/raid1/www/Hosts/bankrupt/TCR_Public/040525.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, May 25, 2004, Vol. 8, No. 102
Headlines
ADELPHIA BUSINESS: Agrees To Resolve Structus Litigation Claims
AIR CANADA: Court Extends CCAA Stay Order to September 30, 2004
AMERCO: Objects to Sayers Group's $314,251 Securities Damage Claim
AMERICAN RESIDENTIAL: Fitch Junks Series 1998-1 Class B Rating
ANNUITY & LIFE RE: Auditor KPMG Cuts Professional Ties
APPLIED DIGITAL: Proposes Reverse Stock Split to Preserve Listing
ATA HOLDINGS: CEO Mikelsons Adopts Rule 10b5-1 Trading Plan
ATLAS AIR WORLDWIDE: Reaches Settlement with Creditors Committees
CALPINE CORP: Stockholders to Meet Tomorrow at 10 AM in California
CONSOLIDATED CONTAINER: Completes Senior Debt Refinancing
DEVELOPERS DIVERSIFIED: Acquires More Benderson Assets for $1.3BB
DIRECTV: Federal Court Dismisses Remaining Pegasus Claims
DISTRIBUTION DYNAMICS: Wants to Hire Dorsey & Whitney as Counsel
DJ ORTHOPEDICS: Files Shelf Registration for Selling Stockholders
ENRON CORP: Various Creditors Sell Claims Totaling $470,101,237
ENRON: NuCoastal Offers $2.2 Billion for CrossCountry Energy
ERN LLC: Turns to Navigant Consulting for Financial Advice
ETOYS: Court Upholds Claims Charging Goldman Sachs with Misconduct
FACTORY 2-U: U.S. Trustee Amends Creditors' Committee Membership
FEMONE INC: Pursues Shares Delisting From Berlin Stock Exchange
FINLAY FINE: S&P Rates Proposed $200MM Sr. Unsecured Notes at B+
FLEMING COS: Sankaty Offers High-Priced $70 Million Exit Facility
FLINTKOTE CO.: Hires Frantz Ward as Asbestos Litigation Counsel
FOOTSTAR INC: Reminds Investors About Stock Ownership Restrictions
FOREST OIL: Plans Wiser Oil Purchase to Enhance Business Value
GENTEK INC: Shapiro Capital Discloses 10.40% Equity Stake
GETTY PETROLEUM: Acquires 779 ConocoPhillips Gasoline Stations
GLENN MCCLENDON: Wants Until July 5 to Propose a Chapter 11 Plan
GLOBAL CROSSING: Richard Rainwater Discloses 13.6% Equity Stake
HEALTHSOUTH: Extends Consent Solicitations through May 27, 2004
IA GLOBAL: Discloses Changes to Board Line-Up
ILLUMINATIONS.COM: Has Until June 9 to File a Chapter 11 Plan
IPCS INC: Stockholders' Deficit Widens to $192 Mil. at March 31
KAISER: Wants to Extend Time to Remove Actions Until Sept. 12
KMART: Asks Court To Disallow Continental's $24.5MM Damage Claims
LES BOUTIQUES: Court Grants CCAA Stay Extension Until July 30
MARCO RADOMILE FAMILY: Voluntary Chapter 11 Case Summary
MATSUSHITA ELECTRIC: Closing Vacuum Cleaner Company in Spain
MINORPLANET: Wants to Stretch Lease Decision Deadline to July 15
MIRANT: Simpson Wants Court Nod to Withdraw as Committee Counsel
MIRANT CORPORATION: Bankruptcy Examiner Names Gardere as Counsel
MITEK SYSTEMS: Stock Trades on OTCBB Pending Nasdaq Appeal Outcome
NAVIGATOR VENTURES: Retains SF Partnership as New Accountant
NEW WORLD: Gets Court Nod to Hire Ordinary Course Professionals
OLD UGC: Gets Court Approval to Hire KPMG as Tax Consultants
OWENS CORNING: Silver Valley to Buy Indiana Property for $825K
PAL FAMILY CREDIT: Case Summary & 3 Largest Unsecured Creditors
PARMALAT: US Committee Asks Court To Extend Citigroup Probe Period
PENTHOUSE INT'L: From OTCBB, Stock Now Trades on the Pink Sheets
PER-SE TECH: Form 10-Q Delay Prompts Nasdaq's Delisting Notice
PG&E NATIONAL: ET Committee Applies To Retain Navigant As Advisor
PILLOWTEX: Summit Properties Submits Better Bid for N.C. Facility
PLIANT CORP: Sues Sigma Stretch & Atlantis for Patent Infringement
QUALITY DISTRIBUTION: S&P Revises Outlook on Low-B Ratings to Neg.
RELIANCE GROUP: Moves To Terminate Pension Plan
RICA FOODS: Lenders Agree to Amend Trust Agreement
SK GLOBAL: Obtains Authority to Use $1.3 Million Cash Collateral
SOUTHERN CALIFORNIA: Names Barbara Reeves as VP -- Shared Services
SOUTHWEST DEVT: Case Summary & 20 Largest Unsecured Creditors
STAR ACQUISITION: U.S. Trustee Amends Creditors' Committee
STATE STREET: Case Summary & 22 Largest Unsecured Creditors
SYNERGY MANUFACTURING: Case Summary & Largest Unsecured Creditors
TENNECO AUTOMOTIVE INC: S&P Raises Corporate Credit Rating to BB-
TIMKEN COMPANY: Union Blasts Refusal to Go for Federal Mediation
TRANSWESTERN PIPELINE: Fitch Places Ratings on Watch Positive
UAL CORP: Agrees To Pay $1.25 Million Amendment Fee To DIP Lenders
UNITED AIRLINES: Fails to Reach Consensual Agreement with Retirees
URECOATS: Working Capital Deficit Increases to $5.6M at March 31
US AIRWAYS: Flight Attendants Hire Fin'l Analyst to Evaluate Plan
US STEEL: Appoints Karl Csensich General Manager -- Raw Materials
VIROPHARMA: Conv. Plus Cash Notes Exchange Offer to Expire Today
WEIRTON STEEL: Enters Into Bondholders Settlement Agreement
WESTSIDE GRAVEL: Case Summary & 6 Largest Unsecured Creditors
WEYERHAEUSER: Will Appeal Mixed Verdict in Alder Antitrust Lawsuit
WHITTEN PUMPS: Case Summary & 20 Largest Unsecured Creditors
WICKES: Secures Exclusive Right to File Plan Until August 17
WISER OIL: Agrees to Forest Oil Acquisition for $10.60 Per Share
WOMEN FIRST: Looks to Miller Buckfire for Financial Advice
WRENN ASSOCIATES: Retaining Francis Rich as Business Consultant
YCO HOLDINGS INC: Voluntary Chapter 7 Case Summary
* Large Companies with Insolvent Balance Sheets
*********
ADELPHIA BUSINESS: Agrees To Resolve Structus Litigation Claims
---------------------------------------------------------------
On June 5, 2001, certain parties commenced proceedings against
Adelphia Business Solutions, Inc., (ABIZ) and certain of its
subsidiaries in the Court of Common Pleas, Richland County, South
Carolina for breach of contract and other related claims, seeking
damages against ABIZ arising out of ABIZ's purchase of Structus
Technologies, Inc.
The plaintiffs include:
-- Gary L. Williams,
-- Van S. Gulledge,
-- Catherine B. Ayers,
-- Janet Christy,
-- Kimberly S. Creech,
-- Alvin T. Miller,
-- Brian A. Miller,
-- Suzanne Patterson,
-- Rene Salter,
-- CDSI, Inc.,
-- S. Kemble Oliver, III, as Trustee of Oliver Trust A and
Oliver Trust B, and
-- Michael Mayer, as Trustee of the Mayer Trust
ABIZ disputed the commencement of the Action by claiming that it
failed to satisfy the requisite arbitration provisions of the
agreement related to the Purchase.
As a result, the case was dismissed on procedural grounds and was
subsequently appealed by the Plaintiffs.
The Structus Litigation was stayed upon the ABIZ Debtors' filing
for Chapter 11 protection. The Plaintiffs filed a $30,000,000
unsecured claim in ABIZ's estate.
In a Court-approved Stipulation, the ABIZ Debtors agree to pay
the Plaintiffs $40,000 in cash, after the Structus Litigation is
dismissed with prejudice as it applies to the ABIZ Debtors.
The Plaintiffs agree to release the ABIZ Debtors from any claims
arising from the Structus Litigation. The agreement does not
affect the Plaintiffs' claims against the ACOM Debtors, Peter
Venetis or any member of the Rigas Family.
Headquartered in Coudersport, Pennsylvania, Adelphia Business
Solutions, Inc., now known as TelCove -- http://www.adelphia-
abs.com/ -- is a leading provider of facilities-based integrated
communications services to businesses, governmental customers,
educational end users and other communications services providers
throughout the United States. The Company filed for Chapter 11
protection on March March 27, 2002 (Bankr. S.D.N.Y. Case No. 02-
11389) and emerged under a chapter 11 plan on April 7, 2004.
Harvey R. Miller, Esq., Judy G.Z. Liu, Esq., Weil, Gotshal &
Manges LLP represent the Debtors in their restructuring efforts.
When the Company filed for protection from its creditors, it
listed $ 2,126,334,000 in assets and $1,654,343,000 in debts.
(Adelphia Bankruptcy News, Issue No. 59; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
AIR CANADA: Court Extends CCAA Stay Order to September 30, 2004
---------------------------------------------------------------
Air Canada provides the following update on the airline's
restructuring under the Companies' Creditors Arrangement Act:
Extension of Stay Order to September 30, 2004
Mr. Justice James Farley of the Ontario Superior Court of Justice
approved an extension of the stay period granted to Air Canada on
April 1, 2003 until September 30, 2004.
The extension will allow Air Canada, in conjunction with the
Monitor and its stakeholders, to resolve several outstanding
business issues that must occur before the final Plan of
arrangement can be filed in Court. The Monitor's 26th Report,
dated May 20, 2004, gives an overview of the position as to these
matters.
Air Canada Comments on Value of Common Shares
Air Canada reiterates that shareholders of the corporation will
receive only nominal, if any, consideration for their shares upon
the Corporation's emergence from CCAA protection. The
participation of shareholders is expected to be valued at less
than 0.01% of the total equity of the emerging corporation.
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.
AMERCO: Objects to Sayers Group's $314,251 Securities Damage Claim
------------------------------------------------------------------
On November 8, 2003, the Sayers Group filed a contingent,
unliquidated proof of claim against Amerco in an amount no less
than $314,251, purportedly incurred from January 12, 1998 through
August 25, 2003 and relating to unspecified "violations of
federal securities laws."
Bruce T. Beesley, Esq., at Beesley, Peck & Matteoni, Ltd., in
Reno, Nevada, relates that the Sayers Group does not set forth
any legal or factual basis for the Claim. Instead, the Sayers
Group attached to the Claim a chart entitled "The Sayer's [sic]
Group - Estimated Damages (2/12/98 - 9/26/02)." The attachment
purports to summarize certain purchases and sales of Amerco
Common Stock by Saymar Partners as well as certain purchases and
sales of Amerco Series A Preferred Stock by Robert Speckert. The
attachment does not explain the nature of these alleged "damages"
or the basis for the time frame of February 12, 1998 to
September 26, 2002, which differs from the dates identified in
the Proof of Claim as the "Date debt was incurred."
According to Mr. Beesley, at the time the Claim was filed, the
Sayers Group was the Lead Plaintiff in the punitive class action
lawsuit, which was initiated on January 28, 2003, in the United
States District Court for the District of Nevada. At the same
time it filed the Claim, the Sayers Group also filed another
contingent, unliquidated proof of claim -- Claim No. 445 --
against Amerco. Claim No. 445 was purportedly on behalf of all
persons who purchased or otherwise acquired securities of Amerco
between February 12, 1998 and August 25, 2003, inclusive. In
Claim No. 445, the Sayers Group alleges that Amerco is liable to
the Punitive Class in an undetermined amount arising from damages
the Punitive Class allegedly suffered on account of unspecified,
prepetition violations of federal securities laws in connection
with the purchase of Amerco securities.
Mr. Beesley points out that other than referring to the Action,
the Sayers Group does not provide further explanation of the
legal or factual basis for the Claim, and does not attach
documents or other evidence in support of the Claim.
On December 2, 2003, the three members of the Sayers Group
asserting ownership of common stock withdrew from the lead
plaintiff group and as named plaintiffs in the Action. In a
letter filed with the Court, the Sayers Group advised that "the
fourth member of the Lead Plaintiff group, Robert Speckert,
wishes to continue as Lead Plaintiff in this matter." However,
Mr. Beesley reports that the District Court did not approve Mr.
Speckert's request to continue serving as Lead Plaintiff. The
District Court did not also certify the Punitive Class pursuant
to Rule 23(c) of the Federal Rules of Civil Procedure. Amerco
was never required to file an answer or other pleading or motion
in response to the allegations in the Action.
Pursuant to Section 502(a) of the Bankruptcy Code, the
Reorganized Debtors ask the Court to disallow and expunge in
their entirety the Sayers Group's Claim Nos. 443 and 445.
Headquartered in Reno, Nevada, AMERCO's principal operation is U-
Haul International, renting its fleet of 96,000 trucks, 87,000
trailers, and 20,000 tow dollies to do-it-yourself movers through
over 1,000 company-owned centers and 15,000 independent dealers
located throughout the United States and Canada. The Company
filed for chapter 11 protection on June 20, 2003 (Bankr. Nev. Case
No. 03-52103). Craig D. Hansen, Esq., Jordan A. Kroop, Esq.,
Thomas J. Salerno, Esq., and Carey L. Herbert, Esq., at Squire,
Sanders & Dempsey LLP, represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed $1,042,777,000 in total assets and
$884,062,000 in liabilities. (AMERCO Bankruptcy News, Issue No.
27; Bankruptcy Creditors' Service, Inc., 215/945-7000)
AMERICAN RESIDENTIAL: Fitch Junks Series 1998-1 Class B Rating
--------------------------------------------------------------
Fitch has taken rating actions on the following transaction:
American Residential Home Equity Loan Trust 1998-1
--Class M-1 affirmed at 'AA';
--Class M-2, rated 'A', placed on Rating Watch Negative;
--Class B downgraded to 'CCC' from 'B'.
The negative rating actions on class M-2 and B are taken due to
the poor performance of the underlying collateral in this deal.
The high level of losses and delinquencies has resulted in the
depletion of overcollateralization. As of the April 2004
distribution date, OC is at $81,943, below the target of $490,904.
The affirmation on class M-1 reflect credit enhancement consistent
with future loss expectations. Fitch will continue to closely
monitor this deal.
