/raid1/www/Hosts/bankrupt/TCR_Public/040419.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, April 19, 2004, Vol. 8, No. 76
Headlines
AK STEEL: 1st Quarter Earnings Conference Call Webcast is Tomorrow
AIR CANADA: PLM Equipment Presses for $2M+ Aircraft Lease Payment
AIR CANADA: New Union to Represent Aircraft Maintenance Workers
ALLEGIANCE TELECOM: Cash Burn from Operations Down by 82% in 2003
ASTORIA ENERGY: S&P Assigns B+ Rating to $500MM Secured Bank Loan
AURORA FOODS: Skadden Arps Charges $775K+ in Legal Fees for Feb 04
BIRCH BAY RESORT: Case Summary & 7 Largest Unsecured Creditors
BOISE CASCADES: Ainsworth Lumber Buys Oriented Strand Board Plant
BUDGET: Asks Court to Stretch Lease Decision Period Until May 31
BURNS PHILP: S&P Affirms B+ Rating with Negative Outlook
CAREMARK RX: Releasing First Quarter 2004 Results on May 6
CLS FINANCIAL: Case Summary & 20 Largest Unsecured Creditors
CONSOL ENERGY: First Quarter Conference Call is on April 22
CORNERSTONE PROPANE: May Pursue Restructuring under Chapter 11
CROWN ANDERSEN: Losses & Default Trigger Going Concern Doubt
DE MANAGEMENT INC: Voluntary Chapter 11 Case Summary
DOLLAR GENERAL: S&P Revises Outlook to Positive From Negative
DOVER WATCH: Case Summary & 2 Largest Unsecured Creditors
DOW CORNING: Trust Turns to Crowe Chizek for Financial Advice
ELEC COMMS: Bankruptcy Court Approves Telecarrier Purchase
ENRON CORP: Court Okays 8 Big Claim Settlement Pacts
ENUCLEUS INC: Reports Improved Results After Restructuring
ESTATION: Secured Lender Issues Foreclosure Notice
EXTENDICARE: Receives Consents to Nix Restrictive Debt Covenants
FACTORY CARD: Reports 2003 Results & Wells Fargo Credit Amendment
FEDERAL-MOGUL: Bar Date for EPA Claims Extended to May 28, 2004
FINDEX.COM: Needs More Capital to Continue Operations This Year
FLEMING COMPANIES: Settles CHEP Claim Dispute for $1.5 Million
FRESH CHOICE: Working Capital Deficit Climbs to $6MM at March 2004
GEO SPECIALTY: Hiring Ravin Greenberg as Bankruptcy Co-Counsel
GLOBALSTAR: Now Owned by Thermo Capital Partners
GMX RESOURCES: Auditors Remove Going Concern Qualification
GS MORTGAGE: Fitch Assigns Low-B Ratings to 6 Ser. 2004-C1 Classes
GWBR INC: Case Summary & 20 Largest Unsecured Creditors
HALE-HALSELL COMPANY: Section 341(a) Meeting Slated for April 28
HAYES LEMMERZ: Judge Stays Discovery in 300 Adversary Cases
HEADLINE MEDIA: February 2004 Balance Sheet Insolvent by $9.3MM
HEALTHSOUTH: Court Sets April 23 Status Conference re Bond Issues
HEALTHSOUTH CORP: Director C. Sage Givens Steps Down from Board
INSITUFORM: Will Hold Q1 2004 Conference Call on April 30
INTERMET: Incurs $8MM Net Loss Despite Increased 1st Quarter Sales
INTERSTATE BAKERIES: Exploring Options to Refinance Debt
IPIX CORPORATION: Posts $3.6 Net Loss for First Quarter 2004
JETBLUE AIRWAYS: Will Webcast Q1 2004 Earnings on April 22
LB COMMERCIAL: Fitch Affirms Series 1995-C2 Class F Rating at B+
LMI AEROSPACE: BDO Seidman Uncertain About Going Concern Ability
MEADOWS OPERATIONS: Case Summary & 17 Largest Unsecured Creditors
MIRANT CORP: Equity Committee Wants to Conduct Rule 2004 Discovery
MIRANT: Names Michele Burns Executive VP & Chief Financial Officer
NATIONAL CENTURY: Wants Court Nod to Conduct Rule 2004 Exams
NATIONSRENT: Trustee Sues to Recover Preferences from 88 Creditors
NEXMED INC: Auditors Express Going Concern Doubts
OSE USA: Employs Steve Lerner as New President
PARMALAT GROUP: Proposes Surplus U.S. Asset Sale Procedures
PILLOWTEX CORPORATION: Court Okays Proposed Trading Restrictions
PREMIER FREIGHTLINER: James Goldman Serves as Bankruptcy Counsel
RCN: Opts Not to Make Senior Note Interest Payments Due April 15
SAMARITAN: Raises $4.3MM & Auditor Drops Going Concern Statement
SEA CONTAINERS: S&P Assigns Low B Ratings to Two Proposed Notes
SOLUTIA INC: CDI Asks Court to Lift Stay to Compel Lease Decision
SOUTHWALL: Says Troubled History May Make Refinancing Difficult
SPRING AIR: Wants to Continue Employing Ordinary Course Profs.
STORAGE COMPUTER: Auditors Express Going Concern Uncertainty
TELTRONICS: 2003 Shareholders' Deficit More than Doubles to $6MM
TERREMARK WORLDWIDE: Requires More Funds to Sustain Operations
TORCH OFFSHORE: Looks for More Money to Continue Operations
TRAILER BRIDGE: BDO Seidman Replaces Deloitte & Touche as Auditors
UNITED AIRLINES: Wants Court Nod to Assume MWAA Airport Leases
VALEO INVESTMENT: S&P Downgrades Class A-2 Notes Rating to BB
VANGUARD HEALTH: S&P Upgrades Corporate Credit Rating to B+
VIEW SYSTEMS: Taps Chisholm Bierwolf to Replace Stegman as Auditor
VORNADO OPERATING: Going Concern Ability is in Doubt
VOYAGER ONE: Hires Mendoza Berger & Company as New Accountants
WEIRTON STEEL: Accepts International Steel Group's Asset Bid
WEIRTON STEEL: Asset Sale Hearing Scheduled for Tomorrow
WINDERMERE SCHOOL: Wolff Hill Serves as Bankruptcy Attorneys
WORLDCOM/MCI: Cuts Workforce and Closes Three Call Centers
* Buchalter Nemer Firm Elects Jeffrey K. Garfinkle as Shareholder
* BOND PRICING: For the week of April 19 - 23, 2004
*********
AK STEEL: 1st Quarter Earnings Conference Call Webcast is Tomorrow
------------------------------------------------------------------
AK Steel (NYSE: AKS) announces the following Webcast:
What: AK Steel Corporation's First Quarter 2004
Earnings Conference Call Webcast
When: Tuesday, April 20, 2004 at 11:00 a.m. Eastern Time
Where: http://www.aksteel.comor
http://www.firstcallevents.com/service/ajwz404732386gf12.html
How: Live over the Internet -- Simply log on to the web
at the address above.
Contact: Alan McCoy
Vice President, Public Affairs, 513-425-2826
The webcast will be archived on the company's web site until
April 27, 2004 and will be accessible from the company's home
page. This webcast is copyrighted by AK Steel. All rights
reserved. Any form of copying, rebroadcast, webcast or other
distribution without express written permission is prohibited.
AK Steel produces flat-rolled carbon, stainless and electrical
Headquartered in Middletown, Ohio, AK Steel -- whose December 31,
2003 balance sheet shows a $52.8 million shareholders'
equity deficit -- produces flat-rolled carbon, stainless and
electrical steel products for automotive, appliance, construction
and manufacturing markets, as well as tubular steel products.
AIR CANADA: PLM Equipment Presses for $2M+ Aircraft Lease Payment
-----------------------------------------------------------------
PLM Equipment Growth Fund V, as assignee to PLM Worldwide Leasing
Corporation, and Wells Fargo Bank Northwest, N.A., as owner
trustee of PLM Equipment, demand payment of all amounts due after
April 1, 2003 under certain aircraft lease agreements with Air
Canada.
PLM Equipment and Air Canada are parties to:
-- an aircraft lease agreement dated September 28, 1995 for a
Boeing 737-200, Serial #22264, Canadian Registration Mark
C-GPPW; and
-- an aircraft lease agreement dated March 28, 2006 for a
Boeing 737-200 Serial #22257, Canadian Registration Mark
C-GCPS.
PLM Equipment and Wells Fargo also ask CCAA Court to compel Air
Canada to return all the manuals and technical records for the
Boeing 737-200 Serial #22257.
Although numerous demands have been made, Air Canada failed to
make any payment for the postpetition amounts due under the
Leases. Air Canada owes $2,345,941 in total postpetition rent
arrears and utilization payments.
Under the Aircraft 64 Lease, PLM Equipment leased an aircraft to
Canadian Airlines International Limited for six years at $80,000
for the first 48 months and $106,000 for the next 24 months. The
Lease commenced on September 28, 1995. By aircraft novation and
amendment agreement dated May 12, 2000, Air Canada assumed CAIL's
rights, liabilities and obligations under the Lease and extended
the lease term to May 27, 2003.
Pursuant to the Aircraft 57 Lease, PLM Equipment leased an
aircraft to CAIL for six years at $102,205 for the first 42
months and $137,000 for the next 30 months. The Lease commenced
on March 28, 1996. Under a May 2000 aircraft novation and
amendment agreement, Air Canada assumed CAIL's rights,
liabilities and obligations under the Lease and extended the
lease term to December 28, 2004. The rent provision under the
Lease was also amended to $115,159 per month.
The Leases also require Air Canada to:
(1) compensate PLM Equipment for the cost associated with
certain heavy equipment maintenance check for the
aircraft; and
(2) keep the engines in good operating condition and promptly
replace any engine that become damaged beyond repair --
Engine Payment.
Air Canada continued using the aircraft after the Petition Date.
However, Air Canada failed to comply with its payment and
maintenance obligations under the Leases.
One of the engines on Aircraft 57 is damaged beyond repair and,
as a result, an Engine Payment is due to PLM Equipment under the
Aircraft 57 Lease.
In May 2003, Air Canada repudiated the Aircraft 64 Lease
effective immediately. While Air Canada returned Aircraft 64, it
did not deliver the Manuals and Technical Records until July
2003. Pursuant to the Leases, Air Canada is obliged on the
termination of the Leases to return the aircraft together with
all Manuals and Technical Records.
In November 2003, Air Canada repudiated the Aircraft 57 Lease
effective January 10, 2004. While Air Canada delivered up
Aircraft 57 in January 2004, it has yet to return the Aircraft 57
Manuals and Technical Records.
Without the required Manuals and Technical Records, PLM Equipment
cannot obtain a Certificate of Airworthiness and, therefore,
cannot sell or re-lease the aircraft for full value.
Headquartered in Saint-Laurent, Quebec Canada, Air Canada --
http://www.aircanada.ca/-- represents Canada's only major
domestic and international network airline, providing scheduled
and charter air transportation for passengers and cargo. The
Company filed for CCAA protection on April 1, 2003 (Ontario
Superior Court of Justice, Case No. 03-4932) and Section 304
petition with the U.S. Bankruptcy Court for the Southern District
of New York (Case No. 03-11971). Matthew A. Feldman, Esq., and
Elizabeth Crispino, Esq., at Willkie Farr & Gallagher serve as the
Debtors' U.S. Counsel. When the Debtors filed for protection from
its creditors, they listed C$7,816,000,000 in assets and
C$9,704,000,000 in liabilities. (Air Canada Bankruptcy News, Issue
No. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000)
AIR CANADA: New Union to Represent Aircraft Maintenance Workers
---------------------------------------------------------------
An association of aircraft maintenance employees at Canada's
largest airline wants to create a new union in an effort to better
represent its members.
The Canadian Aircraft Maintenance Association, or CAMA, filed for
certification with the Canada Industrial Relations Board Thursday
after obtaining support from more than half of the aircraft
maintenance workers employed by Air Canada's Line Maintenance unit
to act as their sole bargaining agent.
The application for certification marks a major milestone in a
two-year member recruitment effort.
If the Canada Industrial Relations Board rules in favour of
certification, CAMA would become the sixth union at Air Canada,
representing more than 1,600 aircraft maintenance workers at
airports across Canada.
"Our members feel a new, independent union would better represent
their interests," emphasized CAMA National Director Ken Hickerson.
"Aircraft maintenance workers are true aviation professionals and
they play a much larger role in air travel safety than most people
realize. It's about time Air Canada, the airline industry and the
public provided our members the recognition they deserve, and
that's one goal we hope to accomplish with the creation of this
new trade union."
The Canadian Aircraft Maintenance Association is an ambitious,
grassroots, professional Canadian association with no ties to
international labour organizations. The association is founded by
and represents employees who are responsible for the day-to-day
flight safety and readiness of Air Canada's commercial aircraft.
Headquartered in Saint-Laurent, Quebec Canada, Air Canada --
http://www.aircanada.ca/-- represents Canada's only major
domestic and international network airline, providing scheduled
and charter air transportation for passengers and cargo. The
Company filed for CCAA protection on April 1, 2003 (Ontario
Superior Court of Justice, Case No. 03-4932) and Section 304
petition with the U.S. Bankruptcy Court for the Southern District
of New York (Case No. 03-11971). Matthew A. Feldman, Esq., and
Elizabeth Crispino, Esq., at Willkie Farr & Gallagher serve as the
Debtors' U.S. Counsel. When the Debtors filed for protection from
its creditors, they listed C$7,816,000,000 in assets and
C$9,704,000,000 in liabilities.
ALLEGIANCE TELECOM: Cash Burn from Operations Down by 82% in 2003
-----------------------------------------------------------------
Allegiance Telecom, Inc. (OTC Bulletin Board: ALGXQ), a national
local exchange carrier (NLEC), announced results for its fourth
quarter and year-end 2003.
Allegiance reported fourth quarter revenues of $187.5 million, a
decrease of 0.4 percent compared with 3Q03 and a decrease of 8.5
percent compared with 4Q02, and full- year revenue of $776.9
million, an increase of 0.8 percent compared with 2002. Excluding
the revenue impact of the Company's customer premises equipment
(CPE) sales and maintenance business, which had 4Q03 revenue of
$29.4 million versus $27.8 million in 3Q03, revenue for 4Q03
declined by $2.4 million from the third quarter, a reduction of
1.5 percent. Adjusted EBITDA (see FOOTNOTE) margin for the fourth
quarter was 6.2 percent, with consolidated Adjusted EBITDA of
$11.6 million for 4Q03. Allegiance also reported it achieved Free
Cash Flow from Operations of $4.9 million.
For the year ending December 31, 2003, Allegiance had an Adjusted
EBITDA loss of $13.4 million, an 81.3 percent decrease from 2002.
Capital expenditures for 2003 totaled $22.6 million versus $129.9
million in 2002, a reduction of 82.6 percent.
On February 13, 2004, Allegiance selected XO Communications, Inc.
(OTC Bulletin Board: XOCM) as the winning bidder for substantially
all of the assets of 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 will purchase, for approximately $311 million in cash and
approximately 45.38 million shares of XO common stock,
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 dedicated dial-up access services business
operated under an agreement with Level 3 Communications LLC, its
shared hosting business and certain other Allegiance assets and
operations. On February 20, 2004, the U.S. Bankruptcy Court for
the Southern District of New York approved the proposed purchase
of substantially all of Allegiance's assets by XO, and XO expects
to close on the sale by the end of the second quarter 2004.
Operational and Financial Highlights
Reflecting Allegiance's progress toward positive free cash flow,
Free Cash Flow from Operations was $4.9 million, an increase of
38.8 percent from the third quarter and an increase of 113.9
percent from 4Q02. Allegiance experienced a decline in cash burn
from operations of 82.2 percent in 2003 compared with 2002.
Allegiance Telecom, Inc. -- http://www.algx.com/-- is a
facilities-based national local exchange carrier headquartered in
Dallas, Texas. As the leader in competitive local service for
medium and small businesses, Allegiance offers "One source for
business telecom(TM)" -- a complete telecommunications package,
including local, long distance, international calling, high-speed
data transmission and Internet services and a full suite of
customer premise communications equipment and service offerings.
Allegiance serves 36 major metropolitan areas in the U.S. with its
single source approach. Allegiance's common stock is traded on the
Over The Counter Bulletin Board under the symbol ALGXQ.OB.
ASTORIA ENERGY: S&P Assigns B+ Rating to $500MM Secured Bank Loan
-----------------------------------------------------------------
Standard & Poor's Rating Services assigned its final 'B+' rating
on Astoria Energy LLC's $500 million first-lien senior secured
bank loan due March 2012. The action follows the recent
restructuring of the project's original $690 million offering to
include a $500 million first-lien tranche and a $200 million
second lien tranche. The second-lien tranche is unrated. The
outlook is stable.
The rating reflects the fact that, although first-lien holders
enjoy an improved security position relative to the original
structure, the default risk of the project remains substantially
the same. The higher all-in interest rate of the restructured deal
partially offsets the benefit of the additional security to first-
lien holders.
"Higher pricing than Standard & Poor's originally anticipated has
increased the refinancing risk lenders bear and weakens the
project's financial performance during low-price periods," said
credit analyst Michael Messer.
AE will use the proceeds of the loan to develop, own, and operate
a 552-MW, combined-cycle, gas- and oil-fired power plant located
in the Astoria section of Queens, N.Y. The project will sell
capacity and energy under a 10-year power purchase agreement (PPA)
with a five-year extension option to Consolidated Edison Co. of
New York Inc. (Con Ed; A/Stable/A-1). AE is 50% owned by Steinway
Creek Electric Generating Co. LLC and 50% owned by a consortium of
private investors, including Energy Investor Funds, Caisse Depot
Capital Americas, and the SNC-Lavalin Group. The sponsors expect
to begin construction by April 2004 and commence commercial
operations by May 1, 2006.
The rating reflects risks, including, among other things, the
loan's weak financial profile created by a loan structure that has
only a 1% fixed amortization that exposes lenders to a potentially
serious refinancing risk in 2012; the PPA does not protect the
project or its lenders from a force majeure event that would
discharge AE from having to meet its power supply obligations to
Con Ed; and various aspects of the construction program could
delay commercial operation of the plant beyond the contractually
required May 2006 start date.
Among the strengths are that the PPA with Con Ed provides the
project with a stable stream of revenue payments throughout the
term of the loan; the PPA provisions allow AE to benefit from high
power prices in the New York City market; and a strong competitive
position should allow the AE plant to sell power during non-
contracted periods.
AURORA FOODS: Skadden Arps Charges $775K+ in Legal Fees for Feb 04
------------------------------------------------------------------
Eric M. Davis, Esq., at Skadden, Arps, Slate, Meagher & Flom,
LLP, in Wilmington, Delaware, informs Judge Walrath that Skadden
Arps, legal counsel in Aurora Foods, Inc.'s chapter 11 case, seeks
payment equal to 80% of its total fees and reimbursement of
$32,578 for actual and necessary charges and disbursements it
expended for the month of February 2004.
Total fees reached $775,916 and 80% of that amount is $620,733.
For the covered period, Skadden Arps' professionals devoted 1,945
hours to represent the Debtors in their Chapter 11 cases. Of the
aggregate time expended, partners spent 458.10 hours, counsels
spent 171.90 hours, associates spent 1,165.70 hours and
paraprofessionals spent 149.30 hours:
Professional Title Hours Worked
------------ ----- ------------
Eric M. Davis Partner 172.8
Sally McDonald Henry Partner 188.5
J. Gregory Milmoe Partner 8.6
Patricia Moran Partner 88.2
Stephanie R. Feld Counsel 87.7
Thomas J. Matz Counsel 84.2
David E. Barrett Associate 233.7
C. Michael Chitwood Associate 82.8
Dolores De Elizalde Associate 145.3
Jamie L. Edmonson Associate 118.7
Pamela Lawrence Endreny Associate 7.5
Jarett Epstein Associate 37.3
Jason M. Liberi Associate 165.2
Douglas W. Squasoni Associate 7.9
Robert A. Weber Associate 150.3
Gregory S. Weisman Associate 137.8
Davis L. Wright Associate 11.4
Malikah Ashby Paraprofessional 11.9
John Beaulieu Paraprofessional 7.0
Joanne Episcopo Paraprofessional 5.5
Christopher M. Heaney Paraprofessional 19.9
Michael L. Kreiner Paraprofessional 11.7
Wendy K. LaManne Paraprofessional 7.2
Heather L. MacDonald Paraprofessional 6.2
Andrew B. Marcus Paraprofessional 6.7
Ronald E. Wittman, Jr. Paraprofessional 73.2
-----
1,945
Mr. Davis relates that the 1,945 hours were spent in these
projects:
Project Category Hours Spent
---------------- -----------
General Corporate Advice 337.4
Automatic Stay (Relief Actions) .7
Case Administration 112.7
Claims Admin. (General) 3.9
Disclosure Statement/Voting Issues 44.9
Employee Matters (General) 4.2
Executory Contracts (Personality) 9.2
Financing (DIP and Emergence) 7.6
Intellectual Property 2.2
Leases (Real Property) 4.7
Litigation (General) 6.1
Networking Travel Time 56.5
Regulatory & SEC Matters 74.5
Reorganization Plan/Plan Sponsors 1,222.7
Retention/Fee Matters (SASM&F) 34.4
Retention/Fee Matters/Objections 5.0
Tax Matters 7.5
U.S. Trustee Matters 8.0
Utilities .6
Vendor Matters 2.2
The $32,578 actual and necessary charges and disbursements
expended for the month of February 2004 are:
Expenses Amount
-------- ------
Computer legal research $8,307
Long distance telephone 922
In-house reproduction 4,498
Outside reproduction 6,135
Outside research 65
Filing/court fees 176
Court reporting 3,395
Out-of-town travel 6,860
Courier & express carriers 2,165
Postage 55
------
$32,578
Aurora Foods Inc. -- http://www.aurorafoods.com/-- based in St.
Louis, Missouri, produces and markets leading food brands,
including Duncan Hines(R) baking mixes; Log Cabin(R), Mrs.
Butterworth's(R) and Country Kitchen(R) syrups; Lender's(R)
bagels; Van de Kamp's(R) and Mrs. Paul's(R) frozen seafood; Aunt
Jemima(R) frozen breakfast products; Celeste(R) frozen pizza; and
Chef's Choice(R) skillet meals. With $1.2 billion in reported
assets, Aurora Foods, Inc., and Sea Coast Foods, Inc., filed for
chapter 11 protection on December 8, 2003 (Bankr. D. Del. Case No.
03-13744), to complete a pre-negotiated sale of the company to
J.P. Morgan Partners LLC, J.W. Childs Equity Partners III, L.P.,
and C. Dean Metropoulos and Co. Judge Walrath confirmed the
Debtors' pre-packaged plan on Feb. 20, 2004. Sally McDonald
Henry, Esq., and J. Gregory Milmoe, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP provide Aurora with legal counsel, and David Y.
Ying at Miller Buckfire Lewis Ying & Co., LLP provides financial
advisory services. (Aurora Foods Bankruptcy News, Issue No. 11;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
BIRCH BAY RESORT: Case Summary & 7 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Birch Bay Resort Park Ltd.
8080 Harborview Road
Blaine, Washington 98230
Bankruptcy Case No.: 04-14065
Chapter 11 Petition Date: March 26, 2004
Court: Western District of Washington (Seattle)
Judge: Philip H. Brandt
Debtor's Counsel: Lawrence K. Engel, Esq.
106 West Roy Street
P.O. Box 9598
Seattle, WA 98109
Tel: 206-352-6000
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 7 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
U.S. Bankard Corporation $30,000
William D. Burkitt, Esq. $3,932
Puget Sound Energy $2,162
Home Depot Credit Services $1,176
Federal & State Tax Negotiators $1,035
Nancy Neal, Esq. $804
Steele and Co., CPA, P.S. $690
BOISE CASCADES: Ainsworth Lumber Buys Oriented Strand Board Plant
-----------------------------------------------------------------
Boise Cascade Corporation and its partners in Voyageur Panel
Limited, announced that they have reached an agreement with
Ainsworth Lumber Co. Ltd. for its purchase of Voyageur Panel for
approximately $193 million, plus as much as $10 million more based
on oriented strand board (OSB) prices between closing and year-
end. Boise should realize approximately $90 million from the
transaction, which is expected to close in the second quarter
2004.
Voyageur Panel is a corporation whose shares are owned by Boise,
Abitibi-Consolidated Inc., Northwestern Mutual, and Allstate
Insurance Company. Boise owns approximately 47% of Voyageur
Panel, Abitibi-Consolidated holds 21%, Northwestern Mutual owns
17%, and Allstate owns the remaining 15%. BMO Nesbitt Burns, Inc.,
acted as financial advisor to the shareholders of Voyageur Panel.
Voyageur Panel operates an OSB plant in Barwick, Ontario, Canada.
The plant began production of OSB in 1997 and has an annual
capacity of 440 million square feet. OSB is used mainly as
sheathing for exterior walls and roofs, and as floor underlayment.
In recent years Voyageur Panel added rim board and web, for use in
engineered wood products, to its product line. The plant employs
158.
About Boise Cascade Corporation
Boise (S&P, BB+ Corporate Credit Rating, Stable Outlook),
headquartered in Boise, Idaho, provides solutions to help
customers work more efficiently, build more effectively, and
create new ways to meet business challenges. Boise is a major
distributor of office products and building materials and an
integrated manufacturer and distributor of paper, packaging, and
wood products. Boise owns or controls more than 2 million acres
of timberland, primarily in the United States, to support our
manufacturing operations. Visit the Boise Web site at
http://www.bc.com/
Boise Office Solutions, headquartered in Itasca, Illinois, is a
division of Boise and a premier multinational contract and retail
distributor under the OfficeMax brand of office supplies and
paper, technology products, and office furniture. Boise Office
Solutions had 2003 sales of $4.0 billion.
Boise Building Solutions, headquartered in Boise, Idaho, is a
division of Boise and manufactures plywood, lumber, particleboard,
and engineered wood products. The business also operates 27
facilities that distribute a broad line of building materials,
including wood products manufactured by Boise. Boise Building
Solutions posted manufacturing sales of $824 million and
distribution sales of $2.0 billion in 2003.
Boise Paper Solutions, headquartered in Boise, Idaho, is a
division of Boise and a manufacturer of office papers, a majority
of which are sold through Boise Office Solutions. Boise Paper
Solutions also manufactures printing, forms, and converting
papers; value-added papers; newsprint; containerboard and
corrugated containers; and market pulp. The division had 2003
sales of $1.9 billion. Visit Boise at http://www.bc.com/
BUDGET: Asks Court to Stretch Lease Decision Period Until May 31
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Budget Group Inc. asks the U.S. Bankruptcy Court for the District
of Delaware to extend the period in which they can elect to assume
or reject their remaining unexpired non-residential property
leases through and including May 31, 2004, or until confirmation
of their chapter 11 plan, whichever occurs earlier.
The Debtors' management believes that it has largely completed
the process of evaluating each of the unexpired leases for their
economic desirability and compatibility with the Debtors' Chapter
11 process and already obtained Court approval authorizing
assumption and assignment or rejection for the vast majority of
unexpired leases. Robert S. Brady, Esq., at Young, Conaway,
Stargatt & Taylor, LLP, in Wilmington, Delaware, explains that an
extension will allow the Debtors maximum flexibility to implement
their Chapter 11 Plan successfully and maximize the value of
their estates.
Mr. Brady assures the Court that there is no prejudice to the
lessors under the Unexpired Leases as a result of the extension.
Pending their election to assume or reject, the Debtors will
perform all of their obligations arising from and after the
Petition Date in a timely fashion, including the payment of
postpetition rent due, as required by Section 365(d)(3) of the
Bankruptcy Code.
