network Revenues generated by EDS are at least $33,000,000; -- If EDS generates cumulative Pre-Credit Network Revenues of $396,000,000 for Contract Year 5, the Debtors will grant EDS a one-time credit equal to $60,000,000, minus the amount of all credits previously granted by the Debtors to EDS; -- In the event that by the end of calendar year 2004, EDS has not received a total of $60,000,000 of credits, and only in like event, then for January 2005, February 2005 and March 2005, EDS will be eligible for $5,000,000 per month in credits; and -- Certain rates for specified services purchased by EDS to support its Existing Business, and certain rates for EDS to pursue New Business opportunities, are adjusted. However, because these adjusted rates will not be applicable until April 1, 2004, the Debtors will apply a one-time credit to EDS in an amount equal to the product of (a) $1,250,000, and (b) the number of full months between January 1, 2004 and May 1, 2004, not later than April 4, 2004. At the Debtors' request, Judge Gonzalez approves the Eighth Amendment to the GITSA and the GNOA Letter 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. 50; Bankruptcy Creditors' Service, Inc., 215/945-7000) WORLDSPAN LP: Ratings on S&P's Watch Positive Citing Planned IPO ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B+' corporate credit rating and other ratings on Worldspan L.P. on CreditWatch with positive implications, reflecting the S-1 filing by its parent, Worldspan Technologies Inc., for an initial public offering of up to $315 million of common stock. Proceeds will be used primarily to repay debt. "The planned issuance of common stock, conversion of preferred stock into common stock, and subsequent debt reduction will aid Worldspan's credit ratios and strengthen its financial flexibility," said Standard & Poor's credit analyst Betsy Snyder. "Pro forma for the IPO, the company's balance sheet debt will decline by $113 million, its deferred compensation expense will decline by $117 million, and its equity will be comprised of only common stock," the analyst continued. Atlanta, Ga.-based Worldspan, the leading on-line travel distributor, was acquired in a leveraged buyout in July 2003. As a result, its credit ratios have been relatively weak. In addition, its financial flexibility has also been weaker than its major competitors, which are all publicly held. The corporate credit rating on Worldspan L.P. is based on its leading market position in on-line travel distribution, the fastest-growing segment of the travel distribution industry, offset by a weak financial profile due to the company's July 1, 2003, leveraged acquisition. Worldspan is the leading GDS (global distribution system) for on-line travel bookings. A GDS is a computerized search and reservation system that is used by suppliers of travel and travel-related products and services (e.g., airlines, car rental companies, and hotels) to sell their services, either directly by the suppliers or through travel agencies. Fees are typically paid by the travel suppliers for bookings made through GDS's. The fees are based on the number of transactions or flight segments booked, rather than as a percentage of revenues booked, so that when suppliers' prices (e.g., air fares) decline, GDS revenues do not fall off commensurately, and bookings may actually increase if the price declines stimulate a higher level of bookings. GDS's are the primary distributor of airline travel. This is a highly concentrated industry, with only three major participants other than Worldspan. The company has a 30% market share in the U.S., where it is the second-largest participant, and a 17% share globally. However, in the past few years, the Internet has become the fastest-growing channel for travel distribution. In this channel, Worldspan is, by far, the largest participant, having processed over 65% of on-line airline transactions made in the U.S. in 2003. At Dec. 31, 2003, Worldspan's equity base of $417 million was comprised primarily of $320 million in payment-in-kind preferred stock, and its intangibles and goodwill totaled $750 million. With proceeds from the IPO to be used to repay debt, prepay deferred compensation to Delta, and redeem a portion of preferred stock, the company's credit ratios are expected to show improvement. The effect of the IPO on Worldspan's credit profile could lead to an upgrade. W.R. GRACE: Expanding Deloitte's Services to Lease Consulting ------------------------------------------------------------- The W.R. Grace & Co. Debtors seek the Court's permission to expand the scope of services to be provided by Deloitte & Touche LLP to include lease consulting services, nunc pro tunc to October 1, 2003. Deloitte provides lease-consulting services to the Debtors on an ordinary-course basis. As a result of Deloitte's efforts, the Debtors received a $384,200 payment from a subtenant, and expect to receive additional payments in the future. Based on this recovery of a Lease Underpayment and under the terms of the Engagement Letter, Deloitte earned a $134,470 contingency fee, which has not been paid. The Debtors have not paid Deloitte the contingency fee because they do not believe that they have the authority to do so under the terms of the Retention Order. The Lease Consulting Services As lease consultant, Deloitte will: (a) review certain of the Debtors' leases and subleases to identify potential amounts owed by the Debtors to certain of their landlords and leasehold Tenants; (b) prepare and deliver to the Debtors reports on the Lease Underpayments; and (c) recover the Lease Underpayments for the Debtors. Compensation Deloitte completed the review of the leases and subleases and produced the Lease Underpayment reports. For these services, Deloitte was paid $9,500 in fixed fee compensation under the terms of the Engagement Letter. The Engagement Letter provides that the Debtors will pay Deloitte: (1) $500 per lease or sublease for the review of the leases and subleases and production of the reports; plus (2) 35% of all savings achieved by the Debtors as a result of Deloitte's Lease Consulting Services. The Debtors have paid the fixed fee to Deloitte but the contingency amounts remains unpaid. Disinterestedness Larry D. Ishol, a member of Deloitte in McLean, Virginia, assures the Court that Deloitte remains a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm does not represent any interest adverse to the Debtors, their estates and creditors. (W.R. Grace Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service, Inc., 215/945-7000) * Upcoming Meetings, Conferences and Seminars --------------------------------------------- April 15, 2004 INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION IWIRC Founders Awards and Spring Luncheon JW Marriott, Washington D.C. Contact: 1-703-449-1316 or www.iwirc.com April 15-18, 2004 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting J.W. Marriott, Washington, D.C. Contact: 1-703-739-0800 or http://www.abiworld.org April 18-20, 2004 INTERNATIONAL BAR ASSOCIATION Insolvency is Changing Globally - How and Why? Seville, Spain Contact: www.ibanet.org April 29-May 1, 2004 ALI-ABA Partnerships, LLCs, and LLPs: Uniform Acts, Taxation, Drafting, Securities, and Bankruptcy Fairmont Hotel, New Orleans Contact: 1-800-CLE-NEWS or http://www.ali-aba.org May 3, 2004 AMERICAN BANKRUPTCY INSTITUTE New York City Bankruptcy Conference Millennium Broadway Conference Center, New York, NY Contact: 1-703-739-0800 or http://www.abiworld.org May 13-14, 2004 BEARD GROUP & RENAISSANCE AMERICAN MANAGEMENT The First Annual Conference on Distressed Investing - Europe: Maximizing Profits in the European Distressed Debt Market Le Meridien Piccadilly Hotel - London, UK Contact: 1-800-726-2524; 903-592-5168; dhenderson@renaissanceamerican.com May 20-22, 2004 ALI-ABA Fundamentals of Bankruptcy Law Astor Crowne Plaza, New Orleans Contact: 1-800-CLE-NEWS; http://www.ali-aba.org June 2-5, 2004 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, MI Contact: 1-703-739-0800 or http://www.abiworld.org June 10-12, 2004 ALI-ABA Chapter 11 Business Reorganizations Omni Hotel, San Francisco Contact: 1-800-CLE-NEWS; http://www.ali-aba.org June 14-15, 2004 TURNAROUND MANAGEMENT ASSOCIATION 2004 Advanced Education Workshop Toronto Univesity, Toronto Canada Contact: 312-578-6900 or www.turnaround.org June 24-25, 2004 BEARD GROUP & RENAISSANCE AMERICAN MANAGEMENT The Seventh Annual Conference on Corporate Reorganizations Successful Strategies for Restructuring Troubled Companies The Millennium Knickerbocker Hotel - Chicago Contact: 1-800-726-2524; 903-592-5168; dhenderson@renaissanceamerican.com June 24-26,2004 AMERICAN BANKRUPTCY INSTITUTE Hawaii Bankruptcy Workshop Hyatt Regency Kauai, Kauai, Hawaii Contact: 1-703-739-0800 or http://www.abiworld.org July 15-18, 2004 AMERICAN BANKRUPTCY INSTITUTE The Mount Washington Hotel Bretton Woods, NH Contact: 1-703-739-0800 or http://www.abiworld.org July 28-31, 2004 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Reynolds Plantation, Lake Oconee, GA Contact: 1-703-739-0800 or http://www.abiworld.org September 18-21, 2004 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference The Bellagio, Las Vegas, NV Contact: 1-703-739-0800 or http://www.abiworld.org October 9-10, 2004 INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION IWIRC Annual Fall Conference Nashville, TN Contact: 1-703-449-1316 or www.iwirc.com October 10-13, 2004 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES Seventy Seventh Annual Meeting Nashville, TN Contact: http://www.ncbj.org/ October 15-18, 2004 TURNAROUND MANAGEMENT ASSOCIATION 2004 Annual Convention Marriott Marquis, New York City Contact: 312-578-6900 or www.turnaround.org November 29-30, 2004 BEARD GROUP & RENAISSANCE AMERICAN MANAGEMENT The Eleventh Annual Conference on Distressed Investing Maximizing Profits in the Distressed Debt Market The Plaza Hotel - New York City Contact: 1-800-726-2524; 903-592-5168; dhenderson@renaissanceamerican.com December 2-4, 2004 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Marriott's Camelback Inn, Scottsdale, AZ Contact: 1-703-739-0800 or http://www.abiworld.org March 9-12, 2005 TURNAROUND MANAGEMENT ASSOCIATION 2005 Spring Conference JW Marriott Desert Ridge, Phoenix, AZ Contact: 312-578-6900 or www.turnaround.org April 28- May 1, 2005 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting J.W. Marriot, Washington, DC Contact: 1-703-739-0800 or http://www.abiworld.org June 2-4, 2005 ALI-ABA Partnerships, LLCs, and LLPs: Uniform Acts, Taxation, Drafting, Securities and Bankruptcy Omni Hotel, San Francisco Contact: 1-800-CLE-NEWS; http://www.ali-aba.org July 14 -17, 2005 AMERICAN BANKRUPTCY INSTITUTE Ocean Edge Resort, Brewster, MA Contact: 1-703-739-0800 or http://www.abiworld.org July 27- 30, 2005 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop Kiawah Island Resort and Spa, Kiawah Island, SC Contact: 1-703-739-0800 or http://www.abiworld.org October 19-23, 2005 TURNAROUND MANAGEMENT ASSOCIATION 2005 Annual Convention Chicago Hilton & Towers, Chicago Contact: 312-578-6900 or www.turnaround.org November 2-5, 2005 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES Seventy Eighth Annual Meeting San Antonio, TX Contact: http://www.ncbj.org/ December 1-3, 2005 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Hyatt Grand Champions Resort, Indian Wells, CA Contact: 1-703-739-0800 or http://www.abiworld.org The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* 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 ***