ANNUITY & LIFE RE: Auditor KPMG Cuts Professional Ties
------------------------------------------------------
In a letter dated March 30, 2004, KPMG in Bermuda advised Annuity
and Life Re (Holdings), Ltd. that KPMG will not be seeking re-
election as the Company's independent auditor for the year ending
December 31, 2004. That determination was a decision of KPMG and
was not recommended by the Audit Committee of the Company's Board
of Directors. The Audit Committee has begun the process of
selecting a new independent auditor, but has not yet engaged a
firm to serve in that role.
KPMG's reports on the consolidated financial statements of the
Company for the years ended December 31, 2003 and December 31,
2002 contained a separate explanatory paragraph stating:
"The accompanying consolidated financial statements and financial
statement schedule have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has suffered
significant losses from operations and experienced liquidity
demands that raise substantial doubt about its ability to continue
as a going concern. Management's plans with regard to these
matters are also described in Note 2. The consolidated financial
statements and financial statement schedule do not include any
adjustments that might result from the outcome of this
uncertainty."
Also during the Reporting Period, KPMG discussed orally with the
Company's management, and noted in a letter dated March 24, 2004
to the Audit Committee delivered in connection with KPMG's audit
of the Company's consolidated financial statements for the year
ended December 31, 2003, certain matters involving internal
control and the Company's operations that KPMG considered to be a
reportable condition under standards established by the American
Institute of Certified Public Accountants in regard to the
Company's finance department review procedures. Specifically, KPMG
stated in its letter as follows:
"In our letter to you dated May 5, 2003 we raised the following
observation and recommendation, which we believe is still
relevant:
"In March 2003 Jay Burke assumed the role of Chief Executive
Officer as well as Chief Financial Officer. While we noted that,
late in 2002, the Company hired Maria Galluzzo to support Jay in
an accounting role, we are concerned that Jay may be over-burdened
in carrying out both CEO and CFO responsibilities. In our view, it
is essential that the Company have a full time CFO that has SEC
and reinsurance experience to focus on the financial affairs of
the Company. The Company should hire a full time CFO that has SEC
and reinsurance experience to focus on the financial affairs of
the Company as soon as possible. Consideration should also be
given to hiring another qualified CPA in a controller role to
assist the new CFO.
"In the third quarter of 2003, the Company incorrectly recorded
certain accounting entries related to its Transamerica annuity
reinsurance contract that subsequently resulted in a restatement
of the Company's third quarter results and Form10Q for the three
months ended September 30, 2003. From our review of this incident,
it would appear that certain entries had been made by the
Company's Chief Actuary without proper review by an independent
member of the Company's finance function or by the Company's
CEO/CFO at that time.
"During our year-end audit we also noted that the accounting
entries made for the Transamerica contract and the process
followed during 2003 was very complicated and that, in part, led
to the error in the third quarter.
Recommendation
"The Company should strengthen its review procedures for all
entries being made to the Company's general ledger for the
Transamerica contract such that all entries are subject to formal
independent review before being entered in the general ledger. We
note that, since the third quarter error arose, the Company has
appointed John Lockwood as CFO and, as a result Jay Burke is able
to focus purely on his role as the Company's CEO. We believe that
this appointment should enable the Company to strengthen its
internal review procedures.
"The accounting process for the Transamerica contract should be
reviewed and made simpler, such that only one set of records is
maintained. This single set of accounting records should be
reconciled to the reports received from Transamerica each quarter
and should be subject to the independent review procedures
discussed previously."
The Chairman of the Audit Committee has discussed the reportable
condition with KPMG. The Company will authorize KPMG to respond
fully to the inquiries of any successor accountant concerning the
foregoing.
APPLIED DIGITAL: Proposes Reverse Stock Split to Preserve Listing
-----------------------------------------------------------------
On September 10, 2003, Applied Digital Solutions, Inc. held a
special meeting of its shareholders where they approved the
granting of discretionary authority to the Company's Board of
Directors for a period of twelve months to effect a reverse stock
split not to exceed a ratio of 1-for-25, or to determine not to
proceed with a reverse stock split.
On March 12, 2004, the Company's Board of Directors authorized a
1-for-10 reverse stock split, and effective as of the beginning of
trading on April 5, 2004, each ten shares of the Company's common
stock has been converted into one share of the Company's common
stock. As a result, the number of outstanding shares of the
Company's common stock has been reduced to approximately
50.5 million. In addition, the par value of the Company's common
stock has increased from $0.001 to $0.01 per share. In conjunction
with the reverse stock split, the Company's Board of Directors has
authorized a reduction in the number of authorized shares of the
Company's common stock from 560 million to 125 million.
The Company's Board of Directors expects that the reverse stock
split will address the issue of compliance with the Nasdaq
SmallCap Market's minimum bid price requirement, as well as aid in
positioning the Company to achieve its goal of attracting
institutional and other long-term investors.
* * *
In its Form 10-K for the fiscal year ended December 31, 2003 filed
with the Securities and Exchange Commission, Applied Digital
Solutions, Inc., reports:
"We are a Missouri corporation and were incorporated on May 11,
1993. Our business has evolved during the past few years. We grew
significantly through acquisitions and since 1996 have completed
51 acquisitions. During the last half of 2001 and during 2002, we
sold or closed many of the businesses we had acquired that we
believed did not enhance our strategy of becoming an advanced
technology development company. These companies were primarily
telephone system providers, software developers, software
consultants, networking integrators, computer hardware suppliers
or were engaged in other businesses or had customer bases that we
believed did not promote or complement our current business
strategy. As of December 31, 2003, our business operations
consisted of the operations of five wholly-owned subsidiaries,
which we collectively refer to as the Advanced Technology
segment, and two majority-owned subsidiaries, Digital Angel
Corporation (AMEX:DOC), and InfoTech USA, Inc. (OTC:IFTH)
(formerly SysComm International Corporation). As of December 31,
2003, we owned approximately 66.9% of Digital Angel Corporation
and 52.5% of InfoTech USA, Inc.
"Historically we have suffered losses and have not generated
positive cash flows from operations. Excluding the effects of a
gain on the extinguishment of debt of $70.1 million, we incurred a
consolidated loss from continuing operations of $66.5 million for
the year ended December 31, 2003. We incurred consolidated losses
from continuing operations of $113.9 million and $188.6 million,
respectively, for the years ended December 31, 2002 and 2001, and
as of December 31, 2003, we had an accumulated deficit of $413.9
million. Our consolidated operating activities used cash of $11.4
million, $3.9 million and $18 million during 2003, 2002 and 2001,
respectively. Digital Angel Corporation has suffered losses and
has not generated positive cash flows from operations. Digital
Angel Corporation incurred losses during 2003, 2002 and 2001,
which are presented below. In addition, its operating activities
used cash of $4.7 million, $2.7 million and $3.2 million during
2003, 2002 and 2001, respectively.
"The reduced settlement payment of our debt obligations to IBM
Credit LLC, the conversion to equity of our obligations under
our 8.5% Convertible Exchangeable Debentures, and the sale of
3 million shares of our common stock under our 3 million share
offering, have been major factors mitigating concerns that existed
about our ability to continue as a going concern. Our
profitability and liquidity depend on many factors including the
success of our marketing programs, the maintenance and reduction
of expenses and our ability to successfully develop and bring to
market our new products and technologies. We have established a
management plan intending to guide us in achieving profitability
and positive cash flows over the twelve months ending December
31, 2003, however, no assurance can be given that such plan will
be realized."
ATA HOLDINGS: CEO Mikelsons Adopts Rule 10b5-1 Trading Plan
-----------------------------------------------------------
ATA Holdings Corp., parent company of ATA Airlines, Inc. (Nasdaq:
ATAH), announced that George Mikelsons, Chairman and CEO, has
established a stock trading plan in accordance with the Securities
and Exchange Commission's (SEC) Rule 10b5-1 and the Company's
insider trading policy.
SEC Rule 10b5-1 permits officers, directors and other parties
deemed to be insiders to adopt pre-arranged, written plans to buy
or sell Company stock with predetermined volume and price
parameters. Sales under the plan will occur in a systematic
manner with the goal of minimizing market impact by spreading such
sales over a more extended period of time than would be available
using the Company's allowable trading windows for insiders. Sales
under the plan are limited by SEC Rule 144 volume restrictions.
Mikelsons adopted the plan on May 19, 2004. The plan will allow
Mikelsons to sell up to 200,000 shares over a period ending on
December 31, 2004 (unless terminated earlier), provided that
specified trading prices are achieved. This represents less than
three percent of Mikelsons' current ATAH holdings.
Now celebrating its 31st year of operation, ATA -- whose March 31,
2004 balance sheet shows a shareholders' deficit of $168,426,000
-- is the nation's 10th largest passenger carrier (based on
revenue passenger miles) and one of the nation's largest low-fare
carriers. ATA has the youngest, most fuel-efficient fleet among
the major carriers, featuring new Boeing 737-800 and 757-300
aircraft. The airline operates significant scheduled service from
Chicago-Midway, Hawaii, Indianapolis, New York and San Francisco
to over 40 business and vacation destinations. Stock of the
Company's parent company, ATA Holdings Corp., is traded on the
Nasdaq Stock Exchange under the symbol "ATAH." For more
information about the Company, visit the web site at
http://www.ata.com/
ATLAS AIR WORLDWIDE: Reaches Settlement with Creditors Committees
-----------------------------------------------------------------
Atlas Air Worldwide Holdings, Inc. (AAWH) (Pink Sheets: AAWHQ)
reached a settlement with the court-appointed unsecured creditors
committees of AAWH subsidiaries Atlas Air, Inc. (Atlas) and Polar
Air Cargo, Inc. in the Company's ongoing Chapter 11 bankruptcy
proceedings.
Pursuant to the settlement, all litigation between the parties has
been abated pending final documentation of the settlement terms
and submission of an amended Disclosure Statement and Joint Plan
of Reorganization. As part of the settlement, the Polar unsecured
creditors will receive a 60 percent cash dividend on allowed
unsecured claims against Polar. The Company anticipates that the
total settlement will amount to between $30 to $40 million. The
settlement will be funded by AAWH with cash on hand together with
proceeds of up to approximately $20 million from a rights offering
to be underwritten by certain members of the Atlas creditors
committee. Under the settlement, the percentage of common stock
previously allocated to Polar unsecured creditors will be
reallocated to the Atlas unsecured creditors or sold as part of
the rights offering.
The parties are expected to file a formal settlement term sheet
containing further details of the settlement with the bankruptcy
court by May 26, 2004. The Company then plans to file an amended
Disclosure Statement and Joint Plan of Reorganization by Thursday,
May 27, 2004. A hearing seeking court approval of the Disclosure
Statement has been tentatively set for June 7, 2004.
Once approved by the court, the amended Disclosure Statement and
Joint Plan of Reorganization will be sent out for a vote, with the
expectation of confirming the Plan during the week of July 12,
paving the way for the Company to emerge from Chapter 11 by no
later than July 29, 2004.
"I would like to commend the creditors committees and their
representatives for coming to mutually agreeable settlement terms
in this matter," said Jeffrey H. Erickson, President and CEO of
AAWH. "The agreement reached today moves us closer to our goal of
emerging from bankruptcy as quickly as possible and with minimal
disruption to our operations. We are pleased with the progress we
have made to date and are hopeful that the amended Disclosure
Statement and Joint Plan of Reorganization, incorporating the
terms agreed upon, will be approved."
About AAWH
AAWH, through its subsidiaries, Atlas and Polar, provides cargo
services throughout the world to major international airlines
pursuant to contractual arrangements with its customers in which
it provides the aircraft, crew, maintenance and insurance. The
company also provides airport-to-airport scheduled air-cargo
service, as well as commercial and military charter service. The
principal markets served are Asia and the Pacific Rim from the
United States and Europe and between South America and the United
States.
CALPINE CORP: Stockholders to Meet Tomorrow at 10 AM in California
------------------------------------------------------------------
The 2004 Annual Meeting of Stockholders of Calpine Corporation, a
Delaware corporation, will be held at Seascape Resort, located at
One Seascape Resort Drive, Aptos, California 95003, at 10:00 a.m.,
Pacific Daylight Time, on Wednesday, May 26, 2004, for the purpose
of considering and voting upon the following matters:
1. To elect three Class II Directors to the Board of
Directors, each for a term of three years;
2. To act upon a proposal to amend the Company's Amended and
Restated Certificate of Incorporation to increase the number of
authorized shares of common stock, par value $.001 per share;
3. To act upon a proposal to amend the Company's 1996 Stock
Incentive Plan to increase the number of shares of the Company's
common stock available for grants of options and other stock-based
awards under such plan;
4. To act upon a proposal to amend the Company's 2000 Employee
Stock Purchase Plan to increase the number of shares of the
Company's common stock available for grants of purchase rights
under such plan;
5. To act upon a stockholder proposal, if introduced by the
proponent at the 2004 Annual Meeting of Stockholders, opposing the
Company's geothermal development activities in the Medicine Lake
Highlands and requesting the Company to adopt an indigenous
peoples policy;
6. To act upon a stockholder proposal, if introduced by the
proponent at the 2004 Annual Meeting of Stockholders, regarding
senior executive equity compensation plans;
7. To act upon a stockholder proposal, if introduced by the
proponent at the 2004 Annual Meeting of Stockholders, regarding
stockholder voting;
8. To ratify the appointment of PricewaterhouseCoopers LLP as
independent accountants for the Company for the fiscal year ending
December 31, 2004; and
9. To transact such other business as may properly come before
the meeting and any adjournments or postponements thereof.
Only stockholders of record at the close of business on March 29,
2004 are entitled to notice of, and to vote at, the 2004 Annual
Meeting of Stockholders and at any and all adjournments or
postponements thereof.
About Calpine
Calpine Corporation (S&P, CCC+ Senior Unsecured Convertible Note
and B Second Priority Senior Secured Note Ratings, Negative
Outlook), celebrating its 20th year in power in 2004, is a
leading North American power company dedicated to providing
electric power to customers from clean, efficient, natural gas-
fired and geothermal power facilities. The company generates power
at plants it owns or leases in 21 states in the United States,
three provinces in Canada and in the United Kingdom. Calpine is
also the world's largest producer of renewable geothermal energy,
and owns or controls approximately one trillion cubic feet
equivalent of proved natural gas reserves in the United States and
Canada. For more information about Calpine, visit
http://www.calpine.com/
CONSOLIDATED CONTAINER: Completes Senior Debt Refinancing
---------------------------------------------------------
Consolidated Container Company LLC announced the final terms of
transactions to refinance debt outstanding under its existing
senior credit facilities. This includes approximately $150 million
in proceeds to be received from the sale of 10 3/4% senior secured
discount notes due in 2009, a $220 million senior secured term
loan due in 2008, a $45 million senior secured revolving credit
facility, and the receipt of a $45 million capital contribution,
reflecting the proceeds of the sale of preferred stock to certain
affiliates of existing members. The refinancing extends bank
maturities, lowers required debt amortization levels, reduces cash
interest requirements for up to 3 years and provides for more
capital flexibility going forward.