The Court will convene a hearing on May 17, 2004 to consider the
Debtors' request. By application of Rule 9006-2 of the Local
Rules of Bankruptcy Practice and Procedures of the United States
Bankruptcy Court for the District of Delaware, the Debtors'
lease decision period is automatically extended through the
conclusion of that hearing.
Headquartered in Daytona Beach, Florida, Budget Group, Inc.,
operates under the Budget Rent a Car and Ryder names -- is the
world's third largest car and truck rental company. The Company
filed for chapter 11 protection on July 29, 2002 (Bankr. Del. Case
No. 02-12152). Lawrence J. Nyhan, Esq., and James F. Conlan, Esq.,
at Sidley Austin Brown & Wood and Robert S. Brady, Esq., and
Edward J. Kosmowski, Esq., at Young, Conaway, Stargatt & Taylor,
LLP, represent the Debtors in their restructuring efforts. When
the Company filed for protection from their creditors, they listed
$4,047,207,133 in assets and $4,333,611,997 in liabilities.
(Budget Group Bankruptcy News, Issue No. 37; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
BURNS PHILP: S&P Affirms B+ Rating with Negative Outlook
--------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+/Negative/-'
rating on Burns, Philp & Co. Ltd. The rating reflects the
company's very aggressive financial profile following the largely
debt-funded acquisition of food and ingredients manufacturer
Goodman Fielder Ltd. in March 2003, and the significant
integration risks associated with this substantial acquisition.
The risk of breaching its financial covenants has been heightened
by Burns Philp's weaker-than-expected operating performance in the
six months to Dec. 31, 2003. A more stable performance in the
second half and continued positive free cash flow generation,
however, should partially ease financial pressure and liquidity
concerns. These negative factors are partially offset by the
historically stable cash flows of Goodman Fielder's strong and
diversified product portfolio in Australia and New Zealand, Burns
Philp's global reach in yeast, and the company's lengthy
debt-maturity profile.
"A rating downgrade could result if Burns Philp breaches its
financial covenants, the company's performance does not stablize
due to competitive pressures, or the integration of Goodman
Fielder falters," said Lucie Kistler, credit analyst at Standard &
Poor's. "Also, any future acquisitions of a moderate size would
need to be substantially equity funded to prevent deterioration in
key prudential ratios."
The planned sale of the company's herbs and spices division could
result in some debt reduction, given the company's financial
arrangements require that 25% of net proceeds be applied to debt
reduction. While any debt reduction would be viewed as positive
given Burns Philp's high gearing level, the positive effect from
the required level of debt reduction would not be sufficient to
offset the negative impact on Burns Philp's credit profile arising
from its recent weaker operating performance.
The rating on Burns Philp relies heavily on continued progress
with the successful and timely integration of the Goodman Fielder
businesses, especially given the competitive pressures faced by
the yeast and bakery businesses in the near term. The company
needs to achieve its growth and return targets, synergies and cost
savings, and apply free cash and funds from asset sales to debt
reduction, to ensure that financial coverage measures return to
levels commensurate with the rating.
CAREMARK RX: Releasing First Quarter 2004 Results on May 6
----------------------------------------------------------
Caremark Rx, Inc. announced its intention to release its first
quarter earnings for 2004 on Thursday, May 6, 2004. In addition,
on the same date, management will hold an investor conference call
to discuss the quarterly results and the general operations of the
company. The conference call information is as follows:
Date: Thursday, May 6, 2004
Time: 10:30 a.m. Eastern Time
Toll Number: (706) 634-6560
Toll-Free Number: (888) 596-9623
Leader: Mac Crawford
Replay Number: (706) 645-9291
Conference ID: 6681853
The call will be broadcast live, as well as replayed, through the
Internet. The webcast can be accessed through the "Investor
Information" page on the Caremark Rx, Inc. website at
http://www.caremarkrx.com/and will be available for two weeks.
RealPlayer or Windows Media will be required in order to listen to
the webcast. A link to a free download will be available at
http://www.caremarkrx.com/
A taped replay of the call will also be available beginning at
12:30 p.m. Eastern Time on Thursday, May 6, 2004, until midnight
Eastern Time, Thursday, May 13, 2004, by calling the replay number
listed above.
About Caremark Rx, Inc.
Caremark Rx, Inc. is a leading pharmaceutical services company,
providing comprehensive drug benefit services to over 2,000 health
plan sponsors and their participants throughout the U.S.
Caremark's clients include corporate health plans, managed care
organizations, insurance companies, unions, government agencies
and other funded benefit plans. The company operates a national
retail pharmacy network with over 55,000 participating pharmacies,
seven mail service pharmacies, the industry's only FDA-regulated
repackaging plant, and 23 specialty pharmacies for delivery of
advanced medications to individuals with chronic or genetic
diseases and disorders.
As reported in the Troubled Company Reporter's February 16, 2004
edition, Standard & Poor's Ratings Services said that its ratings
on Nashville, Tennessee-based pharmacy benefit manager Caremark
Rx.Inc. remained on CreditWatch with positive implications. These
include the company's 'BBB-' long-term corporate credit and senior
secured debt ratings as well as the 'BB+' rating on its $450
million in 7.375% senior secured notes. The ratings were
originally placed on CreditWatch on Sept. 3, 2003, following the
company's announcement that it intended to acquire its rival,
AdvancePCS, in a $6 billion transaction funded mostly by stock.
AdvancePCS' ratings also remain on CreditWatch with positive
implications, including its 'BB+' corporate credit and senior
secured debt ratings as well as its 'BB' senior unsecured debt
ratings.
"When the companies complete the transaction, as is expected in
the first half of 2004, Standard & Poor's will raise the corporate
credit and senior secured debt ratings of Caremark to 'BBB' and
the senior secured note ratings to 'BBB-'," said credit analyst
Arthur Wong. "The outlook will be stable. The senior unsecured
debt rating on AdvancePCS will be raised to 'BBB' and the
company's corporate credit and senior secured debt ratings will be
withdrawn."
CLS FINANCIAL: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: CLS Financial Services LLC
4720 200th Street South West
Lynnwood, Washington 98046
Bankruptcy Case No.: 04-14599
Type of Business: The Debtor is a full service mortgage broker &
mortgage banking firm in Washington State.
See http://www.clsfs.com/
Chapter 11 Petition Date: April 6, 2004
Court: Western District of Washington (Seattle)
Judge: Thomas T. Glover
Debtor's Counsel: Larry B. Feinstein, Esq.
Vortman & Feinstein
500 Union Suite #500
Seattle, WA 98101
Tel: 206-223-9595
Estimated Assets: $0 to $50,000
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Granite NW LLC $2,788,122
PO Box 719
Lynnwood, WA 98046
Jerry Vanhook $322,380
PO Box 719
Lynnwood WA 98046
Tabernacle Baptist Foundation $154,775
US Bank $150,000
First Trust $119,214
Kientz Living Trust $107,685
John Meade Living Trust $105,003
William Dray Pension $100,000
Vern Toney $80,070
Phil Barr $80,000
Commerce Bank $72,038
First Trust $66,930
Donna Gauthier $61,660
Trust Co. of Amer. $61,500
Deborah French $56,000
Robert Stookey Revc. Trust $55,700
Commerce Bank $53,733
Darryl Wimmer $51,532
Richard C. White $50,768
Ronald Wimmer $50,000
CONSOL ENERGY: First Quarter Conference Call is on April 22
-----------------------------------------------------------
CONSOL Energy Inc. (NYSE: CNX) announces the following Webcast:
What: CONSOL Energy Reports First Quarter Results
When: Thursday, April 22, 2004 at 10:00 a.m. Eastern
Where: http://www.consolenergy.comor
http://www.firstcallevents.com/service/ajwz404412857gf12.html
How: Live over the Internet -- Simply log on to the web
at the address above.
Contact: Dan Zajdel of CONSOL Energy, +1-412-831-4065, or
Email, DanZajdel@consolenergy.com
If you are unable to participate during the live webcast, the call
will be archived at http://www.consolenergy.com/
CONSOL Energy Inc. (S&P, BB- Corporate Credit Rating, Negative) is
the largest producer of high-Btu bituminous coal in the United
States. CONSOL Energy has 19 bituminous coal mining complexes in
seven states. In addition, the company is one of the largest U.S.
producers of coalbed methane with daily gas production at 12/31/03
of approximately 146 million cubic feet from wells in
Pennsylvania, Virginia and West Virginia. The company also has a
joint-venture company to produce natural gas in Virginia and
Tennessee, and the company produces electricity from coalbed
methane at a joint-venture generating facility in Virginia.
CORNERSTONE PROPANE: May Pursue Restructuring under Chapter 11
--------------------------------------------------------------
CornerStone Propane Partners, L.P., announced that, in connection
with its previously announced pursuit of a stand-alone financial
restructuring, it is working with its advisors to consider its
options, which could include a filing under Chapter 11 of the
United States Bankruptcy Code.
While there is no assurance at this time of whether or when a
financial restructuring or liquidation of CornerStone may occur,
any such action, whether under Chapter 11 or otherwise, may result
in the cancellation of existing indebtedness of CornerStone. While
CornerStone is in discussions with its legal and financial
advisors regarding different restructuring scenarios, it is
possible that certain holders of CornerStone's common units
representing limited partner interests in CornerStone will be
deemed to receive cancellation of indebtedness income for tax
purposes upon confirmation of a plan of reorganization. This
cancellation of indebtedness income would be taxable in the year
that a restructuring is completed.
Unitholders should consult their tax advisors concerning the U.S.
federal income tax consequences of any restructuring or
liquidation and as to the advisability of continuing to hold
limited partnership interests in CornerStone, as well as the laws
of any state, local or foreign taxing jurisdiction.
About CornerStone
CornerStone is a Delaware limited partnership. For more
information, go to http://www.cornerstonepropane.com/
CROWN ANDERSEN: Losses & Default Trigger Going Concern Doubt
------------------------------------------------------------
Crown Andersen Inc. is a publicly traded holding company for
Andersen 2000 Inc. and Griffin Environmental Company, Inc.
Andersen owns all of the outstanding stock of Montair Andersen bv.
Andersen and Montair are engaged primarily in the business of
designing, manufacturing and selling specialized industrial
equipment including industrial pollution control systems, medical
and hazardous waste disposal systems, heat recovery systems,
industrial air handling systems and spray dryer systems. Griffin
is a manufacturer of fabric filter and cartridge dust collectors,
product recovery and pollution control equipment.
The Company sustained substantial losses from operations in 2003
and 2002. In addition, the Company used, rather than provided,
cash in its operations and has violated certain debt covenants.
In view of the matters described in the preceding paragraph,
recoverability of a major portion of the recorded asset amounts
shown in the Company's balance sheet is dependent upon continued
operations of the Company, which in turn is dependent upon the
Company's ability to meet its financing requirements on a
continuing basis, to maintain present financing, and to succeed in
its future operations. These factors, among others, raise
substantial doubt about the Company's ability to continue as a
going concern.
Due to the continued depressed capital equipment market and
significant write downs of assets, the Company reported a net loss
of $4,684,673 in fiscal 2003 compared to a net loss of $3,391,542
in fiscal 2002. The operating loss, before asset write downs, was
approximately $2.6 million in fiscal 2003 and approximately $2.9
million in fiscal 2002. For fiscal 2001, the Company reported net
income of $905,198.
Management has taken the following steps to revise its operating
and financial requirements, which it believes are sufficient to
provide the Company with the ability to continue in existence:
Management has instituted a cost reduction program that included a
reduction in labor costs and reductions in discretionary
expenditures. Further, the Company expects to seek additional
funding through equity financing or other financing avenues.
Management believes that these actions will enable the Company to
continue as a going concern through September 30, 2004.
DE MANAGEMENT INC: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: D.E. Management, Inc.
4526 Jupiter Drive
Salt Lake City, Utah 84124
Bankruptcy Case No.: 04-25408
Chapter 11 Petition Date: April 6, 2004
Court: District of Utah (Salt Lake City)
Judge: Glen E. Clark
Debtor's Counsel: Alan R. Stewart, Esq.
1366 East Holladay Road
Salt Lake City, UT 84117
Tel: 801-278-1063
Estimated Assets: $500,000 to $1 Million
Estimated Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20-largest creditors.
DOLLAR GENERAL: S&P Revises Outlook to Positive From Negative
-------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Dollar
General Corp. to positive from negative. The revision is based on
a preliminary resolution of the SEC investigation into accounting
changes. The ratings on the company, including the 'BB+' corporate
credit rating, were affirmed.
During the fourth quarter of 2003, Dollar General reached an
agreement in principle with the SEC to settle the investigation
into accounting matters for $10 million. The agreement is subject
to approval by the SEC and the court in which the SEC complaint is
filed. The investigation stemmed from the company's restatement of
financial results for fiscal years 1998, 1999, and 2000. Although
the restatement did not materially affect cash flow for the
restated years, it pointed to inadequate financial controls,
which have since been addressed by the financial management team
installed following the restatement.
"The ratings on Goodlettsville, Tenn.-based Dollar General reflect
a highly competitive discount retail environment and risks
associated with an aggressive expansion program, somewhat
mitigated by a good market position and satisfactory cash flow
protection," said Standard & Poor's credit analyst Mary Lou Burde.
The company's base of 6,700 small-format stores provides
inexpensive consumable basics to low- and fixed-income families.
But the stores are increasingly facing competition from large-
format discounters and other "dollar" retailers. This pressure
increases the importance of Dollar General successfully executing
its in-store performance. Store-level execution has been
inconsistent, in large part due to the demands of rapid store
expansion. Still, the company has a track record of consistently
positive same-store sales and a niche position in small markets
serving the "extreme value" segment of the discount industry.
To improve execution, management is moderating the pace of growth
somewhat and implementing numerous operational changes. In 2004,
the company will open about 675 Dollar General stores and 20
Dollar General Market stores (a larger format focused on
perishables). This pace is still aggressive, but below 2000's
record 750-plus store-opening program. Initiatives include better
technology, including a perpetual inventory system; shrink
reduction; standardized store processes; and enhanced supply chain
management through new merchandising and planning programs.
DOVER WATCH: Case Summary & 2 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Dover Watch at Mt. Snow, Ltd.
P.O. Box 146
Valhalla, New York 10595
Bankruptcy Case No.: 04-10537
Type of Business: The Debtor is in the business of developing
resort time share condominiums with associated
recreational property located at Mt. Snow in
W. Dover, Vermont.
Chapter 11 Petition Date: April 14, 2004
Court: District of Vermont (Rutland)
Judge: Colleen A. Brown
Debtor's Counsel: Bernard M. Lewis, Esq.
12 South Main Street
Randolph, VT 05060
Tel: 802-728-9604
Fax: 802-728-6404
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $100,000 to $500,000
Debtor's 2 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Shirley Basso Money loaned $80,000
John Chadwick Services rendered $20,000
DOW CORNING: Trust Turns to Crowe Chizek for Financial Advice
-------------------------------------------------------------
The United States District Court for the Eastern District of
Michigan has approved the appointment of Crowe Chizek and Company
LLC as financial advisor for the Dow Corning Qualified Settlement
Facility Trust.
Dow Corning, once the world's largest maker of silicone breast
implants, has been in Chapter 11 bankruptcy since 1995 as a result
of legal expenses incurred in defending itself against lawsuits
filed by implant recipients. Dow Corning consistently maintained
the implants were safe, but agreed to pay $3.2 billion toward the
claims as part of its bankruptcy settlement.
Crowe Chizek will perform certain functions for the Finance
Committee and Trust. As financial advisor, Crowe Chizek will
oversee the preparation of financial statements and other reports,
prepare income tax returns, confirm that the investment guidelines
are consistently applied to all funds paid to and held by the
trust and provide other accounting and tax consulting services.
Also, Crowe Chizek will determine the available assets of the
depository trust and match the assets to claim payment needs of
the settlement and litigation facilities. Marilee Hopkins,
executive in charge of litigation services for Crowe Chizek, leads
the effort as financial advisor.
"Crowe Chizek is a good fit for this role, because of our
extensive experience in large claims processing, including work
with the United Nations," said Hopkins. "Also, we have the
resources necessary to successfully coordinate these efforts
without the conflicts other firms may have."
Crowe Chizek's litigation services group focuses on all aspects of
forensic accounting, including lost profits and damages in complex
cases, employment and personal injury losses, construction claims
analysis, intellectual property analysis and fraud investigations.
Crowe Chizek professionals also offer corporate recovery services,
providing financial and advisory services to clients involved in
restructuring or bankruptcy-related litigation.
About Crowe Chizek
Crowe Chizek and Company LLC -- http://www.crowechizek.com/--
provides innovative business solutions in the areas of assurance,
consulting, risk management, tax and technology. Celebrating more
than 60 years of "Building Value with Values," Crowe Chizek is one
of the top 10 public accounting and consulting firms in the United
States, serving clients worldwide as a leading member of the
Horwath International network of public accounting and consulting
firms.
ELEC COMMS: Bankruptcy Court Approves Telecarrier Purchase
----------------------------------------------------------
eLEC Communications Corp. (OTCBB:ELEC), a provider of local and
long distance telephone service, announced that is has received
approval from the United States Bankruptcy Court for the Southern
District of New York to purchase Telecarrier Services, Inc.
Telecarrier is a wholly-owned subsidiary of eLEC that had filed
for Chapter 11 bankruptcy protection on July 29, 2002. eLEC will
acquire 100% of the stock of the reorganized Telecarrier through
the confirmed plan of reorganization.
As a wholly-owned subsidiary of eLEC, Telecarrier's financial
statements have been included as a part of the consolidated
financial statements of eLEC. The purchase will allow the entire
customer base of Telecarrier, including approximately 4,300 local
access lines, to remain a part of eLEC. The purchase price was
$325,000.
eLEC's CEO, Paul Riss, stated, "We are pleased that Telecarrier
will be able to emerge from Chapter 11 protection and remain a
component of our operations. During the first quarter of fiscal
2004, Telecarrier contributed revenues of approximately $576,000
and net income of approximately $42,000 to our consolidated
financial statements. By eliminating payables from our
consolidated balance sheet through the reorganization process, we
estimate that we will record a gain of approximately $923,000."
"Once again, we have taken steps to improve our financial
condition and increase working capital," continued Riss. "We look
forward to taking advantage of this emergence from bankruptcy to
further grow the Telecarrier business."
eLEC Communications Corp. is a Competitive Local Exchange Carrier
that offers local and long distance calling plans to small
business and residential customers. We sell under the names of New
Rochelle Telephone and eLEC Communications, and we deliver
telephone services at a price savings and with quality customer
service. For more information on our products and offerings, visit
its web site at http://www.elec.net/
* * *
In its Form 10-KSB for the fiscal year ended November 30, 2003,
eLEC Communications Corp. states:
"The report of the independent auditors on our 2003 financial
statements indicates there is substantial doubt about our ability
to continue as a going concern. We have worked during the course
of the year to improve our financial condition and, as discussed
previously, the sale of most of the assets and liabilities of our
former wholly-owned subsidiary, Essex, in December 2002, the sale
of the stock of Essex in September 2003 and the sale of our
corporate headquarters building in October 2003 has helped us to
continue our business operations. Additionally, we are approaching
a breakeven level and we believe we currently have the cash
resources to further grow our business to profitable levels.
However, we have not recently reported a fiscal quarter with
income from operations and we continue to operate with negative
working capital, which at November 30, 2003 was approximately
$1,938,000. In addition, there remains some doubt as to whether we
will have the financial ability to meet payment demands, if they
are made, from creditors. We believe we will be able to settle
approximately $872,000 of current liabilities to Telecarrier's
creditors via a reorganization plan to bring our Telecarrier
subsidiary out of bankruptcy. We believe it is important to our
current operations to maintain the new customer accounts that we
have established in Telecarrier. If we are successful in
maintaining ownership of a reorganized Telecarrier, we anticipate
that we will have profitable operations and will be able to
further pursue implementation of VoIP technology as an additional
network to carry the voice traffic of our customers. The failure
to retain our Telecarrier subsidiary and to settle past due
amounts within our financial means will have an adverse effect on
our ability to carry out our business plan. The inability to carry
out this plan may result in the continuance of unprofitable
operations, and the eventual shut down of vendor credit
facilities, which would adversely affect our ability to continue
operating as a going concern."
ENRON CORP: Court Okays 8 Big Claim Settlement Pacts
----------------------------------------------------
The Enron Corporation Debtors have negotiated letter agreements
with eight creditors to reduce and allow 16 Proofs of Claim they
believe are overstated. At the Debtors' request, the Court
approves the Reduce and Allow Agreements with:
Claim Allowed
Creditor Claim No. Amount Amount
-------- --------- ------ -------
Angelo, Gordon & Co., LP 11319 $36,001,735 $35,350,148
11321 36,001,735 481,200
Baupost Group Securities LLC 10989 7,776,960 7,478,841
Countour Liquidating Trust 6432 16,436,046 16,333,270
Longacre Master Fund Ltd. 7624 10,761,050 10,357,386
7625 10,761,050 10,357,386
2653 2,263,313 2,114,185
14710 2,263,313 2,114,185
Petro-Canada Hydrocarbons, 6820 21,798,083 9,601,067
Inc. 7072 21,798,083 9,601,067
Tenaska Power Services Co. 17443 128,440 120,582
18268 128,440 120,582
Tenaska III Texas Partners 16346 3,172,966 2,978,864
Ltd. 17184 3,172,966 2,978,864
Venoco, Inc. 9383 2,810,500 2,777,019
9384 2,810,500 2,777,019
(Enron Bankruptcy News, Issue No. 104; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ENUCLEUS INC: Reports Improved Results After Restructuring
----------------------------------------------------------
eNucleus, Inc. (OTC Bulletin Board: ENUI), a next generation
application company that delivers proprietary software solutions
via license and managed hosting for middle market healthcare,
education, distribution, insurance and financial services
industries, reported its financial results for the fiscal year
ended December 31, 2003.
Revenues for the year were $577,574, an increase from $285,687 in
2002. Net loss for the year ended December 31, 2003 including
$897,182 in non-recurring expenses related to the Company's
reorganization was $1,450,985 or $0.28 per share compared with
$5,757,628 including $4,517.579 in reorganization expenses or
$2.50 per share in 2002.
In January 2004, eNucleus acquired PrimeWire, Inc., a software
company servicing the insurance industry and payroll and benefit
administrators for a combination of cash and eNucleus stock.
PrimeWire's ASSETS(TM) program assists benefit providers and
benefit administrators in successfully managing the complex
eligibility, enrollment, billing and reconciliation process-
surrounding employee benefit programs. Currently, 30-39% of all
corporate payroll expenses are benefit related costs.
On November 6, 2003 the Company completed its successful
restructuring and emerged from Chapter 11 reorganization. In
addition to the Company's restructuring, on March 23, 2004,
eNucleus completed a 10-for-1 reverse split of its common stock to
improve shareholder value, as well as the sale of 277,778 shares
of series B preferred stock, convertible to 3.33 shares of
eNucleus common stock and a warrant to purchase one share of
series B preferred stock at $1.00 per share effective at the time
of the reverse split, in a PIPE transaction.
John Paulsen, Chairman and CEO of eNucleus, Inc. said, "The
Company has emerged from its reorganization well positioned for
growth and profitability. The completion of the acquisition of
PrimeWire, as well as the sale of the Company's series B preferred
stock have strengthened eNucleus and will increase long-term
shareholder value. We continue to target strategic acquisitions of
healthcare, education, distribution, insurance and financial
services software providers."
In the first quarter of 2004, the Company successfully completed
licensing agreements for its Benefits Administration Platform with
the Holmes-Shaw Agency, a life and health insurance agency that
represents the Georgia Bankers Association which includes 280
community banks and approximately 11,000 employees, and United
Specialty Benefits which provides voluntary employee benefit
products to more than 400 school systems across Texas, Oklahoma,
New Mexico, Arkansas and Louisiana. Based in part, on the strength
of these new licensing agreements, the Company estimates revenues
for the first quarter of approximately $550,000 and net income in
excess of $200,000.
The Company has scheduled a conference call on Wednesday, April
21, 2004 at 4:30 p.m. EDT to discuss its year-end and first
quarter operating results. John Paulsen, Chairman and CEO of
eNucleus, Inc, will host the call. To participate in the call dial
800-683-1585 approximately 5-10 minutes prior to the scheduled
start time. The call will be available for replay through April
29, 2004 by dialing 877-519-4471 and entering the PIN # 4696432.
About eNucleus
eNucleus -- http://www.eNucleus.com/-- is a next generation
application company that delivers robust software solutions to
companies within the healthcare, education, distribution,
insurance and financial services markets. The seamless and
immediate exchange of critical business information provided by
our software solutions allows our clients to run their businesses
with maximum efficiency and profitability.
ESTATION: Secured Lender Issues Foreclosure Notice
--------------------------------------------------
eStation Network Services, Inc., (NEX: ESN-H) has received a
notice from 2033981 Ontario Inc. demanding payment in full of all
obligations owing by eStation under the subscription receipt trust
indenture dated November 23, 2001. 2033981 is the assignee of New
Millenium Venture Fund Inc., formerly the sole holder of the
subscription receipts issued under the Trust Indenture. In
addition, eStation has received from 2033981 a notice of intention
to enforce security issued pursuant to the Bankruptcy and
Insolvency Act. The obligations of eStation under the Trust
Indenture are secured by a security interest over all of its
assets and are guaranteed by its subsidiary, E-Cash Services Inc.
No demand has been made at this time under the guarantee from E-
Cash.
2033981 has informed eStation that it intends to accept the assets
of eStation (including all of the capital stock of E-Cash) in full
and final satisfaction of the obligations owed by eStation under
the Trust Indenture in accordance with the applicable laws.
2033981 has also advised eStation that its current intention, upon
the successful completion of the Foreclosure, is to operate the
business of eStation and E-Cash as a going concern.
2033981 has also informed eStation that the senior secured
creditors of eStation have consented to 2033981 making the demand
and to the immediate enforcement of the security against
eStation's assets, subject to such secured creditors' prior
ranking security interests.
All of the directors of eStation have previously resigned.
About eStation
eStation (NEX - ESN-H) offers turnkey ATM solutions to major
retail and hospitality chains.
EXTENDICARE: Receives Consents to Nix Restrictive Debt Covenants
----------------------------------------------------------------
Extendicare Health Services, Inc. announced that in connection
with its cash tender offer for any and all of its $200 million
outstanding 9.35% Senior Subordinated Notes Due 2007 and the
related consent solicitation, EHSI has received the required
consents to eliminate substantially all of the restrictive
covenants in the indenture governing the Notes (and the related
events of default), other than the covenants to pay principal of
and interest on the Notes when due, as detailed in the Offer to
Purchase and Consent Solicitation Statement dated April 5, 2004.
EHSI is a wholly owned subsidiary of Extendicare Inc.
As a result of obtaining the required consents, EHSI executed and
delivered a supplemental indenture setting forth the amendments.
The supplemental indenture provides that the amendments will only
become operative when EHSI notifies the trustee under the
indenture and the tender agent for the Notes, D.F. King & Co.,
Inc., that the Notes tendered prior to 5:00 p.m., New York City
time, on Wednesday, April 14, 2004 (the "Consent Date") and not
validly withdrawn are accepted for purchase.
As of the Consent Date, EHSI had received tenders of Notes and
deliveries of related consents from holders of approximately 61%
of the Notes outstanding not owned by EHSI or any of its
affiliates. Those holders who tendered Notes prior to the Consent
Date will receive, subject to the terms and conditions of the
tender offer, the total consideration to be paid per $1,000
principal amount of Notes validly tendered, which is $1,035 and
includes the consent payment of $30 per $1,000 principal amount
of Notes. Subject to the terms and conditions of the tender
offer, the total consideration will be payable to the holders
entitled thereto, together with accrued and unpaid interest to,
but excluding the settlement date.