Steve Macadam, Chief Executive Officer, said, "This refinancing
allows the company to continue the significant improvements
achieved in areas such as productivity, quality and safety. It
also provides us with improved capital flexibility, which will
translate into increased capability to continue to fill our new
business pipeline with profitable sales opportunities. Together,
we believe that the combination of our continued operating
improvements and new business will allow us to continue building
on the improved financial results that posted in the fourth
quarter of 2003 and first quarter of 2004. We are especially
pleased with the support of our lenders and equity sponsors and
view the $45 million equity infusion into the company as a strong
signal of confidence in the future of CCC."
With regard to recently released first quarter results, Macadam
said, "We view the improvements in the first quarter as proof that
the programs we have implemented with regard to management talent,
operating performance, design and development and company
infrastructure are gaining real traction. We expect to continue to
see these improvements contribute to improved financial
performance over time."
Consolidated Container Company LLC, which was created in 1999, is
a leading North American developer, manufacturer, and marketer of
rigid plastic containers for many of the largest branded consumer
products and beverage companies in the world. CCC has long-term
customer relationships with many blue-chip companies including
Dean Foods, DS Waters of America, The Kroger Company, Nestle
Waters North America, National Dairy Holdings, The Procter &
Gamble Company, Coca-Cola North America, Quaker Oats, Scotts and
Colgate-Palmolive. CCC serves its customers with a wide range of
manufacturing capabilities and services through a nationwide
network of 61 strategically located manufacturing facilities and a
research, development and engineering center located in Atlanta,
Georgia. Additionally, the company has 4 international
manufacturing facilities in Canada, Mexico and Puerto Rico.
* * *
As reported in the Troubled Company Reporter's May 7, 2004,
edition, Standard & Poor's Ratings Services said that it assigned
its 'B-' rating and a recovery rating of '2' to Consolidated
Container Co. LLC's proposed $245 million senior secured credit
facilities due 2008, subject to preliminary terms and conditions.
The 'B-' rating is the same as the corporate credit rating; this
and the '2' recovery rating indicate an expectation of substantial
(80%-100%) recovery of principal in the event of a default.
Standard & Poor's also assigned its 'CCC' rating and a '5'
recovery rating to the proposed $170 million senior secured second
lien notes due 2009, which are to be issued under Rule 144A with
registration rights by Consolidated Container Co. LLC and its
wholly owned subsidiary, Consolidated Container Capital Inc. The
'CCC' rating is two notches below the corporate credit rating;
this and the '5' recovery rating indicate that creditors would
recover a negligible (0%-25%) amount of principal (including
accreted interest) in the event of a default. Under the indenture
governing the senior secured notes, the company has the option
not to pay cash interest on the notes for the first three years,
after which cash interest is payable.
"At the same time, Standard & Poor's revised its outlook on
Consolidated Container to positive from stable, as the successful
completion of the proposed debt refinancing would substantially
reduce refinancing risk, improve liquidity, and loosen financial
covenants," said Standard & Poor's credit analyst Liley Mehta.
Standard & Poor's also affirmed its 'B-' corporate credit rating
on the Atlanta, Georgia-based company. Total debt outstanding was
about $600 million at Dec 31, 2003.
DEVELOPERS DIVERSIFIED: Acquires More Benderson Assets for $1.3BB
-----------------------------------------------------------------
Developers Diversified Realty Corporation (NYSE: DDR) announced
that it has closed on 53 assets, totaling approximately 9.8
million square feet, from Benderson Development Company, Inc. for
approximately $1.3 billion. In total, Developers Diversified has
acquired 98 assets from Benderson, totaling approximately 17.5
million square feet, including assets acquired last week by its
Australian Listed Property Trust joint venture, Macquarie DDR
Trust.
Developers Diversified anticipates that it will close on the
remaining properties in the acquisition portfolio as various
closing conditions, such as completion of title and survey
documentation, lender consents relating to loan assumptions and
partner approvals, are satisfied.
Developers Diversified now owns and manages 460 retail operating
and development properties totaling approximately 101 million
square feet of real estate in 44 states. Developers Diversified
is a self-administered and self-managed real estate investment
trust (REIT) operating as a fully integrated real estate company
which develops, leases and manages shopping centers. You can
learn more about Developers Diversified on the internet at
http://www.ddrc.com/
* * *
As reported in the Troubled Company Reporter's April 7, 2004
edition, Fitch affirmed Developers Diversified Realty's ratings at
'BBB-' for $833 million outstanding senior unsecured notes due
2004 through 2018, and 'BB+' for $535 million outstanding
preferred stock for the real estate investment trust, following
the company's announcement to acquire a $2.3 billion retail
portfolio. The Rating Outlook is Stable.
DIRECTV: Federal Court Dismisses Remaining Pegasus Claims
---------------------------------------------------------
DIRECTV, Inc., announced that a federal district court judge has
granted DIRECTV's motions eliminating all of the remaining claims
asserted against DIRECTV by Pegasus Satellite TV, Inc. and Golden
Sky Systems, Inc. in a lawsuit filed more than four years ago.
This decision does not affect the $51.5 million jury verdict
entered in DIRECTV's favor against Pegasus on April 14, which is
pending a decision on the award of additional interest of almost
$13 million claimed by DIRECTV. Judgment on that verdict is
expected in the near future.
The court granted summary judgment against Pegasus on its last
claim for monetary relief, for as much as $86 million in
"restitution," on a claim relating to payment of "launch fees" by
programming providers. The court also dismissed Pegasus'
declaratory relief claims concerning DIRECTV's contract with the
NRTC, reaffirming that Pegasus has no rights under that contract.
The court again confirmed that "DIRECTV and NRTC can modify their
agreement at any time in writing."
As previously announced, DIRECTV and the NRTC have agreed that the
term of the DBS Distribution Agreement, which entitles the NRTC to
distribute DIRECTV programming, will end on the later of the date
when the DBS-1 satellite (also called DIRECTV 1) reaches the end
of its useful contractual life or June 30, 2008. After termination
of the DBS Distribution Agreement, which will end no later than
June 30, 2008, DIRECTV will have no further obligation through its
contract with the NRTC to provide services to Pegasus.
The court decided not to resolve DIRECTV's request for declaratory
relief on the term of Pegasus' member agreement with NRTC. The
court ruled that DIRECTV did not have standing to bring the claim
against Pegasus, but should have brought the claim against NRTC.
Because NRTC and DIRECTV have resolved their dispute regarding
term, DIRECTV believes further proceedings involving the NRTC are
unnecessary.
The decision by Judge Lourdes G. Baird, together with the court's
previous rulings, means Pegasus has lost all claims that it
asserted against DIRECTV.
"We are pleased with the court's ruling, eliminating Pegasus'
remaining claims," said Dan Fawcett, executive vice president,
Legal and Business Affairs, DIRECTV, Inc. "Our position has been
completely vindicated with regard to Pegasus' claims, all of which
have been dismissed or decided in DIRECTV's favor on the merits.
"We are also pleased with the court's ruling that our contract is
with the NRTC and that Pegasus has no rights under that contract,"
Fawcett added. "The court's dismissal of the claim concerning the
term of the member agreements, which was the focus of Pegasus'
statement today, has no effect on DIRECTV. NRTC and DIRECTV agreed
to a fixed term, which the court affirmed was appropriate and
could not be challenged by Pegasus. DIRECTV has no direct
obligation to Pegasus, as the court ruled, and DIRECTV's
obligation to NRTC to provide services for sale to Pegasus ends by
June 30, 2008, at the latest. Pegasus' suggestion that it has
rights to distribute DIRECTV programming beyond the date when
DIRECTV has to provide services to NRTC is not only untrue, it
makes no sense."
DIRECTV is represented by Michael Baumann and Alex Pilmer of the
Kirkland & Ellis Los Angeles office.
DIRECTV is the nation's leading digital multichannel television
service provider with more than 12.6 million customers. DIRECTV
and the Cyclone Design logo are registered trademarks of DIRECTV,
Inc., a unit of The DIRECTV Group, Inc. (NYSE:DTV). The DIRECTV
Group is a world-leading provider of digital multichannel
television entertainment, broadband satellite networks and
services, and global video and data broadcasting. The DIRECTV
Group is 34 percent owned by Fox Entertainment Group, which is
approximately 82 percent owned by News Corporation Ltd. Visit
DIRECTV at http://www.directv.com/(DirecTV Latin America
Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
DISTRIBUTION DYNAMICS: Wants to Hire Dorsey & Whitney as Counsel
----------------------------------------------------------------
Distribution Dynamics, Inc., and its debtor-affiliates are asking
for permission from the U.S. Bankruptcy Court for the District of
Minnesota to employ Dorsey & Whitney LLP as their chapter 11
attorneys.
The Debtors tell the Court that they need to retain Dorsey &
Whitney to represent them in connection with all matters relating
to their chapter 11 cases, and to perform other legal services
necessary to their continuing operations.
The professionals who will primarily provide services to the
Debtors and their hourly rates are:
Professionals Designation Billing Rate
------------- ----------- ------------
Mark J. Kalla Partner $410 per hour
Matthew J. Knopf Partner $400 per hour
Chris Lenhart Associate $285 per hour
Steven J. Heim Associate $295 per hour
David P. Close Associate $185 per hour
Marie Jenses Paralegal $170 per hour
Headquartered in Eden Prairie, Minnesota, Distribution Dynamics,
Inc. -- http://www.distributiondynamics.com/-- helps companies
improve bottom-line results by providing fasteners and Class 'C'
commodities. The Company filed for chapter 11 protection on April
26, 2004 (Bankr. Minn. Case No. 04-32489). Mark J. Kalla, Esq.,
at Dorsey & Whitney LLP represents 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.
DJ ORTHOPEDICS: Files Shelf Registration for Selling Stockholders
-----------------------------------------------------------------
dj Orthopedics, Inc., (NYSE: DJO), announced that it has filed a
shelf registration statement on Form S-3 with the United States
Securities and Exchange Commission.
Once the shelf registration statement has been declared effective
by the Securities and Exchange Commission, it will allow certain
stockholders to sell, from time to time, up to 3,197,379 shares of
dj Orthopedics' outstanding common stock. None of the shares
covered by the registration statement will be sold by dj
Orthopedics.
The selling stockholders are J.P. Morgan DJ Partners, LLC and J.P.
Morgan Partners (23A SBIC), L.P., with respect to an aggregate of
3,072,379 of the shares being registered, and Les Cross, dj
Orthopedics' President and CEO, with respect to the remaining
125,000 shares. Mr. Cross has indicated that he plans to use the
majority of his after tax proceeds from sales of his shares being
registered to repay in full his promissory notes due to dj
Orthopedics for historical stock purchases in the approximate
amount of $1.7 million, including accrued interest.
About dj Orthopedics
dj Orthopedics is a global medical device company specializing in
rehabilitation and regeneration products for the non-operative
orthopedic and spine markets. The Company's broad range of over
600 rehabilitation products, including rigid knee braces, soft
goods and pain management products, are used in the prevention of
injury, in the treatment of chronic conditions and for recovery
after surgery or injury. The Company's regeneration products
consist of bone growth stimulation devices that are used to treat
nonunion fractures and as an adjunct therapy after spinal fusion
surgery.
The Company sells its products in the United States and in more
than 30 other countries through networks of agents, distributors
and its direct sales force that market its products to orthopedic
and podiatric surgeons, spine surgeons, orthopedic and prosthetic
centers, third-party distributors, hospitals, surgery centers,
physical therapists, athletic trainers and other healthcare
professionals. For additional information on the Company, please
visit http://www.djortho.com/
* * *
As reported in the Troubled Company Reporter's May 17, 2004
edition, Standard & Poor's Ratings Services raised its corporate
credit and senior secured bank loan ratings on rehabilitation
product manufacturer dj Orthopedics Inc. to 'BB-' from 'B+'. At
the same time, Standard & Poor's raised its subordinated debt
rating on the company to 'B' from 'B-'. The upgrade reflects
Standard & Poor's view that the successful integration of new
higher-margin product lines and financial deleveraging have
strengthened the company's credit profile.
The rating, however, continues to take into account the company's
relatively narrow position in orthopedic devices and competition
from well-entrenched larger companies in dj Orthopedics' newly
acquired bone-stimulation growth business line.
ENRON CORP: Various Creditors Sell Claims Totaling $470,101,237
---------------------------------------------------------------
Pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy
Procedure, the Court received these notices of claim transfer
from February 24, 2004 through April 27, 2004:
A. To Longacre Master Fund Ltd.:
Claim
Transferor No. Amount
---------- ----- ------
Evolution Markets LLC 6793 $148,859
Arizona Electric Power Cooperative, Inc. 7251 73,950
Venoco, Inc. 9384 2,777,019
9383 2,777,019
Range Resources Corporation 7588 1,639,828
Oriun Petro Corp. 7959 59,721
Texas-Ohio Energy, Inc. 1229 9,612,424
PBB Public Relations 9297 50,407
B. To Stonehill Institutional Partners, LP:
Claim
Transferor No. Amount
---------- ----- ------
Inland Production Company 113311 $7,311,683
C. To Contrarian Capital Trade Claims LP:
Claim
Transferor No. Amount
---------- ----- ------
J.M. Huber Corporation - $103,444
Trafigura Derivatives Limited 13353 475,700
D. To H2Z Global Investments LLC:
Claim
Transferor No. Amount
---------- ----- ------
Westin La Cantera Resort 7765 $250,310
E. To Oneok Energy Marketing and Trading Company, LP:
Claim
Transferor No. Amount
---------- ----- ------
Silver Oak Capital, LLC 11317 $25,000,000
F. To Liquidity Solutions, Inc. doing business as Revenue
Management:
Claim
Transferor No. Amount
---------- ----- ------
Alliance Coal, LLC - $763,451
G. To Reliance Trust Company:
Claim
Transferor No. Amount
---------- ----- ------
State Street Bank and Trust Company 10808 $75,853,105
of Connecticut 10807 74,290,471
10806 74,290,471
H. To King Street Capital, LP:
Claim
Transferor No. Amount
---------- ----- ------
Bear, Stearn & Co., Inc. 24699 $35,752,977
I. To Deutsche Bank Securities, Inc.:
Claim
Transferor No. Amount
---------- ----- ------
General Electric Capital Corporation 12814 $12,503,024
J. To Special Situations Investing Group, Inc.:
Claim
Transferor No. Amount
---------- ----- ------
Goldman Sachs Credit Partners, LP 12686 $17,000,000
K. To Triange Offshore Fund, Ltd.:
Claim
Transferor No. Amount
---------- ----- ------
InterChem Americas, Inc. 4553 $940,525
4554 940,525
L. To Bear Stearns & Co., Inc.:
Claim
Transferor No. Amount
---------- ----- ------
Dominion Resources, Inc. 24698 13,592,274
Landesbank Hessen-Thuringen Gisozentrale - 18,180,847
M. To Contrarian Funds LLC:
Claim
Transferor No. Amount
---------- ----- ------
Connect Energy Services, LP 5719 $885,225
5716 424,306
5715 885,225
Trafigura, AG 13355 1,339,275
Gateway Pipeline Company 5661 130,832
N. To Madison Distressed Strategies, LLC:
Claim
Transferor No. Amount
---------- ----- ------
K Petroleum, Inc. - $76,953
O. To Quantum Partners LDC:
Claim
Transferor No. Amount
---------- ----- ------
Merrill Lynch, Pierce, Fenner & Smith, 24667 $11,219,000
Incorporated 24665 11,219,000
P. To Morgan Stanley Emerging Markets, Inc.:
Claim
Transferor No. Amount
---------- ----- ------
ING Bank, N.V., London Branch - $9,454,040
Q. To Merrill Lynch, Pierce, Fenner & Smith, Inc.:
Claim
Transferor No. Amount
---------- ----- ------
Kruger, Inc. & Corner Brook Pulp and 3505 $8,982,000
Paper Limited 23222 8,982,000
R. To Contrarian Funds, LLC:
Claim
Transferor No. Amount
---------- ----- ------
Moriah Properties, Ltd. - $51,150
Brothers Production Properties, Ltd. 4681 52,150
Omaha Public Power District 8354 11,915,600
8353 11,915,600
S. To Morgan Stanley & Co., International Limited:
Claim
Transferor No. Amount
---------- ----- ------
Bear Stearns Bank plc - $18,180,847
(Enron Bankruptcy News, Issue No. 107; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ENRON: NuCoastal Offers $2.2 Billion for CrossCountry Energy
------------------------------------------------------------
Enron announced that it has reached an agreement with NuCoastal
LLC, whose owners are affiliates of Kelso & Company, ArcLight
Capital Partners LLC, Citigroup, and Oscar S. Wyatt, Jr., for the
sale of CrossCountry Energy, Enron's North American natural gas
pipeline business.
The transaction, which has been approved by the Enron Board of
Directors and is supported by the Official Unsecured Creditors'
Committee, requires the approval of the Bankruptcy Court, which
will oversee an "overbid" process to give other potential buyers
an opportunity to submit superior bids. Enron is expected to file
the sale agreement with the Bankruptcy Court early next week.
The transaction purchase price of approximately $2.2 billion
includes the assumption of outstanding Transwestern debt, which is
approximately $430 million.
"This sale agreement provides the best value for our creditors and
reflects a stronger market for quality, high-performing energy
assets than we had seen two years ago," said Stephen F. Cooper,
acting CEO and chief restructuring officer of Enron.
After considering the sale of the pipeline assets following
Enron's bankruptcy, Enron instead formed CrossCountry Energy in
June 2003 as a holding company for Enron's interests in
Transwestern Pipeline Company, Citrus Corp., and Northern Plains
Natural Gas Company. These three businesses have approximately 8.5
Bcf/d of capacity and 9,900 miles of pipeline.
Once the Bankruptcy Court approves the sale, the transaction is
subject to certain regulatory and governmental approvals and is
expected to close by the fourth quarter of 2004.
About CrossCountry Energy
CrossCountry Energy is headquartered in Houston and has
approximately 1,100 employees. Transwestern Pipeline Company is a
wholly owned 2,600-mile pipeline system extending from West Texas
to the California border. Citrus Corp., which is held 50 percent
by Enron and 50 percent by Southern Natural Gas, an El Paso
affiliate, owns the 5,000-mile Florida Gas Transmission system
that runs from south Texas to south Florida. The wholly owned
Northern Plains Natural Gas Company is one of the general partners
of Northern Border Partners, L.P. (NYSE:NBP), which owns interests
in Northern Border Pipeline Company, Midwestern Gas Transmission
Company, Viking Gas Transmission Company and Guardian Pipeline,
LLC. CrossCountry Energy's Internet address is
http://www.crosscountryenergy.com/
ERN LLC: Turns to Navigant Consulting for Financial Advice
----------------------------------------------------------
ERN, LLC, is asking the U.S. Bankruptcy Court for the District of
Maryland, Baltimore Division, to approve its application to employ
Navigant Consulting as its financial consultants.
Navigant, the Debtor relates, is a financial consulting firm
specializing in bankruptcy related services. The Firm has
financial, management and accounting specialists on staff, and its
employees have significant experience as consultants to
financially distressed companies, including companies in
bankruptcies. The Debtor believes that Navigant is well qualified
to perform the requested services for the Debtor in this case.
Navigant has agreed to charge for services performed for the
Debtor in accordance with its customary billing practices.
Navigant will bill the Debtor for services rendered on an hourly
basis at rates ranging from $170 to $450 per hour.
Headquartered in Baltimore, Maryland, ERN, LLC
-- http://www.ern-llc.com/-- provides point of sale check
guaranty and credit card servicing to merchants. The Company
filed for chapter 11 protection on April 28, 2004 (Bankr. Md. Case
No. 04-20521). Carrie Weinfeld, Esq., James A. Vidmar, Jr., Esq.,
and Rebecca S. Beste, Esq., at Linowes and Blocher, LLP represent
the Debtor in its restructuring efforts. When the Company filed
for protection from its creditors, it listed $1,159,361 in total
assets and $12,878,478 in total debts.
ETOYS: Court Upholds Claims Charging Goldman Sachs with Misconduct
------------------------------------------------------------------
New York's Appellate Division, First Department has upheld eToys'
complaint charging Goldman Sachs with breaches of contract,
fiduciary duty and professional malpractice relating to Goldman's
role as lead underwriter of eToys' May 20, 1999 Initial Public
Offering. The complaint alleges that on Goldman's recommendation
the IPO was priced at $20 per share. On the first day of trading
13 million shares changed hands with prices reaching over $85 per
share. The extraordinary demand for eToys' shares -- and the high
price the public was willing to pay for them -- continued for many
months after the IPO with approximately 300 million shares trading
at prices as high as $86.
It is claimed that Goldman knew that a substantially high price
was warranted given the tremendous demand for the stock and
existing market conditions but underpriced the shares to benefit
its select customers from whom they expected, in return,
investment banking business, brokerage commissions and other
benefits. The case is now being prepared for trial.
eToys is represented by Stanley Grossman of Pomerantz Haudek Block
Grossman & Gross LLP and William Wachtel of Wachtel & Masyr.
Special bankruptcy counsel to plaintiff is Traub, Bonacquist &
Fox.
eToys, Inc., now known as EBC I Inc, operated a web-based toy
retailer based in Los Angeles, California. The Company filed a
Chapter 11 Petition on March 7, 2001. When the company filed
for protection from its creditors, it listed $416,932,000 in
assets and $285,018,000 in debt. eToys sold its assets and name
to toy retailer KB Toys.
FACTORY 2-U: U.S. Trustee Amends Creditors' Committee Membership
----------------------------------------------------------------
The United States Trustee for Region 3 amended, for the third
time, his appointments to the Official Committee of Unsecured
Creditors in Factory 2-U Stores, Inc.'s Chapter 11 cases. The
current committee members are:
1. American Endeavor Fund Limited
Attn: Richard H. Wolf
75 Wall Street, 34th Floor
New York, New York 10005
Phone: (212) 429-3083, Fax: (212) 429-3139;
2. Remedy Intelligent Staffing, Inc.
Attn: Kristine R. Bartos
101 Enterprise, Aliso Viejo, California 92656
Phone: (949) 425 -7684, Fax: (949) 425-7991;
3. OKK Trading, Inc.
Attn: Matthew Hyun, 5500 East Olympic Blvd
Suite A, Los Angeles, California 90022
Phone: (323) 725-8800, Fax: (323) 725-8899;
4. Evans, Inc.
Attn: Robert Mulder, 124 E. Olympic St.
Suite 505, Los Angeles, California 90015,
Phone: (213) 746-6960, Fax: (213) 746-2236.
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.
Headquartered in San Diego, California, Factory 2-U Stores, Inc.
-- http://www.factory2-u.com-- operates a chain of off-price
retail apparel and housewares stores in 10 states, mostly in the
western and southwestern US, sells branded casual apparel for the
family, as well as selected domestics, footwear, and toys and
household merchandise. The Company filed for chapter 11 protection
on January 13, 2004 (Bankr. Del. Case No. 04-10111). M. Blake
Cleary, Esq., and Robert S. Brady, Esq., at Young Conaway Stargatt
& Taylor, LLP represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $136,485,000 in total assets and
$73,536,000 in total debts.
FEMONE INC: Pursues Shares Delisting From Berlin Stock Exchange
---------------------------------------------------------------
FemOne, Inc., a publicly held Nevada Corporation (OTC Bulletin
Board: FEMO) and a direct selling company of health and wellness
products, and which announced Thursday that its shares have been
listed for trading on the Berlin-Bremen Stock Exchange, is
pursuing all available efforts to have those shares delisted from
that exchange.
Working with counsel in the United States and in Berlin, FemOne
has been able to learn that the shares were listed by Berlin
Freiverkehr AG, after being appointed by an as-yet unidentified
person or entity to apply for FEMO shares to trade on the Berlin
exchange. According to FemOne's local counsel, because the FEMO
shares trade without restriction in the United States, and the
Berlin application requested dual trading rights, under the
existing German law the application could be filed by a private
individual or broker not associated with the company, and without
the prior knowledge or consent of the company. Once applied to be
approved for listing, the application can only be withdrawn and
the shares can only be delisted from the Berlin Exchange by the
agent which placed the application initially.
Working with Friederike von Hofe, a lawyer at the Berlin Bremen
Stock Exchange, FemOne has been able to determine that the
application for listing was received by the Berlin-Bremen Stock
Exchange on April 22, 2004, but trading has not yet been formally
authorized by the exchange and no shares have actually traded.
Accordingly, naked short selling through the Berlin-Bremen Stock
Exchange could not have been the reason for the volatility in the
market price of FemOne's shares, as previously believed and
announced by the company yesterday.
Said Ray Grimm, CEO of FemOne, Inc., "I just can't imagine a
system that permits the stock of a US company to be listed and
approved for trading on a foreign stock exchange without any
knowledge of or consent by the company prior to trading. If we had
not had it brought to our attention by someone who noticed our
name by looking at the website of that exchange, we would never
have known that our shares were trading in Berlin. It is an
appalling situation, and one which seems to now be affecting
multiple US companies we have run across since becoming aware of
this circumstance."
FemOne intends to pursue the delisting of its shares from the
Berlin-Bremen Stock Exchange, and has taken steps to request the
assistance of Berlin Freiverkehr AG in doing so.
About FemOne, Inc.
FemOne, Inc. (OTC Bulletin Board: FEMO) is based in Carlsbad,
California as a direct-selling company with distribution in the
United States and Canada. More information about FemOne and its
products can be found on the company's web site at www.femone.com.
Questions about this press release can be addressed to Mr. Alfred
Hanser at FemOne Inc. at (760) 448-2498.
* * *
On February 17, 2004, the Board of Directors of FemOne, Inc.,
terminated Dohan and Company, CPA's P.A., as its independent
auditors. The decision to terminate the Company's relationship
with Dohan did not involve a dispute with the Company over
accounting policies or practices. The independent auditors'
reports provided by Dohan on the Company's financial statements
for the years ended June 30, 2003 and June 30, 2002 contained an
unqualified opinion; they were modified as to uncertainty
regarding the Company's ability to continue as a going concern.
FINLAY FINE: S&P Rates Proposed $200MM Sr. Unsecured Notes at B+
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' rating to New
York-based Finlay Fine Jewelry Corp.'s proposed $200 million
senior unsecured notes due 2012, to be issued under Rule 144A with
registration rights. Proceeds of the offering plus borrowings
under the company's revolving credit facility will be used to
redeem the company's outstanding $150 million senior notes due
2008 and Finlay Enterprises Inc.'s (holding company) $75 million
senior debentures due 2008.
At the same time, Standard & Poor's affirmed its outstanding
ratings on the company, including the 'BB-' corporate credit
rating. The outlook is stable.
The proposed notes are rated one notch below the corporate credit
rating due to the substantial amount of priority debt in the
capital structure (including borrowings under Finlay's secured
$225 million revolving credit facility and gold consignment
facility) relative to total assets.
"The ratings reflect the discretionary and seasonal nature of the
retail jewelry industry, intense competition, significant host
store concentration, and the company's leveraged capital
structure," said Standard & Poor's credit analyst Ana Lai. "These
factors are partially offset by Finlay's good market position as
the largest operator of licensed jewelry departments in department
stores, operating 970 units in 46 states."
Finlay's business profile reflects the economically sensitive
nature of jewelry retailing and broad competition from other
jewelry retailers in a highly competitive and fragmented market.
The company derives a substantial portion of its sales from its
two largest host store relationships, with May Department Stores
Co. accounting for about 51% of sales and Federated Department
Stores Inc. accounting for about 18% of sales for the past three
years. As such, Finlay's operations would be negatively affected
should the host stores decide to assume the operation of their
jewelry departments themselves. Further, consolidation activity
in the department store segment could result in Finlay gaining or
losing departments. Although the company's lease agreements
average less than five years, Finlay benefits from its
longstanding relationship with most of its host store groups.
FLEMING COS: Sankaty Offers High-Priced $70 Million Exit Facility
-----------------------------------------------------------------
James H. M. Sprayregen, Esq., at Kirkland & Ellis, LLP, in
Chicago, Illinois, reports that Sankaty Advisors, LLC, has
stepped forward to provide additional funding in the event the
$250 million Exit Facility backed by GE Capital Corp. doesn't
provide adequate financing to pay the obligations due on the
Effective Date under the Third Amended Plan or provide Core-Mark
Newco with adequate post-emergence working capital financing.
In exchange for a $1,750,000 upfront fee plus warrants to obtain
a 2% stake in Core-Mark Newco (valued at about $2 million),
Fleming Companies, Inc.'s signed a Put Agreement with the Sankaty
Funds allowing Core-Mark Newco to put up to $70,000,000 of new
second lien secured Core-Mark Newco notes to Sankaty for cash.
The $1,750,000 fee, at Core-Mark Newco's option, can be paid in
cash or in kind with new Tranche B Notes.
The interest rate on the loan will be LIBOR plus 12%. Pursuant
to the Tranche B Notes Term Sheet, 3% of the interest can be paid
by issuing additional notes. Sankaty will also receive
additional Put Consideration equal to another 12% in the form of
additional PIK Notes.