Holders whose valid tenders are received after the Consent Date,
but prior to midnight, New York City time, on April 30, 2004,
will receive the tender offer consideration, but not the consent
payment, which is $1,005 per $1,000 principal amount of Notes,
plus accrued and unpaid interest to, but excluding the settlement
date. EHSI currently intends to redeem any Notes not tendered in
the tender offer under the terms of the indenture. The current
redemption price for the Notes is $1,031.17 per $1,000 principal
amount of Notes, plus accrued and unpaid interest.
EHSI's obligation to accept for purchase and to pay for Notes
validly tendered in the tender offer is subject to the
satisfaction of certain conditions including, among other things,
the receipt of proceeds from anticipated borrowings under its
amended credit facility and the private placement of its new
notes and acceptance by EHSI of the Notes for purchase pursuant
to the terms of the tender offer, each as described in more
detail in the Offer to Purchase and Consent Solicitation
Statement dated April 5, 2004. The new notes will not be
registered under the Securities Act of 1933, as amended, and may
not be offered or sold in the United States absent registration
or an applicable exemption from registration.
This announcement is not an offer to purchase, nor a solicitation
of an offer to purchase, or a solicitation of tenders or consents
with respect to, any Notes. The tender offer and consent
solicitation are being made solely pursuant to the Offer to
Purchase and Consent Solicitation Statement dated April 5, 2004.
Lehman Brothers Inc. is serving as Dealer Manager and
Solicitation Agent and D.F. King & Co., Inc. is serving as
Information Agent and Tender Agent for the tender offer and
consent solicitation. Requests for documents may be directed to
D.F. King & Co., Inc. by telephone at (888) 567-1626 (toll free)
or (212) 269-5550 (collect), or in writing at 48 Wall Street,
22nd Floor, New York, NY 10005. Questions regarding the tender
offer and consent solicitation should be directed to Lehman
Brothers Inc. at (800) 438-3242 (toll free) or (212) 528-7581
(collect), attention: Liability Management Group.
Extendicare Health Services, Inc. of Milwaukee, Wisconsin is a
wholly owned subsidiary of Extendicare Inc. Through its
subsidiaries, Extendicare Inc. operates 267 long-term care
facilities across North America, with capacity for over 27,800
residents. As well, through its operations in the United States,
Extendicare offers medical specialty services such as subacute
care and rehabilitative therapy services, while home health care
services are provided in Canada. The Company employs 35,800
people in the United States and Canada.
As reported in the Troubled Company Reporter's April 14, 2004
edition, Standard & Poor's Ratings Services assigned its 'BB-'
bank loan rating to nursing home company Extendicare Health
Services Inc.'s (EHSI) new senior secured credit facility due June
2009. A recovery rating of '1' also was assigned to the facility,
indicating the expectation for a full recovery of principal in
the event of a default.
At the same time, Standard & Poor's assigned its 'B-' rating to
the company's $125 million of new senior subordinated notes due
2014. Proceeds of the notes will be used, along with cash and a
modest draw on the new revolver, to repay existing senior
subordinated notes.
The outstanding ratings on the company and its parent, Extendicare
Inc., including the 'B+' corporate credit rating, were affirmed.
The outlook was revised to positive from stable.
"The speculative-grade ratings reflect the difficulties that EHSI
has faced, and will continue to face, in its industry, including a
volatile reimbursement environment and escalating insurance
costs," said Standard & Poor's credit analyst, David Peknay.
"These negative factors are offset by the geographical dispersion
of its 154 nursing homes and 39 assisted living facilities."
FACTORY CARD: Reports 2003 Results & Wells Fargo Credit Amendment
-----------------------------------------------------------------
Factory Card & Party Outlet Corp. (FCPO) announced results for the
fourth fiscal quarter and full year of 2003, ended January 31,
2004.
For the quarter ended January 31, 2004, net sales declined 3.3
percent to $56.9 million, compared with $58.8 million in the
fourth quarter of last year. The net loss for the fourth quarter
of 2003 was $1.1 million, or $0.36 per basic and fully diluted
share, due in large part to a material increase in advertising
expense. Looking back at the fourth quarter of 2002, the Company
reported net income of $372 thousand, or $0.13 per basic and fully
diluted share. Comparable store net sales for the fourth quarter
ended January 31, 2004 declined 5.0 percent.
Net sales for the fiscal year ended January 31, 2004 decreased 1.7
percent to $222.6 million, compared with $226.5 million a year
ago. The Company reported net income for the fiscal year of $1.4
million, or $0.47 per basic share. Fully diluted earnings per
share were $0.40. Comparable store net sales for the fiscal year
ended January 31, 2004 decreased 2.0 percent from the prior fiscal
year.
Additionally, the Company announced that net sales for the first
two fiscal months ended April 3, 2004, increased 7.9% to $38.5
million from $35.7 million during the same period last year.
Comparable net sales increased 5.4% from the same period last
year. The positive sales increase reflects the continued strong
performance of the Company's party category combined with a
favorable calendar shift of the Easter holiday.
"Our fourth quarter results reflect disappointing seasonal sales
within a challenging retail environment. These results were in
spite of increased advertising expenditures for the quarter and a
strong showing in our everyday party category sales," stated Gary
W. Rada, President and Chief Executive Officer. "Despite a
disappointing fourth quarter, we are pleased to have made great
strides during 2003 to significantly reduce the Company's debt,
open six new stores, and complete a second year of profitable
operations. We're also off to a good start in 2004, with
encouraging same store sales increases and another three new
stores opened year to date. Moving forward, we remain focused on
building our party business and executing the Company's growth
strategy, which includes plans to open up to seven more new stores
this fiscal year."
Starting in May 2004, Factory Card & Party Outlet will begin
announcing monthly sales results in the week following the close
of the fiscal month. Further, the Company will also commence
conducting quarterly investor conference calls after the close of
the first quarter ended May 1, 2004. The first call will take
place in June, when the Company reports first quarter earnings.
Lastly, the Company also announced it has extended its revolving
credit facility agreement with Wells Fargo Retail Finance through
April of 2007. The extension allows the Company to borrow up to
$30 million while lowering various borrowing rates and fees
associated with the facility.
A comparison of net income and earnings per share for the period
subsequent to April 6, 2002 (effective date of the consummation of
the plan for reorganization for accounting purposes) to prior
periods would not be meaningful due to significant reorganization
cost, gains related to extinguishment of unsecured creditors'
claims, fresh start accounting adjustments and capital structure
changes related to the Company's previously announced emergence
from Chapter 11.
Factory Card & Party Outlet, (www.factorycard.com) based in
Naperville, Illinois, currently operates 179 Company-owned retail
stores in 20 states, offering an extensive assortment of party
supplies, greeting cards, gift-wrap, and other special occasion
merchandise at everyday value prices.
FEDERAL-MOGUL: Bar Date for EPA Claims Extended to May 28, 2004
---------------------------------------------------------------
As a result of extensive settlement negotiations between Federal-
Mogul Corporation and the United States Environmental Protection
Agency, the parties resolved a variety of issues arising out of
the environmental claims held by the EPA and have agreed on a
variety of terms. At this point, the EPA is reviewing the terms
of a global settlement and expects to soon begin the process of
attempting to obtain the necessary internal approval. The
parties also continue to address the issues arising out of the
environmental claims held by certain state governments to
determine their participation in the global settlement.
In a Court-approved stipulation, the Debtors agree to allow the
EPA more time to file its Claims. The EPA will have until
May 28, 2004 at 4:00 p.m. Eastern Daylight Time, to file a Claim.
The parties believe that the additional time will facilitate the
process of reaching a global settlement and may result in
significant cost savings if the claims can be resolved
consensually. All other provisions of the Bar Date Order remain
in full force and effect.
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)
FINDEX.COM: Needs More Capital to Continue Operations This Year
---------------------------------------------------------------
FindEx.com, Inc. (OTCBB:FIND) announced results for the year ended
December 31, 2003 and for the fourth quarter.
Net sales for the year ended December 31, 2003 increased 12% to
$4,390,757 from sales of $3,908,694 for the year ended December
31, 2002. During 2003 the Company had several non-recurring items
take place totaling approximately $1,390,000 which positively
effected net income. These non-recurring items had no effect on
the cash flow statement. Accordingly, net income increased from
$216,978 in the year ended December 31, 2002 to $1,841,499 for the
year ended December 31, 2003. Net of the non-recurring items, our
net income increased approximately $235,000 from a net income of
approximately $217,000 for the year ended December 31, 2002 to a
net income of approximately $452,000 for the year ended December
31, 2003. Basic Earnings Per Share (EPS) increased from $.01 for
the year ended December 31, 2002 to $.09 for the year ended
December 31, 2003.
For the fourth quarter ended December 31, 2003 the Company
reported net sales of $1,801,937 as compared to $976,228 for the
quarter ended December 31, 2002. This represented an increase in
sales of 84%. Net income increased $1,255,460 for the quarter from
a net income of $93,603 in the fourth quarter of 2002 to net
income of $1,349,063 in the fourth quarter of 2003.
Commenting on the year, Steven Malone, FindEx's Chairman and
President stated, " While pleased with results, we had hoped to
realize a better outcome. We believe the delay experienced in
releasing QuickVerse 8, our flagship product, cost the Company an
additional million dollars in revenue. However, we have made
provisions so that we should not experience significant product
release delays moving forward."
"As for the future, we are very encouraged by the direction we are
heading in 2004 and beyond. We have rebuilt our development team
and are continuing to add new talent. We have expanded our sales
and marketing team, and embarked on an aggressive product
development and marketing schedule that we feel will achieve
substantially greater results for us in the year to come. Lastly,
we are pleased to have finally settled our dispute with the
Zondervan Corporation, and we hope to one day work with them
again."
In discussing the operating results of the Company, Kirk Rowland,
Chief Financial Officer for FindEx stated, "We improved our
profitability from operations, doubled our net income after
removing the non-recurring items, and continued our positive cash
flow from operations. This allowed us to improve our working
capital and make significant progress into the next phase of our
corporate growth strategy. The non-recurring items, while not
providing any cash, did result in approximately $1,390,000 of
additional net income and an improvement in our balance sheet."
In its Form 10-K For the fiscal year ended December 31, 2003 filed
with the Securities and Exchange Commission, FindEx.com, Inc. also
states:
"To date, Findex has funded its purchase of the Parsons Church
Division primarily through operations. Since inception, we have
raised approximately $2,250,000 in net proceeds from equity
financings to fund the acquisition and working capital needs. We
have focused on fulfilling the software license obligation and
have been unable to meet our royalty and trade debt obligations.
In addition, the dispute with TLC over specific performance
provisions of and payments due on the TLC Distribution Agreement
has also lead to the shortage of working capital.
"As of December 31, 2003, Findex had $802,345 in current assets,
$3,747,126 in current liabilities and a retained deficit of
$7,944,278. These factors continue to create an uncertainty about
our ability to continue as a going concern. We had net income
before income taxes of $1,807,932 for the year ended December 31,
2003. Operating expenses for 2003 included approximately $53,000
in non-cash expenses for stock issued for services.
"We do not currently have adequate funds available to fund our
operations over the next twelve months. In order to maintain the
current level of operations, we will need to secure additional
funding sources to meet its operating expenses. Such funding
sources may include, but are not limited to, funding pursuant to
private placements of common or convertible equities, placement of
debt with banks, private or public investors, or other lending
institutions.
"Although there can be no assurance, we believe that through a
combination of outside sources of capital and revenues generated
from direct-to-consumer sales, we will have sufficient sources of
capital to meet our operating needs. However, any substantial
delays in receipt of or failure to obtain such capital and delays
in product releases will prevent us from operating as a going
concern, given our limited revenues and capital reserves."
About FindEx.com Inc.
FindEx is a developer, publisher, and distributor/seller of off-
the-shelf consumer and organizational software products. The
common thread among the Company's products is a customer
constituency that shares a devotion to or interest in Christianity
and faith-based "inspirational" values. We are focused on becoming
the premier provider of Bible study and related faith-based
software products and content to the domestic and international
markets. Our flagship product is QuickVerse. QuickVerse simplifies
biblical research with powerful searching that anyone can use to
find information across multiple Bibles and reference books.
QuickVerse includes customizable options for daily Bible reading,
and devotional and in-depth Bible study. One of our PDA Editions,
specifically made for the Pocket PC or Palm OS, enables users to
take their studies with them Anytime, Anywhere. For product
information see http://www.quickverse.com/
FLEMING COMPANIES: Settles CHEP Claim Dispute for $1.5 Million
--------------------------------------------------------------
Before the Petition Date, Scotta E. McFarland, Esq., at Pachulski
Stang Ziehl Young Jones & Weintraub PC in Wilmington, Delaware,
relates, CHEP and Fleming Companies, Inc. signed a distribution
letter agreement authorizing Fleming to receive CHEP's pallets
and containers from various manufacturers as a participating
distributor in the CHEP pooling system. Before and after the
Petition Date, Fleming, as a participating distributor, received
CHEP pallets from its vendors.
Under the Agreement, Fleming agreed to pay CHEP $15 for any lost
or unaccounted for pallets, with a reduction to $5 a pallet to
the extent that the aggregate number of lost pallets during any
12-month period did not exceed 1% of the number of pallets
transferred in that 12-month period.
In August 2003, CHEP filed a request to terminate the agreement
and for allowance of an administrative claim based on Fleming's
asserted inability to account for 285,983 CHEP pallets during the
period from the Petition Date through and including July 31,
2003. The number of lost pallets was later raised to 316,401 for
the period through August 22, 2003. CHEP asserts a $4,279,472.70
administrative claim. The Debtors dispute this claim and the
request to terminate the agreement.
The Settlement
To settle the dispute, the parties entered into a settlement
agreement. The primary terms of the Settlement Agreement as they
affect the Debtors are:
(1) The Debtors will pay CHEP $1.5 million to settle the
claims and matters asserted by CHEP;
(2) Upon receipt of the payment, the request is deemed
automatically withdrawn with prejudice;
(3) Each party bears its own attorney's fees and costs;
and
(4) The parties exchange mutual releases.
Lenders Object
Deutsche Bank Trust Company Americas, in its capacity as
Administrative Agent, and JPMorgan Chase Bank, in its capacity as
Collateral Agent on behalf of the Debtors' secured lenders,
oppose the Settlement provision providing for immediate payment
to CHEP. In light of the amount and priority status of the
Lenders' claims, the Agents suggest that the payment to CHEP be
deferred until confirmation of a Chapter 11 Plan.
Headquartered in Lewisville, Texas, Fleming Companies, Inc. --
http://www.fleming.com/-- is the largest multi-tier distributor
of consumer package goods in the United States. The Company filed
for chapter 11 protection on April 1, 2003 (Bankr. Del. Case No.
03-10945). Richard L. Wynne, Esq., Bennett L. Spiegel, Esq.,
Shirley Cho, Esq., and Marjon Ghasemi, Esq., at Kirkland & Ellis,
represent the Debtors in their restructuring efforts. When the
Debtors filed for protection from its creditors, they listed
$4,220,500,000 in assets and $3,547,900,000 in liabilities.
(Fleming Bankruptcy News, Issue No. 29; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
FRESH CHOICE: Working Capital Deficit Climbs to $6MM at March 2004
------------------------------------------------------------------
Fresh Choice, Inc. (Nasdaq:SALD) reported a net loss of $407,000
or $0.07 per share, for the first quarter of 2004. This compared
to a net loss of $541,000 or $0.09 per share for the first quarter
of 2003, which included restaurant-opening costs of $192,000.
Sales for the first quarter of 2004 were $18 million, up $337,000,
or 1.9%, compared with sales of $17.7 million in the same period
last year. This is the result of an increase in the number of
restaurants and an increase in comparable-store sales of 1.2%. The
Company had an average of 57 restaurants operating in the first
quarter of 2004 versus 54.5 in the comparable prior year quarter.
Comparable-store guest counts increased 0.1%.
The comparable-store average check was $7.83 for the quarter, an
increase of 1.1% versus the same period of 2003, primarily
reflecting price increases.
At March 31, 2004, Fresh Choice Inc.'s balance sheet shows a net
working capital deficit of $6,143,000 compared to a deficit of
$5,734,000 at December 28, 2003
Everett (Jeff) Jefferson, president and chief executive officer,
said, "The financial results for the first quarter were
disappointing. We continue to be negatively impacted by the weak
sales performance at some of the newer restaurants and an economy,
in our core markets, that continues to experience unemployment
above the national average. We are, however, encouraged by the
recent improvement in our sales trends. The Company's comparable-
store sales were up versus the prior year 1.2% after a modest 0.1%
increase in the fourth quarter of last year.
"We've recently completed the chain-wide rollout of our new pasta
stations featuring new freshly-tossed pastas with sauces prepared
from scratch. These pastas are tossed with fresh ingredients and
garnished with fresh herbs. This new product introduction includes
a remodeled pasta display to better merchandise the products and
in-store signage. In addition, this month we will begin
advertising these new pastas in our print advertising utilizing
four-color graphics. We believe our continued focus on guest
satisfaction, creative new product introductions and a consistent
advertising message will result in continued comparable-store
sales growth as the economy improves and consumer confidence
returns," continued Mr. Jefferson.
"As previously reported, management has thoroughly reviewed its
current restaurant portfolio. As a result of this review,
management is currently negotiating with certain landlords on
possible lease restructurings including the possible closure of
certain restaurants," said Mr. Jefferson.
The Company also announced that one restaurant closed at the
beginning of the second quarter and the Company expects to record
a second quarter charge of between $200,000 and $375,000 for the
estimated store closure and lease termination costs. The recording
of this charge is likely to put the Company out of compliance with
one or more of its loan covenants at the end of the Company's
second quarter of 2004. The Company believes it can obtain a
waiver or renegotiate these covenants with its bank. However,
there can be no assurance that the Company will be able to obtain
a waiver or renegotiate its covenants. Any future store closures
may result in additional charges in subsequent quarters.
Fresh Choice, Inc. operates 52 restaurants under the Fresh Choice
and Zoopa brand names in California (42), the state of Washington
(4) and Texas (6). The Company's Fresh Choice and Zoopa
restaurants offer customers an extensive selection of high
quality, freshly-prepared traditional and specialty salads, hot
pasta dishes, pizza, soups, bakery goods and desserts in a self-
service format. In addition, the Company operates one Fresh Choice
Express restaurant, two dual branded Fresh Choice Express and
licensed Starbucks retail stores and one stand-alone licensed
Starbucks retail store in Texas.
GEO SPECIALTY: Hiring Ravin Greenberg as Bankruptcy Co-Counsel
--------------------------------------------------------------
GEO Specialty Chemicals, Inc. and GEO Specialty Chemicals Limited,
want to retain Ravin Greenberg PC as their bankruptcy counsel.
The Debtors ask the U.S. Bankruptcy Court for the District of New
Jersey to approve their employment of Ravin Greenberg in their on-
going chapter 11 cases.
Ravin Greenberg will represent the Debtors in coordination with
the Cleveland, Ohio law firm of Thompson Hine LLP. Ravin
Greenberg and Thompson Hine have discussed a division of
responsibilities in connection with the representation of the
Debtors, and will make every effort to avoid duplication of
services.
Ravin Greenberg 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; and
c. perform all other necessary legal services in connection
with the prosecution of this Chapter 11 case.
The Debtors report that within one week preceding the commencement
of their chapter 11 cases, Ravin Greenberg received $25,000 for
accrued fees and expenses. In addition, Ravin Greenberg has
received a $50,000 retainer. The retainer will be applied to
postpetition allowances of compensation and reimbursement of
expenses. The Debtors did not disclose Ravin Greenberg's current
hourly rates in this retention.
Headquartered in Harrison, New Jersey, GEO Specialty Chemicals,
Inc. -- http://www.geosc.com/-- develops, manufactures and
markets a wide variety of specialty chemicals, including over 300
products sold to major industrial customers for various end-use
applications including water treatment, wire and cable, industrial
rubber, oil and gas production, coatings, construction, and
electronics. The Company filed for chapter 11 protection on March
18, 2004 (Bankr. N.J. Case No. 04-19148). Howard S. Greenberg,
Esq., Morris S. Bauer, Esq., and Stephen Ravin, Esq., at Ravin
Greenberg, PC represent the Debtors in their restructuring
efforts. On September 30, 2003, the Debtors listed total assets of
$264,142,000 and total debts of $215,447,000.
GLOBALSTAR: Now Owned by Thermo Capital Partners
------------------------------------------------
Globalstar, the world's most widely-used handheld satellite phone
service, announced the completion of its financial restructuring
following the formal acquisition of its main business operations
and assets by Thermo Capital Partners LLC. In concluding this
process, the new owners of Globalstar also announced a number of
additional corporate initiatives and commitments, intended not
only to ensure Globalstar's long-term financial stability but also
to foster far greater growth and expansion for the company than
ever before.
As expected following its preliminary acquisition agreement in
December 2003, Thermo now owns 81.25% of a newly-formed Globalstar
company in exchange for an investment of $43 million, with the
remainder of the equity to be distributed to the creditors of the
original Globalstar company - Globalstar, L.P. (GLP). With this
acquisition, Globalstar's main business has now effectively exited
from the bankruptcy process.
"This is unquestionably a major turning point for Globalstar,"
said Jim Lynch, managing director of Thermo. "Despite its slow
start, Globalstar - now in its fifth year of uninterrupted service
- is by far the best positioned, with the best technology, to take
advantage of the opportunities in the mobile satellite market, by
increasing our attention on Globalstar's customers and their
communication needs."
Thermo also announced several new business initiatives and
strategies, aimed at ramping up the company's growth in the months
and years ahead. These include:
- Spare satellite launch plans: Planning has now begun to
prepare the eight spare satellites that Globalstar is
currently holding in ground storage for launch into orbit,
possibly in late 2005 or early 2006.
- Enhanced Caribbean Service: As previewed in a preliminary
announcement in February, a final site review is now
underway for a new Globalstar gateway in Florida, and the
company hopes to enter into a formal lease agreement for the
site in the weeks ahead, with the gateway - valued at
several million dollars - to be constructed during 2004.
This follows the company's earlier decision to add a fourth
antenna at the company's gateway at Las Palmas, Puerto Rico,
with installation to be completed later this month. Together
these two programs will provide higher quality coverage and
greater system capacity across the Caribbean where
Globalstar service has been exceptionally popular.
- Introduction of New Products and Services: Globalstar will
resume or accelerate several product development programs
that had been slowed down or suspended during the company's
restructuring. Globalstar expects the first new product -
fax capability - to be introduced commercially later this
month.
- Expansion of Data Offerings: Building on Globalstar's
existing portfolio of data services and technology, the
company has now begun offering data services tailored for
specific industries, such as maritime, homeland security,
oil and gas extraction and transport, and more. At the same
time, new data services are also under development, with a
new data compression service scheduled for commercial launch
in the weeks ahead.
- Alaskan Gateway Planning: Thermo has approved work to
proceed on site selection for a new Globalstar gateway in
Alaska, intended to serve virtually the entire state of
Alaska as well as offshore regions in the North Pacific and
Bering Strait where commercial cargo and fishing vessels
have shown strong interest in the company's service.
Underlying these initiatives is a new business plan that
Globalstar and Thermo have been developing over the past several
months, centering on re-aligning the company's resources to bring
greater emphasis on addressing customer needs, particularly in the
company's key markets such as oil and gas, maritime, defense, and
transportation. Furthermore, Globalstar has already recruited new
professional staff who will bring new expertise and skills to the
company's sales and marketing departments and will be hiring
additional professionals to further augment its sales efforts.
Thermo Capital Partners LLC is a private investment group with
over 20 years of experience in managing and developing businesses
in the fields of telecommunications, energy, real estate and more.
The company is distinguished from most private investment firms in
that it has consistently invested in businesses for the long-term
and has taken an active role in the organization and management of
each business, aiming at maximizing growth and return-on-
investment. Thermo expects Globalstar to record at least 70% year-
over-year growth in 2004 and to be operationally profitable by the
fourth quarter of this year.
"Thermo has a solid record of identifying high-potential
businesses and helping them through financial restructurings,
turning one business after another into successful, growing
enterprises," said Steven Bell, general manager of Globalstar
Canada. "We are extremely happy to be working with Thermo, and we
are already benefiting from their expertise and experience."
Details of the Acquisition Agreement
In December 2003, Thermo entered into a preliminary agreement to
acquire Globalstar, subject to a number of conditions, including
regulatory approval and the successful completion of several
settlement and technical agreements. Regulatory approval was
granted in early March, and the U.S. Bankruptcy Court approved the
last of the required agreements on March 31, allowing Thermo to
formally conclude the acquisition announced today.
The acquisition process centered around the establishment of a new
Globalstar company which subsequently assumed ownership of
essentially all of the assets and business operations formerly
owned by GLP. Employees of GLP and its worldwide subsidiaries have
also been transferred to the new company. As a result, GLP no
longer has any significant operations and is expected to be wound
up in the weeks ahead.
Globalstar service will continue to be marketed and sold under the
Globalstar name, and the company's service provider partners
around the world will continue to support customers as usual, with
newer products and services expected to be introduced in the
future.
Globalstar offers satellite telecommunications services, for both
voice and data, from virtually anywhere in over 120 countries
around the world. For more information, visit Globalstar's web
site at http://www.globalstar.ca/or Thermo Capital Partners'
website at http://www.thermocompanies.com/
GMX RESOURCES: Auditors Remove Going Concern Qualification
----------------------------------------------------------
Ken Kenworthy, Sr., Executive Vice President of GMX Resources
Inc., (Nasdaq: GMXR), announces the Company's results for the
quarter and year ended December 31, 2003.
Revenues for the fourth quarter of 2003 were $1,090,882 compared
to $1,149,666 in the fourth quarter of 2002, a decrease of 5% and
a net loss of $28,886 compared to a net loss of $617,223 for the
fourth quarter in 2002, a reduction in the loss of 95%. Basic and
diluted loss per share was less than $.01 cent compared to the
prior year quarter loss of $.09 cents.
Revenues for the year were $5,388,794 compared to $5,988,342 in
2002, a decrease of 10%. Net income was $535,001 compared to a net
loss of $445,800 in 2002, resulting in a significant improvement
in net income. Basic and diluted income per share was $.08 cents
per share compared to a loss of $.07 cents in 2002.
Oil and gas sales decreased 10% in 2003 as a result of a decrease
in production. The average prices per barrel of oil and mcf of gas
received in 2003 was $30.41 and $4.73 respectively, compared to
$23.45 and $3.03 in 2002.
Lease operations expense decreased $496,968 in 2003 to $827,413, a
38% decrease compared to 2002.
The Company has received a formal commitment from its existing
bank lender to extend the maturity of its existing credit facility
from September 1, 2004 to September 1, 2005, if the Company uses
the proceeds of its recently announced $1 million private
placement of common stock to prepay its existing outstanding $1
million of 11% subordinated notes before May 14, 2004. The Company
is considering this proposal, but in the meantime is evaluating
several other proposals from other lenders to refinance its
existing credit facility.
As a result of our recently announced events, our joint drilling
venture, our $1 million subordinated debt, with recent production
increases and improved liquidity from operations, we expect to
have sufficient funds available to meet our obligations and
increase drilling efforts during 2004. Our independent auditors
report on our financial statements does not contain a going
concern qualification as in 2002, reflecting the Company's
improved financial condition.
GMX Resources Inc. -- http://www.gmxresources.com/-- is an
independent natural gas production company headquartered in
Oklahoma City, Oklahoma. GMXR has 53 producing wells in Texas &
Louisiana, 24 proved developed non-producing reservoirs, 48 proved
undeveloped locations and several hundred other development
locations. GMXR has 9,000 net acres on the Sabine Uplift of East
Texas. GMXR has 7 producing wells in New Mexico. The Company's
strategy is to significantly increase production, revenues and
reinvest in increasing production. GMXR's goal is to grow and
build shareholder value every day.
GS MORTGAGE: Fitch Assigns Low-B Ratings to 6 Ser. 2004-C1 Classes
------------------------------------------------------------------
GS Mortgage Securities Corporation II, series 2004-C1, commercial
mortgage pass-through certificates are rated by Fitch Ratings as
follows:
--$410,640,000 class A-1 'AAA';
--$190,490,000 class A-2 'AAA';
--$168,447,000 class A1-A 'AAA';
--$892,264,316 class X-1* 'AAA';
--$846,916,000 class X-2* 'AAA';
--$20,076,000 class B 'AA';
--$7,808,000 class C 'AA-';
--$16,730,000 class D 'A';
--$12,268,000 class E 'A-';
--$13,384,000 class F 'BBB+';
--$7,808,000 class G 'BBB';
--$7,807,000 class H 'BBB-';
--$5,577,000 class J 'BB+';
--$3,346,000 class K 'BB';
--$3,346,000 class L 'BB-';
--$4,461,000 class M 'B+';
--$3,346,000 class N 'B';
--$3,346,000 class O 'B-';
--$13,384,316 class P 'NR'.
*Notional amount and interest only.
Classes A-1, A-2, A-1A, B, C, D, and E are offered publicly, while
classes X-1, X-2, F, G, H, J, K, L, M, N, O, and P are privately
placed pursuant to rule 144A of the Securities Act of 1933. The
certificates represent beneficial ownership interest in the trust,
primary assets of which are 67 fixed-rate loans having an
aggregate principal balance of approximately $892,264,216, as of
the cut-off date.
GWBR INC: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: GWBR Inc.
dba Baker Machine Co., Inc.
134 37th Street North East
Auburn, Washington 98002
Bankruptcy Case No.: 04-14582
Type of Business: The Debtor is a contract machine shop for
aerospace & precision machining.
Chapter 11 Petition Date: April 5, 2004
Court: Western District of Washington (Seattle)
Judge: Karen A. Overstreet
Debtor's Counsel: Charles A. Johnson, Jr., Esq.
5413 Meridian Avenue N #A
Seattle, WA 98103-6138
Tel: 206-632-8980
Estimated Assets: $500,000 to $1 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
CIT Small Bus. Lending Corp. Various pieces of $300,000
P.O. Box 1529 machinery, fixtures,
Livingston, NJ 07039-1529 equipment & equipment
used in the business
CIT Small Bus. Lending Corp. Machine Shop $300,000
P.O. Box 1529 Business and
Livingston, NJ 07039-1529 Equipment
CitiCapital Equipment Lease $90,000
CitiCapital Equipment Lease $90,000
Deliquencies
MBNA America Credit Card $48,744
Purchases - business
IRS Taxes $21,353
Trussler & Associates Delinquent Rent $10,778
Gary Adams, CPA, P.S. Accounting Services $10,143
JP Morgan Chase Credit Card $9,683
Purchases - business
Harvey Titanium Goods & Services $8,530
Tacoma Steel Supply Goods & Services $7,552
Bank of America Credit Card $6,627
Purchases - business
Service Steel & Alum. Corp. Goods & Services $5,670
Summerville Steel Goods & Services $5,660
Bralco Metals Goods & Services $3,877
Burning Specialties Goods & Services $3,877
Application Specialties Inc. Goods & Services - $3,584
tool purchases
Regents Blue Shield Health Insurance $3,030
WA Dept of Employment Taxes $2,987
Security
Puget Sound Energy Utilities $2,542
HALE-HALSELL COMPANY: Section 341(a) Meeting Slated for April 28
----------------------------------------------------------------
The United States Trustee will convene a meeting of Hale-Halsell
Company's creditors at 1:30 p.m., on April 28, 2004 in Room B04 at
224 South Boulder Avenue, Tulsa, Oklahoma 74103. 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 Tulsa, Oklahoma, Hale-Halsell Company --
http://www.hale-halsell.com/-- is into Grocery Wholesale business
which operates 115 Git-N-Go convenience stores and about 10 Super
H Foods supermarkets, primarily in small Oklahoma towns. The
Company filed for chapter 11 protection on March 22, 2004 (Bankr.
N.D. Okla. Case No. 04-11677). Scott P. Kirtley, Esq., at Riggs,
Abney, Neal, Turpen, Orbison represents the Debtor in its
restructuring efforts. When the Company filed for protection from
its creditors, it listed $19,721,000 in total assets and
$9,394,124 in total debts.
HAYES LEMMERZ: Judge Stays Discovery in 300 Adversary Cases
-----------------------------------------------------------
The Court stays the formal discovery in 300 adversary proceedings
in Hayes Lemmerz International, Inc. chapter 11 case and directs
the HLI Creditor Trust to make a formal settlement offer to all
defendants in the adversary proceedings on or before May 10, 2004.
The defendants are given 30 days to respond to the offer. To
assist in the settlement process, the parties are directed to
cooperate in exchanging, on an informal basis, documentation and
information.
Judge Walrath will confer with the parties again on July 12, 2004
at 10:30 am, at which time the Court will set another pretrial
schedule for matters that are not yet resolved. (Hayes Lemmerz
Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
HEADLINE MEDIA: February 2004 Balance Sheet Insolvent by $9.3MM
---------------------------------------------------------------
Headline Media Group announced its results for the three and six
months ended April 15, 2004.
Highlights
- Net income from continuing operations before interest, income
taxes, depreciation and amortization (see "Definitions") for
the three months ended February 29, 2004 was $0.2 million, an
increase of $1.5 million from a loss of $1.3 million in the
same period last year. For the six months ended February 29,
2004, net loss from continuing operations before interest,
income taxes, depreciation and amortization was $0.3 million,
an improvement of $1.4 million from a loss of $1.7 million in
the same period last year. Excluding the gain on the sale of an
investment ($0.4 million) which occurred in the prior year, net
income from continuing operations before interest, taxes,
depreciation and amortization for the six months ended February
29, 2004 improved $1.8 million over the prior year.
- Net income before interest, income taxes, depreciation and
amortization for the Company's main asset, The Score Television
Network, during the second quarter was $0.7 million versus a
loss of $0.6 million in the prior year, resulting in an
improvement in operating performance of $1.3 million.
- Loss from discontinued operations (PrideVision TV) for the
second quarter was nil compared to a loss of $0.2 million in
the prior year. For the period November 29, 2003 to February
29, 2004, operating losses from PrideVision TV have been
included in deferred charges, and will be recognized upon the
closing of the sale of PrideVision's Canadian assets. Income
from discontinued operations for the six months ended February
29, 2004 was $0.1 compared to a loss of $1.8 million in the
prior year due to cost containment initiatives as well as gains
on the settlement of liabilities.
- Net loss for the Company for the three months ended February
29, 2004 was $0.5 million, an improvement of $1.8 million from
a loss of $2.3 million in the same period last year. For the
six months ended February 29, 2004, net loss was $1.6 million,
an improvement of $3.3 million from a loss of $4.9 million in
the same period last year.
Three Months Ended February 29, 2004
Revenue for the second quarter decreased by $1.7 million to $5.7
million compared to $7.4 million in the prior year. This decrease
was due to $2.2 million lower revenue in St. Clair attributable to
lower advertising contracts offset by an increase of $0.5 million
at The Score as a result stronger advertising and increased
subscriber revenue.
Operating expenses excluding rights fees were $5.3 million during
the quarter, compared to $6.5 million in the prior year,
representing a decrease of $1.2 million. Operating expenses at The
Score were approximately $0.1 million higher in the quarter,
reflecting additional program related expenses. Operating expenses
at St. Clair were $1.4 million less than the prior year, due
primarily to the reduction in publishing expenses associated with
print properties that were not renewed.
Program rights expenses were $0.1 million during the quarter,
compared to $2.1 million in the prior year. Program rights for the
quarter were $0.2 million at The Score and $(0.1) million at St.
Clair (due to restructuring a rights contract during the quarter)
versus $1.1 million and $1.0 million respectively in the prior
year. The reduction in program rights at The Score reflects lower
program rights fees on World Wrestling Entertainment properties as
well as lower program rights costs for other programs. The
reduction in program rights at St. Clair reflects lower program
rights fees due to the loss of certain print properties.
Net income from continuing operations before interest, income
taxes, depreciation and amortization was $0.2 million during the
quarter, an improvement of $1.5 million from a loss of $1.3
million in the same period last year. Interest expense for the
second quarter was approximately $0.4 million compared to
approximately $0.5 million in the prior year. The decrease of
approximately $0.1 million reflects the repayment of a $2 million
credit facility in August 2003 at The Score and no increase in
debt at the parent Company.
Depreciation and amortization expense of $0.3 million in the
second quarter was comparable to the prior year. For the second
quarter and in the prior year, fixed asset additions were
negligible.
Net loss for the three months ended February 29, 2004 was $0.5
million or ($0.01) per share based on a weighted average 82.6
million Class A Subordinate Voting Shares and Special Voting
Shares outstanding, an improvement of $1.8 million from a loss of
$2.3 million or ($0.03) per share based on a weighted average 65.6
million Class A Subordinate Voting Shares and Special Voting
Shares outstanding in the prior year.
The Score Television Network
Revenues for The Score increased $0.5 million, or 12.8% for the
quarter, from $3.9 million for the three months ended February 28,
2003 to $4.4 million for the three months ended February 29, 2004.
Advertising revenue increased $0.3 million or 13.0% during the
quarter compared to the prior year as a result of continued
audience growth and improved ratings. Subscriber revenue increased
by $0.2 million or 12.02% over the same quarter last year. In
addition, the number of subscribers to The Score continues to
grow. As at February 29, 2004, The Score had 5.4 million paying
subscribers.
Operating expenses were $3.7 million in the quarter, compared to
$4.5 million in the prior year, representing a decrease in
operating expenses of $0.8 million. The Score's program rights
expenses decreased by $0.9 million to $0.2 million in the quarter
compared to $1.1 million in the prior year reflecting lower
program rights fees for World Wrestling Entertainment properties.
Other operating expenses increased by approximately $0.1 million
during the quarter compared to the prior year.
Income before interest, income taxes, depreciation and
amortization for the second quarter was $0.7 million versus a loss
of $0.6 million in the prior year, resulting in an improvement in
operating performance of $1.3 million.
St. Clair
Revenue for St. Clair was $1.3 million in the second quarter
compared to $3.5 million in the prior year. The decrease in
revenue of $2.2 million reflects a decline in print advertising
sales, specifically within sports programming publications. St.
Clair did not renew the publishing rights for Maple Leaf Sports
and Entertainment's programs for the Toronto Maple Leafs and
Toronto Raptors 2003/04 season, and as a result, sales contracts
that included packaged advertising did not renew. In addition, St.
Clair restructured its sponsorship contracts for the Canadian
Curling Association and World Curling Federation, and as a result,
revenues were expected to decline, but the profitability from
these contracts is expected to remain unaffected.
Operating expenses were $1.1 million in the quarter, compared to
$3.6 million in the prior year, representing a decrease in
operating expenses of $2.5 million. The decrease in expenses
primarily reflects lower printing and production costs as a result
of the loss of a publication property, and lower promotional and
selling expenses on the CCA/WCF contracts as compared to the prior
year.
Income before interest, income taxes, depreciation and
amortization for the second quarter was $0.2 million compared to a
loss of $0.1 million in the prior year.
During the second quarter, St. Clair restructured its operations
for the production of Performance magazine, and partnered with
another organization to better service its customers.
Corporate
Operating expenses and the loss before interest, income taxes,
depreciation and amortization for the Corporate group were $0.7
million in the second quarter compared to $0.6 million in the
prior year.
Six Months Ended February 29, 2004
Revenues for the six months ended February 29, 2004 decreased to
$11.9 million from $15.2 million for the same period last year.
Advertising revenues decreased by $3.6 million due primarily to
the reduction in advertising revenue at St. Clair specifically
within its sports properties. Subscriber fee revenue increased by
$0.3 million reflecting an increase in the number of subscribers
for The Score.
Operating expenses excluding rights fees were $10.8 million for
the six months ended February 29, 2004 compared to $12.9 million
in the prior year, representing a decrease of $2.1 million.
Operating expenses at The Score were $0.4 million higher in the
six month period, reflecting the productions costs of new
programming and greater sales and marketing expenses. Operating
expenses at St. Clair were $2.4 million less than the prior year,
mitigating some of the decline in revenues. Operating expenses for
the Corporate group were approximately $85,000 less than the prior
year.
Program rights were $1.4 million during the six month period ended
February 29, 2004, compared to $4.5 million in the prior year.
Program rights for the six month period were $1.5 million at The
Score and $(0.1) million at St. Clair (due to the restructuring of
a rights contract during the quarter) versus $3 million and $1.5
million respectively in the prior year. The reduction in program
rights at The Score reflects lower program rights fees on World
Wrestling Entertainment properties as well as lower program rights
costs for other programs. The reduction in program rights at St.
Clair reflects lower program rights fees due to the loss of
certain print properties.
Gain on sale of investment - during the six month period ended
February 28, 2003, the Company sold an investment in a private
company for cash proceeds of $0.4 million ($0.3 million U.S.). The
carrying value of the investment was nil, resulting in a gain on
sale of $0.4 million.
Net loss from continuing operations before interest, income taxes,
depreciation and amortization for the six months ended February
29, 2004 was $0.3 million, compared with $1.7 million for the same
period last year. Interest expense for the six month period ended
February 29, 2004 was $0.7 million compared to the $0.8 million
interest expense in the prior year. The decrease of approximately
$0.1 million reflects the repayment of a $2.0 million credit
facility in August 2003 at The Score and no increase in debt at
the parent Company.
Net loss for the six months ended February 29, 2004 was $1.6
million or ($0.02) per share based on a weighted average 82.6
million Class A Subordinate Voting Shares and Special Voting
Shares outstanding, compared to a net loss of $4.9 million or
($0.07) per share based on a weighted average 65.2 million Class A
Subordinate Voting Shares and Special Voting Shares outstanding in
the prior year.
At February 29, 2004, Headline Media Group Inc.'s balance sheet
shows a shareholders' deficiency of $9,333,000.
The Score Television Network
Revenue for The Score increased $0.1 million, or 1.3%, from $9.5
million for the six months ended February 28, 2003 to $9.6 million
for the six months ended February 29, 2004. Advertising revenue
decreased by $0.2 million compared to the same period in the prior
year. Subscriber revenue increased by $0.3 million, or 10.5% for
the six months ended February 29, 2004 over the same period last
year. The $0.3 million increase primarily reflects an increase in
the number of subscribers.
Operating expenses were $8.8 million for the six months ended
February 29, 2004, compared to $9.9 million in the prior year,
representing a decrease in operating expenses of $1.1 million,
reflecting lower program rights fees for World Wrestling
Entertainment properties.
Income before interest, income taxes, depreciation and
amortization for the six months ended February 29, 2004 was $0.8
million comparable to loss of $0.5 million in the prior year.
St. Clair
Revenue for St. Clair was $2.3 million for the six months ended
February 29, 2004 compared to $5.8 million in the prior year. The
decrease in revenue of $3.5 million reflects a decline in print
and TV advertising sales. St. Clair did not renew its publishing
contract for the Toronto Maple Leaf and Toronto Raptors game day
programs for the 2003/04 season which represented most of the
decline in sales.
Operating expenses for the six months ended February 29, 2004 were
$2.3 million, compared to $6.2 million in the prior year,
representing a decrease in operating expenses of $3.9 million. The
decrease in expenses primarily reflects lower printing and
production costs, consistent with the lower television advertising
sales, lower rights fees, and reduced promotional and selling
expenses as compared to the prior year.
Income before interest, income taxes, depreciation and
amortization for the six months ended February 29, 2004 was
$36,000 compared to a loss of $0.4 million in the prior year.
During the for the six months ended February 29, 2004, St. Clair
amended it contracts with the Canadian Curling Association as well
as the World Curling Federation for the 2003/04 season so as to
act as a sales agency compared to its prior role as a marketing
agent. In addition, St. Clair restructured its operations for the
production of Performance magazine, and partnered with another
organization to better service its customers. Both initiatives are
expected to improve St. Clair's working capital position, and
improve profitability over the coming year.
Corporate
Operating expenses for the Corporate group were $1.1 million for
the six months ended February 29, 2004 compared to $1.2 million in
the prior year.
Liquidity and Capital Resources
Cash flow used in operations for the three months ended February
29, 2004 was $0.5 million compared to $0.6 million in the prior
year, reflecting lower operating losses in the current year. Cash
flow used in operations for the six months ended February 29, 2004
was $0.5 million compared to $1.6 million in the prior year, again
reflecting significantly lower operating losses and positive non-
cash operating working capital movements.
Cash flow from financing activities was nil for the three and six
months ended February 29, 2004 compared to cash flow received in
financing activities of $1.2 million in the prior year. During the
three months ended February 28, 2003, the Company secured $0.5
million from a non-brokered private placement of 1,428,571 Class A
Subordinate Voting shares with Levfam Holdings Inc., the Company's
controlling shareholder, at a price of $0.35 per share. In
addition, the Company drew down $0.7 million from a credit
facility provided by Levfam Finance Inc.
Cash flow used in investment activities for the three months ended
February 29, 2004 was $0.2 compared to cash flow from investment
activities of $27,000 in the prior year. The decrease in cash flow
from investment activities reflects some increased fixed asset
additions and the inclusion of PrideVision TV's operating loss
from November 29, 2003 to February 29, 2004.
With the existing credit facilities and financing in place,
assuming the successful execution of its business plan, and
pending the refinancing of The Score's bank credit facility that
matured on February 29, 2004 but was extended to April 16, 2004,
management believes there are sufficient resources to fund
operations until the end of Fiscal 2004. Beyond Fiscal 2004, the
Company will require additional funding in order to continue
operations and service the commitments under existing agreements.
The Company's successful execution of its business plans are
dependant upon a number of factors that involve risks and
uncertainty. In particular, revenues in the specialty television
industry, including subscription and advertising revenues are
dependant upon audience acceptance, which cannot be accurately
predicted.
The Company will be pursuing financing with potential lenders and
investors, which if successful, will, in management's view, enable
the Company to achieve its business plans in the long-term. No
agreements with potential lenders or investors have been reached
yet and there can be no assurance that such agreements will be
reached. In addition, the Company continues to review other
alternatives, which could involve renegotiating existing cash
commitments, a restructuring of the business units which may
include the divestiture of certain assets of the Company, or
attracting a strategic investor that would assist in developing
the business of the Company.
About Headline Media Group Inc.
Headline Media Group Inc. (TSX: HMG) is a media company focused on
the specialty television sector through its main asset, The Score
Television Network. The Score is a national specialty television
service providing sports, news, information, highlights and live
event programming, available across Canada in over 5.4 million
homes. HMG also owns PrideVision TV, the world's first 24/7 GLBT
television network, and The St. Clair Group, a Canadian sports
marketing and specialty publishing company.
HEALTHSOUTH: Court Sets April 23 Status Conference re Bond Issues
-----------------------------------------------------------------
HealthSouth Corporation (OTC Pink Sheets: HLSH) announced that
Judge Allwin Horn, III of the Circuit Court of Jefferson County,
Alabama, issued an order in the lawsuit between HealthSouth and
some of its bondholders setting a status conference for April 23rd
to schedule an expedited hearing to determine the merits of
certain issues. In particular, these issues are the validity of
default notices purportedly given by certain bondholders and
whether HealthSouth is obligated to pay a "make-whole premium"
under the facts and circumstances of this case. Although the Court
did not grant HealthSouth's request for a preliminary injunction
and dissolved its temporary restraining order against acceleration
by bondholders, it expressly stated that "the parties should not
consider that this Court has determined the Default Notices are
validly and legally issued".
Counsel for the bondholders stated in a letter to the Court that
the bondholder defendants would not issue any notice of
acceleration for at least thirty days so long as HealthSouth
engages in good-faith negotiations with the bondholders during
that time. Joel C. Gordon, acting HealthSouth chairman of the
Board of Directors said, "We certainly will continue to negotiate
in good- faith with the representatives of the unofficial
committee of bondholders, which hopefully will lead to a
consensual resolution which the Court indicated it believed would
be in the best interests of all involved." HealthSouth reiterated
that it is extremely encouraged by the significant positive
response that it has received so far to its consent solicitation
and has decided to extend the consent solicitations through April
28, 2004 in order to allow all holders the opportunity to
participate.
About HEALTHSOUTH
HealthSouth is the nation's largest provider of outpatient
surgery, diagnostic imaging and rehabilitative healthcare
services, with nearly 1,700 locations nationwide and abroad.
HealthSouth can be found on the Web at http://www.healthsouth.com/
HEALTHSOUTH CORP: Director C. Sage Givens Steps Down from Board
---------------------------------------------------------------
HealthSouth Corporation (Pink Sheets: HLSH) announced that C. Sage
Givens has voluntarily resigned from the HealthSouth Board of
Directors as part of its previously announced board transition
plan.
Joel C. Gordon, Interim Chairman of the Board of HealthSouth said,
"We appreciate the many years of service Sage dedicated to
HealthSouth and its shareholders. The support and dedication shown
by Sage and our other directors over the past year have been
invaluable in helping to stabilize HealthSouth's operations and
map out a course for the future."
Givens, founding Managing Director of Acacia Venture Partners, had
been a member of the Board of HealthSouth since 1985. Over the
course of her career, Givens also has served on the Boards of a
number of other healthcare companies, including AmeriGroup
Corporation, that have become industry leaders.
"It has been a tremendous honor and privilege to serve as a
director of HealthSouth," said Ms. Givens. "I wish HealthSouth
every success in the future."
About HEALTHSOUTH
HealthSouth is the nation's largest provider of outpatient
surgery, diagnostic imaging and rehabilitative healthcare
services, with nearly 1,700 locations nationwide and abroad.
HealthSouth can be found on the Web at http://www.healthsouth.com/
INSITUFORM: Will Hold Q1 2004 Conference Call on April 30
---------------------------------------------------------
Insituform Technologies, Inc. will issue its financial results for
the first quarter ended March 31, 2004 on Thursday, April 29,
after the close of the market.
Tom Rooney, President and Chief Executive Officer, and Chris
Farman, Vice President and Chief Financial Officer, will host a
conference call on Friday, April 30, 9:30 a.m. Eastern Time, to
discuss first quarter financial results. After opening remarks,
there will be a limited question and answer period.
Any financial or statistical information presented during the
call, including any non-GAAP measures, the most directly
comparable GAAP measures and reconciliation to GAAP results, can
be accessed by clicking on the Presentations tab on the Investor
Relations page of Insituform's Web site --
http://www.insituform.com/-- or by using the following link:
http://www.shareholder.com/insituform/MediaList.cfm
Insituform Technologies, Inc. is a leading worldwide provider of
proprietary technologies and services for rehabilitating sewer,
water and other underground piping systems without digging and
disruption. More information about Insituform can be found on its
Internet site at http://www.insituform.com/
As reported in the Troubled Company Reporter's March 17, 2004
edition, Insituform Technologies, Inc.'s results in the fourth
quarter of 2003 triggered non- compliance with certain financial
covenants under its Senior Notes, its Credit Facility and an
insurance collateral agreement. The Company obtained amendments to
the various debt agreements with more flexible financial covenants
in place, but additional restrictions on the use of cash.
Management feels confident that it will be in compliance with the
amended covenants in 2004 and beyond.
INTERMET: Incurs $8MM Net Loss Despite Increased 1st Quarter Sales
------------------------------------------------------------------
INTERMET Corporation (Nasdaq: INMT), one of the world's leading
manufacturers of cast-metal automotive components, reported 2004
first-quarter sales of $210.6 million, a nine-percent increase
over the $193.0 million reported for the first quarter of 2003.
Contributing to increased sales were $4.6 million related to
currency exchange, $9.8 million related to the consolidation of
the company's Porto Foundry acquired in July 2003, and $3.2
million in sales- volume growth.
The company also reported a 2004 first-quarter net loss of $7.9
million, or $0.31 per diluted share, compared with 2003 first-
quarter net income of $3.2 million, or $0.12 per diluted share.
Gross profit was $13.5 million, compared with $21.2 million
reported in the 2003 first quarter.
INTERMET's first-quarter results included unprecedented scrap-
steel cost increases in both North America and Europe, which were
approximately $9.3 million higher compared with the first quarter
of 2003; $0.7 million due to costs incurred at our Havana Foundry,
which is in the process of being closed; and a $1.4 million charge
for the write-off of previously capitalized debt- issuance costs
related to the company's debt refinancing that was completed in
January of this year.
Commenting on the quarter, Gary F. Ruff, President and Chief
Executive Officer, said, "We are pleased by our increase in sales,
especially when considering that production at our major North
American customers was down over six percent compared with the
first quarter of 2003. In addition, our efforts to implement
INTERMET's product and process offerings are beginning to produce
increased sales. These new sales are vital in that they
demonstrate INTERMET's capabilities as an international casting
supplier and technical leader, and contribute to future growth and
profitability. Our manufacturing operations also performed well
during the first quarter, improving both throughput and quality.
Increased sales coupled with better capacity utilization have laid
the groundwork for even greater operational efficiency and
effectiveness.
"However, the dramatic rise in the cost of scrap steel during this
quarter and the fourth quarter of 2003 significantly impacted our
bottom line," Ruff said. "From June 2003 to March of this year,
scrap-steel prices have nearly doubled to almost $300 per net ton.
These increases have been attributed to increased global demand
and reduced availability of premium scrap material. INTERMET was
prepared to deal with more normal increases at typical rates, but
not these unusual circumstances. INTERMET expects to recover most
of the increases through surcharges in its customer contracts, but
time lags built into most of the contracts push the surcharge
recovery into the second half of 2004 and early 2005."
INTERMET reported debt of $394 million at the end of the first
quarter of 2004 compared with $294 million at the end of 2003. The
increase in debt was mainly due to INTERMET's cash balance at the
end of the quarter, which had not been applied to debt repayment.
Capital spending for the quarter was $6.9 million, debt-to-total
capitalization was 72.3 percent and depreciation and amortization
expense was reported at $12.4 million.
INTERMET also announced that it completed an amendment to its
senior secured credit facility providing additional financial
flexibility. According to INTERMET Vice President of Finance and
CFO Bob Belts, high steel prices warranted the change. "Our
request to our senior lenders to relax certain financial covenants
was directly related to the recent unexpected rise in the cost of
scrap steel, which added over $9 million to our cost of sales in
the first quarter," said Belts. "This amendment is effective from
the first quarter of 2004 through the second quarter of 2005 and
will relax the company's financial-covenant ratios and provide
adequate liquidity. We are pleased that our lenders have provided
continued support for INTERMET's business strategy."
Second-Quarter Outlook
Due to uncertainty in the scrap-steel market, INTERMET is not
providing second-quarter guidance at this time.
The INTERMET Board of Directors voted to approve a quarterly
dividend of $0.04 per share, payable July 1, 2004, to shareholders
of record as of June 1, 2004.
With headquarters in Troy, Michigan, INTERMET Corporation (S&P,
BB- Corporate Credit Rating, Negative) is a manufacturer of
powertrain, chassis/suspension and structural components for the
automotive industry. INTERMET's strategy is to be the world's
leading supplier of cast-metal automotive components. The company
has approximately 6,000 employees at facilities in North America
and Europe. More information is available on the Internet at
http://www.intermet.com/
INTERSTATE BAKERIES: Exploring Options to Refinance Debt
--------------------------------------------------------
Interstate Bakeries Corporation (NYSE:IBC), the nation's largest
wholesale baker and distributor of fresh baked bread and sweet
goods, reported a net loss for the quarter ended March 6, 2004 of
$(0.15) per diluted share on a net sales decline of approximately
2.5 percent from the comparable quarter in the prior year.
Included in the quarter's results were restructuring charges of
$1,463,000, or $0.02 per diluted share, related to the closures
and restructurings of bakeries and thrift store locations
initiated during fiscal 2004 and 2003 and a $3,000,000, or $0.05
per diluted share, charge related to the potential settlement of a
securities class action that has been pending against the Company
since October 2003.
The Company said a reduction in unit volume, along with its
continuing challenge to deal with overcapacity and a high fixed
cost infrastructure, was the primary driver in the quarter's loss.
The unit decline was partially attributable to an industry-wide
trend of declining white bread sales.