Core-Mark Newco must repay everything it owes to Sankaty in 5
years, subject to call protections if Core-Mark Newco wants to
pay its obligations early. The Sankaty Notes can't be repaid
before GE Capital is paid in full. Core-Mark Newco's obligation
to repay money it borrows from Sankaty will be secured by a lien
on all assets and that lien is subordinated to GE Capital's lien.
GE Captail, as previously reported, will extend up to $250 million
of Exit Financing to Core-Mark Newco.
The Bankruptcy Court has to put its stamp of approval on this
deal by June 4, 2004, or it falls apart by its own terms.
Fleming's Plan must also be confirmed within the next five months
so that the Effective Date takes place by October 31, 2004 . . .
or the deal collapses. If the deal collapses, Sankaty will hold
a $1,750,000 administrative claim against Core-Mark's and
Fleming's estates.
Bankruptcy Court documents show Fleming's been talking to Sankaty
since at least March 25, 2004.
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. 33; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
FLINTKOTE CO.: Hires Frantz Ward as Asbestos Litigation Counsel
---------------------------------------------------------------
The Flintkote Company wants to employ Frantz Ward LLP as its
special asbestos litigation counsel. The Debtor tells the U.S.
Bankruptcy Court for the District of Delaware that it is retaining
Frantz Ward because of the long-standing familiarity of the firm
with the its historical and current asbestos-related liability, as
well as their extensive experience in the field of asbestos
litigation and mass tort defense.
For over 25 years, Barbara J. Arison, Esq., has represented the
Debtor in connection with asbestos-related personal injury claims
and related litigation asserted against the Debtor. Currently, the
Debtor is subject to approximately 155,000 pending Asbestos PI
Claims asserted by or on behalf of asbestos personal injury
claimants. Frantz Ward has served as the Debtor's primary
litigation counsel with respect to Asbestos PI Claims since Ms.
Arisen joined the law firm of Frantz Ward in January, 2000.
Due to the vast number of pending Asbestos PI Claims and Frantz
Ward's familiarity with these claims, the Debtor submits that the
firm's continued representation is critical to the success of this
chapter 11 case.
Frantz Ward will provide the legal and litigation support required
by the Debtor in connection with its asbestos litigation matters
including, without limitation:
a. counseling, providing strategic advice to, and
representing the Debtor in connection with any and all
matters in or outside of these bankruptcy proceedings
arising from or relating to the Asbestos PI Claims,
including, without limitation;
(i) counseling and representing the Debtor and/or
coordinating the representation of the Debtor in
connection with all aspects of the Asbestos PI
Claims, including commencing, conducting and/or
defending related litigation wherever located;
(ii) counseling and representing the Debtor and assisting
the Debtor's general bankruptcy counsel in
connection with the formulation, negotiation and
promulgation of a plan of reorganization and related
documents as these documents relate to the Asbestos
PI Claims; and
(iii) counseling and representing the Debtor and assisting
the Debtor's general bankruptcy counsel in
connection with reviewing, estimating, and resolving
the Asbestos PI Claims;
b. analyzing, litigating and advising the Debtor concerning
the Asbestos PI Claims, including issues related to:
(i) removal, transfer, venue, abstention, injunctions,
automatic stay and related matters, in each case, to
the extent related to alleged asbestos liability;
(ii) assisting the Debtor's general bankruptcy counsel
with respect to trust distribution procedures as
they relate to the Asbestos PI Claims;
(iii) assisting and providing the Asbestos PI claims data
to a committee of creditors; and
(iv) advising the Debtor's general bankruptcy counsel
with respect to motions for relief from the
automatic stay relating to Asbestos PI Claims; and
c. rendering such other services as may be in the best
interests of the Debtor in connection with any of the
foregoing, as agreed upon by Frantz Ward and the Debtor.
Frantz Ward will charge the Debtor for its legal services on an
hourly basis in its ordinary and customary rates
Designation Billing Rate
----------- ------------
attorneys $375 to $170 per hour
paraprofessionals $120 to $50 per hour
Headquartered in San Francisco, California, The Flintkote Company
is engaged in the business of manufacturing, processing and
distributing building materials. The Company filed for chapter 11
protection on April 30, 2004 (Bankr. Del. Case No. 04-11300).
Attorneys at Sidley Austin Brown & Wood LLP serve as lead counsel
to the Company. James E. O'Neill, Esq., Laura Davis Jones, Esq.,
and Sandra G. McLamb, Esq., at Pachulski, Stang, Ziehl, Young &
Jones serve as local counsel to the Debtor in its restructuring
efforts. When the Company filed for protection from its
creditors, it listed both estimated debts and assets of more than
$100 million.
FOOTSTAR INC: Reminds Investors About Stock Ownership Restrictions
------------------------------------------------------------------
Footstar, Inc. reminds investors of certain ownership restrictions
for its common stock in connection with its Chapter 11 filing.
Specifically, the Company noted that there has been an order in
place as of the bankruptcy commencement date of March 2, 2004 that
prohibits any investors who owned less than 5% of Footstar's
common stock before the bankruptcy filing from purchasing an
additional amount of stock that would increase ownership to an
amount equal to or exceeding 5% of the total outstanding stock.
The order also prohibits any 5% or greater shareholders from
acquiring more stock.
In addition, the order requires shareholders to notify Footstar
upon the acquisition of 4.75% of the stock and, in the case of 5%
or greater shareholders, to notify the Company prior to the
disposition of any stock. Notices to this effect were published in
The New York Times and The Wall Street Journal on April 27, 2004.
A full copy of the order can be found on the Footstar website, at
http://www.footstar.com,in the restructuring information section,
or through the Footstar bankruptcy docket.
About Footstar, Inc.
Footstar, Inc. -- http://www.footstar.com/--which filed for
Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No.: 04-
22350) on March 3, 2004, is a leading footwear retailer. As of May
1, 2004, the Company operates 2,498 Meldisco licensed footwear
departments nationwide and 36 Shoe Zone stores. The Company also
distributes its own Thom McAn brand of quality leather footwear
through Kmart, Wal-Mart and Shoe Zone stores.
Paul M. Basta, Esq. of Weil Gotshal & Manges represents the debtor
in its restructuring efforts. When the company filed for
bankruptcy protection, it listed total assets of $762,500,000 and
total debts of $302,200,000.
FOREST OIL: Plans Wiser Oil Purchase to Enhance Business Value
--------------------------------------------------------------
Forest Oil Corporation (Forest) (NYSE:FST) announced a definitive
agreement to acquire all of the outstanding shares of The Wiser
Oil Company (Wiser) (NYSE:WZR) for cash consideration of $10.60
per share. Total consideration will be approximately $330 million,
including assumed debt of approximately $160 million. Forest
believes the transaction will be immediately accretive to its
shareholders on an earnings and cash flow basis.
The transaction provides the following benefits to Forest:
-- Increases the Canadian Business Unit's estimated proved
reserves and production by 35% and 67%, respectively, building
on its Canadian Plains operations
-- Increases the Western Business Unit's estimated proved reserves
and production by 29% and 26%, respectively, continuing to
build its Permian Basin position
-- Adds significant Gulf Coast and Canadian exploration acreage
Forest believes it can profitably exploit and add value to the
Permian Basin assets and reduce field operating costs. In
addition, the acquired Canadian assets have numerous infill
drilling locations for exploitation and the Wild River area
contains several multi-pay exploration opportunities similar to
Forest's successful Narraway field in the Alberta foothills.
Wiser's reported estimated proved reserves as of December 31, 2003
were 191 Bcfe, of which 51% were natural gas. Wiser produced
approximately 64 MMcfe/d in the first quarter of 2004. At December
31, 2003 approximately 50% of Wiser's production and 30% of its
reserves were located in Canada and 20% of Wiser's production and
45% of its reserves were located in the Permian Basin. Also,
approximately 85% of Wiser's estimated proved reserves were
classified as proved developed.
Forest has put in place hedges in anticipation of this
acquisition. Forest entered into natural gas NYMEX swap
arrangements for 25,000 to 30,000 MMbtus/d from July 2004 through
December 31, 2005 at an average price of $6.18 per MMbtu. It also
entered into oil NYMEX swap arrangements for 3,500 to 4,000 Bbls/d
for July 2004 through December 31, 2005 at an average price of
$35.37 per barrel.
Giving effect to this transaction, in the last year Forest has
acquired approximately:
-- 515 Bcfe of estimated proved reserves
-- 175 MMcfe/d of estimated production
-- 360,000 net undeveloped acres
Forest's total consideration for these transactions has been
approximately $720 million. The acquisitions were all made through
negotiated transactions in existing core areas of the company.
"This negotiated transaction will provide additional quality
assets to our Canadian, Western and Gulf Regions, all within their
defined areas of operations. We are particularly pleased to obtain
high quality Canadian assets at an attractive price given the
intense competition for Canadian assets lately. Most of the
acquired assets are in the same reservoirs, the same trends, and
the same neighborhoods as our existing assets. We believe the
Wiser assets will benefit from a more focused capital program and
the implementation of cost reduction initiatives. The investment
is consistent with our four-point strategy as we continue to
invest more capital into our traditional, high rate of return
areas. Nine months ago we stated our goal to acquire properties in
the Gulf Coast, Canada, and the Permian Basin. We have now
achieved that goal with superior economics and high quality
assets," said Craig Clark, Forest's President and Chief Executive
Officer.
Forest plans to finance the acquisition with a combination of
equity, debt and cash on hand. Forest also announced plans to
dispose of at least $100 million of non-strategic assets in the
U.S. and Canada, primarily from its existing portfolio. The asset
dispositions are anticipated to be completed by year-end.
Under the terms of the agreement between Wiser and Forest, a
subsidiary of Forest will commence a tender offer to purchase all
of the outstanding shares of Wiser at a price of $10.60 per share
in cash. The boards of directors of both Forest and Wiser have
unanimously approved the transaction. The Wiser board of directors
is recommending shareholders of Wiser accept the offer and the
holders of approximately 41 percent of the outstanding shares of
Wiser have agreed to tender their shares to the offer. The offer
is expected to commence within the next few days, and is expected
to close at the end of the second quarter or early in the third
quarter of 2004. A vote of Wiser's stockholders will be required
only if less than 90 percent of Wiser's shares are tendered into
the Forest offer. Under certain circumstances, should Forest not
be successful in acquiring the minimum number of shares required
under the tender offer, and Wiser is acquired by, or in certain
instances enters into an agreement to be acquired by another
party, Forest will receive a cash payment of $11 million from
Wiser.
Following completion of the tender offer and receipt of any
necessary Wiser stockholder approval, Wiser will merge with a
subsidiary of Forest and each share of Wiser common stock not
tendered in the tender offer will be converted into the right to
receive $10.60 in cash. Upon completion of the merger, Wiser will
become a wholly-owned subsidiary of Forest.
The closing of the tender offer and merger of the Forest
subsidiary and Wiser are subject to customary terms and
conditions, including the tender of at least a majority of Wiser's
outstanding shares of common stock on a fully diluted basis and
customary regulatory approvals.
* * *
As reported in the Troubled Company Reporter's January 29, 2004
edition, Standard & Poor's Rating Services placed its 'BB'
corporate credit rating on Forest Oil Corp. on CreditWatch with
negative implications.
The CreditWatch listing follows the company's announcement that
the company will record a year-end 2003 reserve write-down
totaling about 74 million barrels of oil equivalent or 444 billion
cubic feet equivalent, which is more than 28% of total 2002 proved
reserves (260 mmboe/1,559 bcfe). Adjusting for acquisitions
completed in 2003, year-end reserves are expected to total
approximately 1,300 bcfe, or 217 mmboe, down nearly 17% over 2002.
"Although we anticipated downward revisions related to Redoubt
Shoal, the magnitude of those revisions (nearly 1.5 times greater
than expected), coupled with the announcement of additional write-
offs aggregating 150 bcfe to be taken throughout the company's
portfolio of properties, significantly weakens the credit profile
and will likely lead to a ratings downgrade," said Standard &
Poor's credit analyst Kimberly Stokes.
GENTEK INC: Shapiro Capital Discloses 10.40% Equity Stake
---------------------------------------------------------
Shapiro Capital Management Company, Inc., beneficially owns
1,040,050 shares of the common stock of GenTek Inc., representing
10.40% of the outstanding common stock of GenTek. Shapiro Capital
Management holds sole voting and dispositive powers over the
1,040,050 shares.
Hampton, New Hampshire-based GenTek Inc. is a diversified provider
of automotive and industrial products and specialty chemicals,
with revenues around $1 billion (before the Krone sale). The Krone
unit had revenues of $316 million and adjusted operating income of
$13 million in 2003. GenTek emerged from bankruptcy in November
2003.
As previously reported, Standard & Poor's Ratings Services said
that its 'BB-' corporate credit rating on Gentek Inc. remains on
CreditWatch with positive implications where it was placed on
March 26, 2004, when the company announced that it had agreed to
sell its Krone communications business to unrated ADC
Telecommunications Inc.
Standard & Poor's also withdrew its 'B' senior secured
rating (with a second lien), as the debt was repaid in full with
asset sale proceeds. GenTek previously announced that it had
completed the sale for $294 million in cash and the assumption of
around $56 million of pension and employee-related liabilities.
Net proceeds mostly reduced debt and, after application of
proceeds, the company is expected to have $25 million-$35 million
of cash and less than $2 million in debt.
GETTY PETROLEUM: Acquires 779 ConocoPhillips Gasoline Stations
--------------------------------------------------------------
Getty Petroleum Marketing Inc., a wholly owned subsidiary of OAO
LUKOIL, announced that its acquisition of 779 Mobil-branded
gasoline stations in New Jersey and Pennsylvania from
ConocoPhillips closed.
According to the terms of this transaction, Getty Petroleum
Marketing Inc. has acquired 308 Mobil-branded fee and lease
properties plus contracts to supply an additional 471 Mobil-
branded locations. Collectively, these sites generate over 1.1
billion gallons of gasoline sales annually and will more than
double the amount of Getty's current light product sales in the
United States.
"We are pleased to announce the closing of this transaction," said
Vincent De Laurentis, President and COO of Getty Petroleum
Marketing Inc. "With this deal finalized, and with the addition of
such premier locations to our portfolio, Getty and LUKOIL have
solidified their position in the Northeast market. We look forward
to continuing our position as a leading supplier of petroleum
products to U.S. consumers."
Lehman Brothers, a global investment bank, acted as sole lead
arranger and sole bookrunner for the Credit Facility and financial
advisor for the acquisition. Renaissance Capital, a Moscow based
investment bank, also acted as financial advisors for the
acquisition.