For the 16 weeks ended March 6, 2004, the Company reported:
-- Net sales of $1,019,711,000, a 2.5 percent decrease from the
prior year's third quarter net sales of $1,045,574,000.
-- Operating loss of $(2,572,000), compared to the previous year's
third quarter operating income of $1,444,000. Contributing to
the third quarter fiscal 2004 operating loss were restructuring
charges of $1,463,000 and a charge of $3,000,000 for a
potential legal settlement, while third quarter fiscal 2003
results included restructuring charges of $5,000,000.
-- A net loss of $(6,607,000) compared to a net loss of
$(6,749,000) in the prior year's third quarter.
-- A loss per diluted share of $(0.15) equal to the prior year's
third quarter loss. Included in third quarter fiscal 2004
diluted loss per share were restructuring charges of $0.02 per
diluted share, while third quarter fiscal 2003 diluted loss per
share included $0.07 per diluted share for restructuring
charges. Also included in fiscal 2004 third quarter results was
a charge amounting to $0.05 per diluted share related to a
potential legal settlement.
For the forty weeks ended March 6, 2004, the Company reported:
-- Net sales of $2,664,524,000, a 1.6 percent decrease in
comparison to the prior year's comparable period net sales of
$2,707,761,000.
-- Operating income of $43,566,000, compared to the previous
year's comparable period operating income of $80,835,000.
Included in fiscal 2004 operating income were restructuring
charges of $4,155,000 and a charge of $3,000,000 for a
potential legal settlement, while fiscal 2003 operating income
included restructuring charges of $6,450,000 and other charges
of $3,591,000 related to a common stock award.
-- Net income of $11,710,000 compared to net income of $32,018,000
in the prior year's comparable period.
-- Earnings of $0.26 per diluted share compared to the prior
year's comparable period earnings of $0.71 per diluted share.
Included in fiscal 2004 results was a charge amounting to $0.05
per diluted share related to a potential legal settlement. Also
lowering diluted earnings per share were restructuring charges
of $0.06 and $0.09 per diluted share for fiscal 2004 and 2003,
respectively, along with other charges of $0.05 per diluted
share in fiscal 2003.
The Company reported that branded sweet goods unit volume for the
third quarter of fiscal 2004 was down 2.8 percent from last year's
comparable period while its total bread volume fell 5.6 percent
and its branded bread units sold were down 3.5 percent. "We
believe the consumer drivers in today's market are convenience,
value and health. In this quarter, the height of ``diet' season,
we believe the ``health conscious' marketplace was specifically
focused on seeking out low-carb alternatives," said IBC's Chairman
of the Board and Chief Executive Officer, James R. Elsesser. "We
see downward pressure across most sectors of our business, as do
our competitors. As a result we are striving to better manage our
costs, while preparing to introduce new products that appeal to
today's consumer."
In an effort to address evolving consumer demands, the Company
introduced a line of low-carb breads, under the "Home Pride Carb
Action" trade name, during the third quarter. Additionally, the
Company is finalizing plans for a major nationwide rollout on
April 19, 2004 of its new "Baker's Inn" products, a line of
distinctively-packaged super premium breads. On the sweet goods
side, the Company introduced new Caramel HoHos nationwide in
February and is giving greater emphasis to more seasonally theme-
based products, as well as offering consumers added value through
bonus pack promotions.
The Company is working diligently to control costs, but has been
unable to offset the unit sales decline resulting in a significant
margin erosion. Cost of products sold for the third quarter
improved somewhat, representing 49.5% of net sales compared to
50.0% of net sales in the prior year, reflecting the effects of
lower overhead costs and cost reductions associated with changes
to the Company's retiree health care plan. Selling, delivery and
administrative expenses increased to 47.4% of net sales from 46.6%
of net sales in the prior year, which is primarily the result of
increases in labor-related costs and declining sales.
Other quarterly items of note include depreciation and
amortization expense and the income tax provision. Depreciation
and amortization expense increased $3,132,000 for the third
quarter of fiscal 2004 over the prior year, reflecting abandonment
of certain bakery assets amounting to approximately $5,000,000,
partially offset by a depreciation decrease related to lower than
historical asset additions. The income tax provision was adjusted
to an effective tax rate of 23.9% on a year-to-date basis,
primarily resulting from favorable adjustments to our estimate for
prior year tax accruals and to prior year refundable state tax
credits.
The Company continued to take steps to improve both its short and
long-term performance. Under Program SOAR, the Company's broad-
based initiative designed to rationalize production and re-
engineer business processes, the Company neared completion of its
streamlined centralized operating structure, which will go into
effect on June 1. "It has been a daunting task to create and
define new accountabilities at every level of the organization,"
said Mr. Elsesser. "However, we are excited about the new
structure and the efficiencies we expect to reap from this effort.
Companies can sometimes lose sight of day-to-day execution during
such massive changes, but we are striving to stay focused on our
immediate challenges while we look for positive ways to transform
the business." The Company is working to quantify the projected
benefits associated with Program SOAR, which it continues to
believe will be substantial. The Company expects to be able to
provide guidance on the anticipated savings and benefits for
fiscal 2005 no later than the release of its year-end results.
The $3,000,000 charge for the potential settlement of a securities
class action relates to previously disclosed litigation against
the Company and three current or former officers and directors. On
March 30, 2004, the Company participated in a mediation with the
plaintiffs in the case. At the end of that session, the parties
reached a preliminary agreement on the economic terms of a
potential settlement of the case, which called for a $3,000,000
cash contribution by the Company. The Company agreed with
plaintiffs to work towards the resolution of any non-economic
issues related to the potential settlement, including documenting
and implementing the parties' agreement. Assuming that these
remaining issues can be resolved, any agreement will be subject to
court approval after notice to the class and a hearing.
The Company was in compliance with the financial covenants in its
senior secured credit facilities at the end of the third quarter.
The Company plans to seek an amendment related to its senior
secured credit facilities because it may not be able to meet the
relaxed covenants, completed in April 2003, at fiscal year end, or
the original covenants at the end of the first quarter of fiscal
2005. The Company is actively exploring options for refinancing
our debt and plans to execute one or more such transactions.
Subsequent to quarter end, the Company announced plans to close a
bread bakery in San Pedro, California. In addition, the Company
finalized the first phase of its plan to centralize certain
finance and accounting functions.
Looking forward, Mr. Elsesser said, "We will continue to intensify
our efforts to re-engineer our business for the future success of
the Company. We are pursuing both short-term tactics and longer-
term strategies that will help move IBC to the next level."
Interstate Bakeries Corporation is the nation's largest wholesale
baker and distributor of fresh baked bread and sweet goods, under
various national brand names including Wonder, Hostess, Home
Pride, Dolly Madison, Merita and Drake's. The Company, with 57
bread and cake bakeries located in strategic markets from coast-
to-coast, is headquartered in Kansas City, Missouri.
IPIX CORPORATION: Posts $3.6 Net Loss for First Quarter 2004
------------------------------------------------------------
IPIX Corporation (Nasdaq: IPIX), a leader in mission-critical
imaging solutions, announced financial results for the quarter
ended March 31, 2004.
For the quarter, revenue was $0.7 million, net loss available for
common shareholders was $3.6 million and fully diluted loss per
common share was $0.41. A comparison of 2004 financial results to
prior periods is not useful since prior periods reflect revenue
from the Company's commercial agreement with eBay, which ended in
2003.
"During the first quarter, we focused on bringing new products to
market and developing our sales channels. I am very pleased with
the results," Don Strickland, IPIX(TM) president and CEO said. "At
the end of March 2004 we launched IPIX Security with the
introduction of the award winning CommandView(TM) family of video
surveillance cameras."
IPIX finished the first quarter of 2004 with approximately $9
million in cash reserves (cash and cash equivalents, short-term
restricted investments, long-term restricted cash and short-term
investments) and began the second quarter by generating
approximately $8 million in cash from the sale of its common stock
(from previously disclosed April 5, 2004 private investments and
from stock option exercises). The Company has three business units
all at different stages in their development. Management expects
to continue to make significant investments in the development,
sale and marketing of new products for the security market and in
the image management (Ad Technologies) business.
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.
JETBLUE AIRWAYS: Will Webcast Q1 2004 Earnings on April 22
----------------------------------------------------------
JetBlue Airways Corporation, announced that it will hold its
quarterly conference call to discuss first quarter 2004 earnings
on April 22, 2004 at 10:00 a.m. Eastern Time.
We cordially invite you to listen to a live webcast of the call,
which will be accessible on JetBlue's investor relations website
at the following web address: http://investor.jetblue.com/
For those unable to listen to the live webcast, it will also be
archived on JetBlue's investor relations website under 'Audio
Archives' following the conference call.
About JetBlue
JetBlue (S&P/BB-/Stable/--) is a low-fare, low-cost passenger
airline, which provides high-quality customer service. JetBlue
operates a fleet of 58 new Airbus A320 aircraft and plans to add
another 11 A320s to its fleet in 2004. The airline has 100 EMBRAER
190 aircraft on order with options for an additional 100 with
deliveries scheduled to begin in mid 2005. All JetBlue aircraft
feature roomy all-leather seats each equipped with free live
satellite television, offering up to 24 channels of DIRECTV(R)
Programming at every seat (see Note).
Based at New York City's John F. Kennedy International Airport,
JetBlue currently operates 246 flights a day and serves 23
destinations in 11 states and Puerto Rico. JetBlue plans to
commence new service between Boston, Massachusetts and Oakland,
California and between Washington, D.C. and Sacramento, Califronia
on May 4, between JFK and San Jose, California on June 10, and
between JFK and Aguadilla, Puerto Rico on May 28. Subject to
receipt of government operating authority, JetBlue also plans to
initiate service between JFK and Santiago and Santo Domingo,
Dominican Republic on June 10 and June 17, respectively. With
JetBlue, all seats are assigned, all travel is ticketless, all
fares are one-way, and a Saturday night stay is never required.
For more information, visit http://www.jetblue.com/
LB COMMERCIAL: Fitch Affirms Series 1995-C2 Class F Rating at B+
----------------------------------------------------------------
LB Commercial Conduit Mortgage Trust's, multiclass pass-through
certificates, series 1995-C2, are affirmed as follows:
--Interest-only class IO at 'AAA';
--$10.6 million class C at 'AAA';
--$13.0 million class D at 'AAA';
--$24.7 million class E at 'A';
--$9.1 million class F at 'B+'.
Fitch does not rate the $9.1 million class G certificates.
The rating affirmations reflect the consistent loan performance
and scheduled amortization of the pool's collateral balances. As
of the March 2004 distribution date, the pool's aggregate
principal balance has been reduced by 74% to $66.4 million from
$259.9 million at issuance. The trust has no realized losses to
date.
The pool has become more concentrated by loan size and property
type, with the top five loans representing 49% of the pool and
hotels and self-storage representing (75%). Three loans (26%) are
currently in special servicing. The two largest specially serviced
loans, (21%) are secured by full-service hotels located in Fort
Worth, TX and are cross-collateralized and cross-defaulted. The
performance of both properties has declined significantly from
issuance due to increased competition and the general downturn in
the economy. The properties are currently real-estate owned (REO)
and are expected to be marketed for sale in the next few months.
The other specially serviced loan (5%) is secured by an anchored
retail property in Millville, NJ and is in the process of
foreclosure. The special servicer continues to market the vacant
space. Losses are expected on all three loans.
Various stress scenarios were applied to account for potentially
problematic loans as well as shifts in loan and property type
concentrations. Even under these stress scenarios subordination
levels were sufficient to affirm the ratings.
LMI AEROSPACE: BDO Seidman Uncertain About Going Concern Ability
----------------------------------------------------------------
LMI Aerospace, Inc. (Nasdaq: LMIA), a leading provider of
assemblies, kits and detail sheet metal and machined components to
the aerospace, defense and technology industries, announced that
net sales for the year 2003 were $75.9 million, a decrease of 6.8
percent from the year 2002. For the year ended December 31, 2003,
LMI reported a net loss of ($4.0) million or ($0.49) per diluted
share, compared to a net loss of ($8.3) million or ($1.03) per
diluted share 2002.
Additionally, LMI announced that its independent certified public
accountants, BDO Seidman, LLP, has included an explanatory
paragraph in its opinion regarding uncertainty related to the
Company's ability to continue as a going concern. This conclusion
was based upon the Company's substantial losses in recent years
and uncertainty about the Company's ability to meet its financial
covenants with its primary lender.
Sales in the fourth quarter of 2003 were $18.6 million, compared
to $21.9 million in the fourth quarter of 2002 and $17.6 million
in the third quarter of 2003. LMI generated a net loss of ($1.6)
million or ($0.20) per diluted share in the fourth quarter of 2003
compared to a net loss of ($7.7) million or ($0.94) per diluted
share in the fourth quarter of 2002. The fourth quarter of 2002
included a goodwill impairment charge of $5.1 million.
During the fourth quarter of 2003, the Company generated a loss
before income taxes of ($2.6) million, which was influenced by
four significant items:
Expense for obsolete or slow moving inventory in
excess of historical experience $ 1.9 million
Plant moving expenses in Vista, California $ 0.3 million
Restructuring expense in St. Charles, Missouri,
and Wichita, Kansas $ 0.1 million
Gain on sale of securities $(0.3) million
Net negative impact on operating loss
in the quarter $ 2.0 million
A more complete review of the fourth quarter results for 2003 and
2002 and guidance for 2004 will be released later this week.
Backlog at December 31, 2003 was approximately $53.9 million, down
from $72.1 million at December 31, 2002.
"Because of operating difficulties experienced by many of our key
customers in 2003, our emphasis has been on previously announced
cost reduction efforts at our St. Charles, Missouri and Wichita,
Kansas facilities as well as in corporate overhead costs. Most of
the restructuring was completed by March 2004 and we are budgeting
our costs based on 2004 sales of $75 million to $80 million," said
Ronald Saks, President and Chief Executive Officer. "Beginning in
September 2003 our machining and technology segment experienced
significantly higher order rates for both its military and laser
products and we now expect increased sales volume for this segment
in 2004. In the first quarter of 2004, our sheet metal segment has
begun to receive orders for new components on regional, business
and commercial aircraft, the largest portion of which is being
transferred from another industry supplier. We will modify our
budgets and guidance, if necessary, when we are able to reasonably
estimate the size and impact of these orders."
LMI Aerospace, Inc. is a leading supplier of quality components to
the aerospace and technology industries. The Company operates
thirteen facilities that fabricate, machine, finish and integrate
formed, close tolerance aluminum and specialty alloy components
for commercial, corporate, regional and military aircraft, laser
equipment used in the semiconductor and medical industries, and
for commercial sheet metal industries.
MEADOWS OPERATIONS: Case Summary & 17 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Meadows Operations, Inc.
aka Elk Meadows Resort
P.O. Box 533
Beaver, Utah 84713
Bankruptcy Case No.: 04-24934
Type of Business: The Debtor operates a ski resort in Utah with
an expanded snowboard park operating year-round.
See http://www.elkmeadows.com/
Chapter 11 Petition Date: March 29, 2004
Court: District of Utah (Salt Lake City)
Judge: William T. Thurman
Debtor's Counsel: Jeffrey N. Walker, Esq.
Holman & Walker
9537 South 700 East
Sandy, UT 84070
Tel: 801-990-4990
Estimated Assets: $10 Million to $50 Million
Estimated Debts: $10 Million to $50 Million
Debtor's 17 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Jerry Case Promissory Note $250,000
EMSSD SID bond payment and $170,025
services (water,
snow, etc.)
beaver County Treasure Property taxes $101,054
John Hubbard Promissory Note $75,000
Wooded Ridge Homeowners Association dues $23,211
W.W. Clyde Construction services $20,824
Snowflake Homeowners Association dues $4,055
Dopplemayr CTEC, Inc. Chairlift services $2,651
Utah Power Electricity $2,654
Keith Hutchinson Rental of signboard $2,250
Holly Ridge Homeowners Association dues $2,150
Stonewood Homeowners Association dues $1,320
Cornelius Online Website services $900
Riverside Storage Storage fees $515
Scholzen Products Equipment rental $444
Amerigas Propane $374
Jones Waldo, Holbrook Legal services $202
& McDonough
MIRANT CORP: Equity Committee Wants to Conduct Rule 2004 Discovery
------------------------------------------------------------------
Eric J. Taube, Esq., at Hohmann, Taube & Summers LLP, in Austin,
Texas, relates that the Mirant Corp. Debtors' cases have been, and
promise to continue to be, large, complex and expensive. While
certain business priorities have, as in other large cases,
required significant expenditure of professional expertise, time
and resulting cost, these cases also have been characterized by an
unfortunately high level of disputes as to case management --
issues most often left to the business judgment of a debtor's
executive management and other matters that usually do not
require significant attention of estate professionals or the
Court.
Recently, there have been a number of media reports suggesting
that a significant contributor to the difficult administration of
these cases, and to the disappointing failure of prepetition
negotiations, is the existence of a disabling conflict of
interest within one or more members of the Mirant Creditors
Committee. These alleged conflicts are reportedly derived, at
least in part, from the asserted purchase of credit insurance or
similar financial protection by at least one of the Debtors'
largest creditors, Citibank, N.A. The insurance provided to
Citibank, or other similarly situated creditors, substantial
benefit upon failure of the prepetition negotiations or other
lack of progress in the Debtors' reorganization process.
Mr. Taube notes that Citibank is a member of the Mirant Creditors
Committee. Five of the other 10 members of the Mirant Creditors
Committee are also large commercial banks.
It has been reported that the Mirant Creditors Committee intends
to investigate Citibank's alleged conflicts and related issues,
and that Citibank has agreed to cooperate with that
investigation.
Moreover, the Equity Committee was informed that other factors
contributing to a difficult relationship between the Mirant
Creditors Committee has been:
(i) the reportedly abusive conduct of at least one other
member representative of the Mirant Creditors Committee
towards the Debtors' senior management; and
(ii) the Mirant Creditors Committee's adamant insistence of
the resignation of one or more members of the Debtors'
senior management.
The Equity Committee is concerned that the Mirant Creditors
Committee's conduct, or certain of its members, may have
seriously eroded the morale of the Debtors' employee base and
adversely affected the Debtors' search for a new Chief Executive
Officer. Indeed, the Equity Committee's professionals have been
informed that many of the Mirant Creditors Committee's objections
to seemingly proper motions have been motivated by animus over
and retribution for its inability to dictate an immediate change
in management.
Furthermore, the Equity Committee is concerned that the apparent
conflicts of at least one prominent member of the Mirant
Creditors Committee and the rampant rumors of inappropriate
creditor committee member behavior are contributing toward
additional and unnecessary expenses in these proceedings. These
factors also lead to a lack of confidence by investors and others
in the effectiveness of the reorganization process in these
cases, and a multiplicity of contested matters not contributive
to enterprise value or reorganization process, all to the
substantial detriment of Mirant's stockholders and other parties-
in-interest.
Accordingly, the Equity Committee seeks the Court's authority to
conduct discovery under Rule 2004 of the Federal Rules of
Bankruptcy Procedure, as to matters concerning the Debtors'
conduct and other matters relevant to these cases.
As part of the Equity Committee's efforts to undertake the
proposed examination, this discovery framework would be utilized:
(a) Initial pointed document requests would be directed to
Citibank and the other members of the Mirant Creditors
Committee;
(b) Depositions would be conducted of individuals at Citibank
and certain other members of the Mirant Committee having
knowledge and information relating to the produced
documents; and
(c) Depositions would be conducted of members of the Mirant
Creditors Committee having knowledge and information
relating to the Debtors' prepetition restructuring
efforts and the postpetition conduct by certain Mirant
Creditors Committee members relative to the Debtors'
efforts to effectively administer these Chapter 11 cases.
Citibank Wants Examiner
"The Discovery Motion is based upon the factual incorrect
assumption that Citibank is or was party to a credit derivative
protection arrangement relating to Citibank's debt claims against
Mirant Corporation," David M. Bennett, Esq., at Thompson & Knight
LLP, in Dallas, Texas, remarks. While Citibank holds in excess
of $200,000,000 of Mirant debt under certain prepetition credit
facilities, none of which is or, at any point in 2003 or
thereafter, ever was protected or otherwise hedged by credit
derivative protection.
Mr. Bennett clarifies that Citibank is not presently, and during
all relevant periods was not, a party to any credit derivative
protection arrangement related to the Mirant debt obligations it
held. Citibank explained these facts to the Equity Committee --
and offered to provide them with the Declaration of John Dorans
before the Discovery Motion was filed. Despite Citibank's desire
to address the issues raised in the Discovery Motion without
seeking Court intervention, the Equity Committee has chosen to
file the Discovery Motion.
With no basis in fact, the Discovery Motion appears to be part of
a continuing attempt by Mirant, acting this time through the
Equity Committee, to gain tactical advantage by attacking certain
creditors who express dissenting views -- particularly at
critical times like these when the Debtors are in the process of
unveiling their new business plan -- and diverting attention from
the true issues at hand. This strategy appears to be a
continuation of one the Debtors' incumbent management adopted
during the prepetition period, in a last-minute attempt to gain
support for the Debtors' proposed prepackaged Chapter 11 plan of
reorganization. Under the Prepackaged Plan, the Debtors proposed
to restructure billions of dollars of indebtedness while leaving
its equity unimpaired. "That strategy proved unsuccessful,
however, as the Debtors abandoned the Prepackaged Plan only hours
before the voting deadline and filed these Chapter 11 cases," Mr.
Bennett tells the Court.
It is now clear that Citibank was correct all along in its
assessment of the Prepackaged Plan -- it was based on an
unrealistic business plan, which, if it had been implemented,
would have rendered Mirant hopelessly undercapitalized and
heading toward a subsequent bankruptcy. Accordingly, although it
was difficult to identify any equity value in Mirant prior to the
Petition Date, it is now easy to conclude that there is no equity
value in Mirant.
Mr. Bennett relates that the only reason the Equity Committee
exists is that the Prepackaged Plan created an illusion of equity
value. Although the Debtors' management has attempted to avoid
publicly admitting the flaws in their original business plan and
the other mistaken assumptions underlying the Prepackaged Plan,
fairly quickly after the Cases were commenced, it became apparent
that there is no value for equity. Unfortunately, because the
Equity Committee was formed base on the inflated valuation
implied by the Prepackaged Plan, the estates must contend with an
Equity Committee that has no real economic stake in the outcome
of these cases.
The Equity Committee now seeks to justify its existence and,
through the Discovery Motion, has turned to the tried and true
approach for parties that are out of the money -- attempt to
delay and obfuscate by attacking the senior creditors in hopes of
extorting value. Mr. Bennett notes that the Equity Committee's
timing is particularly curious given that the Debtors have been
seeking to have another member of the Mirant Creditors Committee
that has expressed dissenting views to management removed from
its position on the Mirant Creditors Committee, just at the time
the Debtors are unveiling their new business plan. It is also
noteworthy that contemporaneous with the Equity Committee's
efforts to obtain this information, the Debtors are also trying
to obtain the information from Citibank and the Lenders.
In his declaration, Mr. Dorans explains that Citibank and Credit
Suisse Fist Boston, together with other group of Lenders, did
oppose the Prepackaged Plan to address Lender concerns. Citibank
sought to protect the Lenders from flaws in the Debtors'
restructuring strategy and to negotiate a restructuring that was
compatible with a long-term view of what was in the best interest
of long-term holders of Mirant debt.
Mr. Dorans argues that the Equity Committee's request must be
denied since the uncontroverted evidence establishes that there
is no disabling conflict of interests. In addition, the Equity
Committee seeks materials and information that are privileged or
otherwise not subject to discovery.
Although Mr. Dorans' Declaration now disposes of the rumors the
Equity Committee referred to, in light of the other issues
raised, Citibank believes that a complete inquiry should be
undertaken into the cause of these disruptions, including the
development and solicitation of the Prepackaged Plan. This
inquiry should not be limited to the conduct of only some of the
parties, but should encompass the conduct of all parties,
including most notably, the Debtors' management. Due to the
scope of this inquiry, it should not be undertaken by a partisan
body like the Equity Committee, but by an independent examiner.
Citibank welcomes the opportunity to cooperate with a
disinterested examiner to set the records straight.
Accordingly, Citibank asks the Court to deny the Equity
Committee's request and appoint an examiner in these cases.
Mr. Bennett asserts that a disinterested examiner will be able to
undertake an investigation in a professional manner, unencumbered
by the pressures of a constituency to uncover "facts" to support
a certain result. An investigation by an examiner will be far
less controversial and should permit the parties to focus on the
true issues in these cases.
Mr. Bennett asserts that appointment of an examiner is warranted
because Citibank's fixed, liquidated unsecured claims against the
Debtors far exceed the $5,000,000 statutory limit for the
appointment of an examiner and are not claims for goods,
services, taxes or amounts owing to an insider.
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. 28; Bankruptcy Creditors' Service, Inc., 215/945-7000)
MIRANT: Names Michele Burns Executive VP & Chief Financial Officer
------------------------------------------------------------------
Mirant (Pink Sheets: MIRKQ) announced that, effective May 3, M.
Michele Burns, 46, will be joining the company as executive vice
president and chief financial officer. Burns will assume lead
responsibility for the company's financial restructuring. She will
report to Marce Fuller, Mirant's president and chief executive
officer.
Burns brings more than 23 years of experience in corporate finance
and accounting to Mirant, having served as executive vice
president and chief financial officer at Delta Air Lines, Inc.,
and as partner at Arthur Andersen, LLP.
"Adding a high-caliber professional like Michele is a significant
achievement for Mirant and further strengthens our senior
management team. As one of the nation's most well-respected CFOs,
she has the experience and skill to lead our financial
restructuring, and play a key role in enabling Mirant to emerge
from Chapter 11," said Fuller.
"I believe that Mirant's focus on the right assets and the right
markets, coupled with appropriate asset management, can enable the
company to regain a leadership position in this industry," said
Burns. "This focus, along with the commitment of Mirant employees,
is a winning combination. I am proud to be a part of the company's
leadership team and look forward to continuing the outstanding
restructuring work that has begun."
In her career at Delta, Burns is credited with stabilizing the
company's finances immediately after the September 11 terrorist
attacks, then leveraging Delta's business unit, technology and
supply chain strategies to reduce costs by over $2.5 billion. She
was also responsible for Delta's business development activities,
including the highly successful e-business partnership with
priceline.com. Delta sold its stake in priceline.com in 2000,
netting $1 billion of cash.
Burns serves as a member of the board of directors for Wal-Mart
Stores, Inc., Cisco Systems, Inc., the Ivan Allen Company and the
Atlanta Symphony Orchestra. She is also treasurer and a member of
the board of directors of the Elton John AIDS Foundation.
She graduated Summa Cum Laude from the University of Georgia with
a bachelor's degree in Business Administration and a master's
degree in Accountancy.
Headquartered in Atlanta, Georgia, Mirant Corporation is a
competitive energy company that produces and sells electricity in
North America, the Caribbean, and the Philippines. Mirant owns or
controls more than 22,000 megawatts of electric generating
capacity globally. The company operates an asset management and
energy marketing organization from its headquarters in Atlanta.
For more information, visit http://www.mirant.com/. Together with
its direct and indirect subsidiaries, Mirant 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.
NATIONAL CENTURY: Wants Court Nod to Conduct Rule 2004 Exams
------------------------------------------------------------
National Century Financial Enterprises, Inc. seeks the Court's
authority to obtain documents from 19 additional entities and
individuals concerning:
(a) the property of the Debtors;
(b) the assets, liabilities and financial condition of the
Debtors;
(c) matters that may affect the administration of the Debtors'
estates; and
(d) the identification and prosecution of certain potential
claims against third parties by a representative of the
Debtors' estates.
The 19 third party individuals and entities are:
* Bank Boston,
* Bank of America (Chicago, Illinois),
* Bricker & Eckler,
* Carolina First (Greenville, South Carolina),
* Citibank (South Dakota), N.A.,
* Citicorp Investment Services,
* Comerica Bank,
* Fleet Bank,
* Fleet Bank (Vorrhees, New Jersey), N.A.,
* Fleet Pennsylvania Services,
* Kaye Scholer, LLP,
* Mitchell Stein,
* Pennsylvania Capital Bank (Pittsburgh, Pennsylvania),
* Seward & Kissell, LLP,
* Smith Barney,
* Squire Sanders & Dempsey, LLP,
* Three Rivers Bank (Pittsburgh, Pennsylvania),
* Wachtell Lipton Rosen & Katz, and
* Wilmington, Trust Co.
The Debtors also ask the Court to issue subpoenas to take Rule
2004 depositions of 23 individuals or entities regarding:
(a) their production of documents in response to the
previously issued 2004 document subpoenas;
(b) their involvement with, and their participation in
transactions involving, NCFE, its affiliates, its
founders, or entities owned or controlled by the founders;
and
(c) questions raised by the documents produced by them in
connection with the Debtors' prior Rule 2004 document
subpoena.
The 23 Rule 2004 Deposition Targets are:
* Bank One,
* Barbara Poulsen,
* Cary Purcell,
* Craig Porter,
* Credit Suisse First Boston,
* Deloitte & Touche,
* Donald Ayers,
* Eric R. Wilkinson,
* Harold W. Pote,
* Hausser Taylor,
* Joe Roberts,
* John Snoble,
* JP Morgan Chase Bank,
* Lance Poulsen,
* Mitchell Stein,
* Peggy Scott,
* PricewaterhouseCoopers,
* Randolph Speer,
* Rebecca Parrett,
* Roger Faulkenberry,
* Steven Scott,
* Thomas G. Mendell, and
* Tim Kincaid.
Kathy D. Patrick, Esq., at Gibbs & Bruns, in Houston, Texas,
relates that the Debtors seek materials and oral testimony from a
large number of parties, the scope of materials and testimony
sought is wide, and the remaining time for the Debtors to assert
their claims is limited. The Debtors conclude that it would not
be productive or efficient to engage in a party-by-party effort
to obtain materials informally. Thus, the Debtors have not
contacted the parties. Instead, the Debtors determine to utilize
Rule 2004 of the Federal Rules of Bankruptcy Procedure to collect
the information.
Headquartered in Dublin, Ohio, National Century Financial
Enterprises, Inc. -- http://www.ncfe.com/-- is the market leader
in healthcare finance focused on providing medical accounts
receivable financing to middle market healthcare providers. The
Company filed for Chapter 11 protection on November 18, 2002
(Bankr. D. Ohio Case No. 02-65235). Paul E. Harner, Esq., Jones,
Day, Reavis & Pogue represents the Debtors in their restructuring
efforts. (National Century Bankruptcy News, Issue No. 37;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
NATIONSRENT: Trustee Sues to Recover Preferences from 88 Creditors
------------------------------------------------------------------
In separate court filings, Perry Mandarino, as Trustee for the
NationsRent Unsecured Creditors' Liquidating Trust, seeks to
avoid and recover preferential transfers from 88 creditors:
Creditors Amount
--------- ------
Archie's Truck Service $10,881
Arrow Master, Inc. 12,298
CST Corporation 14,285
Carquest 14,349
Cogg's Tire Service, Inc. 11,729
Corporate Safe Specialists 10,027
Coleman Engineering, Inc. 14,374
Colorado Fasteners-Metric, Inc. 10,752
Collision Pro 13,601
Construction Electrical Products 12,481
Construction Machinery, Inc. 14,379
Construction Tire & Machinery & Maintenance 12,394
Custom Networks, Inc. 13,500
Dayton-Evans Motor Truck, Inc. 10,125
Delta BCX Printing 11,793
Delta Foremost Chemical Corporation 12,664
Ditch Witch of Birmingham 13,954
Doskocil Industries, Inc. 19,340
Dossey Holdings, Inc. 144,145
Double A 16,666
Duhon Machinery Co., Inc. 16,403
EZ Environmental Solutions 47,091
Evans Oil Company 12,555
Fallon Community Health 13,434
Ferrell Gas 11,359
First Coast Tire Service 11,411
Fischer Group 130,515
Fleet Business Credit Corporation 609,407
Fleetwing Corporation 13,047
Fluid Tech Hydraulics, Inc. 11,345
Fort Worth Gear & Axle, Inc. 26,058
Gabrielli Truck Sales, Ltd. 13,581
General Equipment Company 32,343
Husqvarna Forest & Garden 39,033
Ingersoll-Rand Co. 281,247
Interstate Battery System of America 56,026
International Business Machines Corporation 17,589
J & B Auto Supply, Inc. 17,810
J&B Tire Sales & Service 11,133
Jeff Falkanger & Associates 89,762
Jek Supply Co., Inc. 17,946
Joe Jeter Sales 14,700
L&P Financial Services 51,540
Ligthbourn Equipment Co. 25,551
Loot, Inc. doing business as Jacks Too Rental, Inc. 60,493
M & D Distributors 20,252
Miller Bros Giant Tire Service-Jacksonville, Inc. 17,810
Miller Bros Giant Tire Service-Jacksonville, Inc. 17,810
Mobile Products, Inc. 25,716
Morgan Guaranty Trust Co. of New York 105,254
Morgan Auto Supply Co. 18,688
Napa Autoparts 21,995
M & D Distributors 20,252
Raymond, Linda A. 45,047
SB Power Tool Corporation 19,335
S&D Tire, Inc. 10,947
Sanford Auto & Truck Parts 14,058
Schmidt Equipment, Inc. 10,734
Sensormatic Electronics Corporation 48,249
Services & Materials Co. 25,579
Smith Brothers 13,345
Smitty's Fleet Service 10,956
Soco Group 11,595
Spencer Technologies, Inc. 40,804
Star Industries Company, Inc. 16,451
Stihl Inc. National Accounts 78,473
Stone Construction Equipment, Inc. 5,616
Sun Coast Resources, Inc. 14,529
Tire Centers, LLC 11,409
Triton Transport, Inc. 15,588
Truck Lease Corporation 26,560
Truck PM Corporation 22,074
Tullo Truck Stop 12,648
Unifirst Corporation 10,233
Valley Rubber & Gasket 13,890
Valley Tire Co., Inc. 20,883
Vector Security, Inc. 21,420
Verizon Credit, Inc. 80,527
Vermeer Manufacturing Company 51,998
Vermeer Northeast 16,239
Vermeer Sales of Texas, Inc. 16,614
Virginia Abrasives Corporation 38,476
Wagman Metal Products, Inc. 18,442
Wayne Miller's Mobile Tire, Inc. 16,507
Warrior Tractor & Equipment Co., Inc. 16,268
Wendell, Randy 28,186
Witch Equipment Company, Inc. 29,446
Worcester Truck Body Co., Inc. 19,699
Worldwide Installation 10,500
The Transfers were for or on account of antecedent debts the
Debtors owed to the creditors and were made while the Debtors
were insolvent. The Debtors made the Transfers to the Creditors
within 90 days of the Petition Date.
As a result of the Transfers, Mr. Mandarino asserts that the
Creditors received more than they would have received if:
-- these cases were under Chapter 7 of the Bankruptcy Code;
-- the Transfers had not been made; and
-- the Creditors received payment to the extent provided by
the Bankruptcy Code.
Accordingly, Mr. Mandarino asks the Court for a judgment:
(a) avoiding the Transfers pursuant to Section 547 of the
Bankruptcy Code;
(b) directing the Creditors, pursuant to Section 550, to
immediately pay the Transfers with interest; and
(c) awarding him costs, expenses and reasonable attorneys'
fees. (NationsRent Bankruptcy News, Issue No. 46;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
NEXMED INC: Auditors Express Going Concern Doubts
-------------------------------------------------
As a result of NexMed Inc.'s losses to date, expected losses in
the future, limited capital resources and accumulated deficit, the
Company's independent auditors have concluded that there is
substantial doubt as to NexMed's ability to continue as a going
concern for a reasonable period of time, and have modified their
report in the form of an explanatory paragraph describing the
events that have given rise to this uncertainty. These factors may
make it more difficult for NexMed to obtain additional funding to
meet its obligations. The Company's continuation is based on its
ability to generate or obtain sufficient cash to meet its
obligations on a timely basis and ultimately to attain profitable
operations. Management anticipates that the Company will continue
to incur significant losses until successful commercialization of
one or more of its products, and it may never operate profitably
in the future.
The Company will need significant additional funding to continue
with its research and development efforts. Its research and
development expenses for the years ended December 31,
2003, 2002 and 2001, were $8,439,340, $21,615,787 and $12,456,384,
respectively. Since January 1, 1994, when NexMed repositioned
itself as a medical and pharmaceutical technology company, it has
spent $59,134,688 on research and development. While its expenses
for research and development were significantly lower in 2003 than
in 2002, NexMed expects them to increase significantly in 2004.
Given its current level of cash reserves and low rate of revenue
generation, the Company will not be able to fully advance the
development of its products unless it raises additional cash
through financing from the sale of its securities and/or through
partnering agreements. If successful in entering partnering
agreements for its products under development, it will receive
milestone payments, which will offset some of its research and
development expenses.
The Company's anticipated cash requirements for Alprox-TD(R)
through the new drug application filing in the first half of 2005,
including completion of an open-label study, will be approximately
$20 million. Initiation, but not completion of the open-label
study is a prerequisite for the Company's New Drug Application
filing.
The Company will also need significant funding to pursue its
overall product development plans. In general, NexMed's products
under development will require significant time-consuming and
costly research and development, clinical testing, regulatory
approval and significant additional investment prior to their
commercialization. The research and development activities it
conducts may not be successful; its products under development may
not prove to be safe and effective; its clinical development work
may not be completed; and the anticipated products may not be
commercially viable or successfully marketed. Commercial sales of
its products cannot begin until the Company receives final FDA
approval. The earliest time for such final approval of the first
product which may be approved, Alprox-TD(R), is sometime in late
2005. NexMed intends to focus its current development efforts on
the Alprox-TD(R) cream treatment, which is in the late clinical
development stage.
Through December 31, 2003, the Company had an accumulated deficit
of $85,221,535. Its operations have principally been financed
through private placements of equity securities and debt
financing. Funds raised in past periods should not be considered
an indication of additional funds to be raised in any future
periods.
OSE USA: Employs Steve Lerner as New President
----------------------------------------------
OSE USA, Inc. announced the hiring of Steve Lerner as its new
President.
Prior to joining OSE USA, Mr. Lerner was founder and chief
executive officer of Gigasys Corporation of Carlisle,
Massachusetts, an advanced semiconductor packaging firm
specializing in System-in-Package solutions and supplier related
management services, including quality systems audits, process
development, equipment procurement, strategic alliances and supply
chain management. He is a recognized authority in microelectronics
packaging and test foundry services with significant international
experience in both S.E. Asia and Europe. Prior to his association
with Gigasys Corporation, Mr. Lerner was CEO and founder of CS2, a
Belgian component contract test and assembly company, and managing
Director of Amkor/Anam Euroservices in France, and has held
several other senior management positions in other SATS related
companies. He is a graduate (BSME) of the State University of New
York at Stony Brook, the holder of several United States patents,
and a member of the Institute of Electrical and Electronics
Engineers and CPMT.
Chairman of the Board of Directors Edmond Tseng stated: "The Board
of Directors of OSE USA welcomes Steve Lerner to spearhead the
Company's business development program in the North American
market. The addition of Steve to our management team signals our
commitment to achieve both immediate revenue goals and our
strategic objective of restoring the company to profitability."
Mr. Lerner expressed his pleasure with his appointment, saying: "I
am very excited about joining one of the early pioneers in the
SATS space, especially at a time when the Company's true value
relative to its peer group is largely unrecognized. What most
people don't realize, is that given the diversity of OSE's mature
design and manufacturing capabilities in SATS, EMS, and MEMS, the
Company is positioned to offer the industry's most comprehensive
set of SiP solutions at both the IDM and OEM levels. I look
forward to working with the OSE team in bringing this Company back
to its former stature as a leader in the SATS sector."
Founded in 1992, OSE USA -- whose December 31, 2003, balance sheet
discloses a net capital deficit of about $37.4 million -- has been
the nation's leading onshore advanced technology IC packaging
foundry. In May 1999, Orient Semiconductor Electronics, Ltd., one
of Taiwan's top IC assembly and packaging services companies,
acquired a controlling interest, boosting its US expansion
efforts. The Company sold and discontinued manufacturing
operations in 2003 in order to concentrate on the distribution
segment of the market. For more information about OSE USA, visit
http://www.ose.com.tw/
PARMALAT GROUP: Proposes Surplus U.S. Asset Sale Procedures
-----------------------------------------------------------
Parmalat Group North America owns parcels of real property and
miscellaneous equipment that are not used in the operations of
their business. The Debtors and their investment bankers believe
that a potential purchaser of substantially all of their assets
would not fully value the Non-Operating Properties and the Surplus
Assets in its purchase price. Accordingly, the Debtors determined
that they can realize a greater return for the Non-Operating
Properties and the Surplus Assets by selling them separately from
their operating assets.
Due to the disparate locations and diverse nature of the Non-
Operating Properties and the Surplus Assets, the U.S. Debtors
also determined that it would be counterproductive to attempt to
sell the Non-Operating Properties and the Surplus Assets on a
consolidated basis. Holding separate auctions at various
locations would also be costly and inefficient because the
auctioneers' fees, plus the administrative cost of obtaining
Court approval to retain auctioneers for each sale would be
unacceptably high relative to the value of the properties and
assets.
The U.S. Debtors also note that potential purchasers of
relatively small single parcels of property or pieces of
equipment may not be willing to wait months for bidding
procedures, an auction, and court approval. These impediments to
a sale may discourage potential purchasers or decrease the
purchase price the Debtors would otherwise receive from the sale.
An expedited sale procedures will permit the Debtors to be
responsive to the needs of interested purchasers, thereby
avoiding lost sales due to delay, while still providing for a
review of the proposed transaction, where necessary, by creditor
representatives.
For these reasons, the U.S. Debtors ask the Court to establish
procedures for the sale of the Non-Operating Properties and the
Surplus Assets.
Sale Procedures for Non-Operating Properties
The U.S. Debtors propose to sell the Non-Operating Properties
through a marketing process that will ensure the highest return
to the estate at the lowest cost. The Debtors will hire brokers
with expertise in the particular markets in which the Non-
Operating Properties are located to conduct aggressive marketing
campaigns and obtain the highest purchase price for the Non-
Operating Properties. After a reasonable period of marketing,
the Debtors will choose the highest and best purchase price for
each of the Non-Operating Properties and sell the Non-Operating
Properties using these procedures in lieu of a notice of motion
and hearing pursuant to Section 363 of the Bankruptcy Code:
-- The Debtors will give notice of each proposed sale of a
parcel of Non-Operating Property to:
(i) the United States Trustee;
(ii) the attorneys for the Official Committee of
Unsecured Creditors;
(iii) the attorneys for GE Capital Corporation;
(iv) the attorneys for Citicorp, N.A.; and
(iv) the holder of any lien, claim, or encumbrance
relating to the Non-Operating Property proposed to
be sold.
-- Notices will be served by facsimile, so as to be received
no later than 5:00 p.m. (Eastern Standard Time) on the date
of service. The Notice will specify:
(i) the Non-Operating Property to be sold;
(ii) the identity of the seller;
(iii) the identity of the proposed purchaser;
(iv) the proposed purchase price;
(v) any other relevant terms of sale; and
(vi) the current estimated fair market value of the
Non-Operating Property to be sold, if available.
The Debtors will have the right to make non-material
amendments to the terms of the sale set forth in the Notice
without serving an amended Notice on the Notice Parties;
-- The Notice Parties will have five business days after the
Notice is served to object to the proposed transaction.
All objections must be in writing, delivered to the
Debtors' counsel:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attn: Gary T. Holtzer, Esq.
so as to be actually received no later than 5:00 p.m. five
business days after the Notice is served. If Weil Gotshal
receives no written objection before the expiration of the
Objection Period, the Debtors will be authorized to
consummate the proposed sale transaction and take such
actions as are necessary to close the transaction and
obtain the sale proceeds;
-- If a Notice Party objects to the proposed transaction
within the Objection Period, the Debtors and the objecting
Notice Party will use good faith efforts to resolve the
objection. If the Debtors and the objecting Notice Party
are unable to achieve a consensual resolution, the Debtors
will not proceed with the proposed transaction pursuant to
these procedures, but may seek Court approval of the
proposed transaction upon notice and a hearing; and
-- Nothing in the procedures will prevent the Debtors, in
their sole discretion, from seeking Court approval at any
time of any proposed transaction upon notice and a hearing.
Sale Procedures for Surplus Assets
With respect to the Surplus Assets, the U.S. Debtors believe that
a combination of sale methods would yield the highest return for
their estates, including the use of private sales, auctions, or
brokers, depending on the nature of the asset. The Debtors
propose to use their best judgment to select the method for each
particular Surplus Asset that will yield the highest sale price.
If the price offered for a Surplus Asset is over $100,000, the
Debtors will submit a Notice and follow the procedures for
selling Non-Operating Properties before selling the Surplus
Asset. The Debtors propose to sell any Surplus Asset for under
$100,000 without further Court approval or prior notice. If the
Debtors sell a Surplus Asset for between $50,000 and $100,000,
they will send a notice of the sale within 30 days after the sale
is consummated to all Notice Parties. If they sell a Surplus
Asset for under $50,000, they will not be obligated to notify any
parties-in-interest of the sale.
To the extent necessary, the U.S. Debtors seek the Court's
authority to employ and compensate any brokers or auctioneers
needed to consummate the sale of the Non-Operating Properties and
the Surplus Assets.
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. 12; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
PILLOWTEX CORPORATION: Court Okays Proposed Trading Restrictions
----------------------------------------------------------------
Pillowtex Corporation is currently reviewing strategic
alternatives with a view to preserving value through
reorganization, Donna L. Harris, Esq., at Morris, Nichols, Arsht &
Tunnel, in Wilmington, Delaware, reports. The review is conducted
in consultation with, and with the participation of, the Official
Committee of Unsecured Creditors and its advisors.
According to Ms. Harris, one of the Debtors' valuable assets is
their Net Operating Losses carryforwards since the NOL's
availability would maximize the value of their remaining assets
and, therefore, the ultimate recoveries of the Debtors'
creditors. The Debtors estimate that there will be more than
$300 million of NOL carryforwards after the consummation of their
Chapter 11 Plan.
Section 172 of the Internal Revenue Code permits corporations to
carry forward NOLs to offset future income, thus, reducing
federal income tax liability and significantly improving a
corporation's cash position. Under certain strategic
alternatives that the Debtors are currently reviewing, it is
contemplated that one or more of the Debtors could reorganize
pursuant to a Chapter 11 plan, and that their creditors could
receive an interest in the Reorganized Debtors' business.
Ms. Harris notes that the Debtors' ability to use their NOLs,
however, could be severely limited under Section 382 of the
Internal Revenue Code as a result of the trading of claims
against, and equity securities in, the Debtors before the
consummation of a Chapter 11 plan. Section 382 limits the amount
of taxable income that can be offset by a corporation's NOL
carryforwards in any taxable year after an ownership change. An
"ownership change" generally occurs if the percentage of the
stock of the corporation owned by one or more 5% shareholders has
increased by more than 50 percentage points over the lowest
percentage of stock owned by the shareholders at any time during
the testing period ending on the date of ownership change.
The Debtors' proposed Chapter 11 plan, Ms. Harris says, would
distribute a majority of the common stock of the reorganized
Debtors to a new equity investor or joint-venture partner and to
employees, lessors and other creditors. In that scenario, the
Debtors will likely experience an "ownership change."
Ms. Harris admits that the Debtors are now faced with the problem
that too many equity holders or creditors may transfer their
equity securities or debt claims before the effective date of a
Plan, thus triggering an ownership change that would not fall
within the ambit of these special bankruptcy provisions. To
preserve flexibility in crafting a Chapter 11 plan that qualifies
for relief under one of the special bankruptcy provisions, and
thus maximize their ability to use their NOLs, the Debtors need
to monitor and possibly object to changes in ownership of claims
and equity securities.
By this motion, the Debtors ask the Court to establish notice and
hearing procedures that must be complied with as a precondition
to the effectiveness of the trading of claims and equity
securities.
The Debtors propose these procedures:
A. Procedure for Trading in Equity Securities
(a) Any person or entity that currently is or becomes a
Substantial Equityholder will file with the Court, and
serve on the Debtors, their counsel, and the counsel
to the Committee, a notice of that status;
(b) Before effectuating any transfer of equity securities
which would result in (1) an increase in the amount of
common stock of Pillowtex beneficially owned by a
Substantial Equityholder or (2) a person or entity
becoming a Substantial Equityholder, the Substantial
Equityholder or the person or entity will file with the
Court, and serve on the Debtors, their counsel, and to the
Committee's counsel, advance written notice of the
intended transfer of equity securities;
(c) Before effectuating any transfer of equity securities
which would result in (1) a decrease in the amount of
common stock of Pillowtex beneficially owned by a
Substantial Equityholder or (2) a person or entity
ceasing to be a Substantial Equityholder, the Substantial
Equityholder will file with the Court, and serve on the
Debtors, their counsel, and to the Committee's counsel,
advance written notice of the intended transfer of
equity securities;
(d) The Debtors and the Committee will have 30 calendar days
after receipt of a Notice of Proposed Transfer, to file
with the Court and serve on the Substantial Equityholder,
person or entity that filed the Notice of Proposed
Transfer, an objection to any proposed transfer of equity
securities on the grounds that the transfer may adversely
affect the Debtors' ability to utilize their NOLs. If the
Debtors or the Committee file an objection, each transfer
that is the subject of the objection will not be effective
unless approved by a final and non-appealable Court order.
If the Debtors or the Committee do not object within the
30-day period, the transfer may proceed solely as set
forth in the Notice of Proposed Transfer. Further
transfers must be the subject of additional notices, with
an additional 30-day waiting period; and
(e) For purposes of this request:
(1) A "Substantial Equityholder" is any person or entity
that beneficially owns at least 860,000 shares,
representing 4.5% of all issued and outstanding shares
of the common stock of Pillowtex;
(2) "Beneficial ownership" of equity securities includes
direct and indirect ownership, ownership by the
holder's family members or persons acting in concert
with that holder to make a coordinated acquisition
of stock or to maintain a coordinated holding of
stock, and ownership of shares, which the holder has
an option to acquire; and
(3) An "option" to acquire stock includes any contingent
purchase, warrant, convertible debt, put, stock
subject to risk of forfeiture, contract to acquire
stock or similar interest, regardless of whether it
is contingent or otherwise not currently exercisable.
B. Procedure for Trading in Claims
(a) Any person or entity that currently is or becomes a
Substantial Claimholder will file with the Court, and
serve on the Debtors, their counsel, and to the
Committee's counsel, a notice of that status;
(b) Before effectuating any transfer of claims which would
result in (1) an increase in the aggregate principal
amount of claims beneficially owned by a Substantial
Claimholder or (2) a person or entity becoming a
Substantial Claimholder, the Substantial Claimholder,
person or entity will file with the Court, and serve on
the Debtors, their counsel, and to the Committee's
counsel, advance written notice of the intended transfer
of claims, regardless of whether the transfer would be
subject to the filing, notice and hearing requirements of
Rule 3001 of the Federal Rules of Bankruptcy Procedure;
(c) Before effectuating any transfer of claims which would
result in (1) a decrease in the aggregate principal amount
of claims beneficially owned by a Substantial Claimholder
or (2) a person or entity ceasing to be a Substantial
Claimholder, the Substantial Claimholder will file with
the Court, and serve on the Debtors, their counsel, and to
the Committee's counsel, advance written notice of the
intended transfer of claims, regardless of whether the
transfer would be subject to the filing, notice and
hearing requirements of Bankruptcy Rule 3001;
(d) Each of the Debtors and the Committee will have 30
calendar days after receipt of a Notice of Proposed
Transfer to file with the Court, and to serve on the
Substantial Claimholder, person or entity that filed the
Notice of Proposed Transfer, an objection to any proposed
transfer of claims on the grounds that the transfer may
adversely affect the Debtors' ability to utilize their
NOLs. If the Debtors or the Committee file an objection,
each transfer that is the subject of the objection will
not be effective unless approved by a final and non-
appealable Court order. If the Debtors or the Committee
do not object within the 30-day period, the transfer may
proceed solely as set forth in the Notice of Proposed
Transfer. Further transfers must be the subject of
additional notices, with an additional 30-day waiting
period; and
(e) For purposes of this request:
(1) A "Substantial Claimholder" is any person or entity
that beneficially owns:
-- an aggregate principal amount of claims against the
Debtors equal to or exceeding $5,000,000 or any
controlled entity through which a Substantial
Claimholder beneficially owns an indirect interest
in claims against the Debtors; or
-- a lease or leases under which one or more of the
Debtors are lessees and pursuant to which payments
of $5,000,000 or more, in the aggregate, are or
will become due;
(2) "Beneficial ownership" of claims includes direct and
indirect ownership, ownership by the holder's family
members or persons acting in concert with the holder
to make a coordinated acquisition of claims or to
maintain a coordinated holding of claims, and
ownership of claims which a person or entity has an
option to acquire; and
(3) An "option" to acquire claims includes any contingent
purchase, put, contract to acquire a claim or similar
interest, regardless of whether it is contingent or
otherwise not currently exercisable.
Once an NOL is limited under Section 382, its use is limited
forever, and once a claim or equity is transferred, that transfer
cannot be undone. Unfettered trading in the Debtors' claims and
equity securities could, thus, cause irreparable harm, by
jeopardizing the Debtors' ability to offset taxable income freely
with the NOLs. Therefore, Ms. Harris says, the establishment of
the Notice and Hearing Procedures is necessary to avoid an
irrevocable loss of the Debtors' NOLs.
* * *
Judge Walsh grants the Debtors' request. Judge Walsh clarifies
that any purchase, sale or other transfer of claims against or
equity securities in the Debtors in violation of the authorized
Notice and Hearing Procedures, will be null and void ab initio as
an act in violation of the automatic stay under Sections 105(a)
and 362 of the Bankruptcy Code.
The Court also directs the Debtors to serve a notice of entry of
the Order on:
* the U.S. Trustee;
* the Committee;
* the counsel to Bank of America, as agent for the term loan
lenders;
* the counsel to Congress Financial Corporation, as agent for
the revolving term loan lenders;
* the trustees for outstanding Industrial Revenue Bonds;
* all known creditors and shareholders;
* the transfer agent for the stock of Pillowtex; and
* all parties who filed notices of transfers of claims under
Bankruptcy Rule 3001(e)
The transfer agent for the stock of Pillowtex must also provide
the Notice to all holders of the stock registered with the
transfer agent, on at least a quarterly basis.
The Court also directs any person or entity, or any broker or
agent acting on their behalf, that transfers (i) claims against
the Debtors in the aggregate principal amount of at least
$5,000,000 or (ii) shares of Pillowtex common stock, or options
to acquire shares of Pillowtex common stock, representing in the
aggregate 860,000 share or more to another person or entity, to
provide a copy of the Court Order to the transferee or any broker
or agent action on the transferee's behalf.
Headquartered in Dallas, Texas, Pillowtex Corporation --
http://www.pillowtex.com/-- sells top-of-the-bed products to
virtually every major retailer in the U.S. and Canada. The Company
filed for Chapter 11 protection on November 14, 2000 (Bankr. Del.
Case No. 00-4211). David G. Heiman, Esq., at Jones, Day, Reavis &
Poque represents the Debtors in their restructuring efforts. On
July 30, 2003, the Company listed $548,003,000 in assets and
$475,859,000 in debts. (Pillowtex Bankruptcy News, Issue No. 62;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
PREMIER FREIGHTLINER: James Goldman Serves as Bankruptcy Counsel
----------------------------------------------------------------
Premier Freightliner, Inc., asks permission from the U.S.