About the Company
Founded in 1991, LUKOIL is one of the world's largest vertically
integrated oil companies and currently ranks second in the world
in terms of proven reserves. As a publicly traded company, LUKOIL
is the most diversified Russian oil company and the first to have
ventured abroad to make a significant commitment to the U.S.
market. LUKOIL is Russia's number one petroleum refiner and with
this acquisition, has more than 4,700 gasoline stations worldwide
and over 2,000 outlets in the United States. It is publicly traded
on numerous international stock exchanges and most recently was
listed on the London Stock Exchange (Symbol: LKOD).
* * *
As reported in the Troubled Company Reporter's May 6, 2004
edition, Standard & Poor's Ratings Services assigned its 'B+'
corporate credit rating to Getty Petroleum Marketing Inc. In
addition, Standard & Poor's assigned its 'BB-' rating and a
recovery rating of '1' to the company's proposed $75 million
senior secured revolving credit facility due 2008 and its 'B+'
rating and recovery rating of '2' to the company's proposed $270
million senior secured term loan B due 2010.
Getty, an indirect wholly owned subsidiary of OAO Lukoil
(BB/Stable/--), is a petroleum marketing company that is focused
on the Northeastern U.S. Getty today controls 1,080 retail service
stations, supplies an additional 240, and has a small home heating
oil business.
GLENN MCCLENDON: Wants Until July 5 to Propose a Chapter 11 Plan
----------------------------------------------------------------
Glenn McClendon Trucking Company, Inc., asks the U.S. Bankruptcy
Court for the Middle District of Alabama for an additional 60-day
extension of time within which only the Debtor has the right to
file a chapter 11 plan and disclosure statement.
The Debtor relates that from almost the inception of the filing of
the case, it focused on working out a sale of its major assets, a
merger, or some sort of acquisition with Carroll Fulmer Trucking
Company of Florida. Recently, it became obvious to the officers
and management of Debtor that the offer of Carroll Fulmer was
going to be inadequate considering the value of the Debtor's
assets.
While the possibility of the Debtor working out an agreement with
Carroll Fulmer has not ended, it believes that the chances of an
agreement being worked out in the near future are extremely slim.
As a result, the Debtor has started concentrating its efforts on
trying to formulate a true plan of reorganization, and to continue
its operations after certain changes are made.
The Debtor points out that it needs at least until July 5, 2004 to
exclusively file its plan and disclosure statement.
Headquartered in LaFayette, Alabama, Glenn McClendon Trucking Co.,
Inc., -- http://www.mccl.com-- is a leading van TL carrier with
emphasis on time sensitive transportation services, dedicated
equipment, and a full range of Logistics capabilities. The
Company filed for chapter 11 protection on January 7, 2004 (Bankr.
M.D. Ala. Case No. 04-80022). Charles-LH Parnell, Esq., at
Parnell & Crum, P.A., represents the Debtor in its restructuring
efforts. When the Company filed protection from its creditors, it
listed $8,200,000 in total assets and $13,000,000 in total debts.
GLOBAL CROSSING: Richard Rainwater Discloses 13.6% Equity Stake
---------------------------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission dated May 11, 2004, billionaire Richard E. Rainwater
discloses that he beneficially owns 3,000,000 shares of Global
Crossing Ltd. common stock, which constitutes approximately 13.6%
of the 22,000,000 shares outstanding:
(a) 2,891,458 shares owned directly by Mr. Rainwater; and
(b) 108,542 shares owned by The Richard E. Rainwater
Charitable Remainder Unitrust No. 2, Richard E. Rainwater,
Trustee.
Mr. Rainwater is the sole trustee of the Trust and in that
capacity exercises the power to vote and to dispose of all shares
owned by the Trust. Mr. Rainwater may have a pecuniary interest
in the shares owned by the Trust.
Mr. Rainwater acquired in December 2003 and February 2004 an
aggregate of 280,138 shares of the Stock, and the Trust acquired
in December 2003 108,542 shares of the Stock, pursuant to the
GX's bankruptcy plan of reorganization.
From March 17 through May 11, 2004, Mr. Rainwater used
$24,390,327.10 in personal funds to make open market purchases of
2,611,320 shares of GX common stock.
According to Mr. Rainwater, all of the shares of GX Stock he
acquired have been acquired for investment purposes.
Headquartered in Florham Park, New Jersey, Global Crossing Ltd.
-- http://www.globalcrossing.com/-- provides telecommunications
solutions over the world's first integrated global IP-based
network, which reaches 27 countries and more than 200 major cities
around the globe. Global Crossing serves many of the world's
largest corporations, providing a full range of managed data and
voice products and services. The Company filed for chapter 11
protection on January 28, 2002 (Bankr. S.D.N.Y. Case No.
02-40188). When the Debtors filed for protection from their
creditors, they listed $25,511,000,000 in total assets and
$15,467,000,000 in total debts. Global Crossing emerged from
chapter 11 on Dec. 9, 2003. (Global Crossing Bankruptcy News,
Issue No. 60; Bankruptcy Creditors' Service, Inc., 215/945-7000)
HEALTHSOUTH: Extends Consent Solicitations through May 27, 2004
---------------------------------------------------------------
HealthSouth Corp. (OTC Pink Sheets: HLSH) announced that it is
extending its solicitation of consents from holders of its 6.875%
Senior Notes due 2005, 7.375% Senior Notes due 2006, 7.000% Senior
Notes due 2008, 8.375% Senior Notes due 2011, and 7.625% Senior
Notes due 2012 until 11:59 p.m., New York City Time, on May 27,
2004.
HealthSouth initiated the consent solicitations in order to
minimize litigation and consensually resolve the amount of the
payment to be made to Noteholders in exchange for required waivers
and consents. In return for these consents and waivers, the
Company has offered a fee of 1.375% of the debt outstanding, which
the Company believes is fair compensation. Holders of two tranches
of the Company's notes -- the 10.750% Senior Subordinated Notes
due 2008 and 8.500% Senior Notes due 2008 -- have overwhelmingly
accepted the 1.375% consent payment, which the Company believes
underscores the commercial reasonableness of its proposal.
This dispute between the Company and its Noteholders is merely a
commercial dispute between parties as to the amount of money to be
paid for consents and waivers. It does not involve the Company's
operations or its ability to meet its interest payment
obligations.
The Company intends to continue to negotiate with its Noteholders
and is optimistic that these differences will be resolved on a
fair and commercially reasonable basis in order to facilitate its
continuing restructuring efforts.
Terms of Consent Solicitations
The Company has agreed to pay $13.75 per $1,000 principal amount
to holders of its 6.875% Senior Notes due 2005, 7.375% Senior
Notes due 2006, 7.000% Senior Notes due 2008, 8.375% Senior Notes
due 2011 and 7.625% Senior Notes due 2012 who deliver valid and
unrevoked consents prior to the expiration of the consent
solicitations, subject to the proposed amendments to the
indentures becoming operative.
Each holder of notes who consents to the proposed amendments will
also be waiving all alleged and potential defaults under the
indentures arising out of events occurring on or prior to the
effectiveness of the proposed amendments. Consents for any series
of notes may be revoked at any time prior to the date on which the
trustee under the indenture for that series receives evidence that
the requisite consents have been obtained.
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/
IA GLOBAL: Discloses Changes to Board Line-Up
---------------------------------------------
On April 5, 2004, IA Global Inc. announced that effective April 3,
2004, Chinin Tana, Satoru Hirai, Hiroshi Kubori and Masazumi Ishii
resigned as directors of the Company. Masazumi Ishii, the Audit
Committee Chairman, was the Audit Committee Financial Expert
within the meaning of the SEC rules. According to the Company the
resignations were not due to any disagreement with the Company on
any matter relating to the its operations.
On April 5, 2004, the Company also announced that Eric La Cara was
appointed a director of the Company. In addition, Mr. La Cara was
appointed Chairman of the Audit Committee and the Audit Committee
Financial Expert within the meaning of the SEC rules and a member
of the Nominating and Compensation committees. Mr. La Cara has
been the Representative Director of Aviso Group, in Japan since
2001, focusing on Japan market entry, Accounting & Tax, subsidiary
set-up, and corporate registration, and Finance Manager of NuCore
Technology, a Japanese subsidiary of a US based technology
company, since January 2004. He also served as Financial Manager
of Nihon Synopsys, a Japanese subsidiary of a US based technology
company from November 2002 until December 2003.
As a result of these changes, the Company's Board will consist of
two management directors, Alan Margerison, CEO, and Mark E. Scott,
CFO, and three independent directors, Raymond Christinson, Jun
Kumamoto and Eric La Cara. The Company's Audit, Compensation and
Nominating Committees will each be comprised solely of the
Company's independent directors. Thus, the Company will remain in
compliance with relevant AMEX and SEC rules for Board composition
and Corporate governance.
Officer Resignation
On April 5, 2004, the Company announced that Satoru Hirai,
resigned as Chief Operating Officer effective March 31, 2004.
Liquidity and Capital Resources
In its Form 10-Q For the quarterly period ended March 31, 2004
filed with the Securities & Exchange Commission, IA Global, Inc.,
reports:
"We had cash of approximately $4.5 million and net working capital
of approximately $1.8 million as of March 31, 2004. We had a net
loss of $2.1 million for the year ended December 31, 2003 and we
expect to incur operating losses through 2004.
"We received $280,000 from the sale of iAccele on January 16,
2004, $400,000 from a subscription agreement from an affiliated
party on January 12, 2004, $354,000 from the sale of our Fan Club
shares on February 10, 2004 and $1,500,000 from a convertible note
from an affiliated party on March 17, 2004. We may need to obtain
additional financing in order to continue our current operations,
including the cash flow needs of Fan Club, Rex Tokyo and QuikCAT
Australia and to acquire businesses. Our major shareholder has
indicated a willingness to support our financing efforts. However,
there can be no assurance that we will be able to secure
additional funding, or that if such funding is available, whether
the terms or conditions would be acceptable to us, from our major
shareholder or otherwise. Moreover, if we raise additional capital
through borrowing or other debt financing, we would incur
substantial interest expense. Sales of additional equity
securities will dilute on a pro rata basis the percentage
ownership of all holders of common stock. If we do raise more
equity capital in the future, it is likely that it will result in
substantial dilution to our current stockholders."
ILLUMINATIONS.COM: Has Until June 9 to File a Chapter 11 Plan
-------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the Central District of
California, Los Angeles Division, Illuminations.com, Inc.,
obtained an extension of its exclusive periods. The Court gives
the Debtor until June 9, 2004, the exclusive right to file its
plan of reorganization and until August 6, 2004, to solicit
acceptances of that Plan.
Headquartered in Petaluma, California, Illuminations.com, Inc. --
http://www.illuminations.com-- is a premium candle manufacturer
with products that include candles and accessories, tabletop
decorations, mirrors, accent furniture, crystal and others. The
Company filed for chapter 11 protection on January 9, 2004 (Bankr.
C. Calif. Case No. 04-10427.) Haig M. Maghakian, Esq., At
Millbank, Tweed, Hadley & McCloy represents the Debtor in its
restructuring efforts. When the Company filed for protection from
its creditors, it listed estimated assets of over $10 million and
estimated debts of more than $50 million.
IPCS INC: Stockholders' Deficit Widens to $192 Mil. at March 31
---------------------------------------------------------------
IPCS Inc., a Sprint PCS affiliate that owns and operates the
Sprint PCS network in 38 markets in four Midwestern states,
reported financial results for the second fiscal quarter ended
March 31, 2004. This information supplements the subscriber
activity results, which the Company previously announced on April
12, 2004.
iPCS is the PCS Affiliate of Sprint with the exclusive right to
sell wireless mobility communications, network products and
services under the Sprint brand in 38 markets in Illinois,
Michigan, Iowa and eastern Nebraska with approximately 7.6 million
residents. The territory includes key markets such as Grand
Rapids, Michigan, Champaign-Urbana and Springfield, Illinois, and
the Quad Cities of Illinois and Iowa. iPCS is headquartered in
Schaumburg, Illinois.
On November 30, 2001, AirGate PCS, Inc. acquired 100% of the
shares of iPCS by means of a stock-for-stock merger. iPCS was
designated as an unrestricted subsidiary of AirGate and both
companies operated as separate business entities.
On February 23, 2003, iPCS and its wholly owned subsidiaries filed
voluntary petitions seeking relief from creditors pursuant to
Chapter 11 of the Bankruptcy Code in the United States Bankruptcy
Court for the Northern District of Georgia. On October 17, 2003,
AirGate PCS irrevocably transferred all of its shares of iPCS
common stock to a trust organized under Delaware law. The
beneficial owners of AirGate common stock at the date of transfer
are beneficiaries of the trust. AirGate has no interest in the
trust. iPCS filed its plan of reorganization with the Court on
March 31, 2004, which was amended on April 16, 2004. iPCS filed
its disclosure statement with the Court on April 16, 2004. A
hearing on the disclosure statement has been scheduled for May 27,
2004.
On April 30, 2004, iPCS Escrow Company, a recently formed, wholly
owned indirect subsidiary of iPCS, completed an offering of $165
million aggregate principal amount of 11.50% senior notes due
2012. In connection with the confirmation and effectiveness of the
plan of reorganization, iPCS Escrow Company will be merged with
and into iPCS and, upon the consummation of the merger, the senior
notes will be senior unsecured obligations of iPCS. iPCS Escrow
Company deposited the proceeds of the offering into an escrow
account pending the merger. If the merger has not been consummated
or if iPCS elects a special manadatory redemption, in each case
prior to August 28, 2004, iPCS Escrow Company will redeem all of
the senior notes at a price equal to 100% of the principal amount
plus interest.
At March 31, 2004, iPCS, Inc.'s balance sheet shows a
stockholders' deficit of $191,828,000 compared to a deficit of
$179,577,000 at September 30, 2003.
KAISER: Wants to Extend Time to Remove Actions Until Sept. 12
-------------------------------------------------------------
Pursuant to Section 1452 of the Judiciary Procedures and Rule
9027 of the Federal Rules of Bankruptcy Procedure, the Kaiser
Aluminum Corporation Debtors ask the Court to further extend their
deadline to remove pending actions to the later of:
-- September 12, 2004, or
-- 30 days after an order is entered terminating the automatic
stay with respect to a particular action sought to be
removed.
Kaiser Aluminum and Chemical Corporation and other Debtors remain
parties to a wide-variety of non-asbestos prepetition litigation,
and a significant number of prepetition asbestos-related
proceedings that are pending in multiple courts and tribunals.
Due to the number of Actions involved and the complex nature of
the Actions, the Debtors require more time to determine which, if
any, of the Actions should be removed and, if appropriate,
transferred to the District Court. The extension will protect
the Debtors' valuable right to economically adjudicate the
lawsuits if the circumstances warrant removal.
Absent an extension of the Removal Deadline, Kimberly D.