Bankruptcy Court for the Western District of Texas, El Paso
Division, to employ James, Goldman & Haugland, P.C., as its
bankruptcy attorneys.
The Debtor will pay James Goldman its current hourly rates of:
Attorney Billing Rate
-------- ------------
Wiley F. James, III $225 per hour
Joe Lopez $175 per hour
Jamie Wall $125 per hour
Aimee Charland Gillette $ 95 per hour
The professional services that James Goldman will render include:
a) analysis of the Applicant's financial situation, and
rendering advice to the Debtor in determining whether to
file a petition in bankruptcy;
b) preparation and filing of the Voluntary Petition,
Schedules, Statement of Financial Affairs, Plan of
Reorganization and Disclosure Statement, as required;
c) representation of the Debtor at the meeting of creditors
and confirmation hearing, and any adjourned hearings
thereof;
d) representation of the Debtor in adversary proceedings and
other contested bankruptcy matters;
e) providing the Debtor legal advice with respect to its
powers and duties as a Debtor-in-Possession and the
continued operation of its business;
f) preparation on behalf of the Debtor, as a Debtor-in-
Possession, the necessary applications, answers, orders,
reports and other papers;
g) helping the Debtor with any necessary documents for the
obtaining of post-petition credits, offsets, etc.; and
h) performance of all the legal services for the Debtor, as a
Debtor-in-Possession, which may be necessary herein.
Headquartered in El Paso, Texas, Premier Freightliner, Inc., filed
for chapter 11 protection on March 1, 2004 (Bankr. W.D. Tex. Case
No. 04-30514). Wiley F. James, III, Esq., at James, Goldman &
Haugland, P.C., represents the Debtor in its restructuring
efforts. When the Company filed for protection from its
creditors, it listed $2,305,956 in total assets and $10,814,175 in
total debts.
RCN: Opts Not to Make Senior Note Interest Payments Due April 15
----------------------------------------------------------------
RCN Corporation (Nasdaq: RCNC), as previously announced, is
continuing negotiations on a collaborative basis with its senior
secured lenders, an ad hoc committee of holders of its Senior
Notes and others regarding a consensual financial restructuring of
its balance sheet. RCN said that it remains hopeful that these
negotiations will lead to agreement on a successful consensual
financial restructuring plan in the near term, although there is
no assurance this will occur.
In connection with these negotiations, RCN said that it has chosen
to defer the decision to make interest payments scheduled to be
made on April 15, 2004, of approximately $8 million with respect
to its 10% Senior Notes due 2007 and approximately $17.6 million
with respect to its 11.125% Senior Discount Notes due 2007. In the
event that RCN does not make these interest payments within 30
days beginning April 15, 2004, Events of Default would arise with
respect to the 10% Senior Notes and the 11.125% Senior Notes and
entitle, but not require, holders thereof to declare the
outstanding 10% Senior Notes and 11.125% Senior Notes,
respectively, immediately due and payable.
RCN has said that it expects any financial restructuring to be
implemented through a reorganization of the Company under chapter
11. The Company believes that a consensual financial restructuring
pursuant to a chapter 11 reorganization would achieve the most
successful financial outcome for the company and its constituents.
Since financial restructuring negotiations are ongoing, the
treatment of existing creditor and stockholder interests in the
company is uncertain at this time. However, RCN has said that the
restructuring will likely result in a conversion of a substantial
portion of its outstanding Senior Notes into equity and an
extremely significant, if not complete, dilution of current
equity. Accordingly, the value of RCN's securities is highly
speculative. The Company urges that appropriate caution be
exercised with respect to existing and future investments in any
of the RCN's debt obligations or its Common stock.
RCN previously announced that it did not make interest payments of
approximately $10.3 million, due January 15, 2004, on its 10-1/8%
Senior Notes due 2010 and approximately $14.2 million, due
February 15, 2004, on its 9.8% Senior Discount Notes Due 2008
within the 30-day grace periods provided under the indentures
governing those Senior Notes. As previously stated, RCN, the
Lenders and members of the Noteholders' Committee have entered
into and subsequently extended forbearance agreements under which
the Lenders and members of the Noteholders' Committee have agreed
not to declare any Events of Default, which they would be entitled
but not required to do, under the RCN's senior credit facilities
or Senior Notes, respectively, as a result of the Company not
making the interest payment on the 10-1/8% Senior Notes and the
9.8% Senior Notes prior to the end of the applicable grace periods
and certain other defaults. If such declarations were made, the
indebtedness would become immediately due and payable. The current
forbearance agreements will expire at 11:59 p.m. on May 3, 2004,
unless further extended.
RCN's objective is to reach agreement on a consensual financial
restructuring plan during the current forbearance period. If
financial restructuring negotiations were to proceed beyond that
period or were to end, however, additional forbearance, waiver
and/or amendment agreements would be needed to support RCN's
continuing operations. In addition, in the absence of an agreement
on a consensual financial restructuring upon expiration of the
forbearance agreements, the Lenders and members of the
Noteholders' Committee who hold 10-1/8% Senior Notes and 9.8%
Senior Notes would be entitled, but not required, to declare RCN's
senior credit facilities and the outstanding 10-1/8% Senior Notes
and 9.8% Senior Notes, respectively, immediately due and payable.
Any acceleration of amounts due under RCN's senior credit
facilities or the 10-1/8% Senior Notes or the 9.8% Senior Notes
would, due to cross default provisions in the Company's indentures
governing its other senior notes, entitle, but not require, the
holders of RCN's other senior notes to declare the other senior
notes immediately due and payable. Holders of 10-1/8% Senior Notes
or the 9.8% Senior Notes that are not members of the Noteholders'
Committee are not subject to the terms of the forbearance
agreements. If acceleration of the Company's senior credit
facilities and 10-1/8% Senior Notes or the 9.8% Senior Notes were
to occur, RCN would not, based on current and expected liquidity,
have sufficient cash to pay the amounts that would be payable.
Although RCN is actively pursuing discussions towards a final
agreement on a consensual financial restructuring, there can be no
assurance that such an agreement will ultimately be reached, that
RCN would be able to obtain further extensions of its forbearance
agreements with the Lenders and members of the Noteholders'
Committee, or that holders of 10-1/8% Senior Notes or the 9.8%
Senior Notes that are not members of the Noteholders' Committee
will not declare an Event of Default under the 10-1/8% Senior
Notes or the 9.8% Senior Notes (which would terminate the
forbearance agreement with Lenders), or seek other remedies
available under applicable law or the terms of the 10-1/8% Senior
Notes or the 9.8% Senior Notes, prior to such time. RCN will
continue to apply substantial effort and resources to reaching a
formal agreement on a consensual financial restructuring while
also continuing to evaluate the best alternatives for RCN under
current circumstances and as discussions and events unfold.
For additional information about the restructuring process, please
visit http://www.rcntomorrow.com/
About RCN Corporation
RCN Corporation (Nasdaq: RCNC) is the nation's first and largest
facilities-based competitive provider of bundled phone, cable and
high-speed Internet services delivered over its own fiber-optic
local network to consumers in the most densely populated markets
in the U.S. RCN has more than one million customer connections and
provides service in Boston, New York, Philadelphia/Lehigh Valley,
Chicago, San Francisco, Los Angeles and Washington, D.C.
metropolitan markets.
SAMARITAN: Raises $4.3MM & Auditor Drops Going Concern Statement
----------------------------------------------------------------
Samaritan Pharmaceuticals Inc. (OTCBB:SPHC), a developer of
innovative drugs to target AIDS, Alzheimer's and Cardiovascular
disease, announces that since the beginning of the year, the
Company has raised over $4.3 million in gross proceeds from
institutional and accredited individual investors.
The Company further announces that in connection with the filing
of the December 31, 2003 Financial Statements, its independent
auditors Sherb & Co., LLP, New York, NY removed the "going
concern" qualification from the accounting firm's independent
audit of Samaritan's 2003 annual financial statements. Removing
the "going concern" qualification is an expression of greater
confidence in Samaritan's financial performance over the next
year.
"To say we are delighted is an understatement. We look at this
capital, as a new beginning for Samaritan, the proceeds from this
transaction will be used to fund ongoing operations, expedite, and
expand existing research and development," stated Dr. Janet
Greeson, CEO and President of Samaritan.
Dr. Greeson further stated, "We are extremely grateful. No one
ever accomplishes something like this alone. Our shareholders and
Fusion Capital were absolutely tremendous; it was quite
overwhelming how much support we received from them."
Mr. Eugene Boyle, CFO of Samaritan stated, "We now have the
financial stability and resources to continue our ambitious
pipeline development strategy with Georgetown University and
finance future clinical trials."
About Samaritan Pharma
Samaritan Pharmaceuticals bridges University bright ideas through
drug development, thereby creating a path for promising new
innovative drugs to become commercially viable products.
Currently, Samaritan is advancing its late stage, HIV Immuno-
therapeutic drug, with antiviral properties through regulatory
affairs, and plans to commence FDA Phase III trials in 2004. At
the same time, in collaboration with Georgetown University,
Samaritan is advancing a growing pipeline of drugs for AIDS,
Alzheimer's, and Cardiovascular disease through preclinical
trials, in preparation for future growth.
SEA CONTAINERS: S&P Assigns Low B Ratings to Two Proposed Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' rating to Sea
Containers Ltd.'s proposed $150 million senior unsecured notes and
its 'BB' rating to the proposed $120 million secured credit
facility. A recovery rating of '1' is also assigned to the credit
facility, indicating a high expectation of full recovery of
principal in a default scenario. At the same time, Standard &
Poor's affirmed its other ratings, including the 'BB-'
corporate credit rating, on the provider of transportation
services and lessor of marine cargo containers. The outlook is
stable.
"The ratings on Bermuda-based Sea Containers Ltd. reflect a
relatively weak financial profile and financial flexibility,
partially offset by fairly strong competitive positions in its
major businesses," said Standard & Poor's credit analyst Betsy
Snyder. Sea Containers is involved in passenger transport
operations and marine cargo container leasing. It also has a 42%
stake in Orient-Express Hotels Ltd. (OEH). Passenger transport is
the largest operation, accounting for approximately 90% of
total revenues. This business includes passenger and vehicle ferry
services in the English Channel, the Irish Sea, and the Northern
Baltic Sea; and passenger rail service between London and
Scotland, GNER (Great North Eastern Railway). While Sea Containers
is one of the larger ferry participants on routes it serves, this
is a highly competitive business, with several participants.
Sea Containers' earnings and cash flow have recovered somewhat
since 2001, due to improving conditions at the passenger transport
and GE SeaCo operations. Demand for marine cargo containers has
been strong since mid-2002, and passenger train travel has
recovered since a series of accidents that occurred in 2000 and
2001. GNER's franchise expires in April 2005, and the company
plans to bid for a renewal, as well as bid for other rail
franchises. Although nonrenewal of the GNER franchise will
result in reduced consolidated EBITDA, it will also reduce debt
since all GNER's assets are financed through operating leases. The
company has sold assets to redeem debt and has indicated it could
sell a portion of its OEH stake to redeem $80 million of debt
securities due in December 2004 if the proposed $150 million debt
financing is unsuccessful. While the assets that were sold are
noncore, their sale will leave the company with reduced cash flow
and fewer assets available for sale.
Earnings from several of Sea Containers' businesses have begun to
improve, which has aided its credit ratios. The company expects to
use proceeds of the proposed $150 million debt financing to redeem
$80 million of debt securities maturing in December 2004. The
company has also indicated it would sell a portion of its stake in
OEH to redeem debt if necessary. As a result, concerns regarding
refinancing risk have been alleviated. The extension of the GNER
franchise remains another element of uncertainty. While a range of
possibilities could occur, none are likely to have a rating
effect.
SOLUTIA INC: CDI Asks Court to Lift Stay to Compel Lease Decision
-----------------------------------------------------------------
Solutia, Inc. and CDI Engineering Solutions, Inc. are successors-
in-interest to a Consultant Agreement between Monsanto Company
and Stubbs, Overbeck & Associates, Inc., Consulting Engineers.
Pursuant to the Consultant Agreement, CDI provides the Debtors
with staffing and engineering services at their Chocolate Bayou
and Texas City plants. The Debtors currently owe CDI over
$587,000 for unpaid, prepetition services provided under the
Consultant Agreement.
Anna C. Palazzo, Esq., at Dechert LLP, in New York, relates that
the initial term of the Consultant Agreement expired over 25
years ago but the parties have continued their business
relationship. Pursuant to a Supplemental Agreement, the parties
confirmed the Consultant Agreement as being "continuous and
valid." The Supplemental Agreement did not set a new term going
forward. Accordingly, CDI believes that the Consultant Agreement
is terminable at will by either party.
The Debtors and CDI are also party to an Agreement for Temporary
Worker Services. Pursuant to the Worker Services Contract, CDI
provides temporary technical staffing to the Debtors at their
Pensacola, Florida plant. The Debtors owe CDI over $45,000 for
unpaid, prepetition services under the Worker Service Contract.
The initial terms of the Pensacola Contract ended on
October 15, 2003, but it was automatically renewed for another
one-year term. CDI can terminate the Pensacola Contract by
providing 30-days' notice prior to the October 15 anniversary
date.
By this motion, CDI asks the Court to:
(a) lift the stay so that it may terminate the CDI Contracts;
(b) compel the Debtors to adequately protect CDI pursuant to
Section 361 of the Bankruptcy Code; and
(c) compel the Debtors to assume or reject the CDI Contracts.
Ms. Palazzo states that under the CDI Contracts, the Debtors owe
CDI over $425,000 in outstanding invoices. Ms. Palazzo contends
that CDI should not be forced to extend what is essentially
unsecured-term credit to the Debtors, allowing them to reap the
benefit of the bargain, while CDI is prohibited from terminating
the CDI Contracts. In addition, since the Petition Date, the
Debtors have either been late or have completely missed making
payments on at least five invoices for services under the CDI
Contracts.
Ms. Palazzo further contends that compelling the Debtors to
assume or reject the CDI Contracts is appropriate because CDI is
suffering losses by not being able to assign its staff,
particularly the trained engineers, to other project locations.
By contrast, the Debtors would not suffer significant harm if the
Court compels them to decide on the CDI Contracts.
Headquartered in St. Louis, Missouri, Solutia, Inc. --
http://www.solutia.com/-- with its subsidiaries, make and sell a
variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications. The Company
filed for chapter 11 protection on December 17, 2003 (Bankr.
S.D.N.Y. Case No. 03-17949). When the Company filed for
protection from their creditors, they listed $2,854,000,000 in
assets and $3,223,000,000 in debts. (Solutia Bankruptcy News,
Issue No. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000)
SOUTHWALL: Says Troubled History May Make Refinancing Difficult
---------------------------------------------------------------
Southwall Technologies Inc. released its financial results for the
fourth quarter and Fiscal 2003 following the close of market on
April 15th.
Selected Fourth Quarter 2003 Financial Highlights
-- Revenue of $10.9 million; Loss of $1.29 per share
-- Needham led financing completed
-- Major reorganization implemented
Net revenues for the fourth quarter 2003 were $10.9 million,
compared with $13.5 million for the same quarter in 2002 and with
$11.9 million for the third quarter of 2003. The year-to-year
revenue decline of $2.6 million was mainly in the Display products
segment while the sequential revenue decline of $1.0 million was
seen across the automotive and electronic display segments of the
business.
Southwall's fourth-quarter 2003 net loss was $16.1 million, or a
loss of $1.29 per share, compared with net loss of $6.9 million,
or $0.55 per share, for the same quarter a year ago and with a net
loss of $22.8 million, or a loss of $1.82 per share, for the third
quarter of 2003. During the fourth quarter 2003 Southwall incurred
a non cash Asset Impairment charge of $8.6 million associated with
the closing of manufacturing facilities and a non cash charge of
$0.8 million associated with the warrants issued in conjunction
with the Needham financing deal. 12.54 million shares outstanding
were used to calculate fourth-quarter 2003 per share data.
Net revenues for the fiscal year ended December 2003 were $53.3
million, compared with $68.8 million for 2002. The year-to-year
revenue decline of $15.5 million was due to decreased revenues in
the electronic display and architectural segments of the business.
Gross margin for 2003 of $7.4 million was 14% of revenue compared
with $19.1 million or 28% of revenue for 2002. The year-to-year
gross margin percentage decline was mainly due to the impact of
amortizing fixed manufacturing costs over lower production
volumes.
Net Losses for fiscal 2003 were $42.3 million, compared with a Net
Loss of $4.2 million for 2002 reflecting the lower gross margins
in 2003 coupled with the non cash Asset Impairment and Warrant
expenses of $28 million and $0.8 million respectively incurred
during the third and fourth quarter 2003. The Net Loss per share
for fiscal 2003 was $3.37 per share, compared with $0.40 per share
for 2002.
Southwall's balance sheet at December 31, 2003 included cash and
cash equivalents of $1.2 million, compared with $2.0 million on
December 31, 2002 and with $0.6 million on September 28, 2003.
"As a result of disappointing revenue and earnings results and
negative cash flows during last year the Southwall Board of
Directors and Management took certain measures during the fourth
quarter 2003. At that time the company was in dire need of
additional working capital. We restructured our operations to
focus on our newest manufacturing facility in Germany, implemented
broad cost reductions and refinanced Southwall with the assistance
of the Needham-led group," said Thomas G. Hood, Southwall's
president and chief executive officer. "It has been a difficult
six months for our employees, customers and creditors, and I'd
personally like to thank all of them for their contributions. I
believe that with our newly streamlined operations, focused
management and new financial partnering that we will return to
profitability, perhaps as early as the second half of fiscal
2004," added Hood.
In its Form 10-K For the fiscal year ended December 31, 2003,
Southwall Technologies Inc. also states:
"Our working capital position, financial commitments and
historical performance raise substantial doubt about our ability
to continue as a going concern.
"We have prepared our consolidated financial statements assuming
we will continue as a going concern and meet our obligations as
they become due. We incurred a net loss and negative cash flows
from operations in 2002 and 2003 and expect to incur net losses
through the third quarter of 2004. These factors together with our
working capital position and our significant debt service and
other contractual obligations at December 31, 2003, raise
substantial doubt about our ability to continue as a going concern
without restoring profitable operations, generating cash flow from
operating activities and obtaining additional financing. These and
other factors related to our business during recent years,
including the restatement in 2000 of our financial statements for
prior periods, operating losses in 1998, 1999, 2000, 2002 and
2003, our past failure to comply with covenants in our financing
agreements and our voluntary delisting from Nasdaq in March 2004
may make it difficult for us to secure the required additional
borrowings on favorable terms or at all. We intend to seek
additional borrowings or alternative sources of financing,
however, difficulties in borrowing money or raising financing
could have a material adverse effect on our operations, planned
capital expenditures, ability to comply with the terms of
government grants and our ability to continue as a going concern."
About Southwall Technologies Inc.
Southwall Technologies Inc., designs and produces thin film
coatings that selectively absorb, reflect or transmit light.
Southwall products are used in a number of automotive, electronic
display and architectural glass products to enhance optical and
thermal performance characteristics, improve user comfort and
reduce energy costs. Southwall is an ISO 9001:2000-certified
manufacturer and sells advanced thin film coatings to over 25
countries around the world. Southwall's customers include Audi,
BMW, DaimlerChrysler, Hewlett-Packard, Mitsubishi Electric, Mitsui
Chemicals, Peugeot-Citroen, Pilkington, Renault, Saint-Gobain
Sekurit, and Volvo.
SPRING AIR: Wants to Continue Employing Ordinary Course Profs.
--------------------------------------------------------------
Spring Air Partners - North America, Inc., and its debtor-
affiliates are asking permission from the U.S. Bankruptcy Court
for the Southern District of New York to retain the services of
the professionals they utilize in the ordinary course of their
businesses.
The Debtors seek the authority to continue the retention of each
of the Ordinary Course Professionals without the necessity of a
formal retention application. In effect, the Debtors will
compensate the Ordinary Course Professionals for services
rendered, without the necessity of the court's approval
The Ordinary Course Professionals are tax accountants, and
computer systems and programming managers that assist the Debtors
in operating their computer systems and accounting and bookkeeping
software.
The Debtors believe it would be wasteful and burdensome both to
them and the Court to request that each such Ordinary Course
Professional apply separately for approval of such Ordinary Course
Professional's retention, employment and compensation. Instead,
the Debtors propose that they be permitted to pay to each Ordinary
Course Professional, on a monthly basis 100% of the fees and
disbursements incurred without regard to whether such amounts were
incurred in the prepetition or postpetition period; provided,
however, that any professional's fees and disbursements will not
exceed a total of $25,000 per month.
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.
STORAGE COMPUTER: Auditors Express Going Concern Uncertainty
------------------------------------------------------------
Storage Computer Corporation (AMEX:SOS) a leading worldwide
provider of high-performance storage and data delivery systems,
announced the Company's results for the fourth quarter and year
ended December 31, 2003.
Revenue for the quarter was $404,231 versus $3,400,383 for the
fourth quarter of 2002. Revenue for the year ended December 31,
2003 was $1,045,038 versus $5,372,110 for the year ended December
31, 2002. Revenue for the fourth quarter and all of 2002 included
$3,000,000 for license fees. There was no license fee revenue in
2003.
The net loss for the three months ended December 31, 2003 was
$1,260,881, compared to a net profit of $942,286 for the three
months ended December 31, 2002. The fully diluted loss per share
available to common stockholders was $0.03 for the three months
ended December 31, 2003 compared to fully diluted profit per share
available to common stockholder of $0.04 for the three months
ended December 31, 2002. Dividends on preferred stock including
amortization of the beneficial conversion were $37,435 ($0.002 per
share) for the three months ended December 31, 2002. There were no
comparable amounts in the fourth quarter of 2003.
The net loss for the year ended December 31, 2003 was $4,749,422
compared to a net loss of $27,172,131 including a non cash charge
for impairment of goodwill and other intangible assets totaling
$15,257,400 for the year ended December 31, 2002. The fully
diluted loss per share available to common stockholders was $0.13
for the year ended December 31, 2003 compared to $1.33 for the
year ended December 31, 2002. Dividends on preferred stock
including amortization of the beneficial conversion features were
$17,595 ($0.0005 per share) for the year ended December 31, 2003
compared to $635,672 ($0.03 per share) for the year ended December
31, 2002.
We incurred operating losses through 2003. The development and
introduction of new products continues, however revenue remains at
a low level due primarily to the continuing concentration on the
realignment of our core business toward Storage Wide Area
Networking (SWAN) market segment for our CyberNAS Network attached
Storage and Cyber VSA Storage Operating Systems. To conserve cash
we are continuing to operate at the reduced overhead levels
announced previously. Our staffing levels allow us to respond to
market opportunities as they develop. Total costs and expenses in
2003 were $5,761,246 compared to $17,710,751 in 2002 (excluding
$15,257,435 of impairment expenses for goodwill and identifiable
intangible assets.)
Sullivan Bille P.C, auditors for the Company, said in their
opinion "that the Company's recurring losses and negative cash
flows from operations raises substantial doubt about its ability
to continue as a going concern."
The Company has received inquiries from interested investors to
provide equity financing. The terms of these proposed financings
contained toxic provisions and the dilutive impact could have been
significant. Management felt that these financings would not be in
the best interest of the shareholders and would seek financing
with more favorable terms. There can be no assurance that we will
be successful in obtaining this financing.
Ted Goodlander, President and Chief Executive Officer, said, " It
is preferable to receive a going concern opinion from our auditors
than to accept financing that would not be in the best interest of
our shareholders."
Mr. Goodlander continued, "We will continue our efforts to obtain
financing with terms that recognize the potential of this
business."
About Storage Computer Corporation
Storage Computer Corporation (AMEX:SOS), a leading worldwide
provider of high performance storage solutions, develops and
manufactures software-driven, multi-host storage solutions for
powering advanced business applications. Based on open system
architectures Storage Computer's high-bandwidth storage technology
supports a great variety of applications, including advanced
database activities, interactive multi-media, multi-cast content,
medical imaging and more. Storage Computer's worldwide
headquarters are in Nashua, New Hampshire, with subsidiaries and
distribution in over 20 countries. Company information may be
found at http://www.storage.com/
TELTRONICS: 2003 Shareholders' Deficit More than Doubles to $6MM
----------------------------------------------------------------
Teltronics, Inc. (OTC Bulletin Board: TELT) announced its
financial results for the year ended December 31, 2003. The
revenues for 2003 decreased to $46.9 million from $54.4 million
for 2002, a decrease of 13.8%. However, the Company's net loss for
2003 decreased to $3.3 million from $4.6 million for 2002, which
represents a decrease of 28.3%. The net loss available to common
shareholders for 2003 decreased to $3.9 million from $5.1 million
for 2002. Our diluted net loss per share for 2003 was $0.54 as
compared to a diluted net loss per share of $0.93 for 2002.
Gross profit margin increased from 36.1% for 2002 to 39.0% for
2003. The Company's operating expenses for 2003 decreased $2.7
million from 2002 due primarily to cost cutting measures by the
Company during 2002 and 2003.
"While we are clearly disappointed at the decrease in sales, we
are encouraged that we were also able to decrease our net loss.
The last few years have presented a challenge to all companies in
the telecommunications industry as most of us have seen declines
in our sales," said Ewen Cameron, Teltronics' President and Chief
Executive Officer. "During this time our strategy has been to
focus on cutting costs and being responsive to the changing needs
of our customers by continuing to develop new products," continued
Cameron. "We believe the launch of the new IP products as well as
the continued savings from our cost cutting should positively
impact the Company in 2004," Cameron concluded.
At December 31, 2003, Teltronics, Inc.'s balance sheet shows a
total shareholders' deficiency of $6,124,389 compared to
$2,608,646 the prior year.
About Teltronics Inc.
Teltronics, Inc. is dedicated to excellence in the design,
development, and assembly of electronics equipment and software to
enhance the performance of telecommunications networks. The
Company manufactures telephone switching systems and software for
small-to-large size businesses, government, and 911 public safety
communications centers. Teltronics provides remote maintenance
hardware and software solutions to help large organizations and
regional telephone companies effectively monitor and maintain
their telecommunications systems. The Company also serves as an
electronic contract-manufacturing partner to customers in the U.S.
and overseas. Further information regarding Teltronics can be
found at their web site, http://www.teltronics.com/
TERREMARK WORLDWIDE: Requires More Funds to Sustain Operations
--------------------------------------------------------------
Terremark Worldwide Inc. operates facilities at strategic
locations in Florida, California and Sao Paulo from which it
assists users of the Internet and large communications networks in
communicating with other users and networks. Its primary facility
is the Network Access Points of the Americas, where it provides
exchange point, colocation and managed services to carriers,
Internet service providers, network service providers, government
entities, multi-national enterprises and other end users.
Currently, its customers include telecommunications carriers such
as AT&T, MCI, Qwest and Sprint, enterprises such as Bacardi USA,
Intrado and Crescent Heights, and government agencies including
the Diplomatic Telecommunications Services Programming Office
(DTSPO), a division of the United States Department of State, and
the City of Coral Gables.
Terremark's recurring losses from operations and the lack of
committed sources of additional debt or equity to support working
capital deficits raises substantial doubt about the Company's
ability to continue as a going concern. From the time of the
merger through March 31, 2003, the Company has incurred net
operating losses of approximately $202.6 million. Its cash flows
from operations for the years ended March 31, 2003 and 2002 were
negative and its working capital deficit was approximately $39
million and $88.3 million as of March 31, 2003 and 2002,
respectively.
The majority of Terremark's planned operating cash improvement
during its fiscal year 2004 is expected to come from an increase
in revenues and cash collections from customers. If it fails to
achieve planned revenues of $2.0 million to $3.0 million a month,
then it will require additional financing. Its revenues may not
increase and additional financing may not be available and, if
available the financing may not be obtainable on terms acceptable
to the Company. Additional financing may be substantially
dilutive to existing shareholders. If the Company needs to obtain
additional financing and fails to do so, it may have a material
adverse effect on its ability to meet financial obligations and
operate as a going concern.
Consequently, recurring losses from operations, the uncertainty
surrounding the anticipated increase in revenues, including the
rate at which services are sold and the lack of committed
sources of additional debt or equity, raises substantial doubt
about Terremark's ability to continue as a going concern.
TORCH OFFSHORE: Looks for More Money to Continue Operations
-----------------------------------------------------------
Torch Offshore, Inc. (NASDAQ: TORC) announced its fourth quarter
and twelve month 2003 financial results, as summarized below.
Fourth Quarter Results
Revenues for the quarter ended December 31, 2003 were $19.4
million, a decrease of 20.9 percent compared to revenues of $24.5
million for the fourth quarter of 2002. Gross profit (revenues
less cost of sales) for the fourth quarter of 2003 was $0.2
million or 1.2 percent of revenues compared to gross profit for
the fourth quarter of 2002 which was $5.9 million, or 24.0 percent
of revenues. The fourth quarter 2003 net loss was $6.8 million, or
$0.54 per diluted share, compared to net income in the fourth
quarter of 2002 which was $0.5 million, or $0.04 per diluted
share. Fourth quarter 2003 net results were adversely impacted by
a $1.6 million (non-cash) ($1.0 million after tax effect, or $0.08
per diluted share) SFAS No. 144 asset impairment charge related to
the Midnight Carrier, $2.6 million ($1.7 million after tax effect,
or $0.13 per diluted share) of charges relating to claims and
settlements for work completed in prior periods and a $1.3 million
($0.11 per diluted share) deferred tax asset valuation allowance.
Annual Results
For the year ended December 31, 2003, revenues decreased 3.6
percent to $65.6 million generating a gross profit of $6.4 million
or 9.7 percent of revenues, compared to 2002 revenues of $68.0
million that produced a gross profit of $14.6 million, or 21.5
percent of revenues. Included in cost of sales in 2003 was $2.1
million ($1.3 million after tax effect, or $0.11 per diluted
share) of costs related to the termination of the Midnight Hunter
charter. The net loss for the twelve months ended December 31,
2003 totaled $9.2 million, or $0.73 per diluted share, compared to
net income in the twelve months ended December 31, 2002 which was
$0.4 million, or $0.03 per diluted share. Net results for the year
ended December 31, 2003 were adversely impacted by a $1.6 million
(non-cash) ($1.0 million after tax effect, or $0.08 per diluted
share) SFAS No. 144 asset impairment charge related to the
Midnight Carrier, $3.0 million ($1.9 million after tax effect, or
$0.15 per diluted share) of charges relating to claims and
settlements for work completed in prior periods, a $0.5 million
($0.3 million after tax effect, or $0.03 per diluted share) charge
related to costs to establish and commence bidding operations in
Mexico and a $1.3 million ($0.11 per diluted share) deferred tax
asset valuation allowance.
Our independent auditors, Ernst & Young LLP, concluded, as
required by generally accepted auditing standards, that their
auditors' report on the Company's 2003 financial statements,
included in our annual report on Form 10-K, should include an
explanatory paragraph regarding our ability to continue as a going
concern, and accordingly, they included such a paragraph in their
report. Therefore, the Company's management has developed a
financial plan, that is fully described in the Company's Form 10-K
filed with the SEC. Among other measures, our plan includes
pursuing means of raising additional capital. Raising additional
capital during 2004 and 2005 is a requirement for the Company to
continue to conduct operations, meet its obligations and support
the operations of the Midnight Express. Because certain
transactions included in our business plan are not yet complete,
there are inherent uncertainties associated with such
transactions.
Lyle G. Stockstill, Torch Offshore, Inc. Chairman and Chief
Executive Officer, commented, "Overall in 2003, market conditions
remained relatively weak as drilling activity in the Gulf of
Mexico continued at depressed levels. These levels of capital
expenditures by the oil and natural gas companies drove market
prices to lower levels, and as a result, adversely impacted our
gross profit margins and utilization levels. Because of these
market conditions, an adverse arbitration ruling related to the
Midnight Hunter termination, and other events with a direct impact
on our earnings, we experienced a significant loss in 2003."
Stockstill added, "We have disclosed our financial plan for 2004
in our annual report and are confident that it will provide
sufficient financial resources. The Midnight Express was a large
undertaking for a company of our size and this has put a burden on
our current financial resources. However, we believe the payoff in
this investment is on the short-term horizon as we expect the
vessel to enter our active fleet in the second half of 2004."
Recent Developments
The Company is beginning contract negotiations with Mariner Energy
for the first pipelay project for the Midnight Express which is
expected to take place in the fourth quarter of 2004 following the
vessel conversion completion. Although the specifics of the
project have yet to be finalized, the work will take place in the
Gulf of Mexico in water depths ranging up to 4,000 feet and will
entail several of the challenging intricacies of deepwater
pipelay, including pipe-in-pipe and a midline termination skid
installation, the type of work the Midnight Express was designed
and targeted to complete. We will provide further details at a
later time once they are finalized.
Stockstill added, "As with the Midnight Wrangler and Midnight
Hunter, the Midnight Express has found a welcome market upon its
introduction to our active fleet. We are quite excited about the
opportunity to utilize the Midnight Express on this project for
Mariner Energy and we thank them for the opportunity. The Midnight
Express is a dynamic vessel that has the ability to revitalize our
Company - and this work for Mariner Energy is only the first step
for this vessel and our future in the deep waters of the world."
Established in 1978, Torch Offshore, Inc. is involved in offshore
pipeline installation and subsea construction for the oil and
natural gas industry. Torch Offshore, Inc. is expanding beyond its
established shallow water niche market in order to serve the
industry's worldwide growing needs in the deep waters.
TRAILER BRIDGE: BDO Seidman Replaces Deloitte & Touche as Auditors
------------------------------------------------------------------
On February 16, 2004, Trailer Bridge, Inc. dismissed Deloitte &
Touche LLP as its independent accountants. The decision to dismiss
Deloitte & Touche LLP was recommended and approved by the
Company's Audit Committee for reasons of cost efficiencies.
The audit reports of Deloitte & Touche LLP on the consolidated
financial statements of the Company as of and for the years ended
December 31, 2002 and 2001 contained going concern qualifications.
Recently, but prior to the Company's dismissal of Deloitte &
Touche LLP, the Company had advised Deloitte & Touche LLP of its
intention to restate the December 31, 2002 balance sheet to
reclassify the borrowings under its revolving line of credit,
which were previously reported as long-term debt, as current
liabilities in accordance with Emerging Issues Task Force No. 95-
22. The Company advised Deloitte & Touche LLP of its intention to
restate the December 31, 2002 balance sheet in filing its Form 10-
K for the year ended December 31, 2003. Because the underlying
credit agreement was scheduled to mature in January 2004, such
borrowings were classified as current in the interim financial
statements included in the Company's quarterly reports on Form 10-
Q for the quarterly periods ended March 31, 2003; June 30, 2003;
and September 30, 2003.
Deloitte & Touche LLP concurred with the Company's proposal
regarding the treatment of the revolving line of credit prior to
Deloitte & Touche LLP's dismissal. The Company's audit committee
did not discuss this matter with Deloitte & Touche LLP. The
Company authorized Deloitte & Touche, LLP to respond fully to
inquiries of the Company's successor accountant, BDO Seidman LLP,
to respond fully to inquiries of BDO Seidman LLP concerning this
matter.
On February 17, 2004, the Company engaged BDO Seidman LLP as the
Company's independent public accountants.
UNITED AIRLINES: Wants Court Nod to Assume MWAA Airport Leases
--------------------------------------------------------------
The United Airlines Inc. Debtors seek the Court's authority to
assume certain unexpired non-residential real property leases at
the Washington Dulles International Airport and the Ronald Reagan
Washington National Airport.
United Air Lines, Inc. and the Metropolitan Washington Airports
Authority are parties to these unexpired real property leases:
(a) An Airport Use Agreement and Premises Lease dated
February 28, 1990;
(b) A Hangar #3 Agreement dated December 14, 1992;
(c) A Cargo Building Lease dated August 30, 2000;
(d) A Ground Equipment Maintenance Facility Contract dated
September 9, 1988; and
(e) A Permit to Use Property at Dulles and New Facility Permit
dated January 15, 2004.
Washington D.C. is one of the Debtors' hubs and is an important
component of their network of operations. United, United Express
and its code share Star Alliance partners provide connections
from Dulles International Airport and Ronald Reagan Washington
National Airport to hundreds of destinations in the South
Pacific, North Pacific, Europe, Latin America, the Caribbean,
Alaska, Canada and the United States. During 2003, the Debtors
boarded over 5,200,000 passengers on almost 90,000 flights at
Dulles International Airport and Ronald Reagan Washington
National Airport.
Since the Petition Date, MWAA and the Debtors have been in
negotiations on the Leases. As a result, the parties agree to a
Stipulation and Order, which provides that:
(1) The Debtors will assume the Leases and cure all defaults;
(2) The Debtors will be freed from the obligation to construct
a new concourse at Dulles International Airport, saving
$1,300,000,000. The Debtors will reimburse the MWAA over
a 10-year period for planning and design costs incurred;
(3) The Debtors will return 17,800 square feet of excess space
at Dulles International Airport and Ronald Reagan
Washington National Airport, saving $200,000 per year; and
(4) Upon completion of the new United Express Facility at
Dulles International Airport, the Permit will be
incorporated into the Lease and the MWAA will provide the
Debtors with up to $18,800,000 credit memo on account of
the Debtors' construction costs to be applied to monthly
rentals, fees and charges.
Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the
holding company for United Airlines -- the world's second largest
air carrier. the Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at KIRKLAND & ELLIS represent the
Debtors in their restructuring efforts. When the Company filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts. (United Airlines
Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
VALEO INVESTMENT: S&P Downgrades Class A-2 Notes Rating to BB
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the class
A-2 notes issued by Valeo Investment Grade CDO II Ltd. to 'BB'
from 'BB+' and removed it from CreditWatch negative, where it was
placed Jan. 8, 2004. At the same time, the 'AAA' rating on the
class A-1 notes is affirmed based on a financial guarantee
insurance policy issued by Financial Security Assurance.
The lowered rating reflects factors that have negatively affected
the credit enhancement available to support the notes since the
last rating action was taken in September 2003. These factors
include a negative migration in the credit quality of the assets
within the collateral pool and a decline in the weighted average
fixed coupon from the collateral pool available for hedge and
interest payments.
Standard & Poor's noted that over $34.86 million worth of
obligations, based on the current portfolio, have a rating in
'CCC' range, up from $11.35 million at the time of the last rating
action.
Standard & Poor's also noted that, according to the March trustee
report, the transaction is failing its Trading Model test, a
measure of the ability of the credit quality in the portfolio to
support the rating on a given tranche.
The transaction is also failing its Weighted Average Coupon (WAC)
test. According to the March trustee report, the WAC was at 7.69%
versus the required minimum of 7.7%. During the last rating action
the WAC was at 7.76%.
As a part of its analysis, Standard & Poor's reviewed the results
of recent cash flow model runs. These runs stressed various
parameters that are instrumental in the performance of this
transaction, and are used to determine its ability to withstand
various levels of default. When the stressed performance of the
transaction was compared to the projected default performance of
the current collateral pool, Standard & Poor's found that the
projected performance of the class A-2 notes was not consistent
with the prior ratings, given the current quality of the
collateral pool. Consequently, Standard & Poor's is lowering its
rating on these notes to the new level. Standard & Poor's will
continue to monitor the performance of the transaction to ensure
that the ratings assigned to the rated classes continue to reflect
the credit enhancement available to support the notes.
Rating Lowered
Valeo Investment Grade CDO II Ltd.
Rating
Class To From Current Balance (Mil. $)
A-2 BB BB+/Watch Neg 18.50
Rating Affirmed
Valeo Investment Grade CDO II Ltd.
Class Rating Current Balance (Mil. $)
A-1 AAA 440.70
VANGUARD HEALTH: S&P Upgrades Corporate Credit Rating to B+
-----------------------------------------------------------
Standard & Poor's Ratings Services said that it raised its
corporate credit rating on hospital operator Vanguard Health
Systems Inc. to 'B+' from 'B' and its subordinated debt rating to
'B-' from 'CCC+'. At the same time, Standard & Poor's assigned its
'B+' rating and its recovery rating of '3' to Vanguard's proposed
new senior secured bank credit facility. The facility is rated the
same as the company's corporate credit rating; this and the '3'
recovery rating mean that lenders are unlikely to realize full
recovery of principal in the event of a bankruptcy, though
meaningful recovery is likely (50% to 80%).
When the transaction is complete, the 'B+' rating on the existing
secured credit facility will be withdrawn. The ratings outlook is
stable. Total debt outstanding as of Dec. 31, 2003, was $493
million.
"The higher ratings are based on Standard & Poor's increased
confidence that Vanguard can sustain its improving operating
performance and key credit measures, such as return on capital and
leverage, following its favorable progress in important markets,"
said Standard & Poor's credit analyst David Peknay. "The company's
recent operating performance indicates that the January 2003
acquisition of Baptist Health System in San Antonio is progressing
favorably. Moreover, the possibility of further improvement in the
company's San Antonio markets and in its two Phoenix hospitals
could add additional insulation against third-party reimbursement
risks."
Although the company remains relatively aggressive and other
acquisitions are anticipated, Standard & Poor's now expects
Vanguard to operate in such a manner that its credit protection
measures will not deteriorate from current levels.
The low-speculative-grade ratings on Nashville, Tennessee-based
Vanguard Health Systems Inc. reflect a portfolio of hospitals that
is only modestly diversified and which was built during the past
few years primarily through the company's risky strategy of buying
turnaround situations. The portfolio is also highly leveraged. The
competitive nature of Vanguard's markets and chronic reimbursement
risk are other critical risk factors influencing the rating. With
the completion in early 2003 of the Baptist Health System purchase
for $306 million plus working capital, Vanguard now owns and
operates 16 acute-care hospitals in Illinois, Arizona, California,
and Texas. Nearly all of these hospitals were acquired from
not-for-profit entities.
Vanguard attempts to bolster the profitability of its newer
operations by increasing the number of services offered,
recruiting additional physicians, eliminating less profitable
services, and rationalizing capital costs. Along with the Baptist
acquisition, the company expects additional growth from its
Phoenix market after the recent opening of a new hospital and the
reopening of an existing facility.
VIEW SYSTEMS: Taps Chisholm Bierwolf to Replace Stegman as Auditor
------------------------------------------------------------------
On February 24, 2004, View Systems, Inc. engaged Chisholm,
Bierwolf & Nilson, LLC as its independent auditors.
On March 1, 2004, Stegman & Company, Certified Public Accountants,
resigned as View Systems' independent auditors. Stegman and
Company had audited the Company's financials statements for the
two fiscal years ended December 31, 2002 and 2001, and its report
for the year ended December 31, 2002 was modified as to the
uncertainty of View Systems, Inc.'s ability to continue as a going
concern.
VORNADO OPERATING: Going Concern Ability is in Doubt
----------------------------------------------------
Vornado Operating Company operates businesses conducted at
properties it leases from Vornado or entities partially owned by
Vornado, as contemplated by the agreement, dated October 16, 1998,
between the Company and Vornado. The Company expects to rely on
Vornado to identify business opportunities for the Company and
currently expects that those opportunities will relate in some
manner to Vornado and its real estate investments rather than to
unrelated businesses.
Substantial doubt exists as to the Company's ability to continue
as a going concern and its ability to discharge its liabilities in
the normal course of business. The Company has incurred losses
since its inception and, in the aggregate, its investments have
not generated sufficient cash flow to pay all of the Company's
expenses. The Company estimates that it has adequate borrowing
capacity under its credit facility with Vornado to meet its cash
needs until December 31, 2004. However, the principal, interest
and fees outstanding under the line of credit come due on such
date. The Company currently has no external sources of financing
except this facility.
The Company's other potential source of cash is its investment in
AmeriCold Logistics. However, AmeriCold Logistics has also
reported losses since inception and, at December 31, 2003, the
Company's 60% share of AmeriCold Logistics' partners' deficit was
$45,643,000, which includes $49,436,000 of deferred rent (rent
recognized as expense but not paid in cash) to its landlord, the
Vornado REIT/Crescent REIT Partnership (the "Landlord"). AmeriCold
Logistics anticipates that in 2004, the Landlord will restructure
the leases to provide additional cash flow to AmeriCold Logistics.
Notwithstanding the foregoing, the Landlord is under no obligation
to restructure the leases and there can be no assurance that it
will do so. In the absence of the anticipated lease restructuring
or other options, AmeriCold Logistics will not have the ability to
distribute funds to the Company and in turn, the Company will not
have resources sufficient to repay its $25,394,000 loan from
Vornado or the ability to continue as a going concern.
VOYAGER ONE: Hires Mendoza Berger & Company as New Accountants
--------------------------------------------------------------
In February, 2004, the Board of Directors of Voyager One, Inc.
determined that it was in the best interest of the Company to
change its auditors, Haskell & White LLP. to Mendoza Berger &
Company, LLP.
The audit reports provided by Voyager One's auditors, Haskell &
White LLP for the fiscal years ended December 31, 2001 and 2002
did not contain any adverse opinion or disclaimer of opinion nor
was any report modified as to uncertainty, audit scope or
accounting principles, except as follows:
Haskell & White LLP. reports on the Company's financial statements
for the fiscal years ended December 31, 2001 and December 31,
2002, contained an explanatory paragraph stating that:
"The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in
Note 1 to the financial statements, the Company is presently a
shell company and has no operations and limited financial and
other resources. Such matters raise substantial doubt about the
Company's ability to continue as a going concern. Management's
plans regarding those matters are also described in Note 1. The
financial statements do not include any adjustments that might
result from the outcome of this uncertainty."
The Board of Directors approved the appointment of Mendoza Berger
& Company, LLP of Irvine, California as its new auditors in
February, 2004.
WEIRTON STEEL: Accepts International Steel Group's Asset Bid
------------------------------------------------------------
International Steel Group Inc. (NYSE: ISG) announced that its bid
to purchase substantially all of Weirton Steel Corporation's
assets has been approved by the Board of Directors of Weirton
Steel Corporation. A hearing is scheduled for April 20 in
Wheeling, West Virginia, to obtain final approval of the sale from
the United States Bankruptcy Court. The addition of Weirton is
expected to increase ISG's annual steel-making capacity by
approximately 3 million tons.
Rodney B. Mott, ISG's President and Chief Executive Officer said,
"We are excited about working with the International Steelworkers
Union and adding the Weirton workforce and facilities to our team
as ISG continues to strengthen its position as a leader in the
steel industry."
About International Steel Group Inc.
International Steel Group Inc. is the second largest integrated
steel producer in North America, based on steelmaking capacity.
The company has the capacity to cast more than 18 million tons of
steel products annually, excluding the impact of the Weirton
acquisition. It ships a variety of steel products from 11 major
steel producing and finishing facilities in six states, including
hot-rolled, cold-rolled and coated sheets, tin mill products,
carbon and alloy plates, rail products and semi-finished shapes
serving the automotive, construction, pipe and tube, appliance,
container and machinery markets.
About Weirton Steel Corporation
Weirton Steel is the fifth largest U.S. integrated steel company
and the nation's second largest producer of tin mill products. On
May 19, 2003, Weirton Steel filed a voluntary petition for
reorganization under Chapter 11 of the U.S. Bankruptcy Code.
WEIRTON STEEL: Asset Sale Hearing Scheduled for Tomorrow
--------------------------------------------------------
Weirton Steel Corp. announced it will recommend to a bankruptcy
judge tomorrow, April 20, to approve the sale of the company's
assets to Cleveland-based International Steel Group (ISG) Inc.
"After a long and detailed examination of both bids for our
assets, we decided that ISG has the highest and best bid that
complies with applicable legal standards for submission to the
court for the approval of the sale," said D. Leonard Wise, Weirton
Steel chief executive.
"At this time, we will not discuss the details of the two bids. We
will hold that disclosure until the sale hearing in court on
Tuesday."
Mark Glyptis, Independent Steelworkers Union president, added,
"The board's decision ends nearly a year of speculation and stress
for our employees and the community. The brighter future I've
often spoke of is now within our grasp.
"We must keep an integrated steel mill in Weirton. It means so
much to so many people and this valley. We eagerly await Judge
Friend's decision and we are more than ready to do what we do best
-- making the highest quality steel products."
Weirton Steel's board of directors approved a recommendation by
its executive management that ISG's offer be presented to Judge L.
Edward Friend II. The recommendation came two days after an
auction concluded involving the ISG offer and a bid from the
Informal Committee of Secured Noteholders.
However, the board imposed several conditions that must be
satisfied prior to a closing of any transaction.
"I thank the two parties for bidding and our management team, our
legal and financial consultants, the ISU, as well as our board for
working diligently to move this process forward. We look forward
to Tuesday's hearing which will add another successful chapter to
the Ohio Valley's steelmaking story," said Wise.
On May 19, 2003, Weirton Steel filed for chapter 11 bankruptcy
protection in the federal bankruptcy in Wheeling, W.Va. The
company is the fifth largest U.S. integrated steelmaker and the
nation's second largest producer of tin mill products.
WINDERMERE SCHOOL: Wolff Hill Serves as Bankruptcy Attorneys
------------------------------------------------------------
Windermere School Partners, LLLP, wants to employ Wolff, Hill,
McFarlin & Herron, P.A., as its bankruptcy attorneys and asks
permission from the U.S. Bankruptcy Court for the Middle District
of Florida, Orlando Division, to approve Wolff Hill's engagement.
Wolff Hill has been selected because they:
(a) have considerable experience in matters of this nature,
and
(b) are well-qualified to represent the debtor-in-possession.
Wolff Hill is expected to:
a. advise and counsel the debtor-in-possession concerning
the operation of its business in compliance with Chapter
11 and orders of this court;
b. defend any causes of action on behalf of the debtor-in-
possession;
c. prepare, on behalf of the debtor-in-possession, all
necessary applications, motions, reports, and other legal
papers in the Chapter 11 case;
d. assist in the formulation of a plan of reorganization and
preparation of a disclosure statement; and
e. provide all services of a legal nature in the field of
bankruptcy law.
Frank M. Wolff, Esq., shareholder of Wolff Hill discloses that the
firm received $20,000 retainer from the Debtor for post-bankruptcy
fees and costs.
Headquartered in Windermere, Florida, Windermere School Partners
L.L.L.P., filed for chapter 11 protection on March 31, 2004
(Bankr. M.D. Fla. Case No. 04-03610). Frank M. Wolff, Esq., at
Wolff Hill McFarlin & Herron PA represent the Debtors in their
restructuring efforts. When the Company filed for protection from
their creditors, they listed both estimated debts and assets of
over $10 million.
WORLDCOM/MCI: Cuts Workforce and Closes Three Call Centers
----------------------------------------------------------
MCI announced that it is reducing its workforce by approximately
4,000 employees as part of its ongoing cost reduction program.
The majority of this reduction comes from closing three consumer
call centers and reducing staffing in three others, in large part
due to the effects of "Do Not Call" telemarketing laws. MCI
announced earlier this year that it expects to reduce costs by 15
to 20 percent.
The centers being closed are located in Denver, CO; Phoenix,
AZ; and Niles, OH. Staffing is being reduced at MCI facilities
in Alpharetta, GA; Colorado Springs, CO; and Springfield, MO.
The following statement can be attributed to MCI:
"As a result of the impact of federal and state 'Do Not Call'
laws, as well as ongoing telecom market trends, we need to
take this action in order to improve our overall cost structure.
These actions will in no way impact our ability to serve our
customers."
Headquartered 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)
* Buchalter Nemer Firm Elects Jeffrey K. Garfinkle as Shareholder
-----------------------------------------------------------------
Buchalter, Nemer, Fields & Younger LLP, a leading California law
firm, announced the election of Jeffrey K. Garfinkle as a
shareholder in the Orange County office. Mr. Garfinkle focuses his
practice on the representation of creditors, creditors'
committees, and other parties in many of the larger bankruptcy
cases throughout the United States.
"Jeff has made a significant contribution to our firm and has
continuously demonstrated a strong commitment to client service,"
said Rick Cohen, President at Buchalter, Nemer, Fields & Younger.
"Throughout our firm's history we have taken great pride in the
quality of our attorneys. We are delighted to welcome Jeff
Garfinkle as a shareholder."
Mr. Garfinkle is a member of the firm's Insolvency and Bank and
Finance Practice groups and has extensive experience in a variety
of debt financing transactions, workouts, and insolvencies as well
as mergers, divestitures and asset acquisitions particularly from
or by bankrupt or financially distressed companies. His recent
engagements include representing creditors in numerous
pharmaceutical, hospital and healthcare related bankruptcies
throughout the United States, the creditors' committees in
Intrepid USA and Strouds bankruptcy cases, over $2.0 billion in
mergers and acquisitions and the successful reorganization of a
bankrupt Asian airline.
He is admitted to the Ninth Circuit Court of Appeals as well as
all United States District Courts in California. He is a member of
the American Bar Association, American Bankruptcy Institute,
Financial Lawyers Conference and the California Bankruptcy Forum.
Mr. Garfinkle earned his J.D. degree from Emory University School
of Law (1990) and received his B.A. from University of Florida
(1987).
About Buchalter, Nemer, Fields & Younger LLP
Buchalter, Nemer, Fields & Younger provides legal services
nationwide with headquarters in Los Angeles and additional offices
in Orange County and San Francisco. The firm has been serving the
needs of the national and international business community for
over 50 years. In that time, it has become one of California's
best-known law firms, representing clients in the full range of
business transactions. Visit http://www.buchalter.com/for more
information.
* BOND PRICING: For the week of April 19 - 23, 2004
---------------------------------------------------
Issuer Coupon Maturity Price
------ ------ -------- -----
Adelphia Comm 3.250% 05/01/21 43
American & Foreign Power 5.000% 03/01/30 69
Best Buy 0.684% 06/27/21 73
Burlington Northern 3.200% 01/01/45 54
Burlington Northern 3.800% 01/01/20 75
Calpine Corp. 7.750% 04/15/09 73
Calpine Corp. 8.500% 02/15/11 74
Calpine Corp. 8.625% 08/15/10 73
Comcast Corp. 2.000% 10/15/29 39
Cummins Engine 5.650% 03/01/98 74
Cox Communications Inc. 2.000% 11/15/29 37
Delta Air Lines 2.875% 02/18/24 72
Delta Air Lines 7.900% 12/15/09 65
Delta Air Lines 8.000% 06/03/23 71
Delta Air Lines 8.300% 12/15/29 53
Delta Air Lines 9.000% 05/15/16 59
Delta Air Lines 9.250% 03/15/22 59
Delta Air Lines 9.750% 05/15/21 61
Delta Air Lines 10.125% 05/15/10 67
Delta Air Lines 10.375% 02/01/11 68
Delta Air Lines 10.375% 12/15/22 63
Elwood Energy 8.159% 07/05/26 69
Exide Corp. 10.000% 04/15/05 20
Foamex L.P. 9.875% 06/15/07 67
Finova Group 7.500% 11/15/09 61
General Physics 6.000% 06/30/04 52
Goodyear Tire 7.000% 03/15/28 75
Inland Fiber 9.625% 11/15/07 60
Level 3 Communications 6.000% 09/15/09 63
Level 3 Communications 6.000% 03/15/10 62
Liberty Media 3.750% 02/15/30 69
Liberty Media 4.000% 11/15/29 74
Mirant Corp. 2.500% 06/15/21 58
Mirant Corp. 5.750% 07/15/07 59
Motorola Inc. 5.220% 10/01/97 74
Northern Pacific Railway 3.000% 01/01/47 52
Polaroid Corp. 7.250% 01/15/07 25
Polaroid Corp. 11.500% 02/15/06 25
Solutia Inc. ` 7.375% 10/15/27 42
Universal Health Services 0.426% 06/23/20 59
*********
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 ***