Newmarch, Esq., at Richards, Layton & Finger, in Wilmington,
Delaware, explains that the potential consolidation of the
Debtors' affairs into one court may be frustrated, and the
Debtors may be forced to address these claims and proceedings in
a piecemeal fashion to the detriment of their creditors. Ms.
Newmarch assures the Court that the affected plaintiffs will
not be prejudiced with the extension because the plaintiffs may
not prosecute the Actions absent the lifting of the automatic
stay.
Judge Fitzgerald will convene a hearing on June 21, 2004 at 1:30
p.m. to consider the Debtors' request. By application of
Del.Bankr.LR 9006-2, the removal period is automatically extended
through the conclusion of that hearing.
Headquartered in Houston, Texas, Kaiser Aluminum Corporation
operates in all principal aspects of the aluminum industry,
including mining bauxite; refining bauxite into alumina;
production of primary aluminum from alumina; and manufacturing
fabricated and semi-fabricated aluminum products. The Company
filed for chapter 11 protection on February 12, 2002 (Bankr. Del.
Case No. 02-10429). Corinne Ball, Esq., at Jones, Day, Reavis &
Pogue, represent the Debtors in their restructuring efforts. On
September 30, 2001, the Company listed $3,364,300,000 in assets
and $3,129,400,000 in debts. (Kaiser Bankruptcy News, Issue No.
43; Bankruptcy Creditors' Service, Inc., 215/945-7000)
KMART: Asks Court To Disallow Continental's $24.5MM Damage Claims
-----------------------------------------------------------------
The Kmart Corporation Debtors ask the Court to disallow a portion
of Claim Nos. 45580 and 45583 filed by Continental Properties
Companies, Inc., Continental 107 Fund, Ltd., Continental 126 Fund,
Ltd., and Continental 88 Fund, Ltd., which seek recovery of
construction costs related to the Debtors' rejection of real
property leases.
In March 30 and August 21, 2001, the Debtors entered into two
leases with Continental for stores that had not yet been
constructed. Under the Leases, Continental was to construct the
Stores at its sole cost and expense and then, once construction
was finished, the Debtors would occupy the Stores and start
paying rent to Continental. The Debtors had no financial
obligation to Continental unless and until the Store was
completed and Kmart starts occupying the Store.
Andrew Goldman, Esq., at Wilmer, Cutler, Pickering, LLP, in New
York, relates that construction of the Stores was ongoing when
the Debtors filed for bankruptcy. Continental then immediately
stopped construction of the Stores, even though it had incurred
about $12,000,000 in total construction costs for both Stores.
In April 2002, the Debtors rejected both of the Leases under
Section 365 of the Bankruptcy Code.
In July 2002, Continental filed the Claims based on the Debtors'
rejection of the Leases. Continental asserted that it suffered
$12,500,000 in damages resulting from the Debtors' failure to
make monthly Lease payments and other rent obligations, though
Continental concedes that any damages are capped by Section
502(b)(6) of the Bankruptcy Code. Continental asserted that it
suffered additional, uncapped construction cost damages for about
$12,000,000.
Mr. Goldman contends that Continental's Construction Damage
Claims should be disallowed because:
(a) the Debtors were not obligated to pay any of the
construction costs for the Stores under the Leases or any
other agreement between the parties; and
(b) even if the Debtors were somehow liable for the
construction costs, the Construction Damage Claims are
duplicative of the Section 502(b)(6) Claims, and
allowance of both would provide double recovery to
Continental.
Pursuant to the Leases, Continental was at all times solely
responsible for all construction costs for both of the Stores.
Nothing in the Leases requires the Debtors to pay or reimburse
Continental for construction costs.
Continental would ostensibly recoup its expenditures through the
rent payments made by the Debtors under the Leases, which would
commence once the Debtors occupy the Stores. If the Debtors
chose not to occupy the Stores or if Continental never completed
the construction work, Continental assumed the risk of not
recouping its construction costs.
Mr. Goldman notes that Continental has not provided the Debtors
with any basis for asserting the Construction Damage Claims, and
the Leases expressly state that Continental is not permitted to
recover based on equitable grounds. Assuming that Continental
would somehow be entitled to recoup its construction costs under
some equitable theory, Continental's Construction Damage Claims
should be disallowed because they are duplicative of each of the
Section 502(b)(6) Claims. In essence, Continental is seeking a
windfall -- to receive the benefit of its bargain and to have the
Debtors pay its costs for entering into the Lease. (Kmart
Bankruptcy News, Issue No. 74; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
LES BOUTIQUES: Court Grants CCAA Stay Extension Until July 30
-------------------------------------------------------------
Les Boutiques San Francisco Incorporees announces that the
Superior Court of Quebec has granted an extension of seventy
days pursuant to the initial order issued last December 17, 2003
under the Companies' Creditors Arrangement Act. The extension is
granted until July 30, 2004.
However, in the event that no plan of arrangement is sent to
creditors on or before June 9, 2004 or if the plan of arrangement
sent is not based on the recapitalization offer accepted by the
Corporation on May 10, 2004, the Corporation will be required to
return before the Court to detail the reasons thereof. Moreover,
if no meeting of creditors is held in order to approve the plan
of arrangement on or before July 6, 2004, the Corporation will
have to return before the Court to detail the reasons thereof.
The offer accepted on May 10, 2004 by the Corporation aims to
recapitalize and recover the business of the Corporation and of
Les Ailes de la Mode Incorporees. The offer was made by a group of
investors composed of business people including the Corporation's
founder, Mr. Paul Delage Roberge. The offer consists in a private
offering involving the purchase of units of the Corporation (up to
one third of the amount subscribed) and debentures of the
Corporation (up to two thirds of the amount subscribed).
The total minimum amount of the offering is $15.4 million. The
recapitalization offer is conditional notably upon an agreement
regarding the Complexe Les Ailes in downtown Montreal being
entered into between the Corporation, Les Ailes and Ivanhoe
Cambridge by May 27, 2004. Negotiations continue between the
Corporation, Les Ailes, Ivanhoe Cambridge and the Group of
investors on such matter.
The offer of recapitalization also provides for payment of a
total of $15.6 million to the creditors of the Corporation and
Les Ailes other than the banking syndicate. This amount will be
distributed in the proportions and on such terms and conditions
still to be determined by the Corporation and Les Ailes.
Finally, the Corporation wishes to inform that as for the 8%
convertible unsecured subordinated debentures previously issued
and outstanding, it has not paid to the holders the interest
payable on December 21, 2003 and will not pay the interest payable
on June 21, 2004. Pursuant to the initial order issued by the
Court under the CCAA, no holder of Debentures may terminate,
suspend or accelerate the term of its Debentures by reason of non-
payment of interest by the Corporation. Holders of Debentures will
be invited to tender their claims under the arrangement.
The Court orders issued pursuant to the CCAA as well as the
reports of RSM Richter Inc., the monitor designated by the Court,
are available at http://www.rsmrichter.com/
Additional information relative to the Corporation, including its
annual and interim financial statements, is available through
SEDAR at http://www.sedar.com/
As part of its restructuring process, the Corporation has sold
its Boutiques San Francisco as well as two lingerie boutiques,
Victoire Delage and Moments Intimes. The Corporation still
operates four Les Ailes de la Mode stores and a network of
bathing suit stores operating under the banners Bikini Village
and San Francisco Maillots.
MARCO RADOMILE FAMILY: Voluntary Chapter 11 Case Summary
--------------------------------------------------------
Lead Debtor: Marco Radomile Family Trust
c/o Marco A. Radomile, Trustee
37 Alcatraz Avenue
Belvedere, California 94920
Bankruptcy Case No.: 04-11170
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Marco A. Radomile 04-11171
Chapter 11 Petition Date: May 12, 2004
Court: Northern District of California (Santa Rosa)
Judge: Alan Jaroslovsky
Debtor's Counsel: Jeffrey J. Goodrich, Esq.
Law Offices of Goodrich and Jameson
350 Bon Air Center #220
Greenbrae, California 94904
Tel: 415-925-8630
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20-largest creditors.
MATSUSHITA ELECTRIC: Closing Vacuum Cleaner Company in Spain
------------------------------------------------------------
Matsushita Electric Industrial Co., Ltd. (NYSE symbol: MC), best
known for its "Panasonic" brand products, announced plans to
discontinue operations at its subsidiary Matsushita Electric
Espana, S.A. (MAES) at the end of December, 2004, after which it
will begin closing/liquidation procedures.
MAES, which is responsible for production of vacuum cleaners for
the European market, recorded decreased profitability due to
intensified competition and price declines in its market. To
further expand sales of vacuum cleaners in the European market,
Matsushita will shift production to factories in China.
About Matsushita Electric
MAES was established in Barcelona in September 1973 through the
purchase of shares of Anglo Espanola, a Spanish manufacturer of
TVs and other electric appliances. MAES has supplied approximately
13.5 million vacuum cleaners over the past 28 years, since its
start of production in 1975.
MINORPLANET: Wants to Stretch Lease Decision Deadline to July 15
----------------------------------------------------------------
Minorplanet Systems USA, Inc., and its debtor-affiliates are
asking the U.S. Bankruptcy Court for the Northern District of
Texas, Dallas Division, for more time to decide whether they
should assume, assume and assign, or reject their unexpired
nonresidential real property leases.
The Debtors tell the Court that they were hopeful a plan of
reorganization would be confirmed prior to June 1, 2004 -- the
current deadline for assuming or rejecting the remaining leases.
However, certain factors, such as the delay in the appointment of
the Official Committee of Unsecured Creditors, delayed progress in
these proceedings.
The Debtors and the Committee have conferred and met numerous
times since the Committee's appointment, and the Debtors
subsequently filed their Amended Disclosure Statement and their
Amended Joint Plan of Reorganization.
The Debtors have been negotiating with the landlord under one of
the remaining leases and expect to reach an agreement under which
that lease will be restructured and assumed. The Debtors need
additional time to finalize their decision with regard to this
matter.
Consequently, the Debtors request the Court to further extend
their lease decision period until the earlier of:
(i) the confirmation of the Plan, which is expected to occur
by the end of June 2004, and
(ii) July 15, 2004.
Headquartered in Richardson, Texas, Minorplanet Systems USA, Inc.
-- http://www.minorplanetusa.com/-- develops and implements
mobile communications solutions for service vehicle fleets, long-
haul truck fleets and other mobile-asset fleets, including
integrated voice, data and position location services. The
Company filed for chapter 11 protection on February 2, 2004
(Bankr. N.D. Tex. Case No. 04-31200). Omar J. Alaniz, Esq., and
Patrick J. Neligan, Jr., Esq., at Neligan, Tarpley, Andrews and
Foley 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.
MIRANT: Simpson Wants Court Nod to Withdraw as Committee Counsel
----------------------------------------------------------------
The Official Committee of Unsecured Committee of Mirant
Corporation retained Simpson Thacher & Bartlett, LLP, as
its co-counsel on July 25, 2003. The Mirant Committee has
recently determined to employ the slate of advisors that advised
the prepetition bank agents. Simpson is willing to facilitate the
Mirant Committee's preference to receive advice from those sources
by withdrawing from representation of the Mirant Committee.
Accordingly, Simpson asks the Court to authorize its withdrawal
from legal representation of the Mirant Committee.
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. 33; Bankruptcy Creditors' Service, Inc., 215/945-7000)
MIRANT CORPORATION: Bankruptcy Examiner Names Gardere as Counsel
----------------------------------------------------------------
The national law firm of Gardere Wynne Sewell LLP has been
retained as counsel by the Examiner appointed in the pending
multi-billion-dollar bankruptcy of Mirant Corp. (OTC Pink Sheets:
MIRKQ), the Atlanta-based power generation company.
Gardere partner Richard M. Roberson will lead the firm's efforts
on behalf of turnaround specialist William K. Snyder of Dallas'
Corporate Revitalization Partners Inc. Roberson will be supported
by Gardere partner Holland N. O'Neil.
U.S. Bankruptcy Judge D. Michael Lynn of Fort Worth appointed
Snyder as Examiner in April, and Snyder has retained Gardere as
counsel pending court approval.
"We are proud to have been selected to work on one of the largest
bankruptcy cases in the nation," Mr. Roberson says. "Our firm
looks forward to working with Mr. Snyder and his company in the
effort to bring resolution to this massive filing."
Mirant, which has annual revenues of nearly $5 billion, was spun
off from Atlanta-based Southern Company in 2001. Following a
series of financial setbacks, Mirant and numerous direct and
indirect subsidiaries filed for Chapter 11 protection in July
2003, just hours before a midnight deadline for restructuring $4.5
billion in debt.
Judge Lynn ordered Mr. Snyder to investigate several issues in the
Mirant case, including potential causes of action against Mirant
insiders, the Southern spin-off and various intercompany
transactions. In addition, Mr. Snyder will coordinate discovery
efforts and assist in communications among the parties.
Mr. Roberson brings more than 25 years of legal experience to the
Mirant case, having represented major banks, asset-based lenders,
trustees, creditors' committees, receivers, creditors and debtors
in a variety of industries.
Ms. O'Neil has worked on some of the country's largest bankruptcy
cases for more than 17 years. Her clients include debtors in
possession, creditors, trustees, creditors' committees, as well as
clients interested in acquiring assets from troubled companies.
Gardere recently completed the successful restructuring of $1.5
billion debt for CoServ Electric and its affiliates.
Gardere Wynne Sewell LLP, an AmLaw 200 firm, was founded in 1909
and is one of the Southwest's largest full-service law firms. With
offices in Austin, Dallas, Houston, Mexico City and Washington,
D.C., Gardere provides legal services to private and public
companies and individuals in areas of litigation, corporate, tax,
environmental, labor and employment, intellectual property and
financial services.
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.
MITEK SYSTEMS: Stock Trades on OTCBB Pending Nasdaq Appeal Outcome
------------------------------------------------------------------
Mitek Systems, Inc. (Nasdaq: MITK) announced receipt of a
notification from Nasdaq that following a hearing before a Nasdaq
Listing Qualifications Panel on April 22, 2004, the common stock
of Mitek would be delisted from the Nasdaq SmallCap Market
effective with the open of business on Monday, May 24, 2004. The
Nasdaq notice stated that the Panel's determination was based on
Mitek's failure to satisfy the $2.5 million shareholders' equity
requirement as of December 31, 2003.
Nasdaq informed Mitek that its securities would be immediately
eligible for quotation on the OTC Bulletin Board effective with
the open of business on Monday, May 24, 2004. The OTC Bulletin
Board symbol assigned to Mitek is MITK. No application is required
to be filed for inclusion on the OTC Bulletin Board, provided a
market maker enters a quote on the first day of eligibility.
Nasdaq has included the delisting announcement on the "Daily List"
which is available on http://www.OTCBB.com/and to subscribers of
http://www.Nasdaqtrader.com/Shareholders will be able to obtain
quotes for Mitek's common stock at http://www.OTCBB.com//or
through their broker.
Although Mitek plans to appeal the decision made by the Nasdaq
Listing Qualifications Panel, the company's common stock will
trade on the OTC Bulletin Board pending the outcome of the appeal.
No assurance can be made that the appeal will be successful.
"While we are disappointed with the outcome of the hearing, we
believe Nasdaq's decision has no bearing on our ability to move
forward with our business plan," said James DeBello, President and
Chief Executive Officer of Mitek Systems, Inc. "Our recent non-
binding letter of intent with the Laurus Funds, as mentioned in
the May 18, 2004 press release, should help provide us with the
access to capital we need to expand various sales and marketing
initiatives at the Company. We remain upbeat about our future as
we continue to develop new, value added products for our
customers."
About Mitek Systems
Mitek Systems is a premier provider of imaging, item processing,
and check fraud protection solutions for the banking industry and
an established global supplier of embedded software recognition
engines. Mitek develops recognition technology using advanced
neural networking techniques and deploys this expertise in fraud
prevention, check, financial document and forms processing
applications. These applications automatically process over 8
billion documents per year for a variety of OEMs, reseller
partners and end users. For more information about Mitek Systems,
contact us at 14145 Danielson Street, Suite B, Poway, CA 92064;
858-513-4600 or visit our Web site at http://www.miteksystems.com/
* * *
In its Form 10-Q for the quarterly period ended December 31, 2003,
Mitek Systems, Inc. reports:
"The Company's working capital and current ratio were $1,445,000
and 1.67, respectively, at December 31, 2003, and $2,341,000 and
1.87, respectively, at September 30, 2003. At December 31, 2003,
total liabilities to equity ratio was 1.53 to 1 compared to 1.19
to 1 at September 30, 2003. As of December 31, 2003, total
liabilities were $588,000 less than on September 30, 2003.
"The Company currently has a working capital line of credit. This
line requires interest to be paid at prime plus 1 percentage
point, but is subject to a limit on available borrowings of
$750,000. The Company had no borrowings under the working capital
line of credit on December 31, 2003 or on September 30, 2003. This
credit line is subject to a net worth covenant whereby the Company
must maintain a net worth of $2,000,000 in order to use the credit
line. Though the Company had no borrowings under the credit line
as of December 31, 2003, at such time the Company's net worth was
$1,621,000.
"The existing credit line expires on February 28, 2004. The loss
sustained during the quarter ended December 31, 2003 caused the
Company's net worth to fall to $1,621,000. Though the Company had
no borrowings under the credit line as of December 31, 2003, the
Company was no longer in compliance with the aforementioned net
worth covenant. The Company is currently negotiating with its
lender regarding a new credit line. No assurance can be made that
the Company will be able to obtain a new credit line on favorable
terms, or at all. The inability to obtain a favorable credit line
would have a detrimental impact on the Company's liquidity and
could have a material adverse effect on its business, results of
operations and financial position.
"The operations from Fiscal 2003 and the quarter ended December
31, 2003 have resulted in significant operating losses. Should
additional losses occur, the Company may need to raise significant
additional funds to continue its activities. In the absence of
positive cash flows from operations, the Company may be dependent
on its ability to secure additional funding through the issuance
of debt or equity instruments. If adequate funds are not
available, the Company may be forced to significantly curtail its
operations or to obtain funds through entering into collaborative
agreements or other arrangements that may be on unfavorable terms.
The Company's failure to raise sufficient additional funds on
favorable terms, or at all, would have a material adverse effect
on its business, results of operations and financial position."
NAVIGATOR VENTURES: Retains SF Partnership as New Accountant
------------------------------------------------------------
Navigator Ventures, Inc. has appointed SF Partnership LLP as its
new independent public accountant and Amisano Hanson has resigned
effective March 30, 2004, as its independent public accountant,
effective with respect to the Company's fiscal year ending
December 31, 2002. This change in independent public accountants
was approved by the Board of Directors of the Company on March 30,
2004.
The audit reports of Amisano Hanson on the financial statements of
Navigator Ventures as of, and for, the fiscal year ended December
31, 2001, contained an explanatory paragraph as to the Company's
ability to continue as a going concern.
NEW WORLD: Gets Court Nod to Hire Ordinary Course Professionals
---------------------------------------------------------------
New World Pasta Company and its debtor-affiliates sought and
obtained approval from the U.S. Bankruptcy Court for the Middle
District of Pennsylvania to continue employing the professionals
they turn to in the ordinary course of their businesses.
The Debtors customarily retain the services of various attorneys,
accountants, and other professionals to represent them in matters
arising in the ordinary course of their businesses, unrelated to
their chapter 11 cases.
The Debtors submit that they will continue to require the services
of the Ordinary Course Professionals while operating as debtors-
in-possession under the Bankruptcy Code, to render services to
their estates that are similar to those rendered before the
commencement of these chapter 11 cases and thus enable the Debtors
to continue normal business activities that are essential to their
stabilization and reorganization efforts. Moreover, the work of
the Ordinary Course Professionals is directly related to the
preservation of the value of the Debtors' estates, even though the
amount of fees and expenses they incur represents only a small
fraction of that value.
The Debtors will pay, without formal application and order from
the Court, the fees and expenses of each Ordinary Course
Professional in a $30,000 monthly cap for each professional, upon
submission of an appropriate invoice setting forth in reasonable
detail the nature of the postpetition services rendered and
expenses incurred. The aggregate monthly payments to Ordinary
Course Professionals, for these cases is limited to $150,000,
unless additional payments are authorized by the Court.
Headquartered in Harrisburg, Pennsylvania, New World Pasta Company
-- http://www.nwpasta.com/-- is the leading dry pasta
manufacturer in the United States. The Company filed for chapter
11 protection on May 10, 2004 (Bankr. M.D. Pa. Case No. 04-02817).
Eric L. Brossman, Esq., at Saul Ewing LLP represents the Debtors
in their restructuring efforts. When the Company filed for
protection from its creditors, they listed both estimated debts
and assets of over $100 million.
OLD UGC: Gets Court Approval to Hire KPMG as Tax Consultants
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave its stamp of approval to Old UGC, Inc.'s application to
employ KPMG LLP nunc pro tunc to January 12, 2004 as its tax
accountants and consultants
In its capacity, KPMG LLP will:
(i) review of and assistance in the preparation and filing
of federal tax returns including corporate returns,
partnership returns, federal Forms 5471, and state
returns;
(ii) advice and assistance to the Debtor regarding tax
planning issues, including, but not limited to,
research and consultation regarding various federal
tax matters, international taxes, and state and local
taxes;
(iii) assist regarding various compensation and benefit tax
matters, including a review of compensation planning,
payroll withholding tax issues, and other similar
matters;
(iv) assist any existing or future IRS, state and/or local
tax examinations; and
(v) other consulting, advice, research, planning or
analysis regarding tax issues as may be requested and
mutually agreed.
The Debtor relates that it has employed KPMG as tax accountants
and consultants since June of 2002. This prior engagement afforded
KPMG a unique familiarity with the Debtor's books, records,
financial information and other data.
Darice M. Henritze reports that KPMG will bill its current hourly
rates for tax accounting and tax consulting services:
Designation Billing Rate
----------- ------------
National Office Partner $535 per hour
Partners $425 per hour
National Office Senior Manager $400 per hour
Senior Manager $325 per hour
Manager $260 per hour
Senior $190 per hour
Staff $165 per hour
Headquartered in Denver, Colorado, Old UGC, Inc.--
http://www.UnitedGlobalcom.com-- is one of the largest broadband
communications providers outside the United States and provides
full range of video, voice, high-speed Internet, telephone and
programming services. The Company filed for chapter 11 protection
on January 12, 2004 (Bankr. S.D.N.Y. Case No. 04-10156). David A.
Levine, Esq., at Cooley Godward, LLP and Jay R. Indyke, Esq., at
Kronish Lieb Weiner & Hellman, LLP represent the Debtors in their
restructuring efforts. When the Company filed for protection from
their creditors, they listed $846,050,022 in total assets and
$1,371,351,612 in total debts.
OWENS CORNING: Silver Valley to Buy Indiana Property for $825K
--------------------------------------------------------------
Owens Corning and its debtor-affiliates seeks Bankruptcy Court
authority to sell certain real property located at 1838 Middlebury
Street in Elkhart, Indiana, pursuant to a purchase and sale
agreement with Silver Valley Properties, LLC. The Debtors also
seek permission to pay related property taxes.
Owens Corning owns the Elkhart Property, which is comprised of
four acres of land on which there are two buildings totaling
42,500 square feet. The buildings were previously used
as a laminating plant.
Owens Corning acquired the Property as part of its 1997
acquisition of Fabwell. The production plant located on the
Property was closed in 1999, although certain office and
managerial functions were maintained at the Property until 2003,
when the Debtors conducted an analysis of the operating costs
regarding the Property and determined that it would be
advantageous to move the office and managerial functions to a
smaller location, and sell the property.
The Property was listed for sale in February 2004 and was
marketed through:
-- the preparation and circulation of a marketing package,
which included photographs of the Property and relevant
building and Property specifications;
-- the circulation by e-mail of a marketing flyer to over 200
real estate brokers, contractors, bankers, appraisers and
other real estate professionals; and
-- the listing of the Property on various real estate
Web sites.
Ultimately, the Property was shown to six potential purchasers.
Two potential purchasers made offers. Silver Valley tendered the
higher offer.
After some discussions, Silver Valley increased its offer
significantly and entered into the Purchase and Sale Agreement on
May 11, 2004 with Owens Corning.
The principal terms of the Purchase and Sale Agreement are:
(1) The purchase price for the Property is $825,000. The
Agreement requires a $50,000 security deposit, which is
refundable under certain circumstances;
(2) Certain office and conference room equipment, together
with equipment and appliances in a kitchen located on the
Property are included in the sale;
(3) The Agreement contains a financing contingency, by which
Silver Valley's obligations under the Agreement are
subject to, inter alia, Silver Valley's obtaining a
conventional commercial real estate mortgage for $660,000
at an annual interest rate of no greater than 7%;
(4) The Agreement provides for an "Investigation Period,"
commencing on May 11, 2004 and continuing to July 9, 2004.
During the Investigation Period, Silver Valley is entitled
to investigate certain matters regarding the Property,
including:
(a) the Property's zoning, any applicable use permits or
any other government rules and regulations affecting
the use of the Property;
(b) documents regarding, inter alia, environmental
assessment data, real property leases, construction
contracts, management contracts, reciprocal easement
agreements, real property tax bills, soil and building
reports and engineering date; and
(c) the Property's environmental condition.
During the Investigation Period, Silver Valley must notify
Owens Corning of any reasonable objections that it may
have in connection with the Property;
(5) During the Investigation Period, Silver Valley is entitled
to review the title commitment and survey to be obtained
with respect to the Property, and is required to either
approve the commitment or notify Owens Corning of any
items in the Property, which are reasonably objectionable;
(6) Silver Valley agreed to accept the Property in an "as is,
where is" condition, and Owens Corning is not obligated
to make any improvements, repairs or changes to the
Property;
(7) Closing under the Agreement will be held on or before
July 14, 2004;
(8) At closing of the Agreement, Owens Corning will pay its
real estate broker, The Staubach Company and its Indiana
designee, FM Stone Commercial, a brokerage commission;
(9) The Agreement is to be governed by the laws of the
State of Indiana.
J. Kate Stickles, Esq., at Saul Ewing, LLP, in Wilmington,
Delaware, relates that although the Debtors are still determining
the exact amount of property taxes owed with respect to the
Property, the taxes are estimated to be $59,000 in the principal
amount, plus potential interest, penalties and other charges, for
which valid liens have been asserted or may be asserted against
the Property or, alternatively, which likely are entitled to
"priority" status under Section 507(a) of the Bankruptcy Code.
Headquartered in Toledo, Ohio, Owens Corning --
http://www.owenscorning.com-- manufactures fiberglass insulation,
roofing materials, vinyl windows and siding, patio doors, rain
gutters and downspouts. The Company filed for chapter 11
protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837).
Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom
represents the Debtors in their restructuring efforts. On Jun 30,
2001, the Debtors listed $6,875,000,000 in assets and
$8,281,000,000 in debts. (Owens Corning Bankruptcy News, Issue No.
75; Bankruptcy Creditors' Service, Inc., 215/945-7000)
PAL FAMILY CREDIT: Case Summary & 3 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Pal Family Credit Company, Inc.
1 Lenore Avenue
P.O. Box 23
Monsey, New York 10952
Bankruptcy Case No.: 04-22820
Chapter 11 Petition Date: May 23, 2004
Court: Southern District of New York (White Plains)
Debtor's Counsel: Joseph J. Haspel, Esq.
40 Matthews Street, Suite 107
Goshen, NY 10924
Tel: 845-294-8950
Fax: 845-294-9181
Total Assets: $1,500,000
Total Debts: $1,463,350
Debtor's 3 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Robert Bolte Fees $8,000
Herm Underman Tradesman $7,800
Nicholas Morsillo, Esq. Fees $550
PARMALAT: US Committee Asks Court To Extend Citigroup Probe Period
------------------------------------------------------------------
The Final DIP Financing Order gives the Official Committee of
Unsecured Creditors 60 days from the date its retention of
counsel is approved to:
-- file an adversary proceeding or contested matter
challenging the amount, validity, enforceability,
perfection or priority of rights under and in connection
with the Parmalat U.S. Debtors' prepetition transactions
with General Electric Capital Corporation and Citigroup,
Inc.; or
-- otherwise to assert any claims or causes of action or other
rights and defenses against GE Capital and Citigroup.
The Investigation Period may be extended by Court order for good
cause shown.
Early on, it was clear that the 60-day Investigation Period may
not be sufficient given the extreme complexity of the
transactions involved. Michael D. Sirota, Esq., at Cole, Schotz,
Meisel, Forman & Leonard, P.A., explains that the probe against
GE Capital and Citigroup requires not only a review and critical
analysis of complicated transactional documents, numerous other
documents related to the Citigroup Agreement, the GE Capital
Agreements and a $7,000,000 prepetition unsecured credit facility
from Citigroup, and examinations of representatives from GE
Capital, Citigroup and the U.S. Debtors with knowledge of these
transactions, it also entails extensive research and legal
analysis of law regarding the potential recharacterization of the
GE Capital and Citigroup Agreements as disguised financing
arrangements, and the appropriateness of asserting other claims
against GE Capital and Citigroup.
The Committee's retention of Chadbourne & Parke, LLP, as its
counsel was approved on April 1, 2004. Accordingly, the
Investigation Period presently expires on June 1, 2004.
On May 3, 2004, when it became clear that the Investigation was
taking longer than anyone anticipated, the Committee asked
Citigroup to agree to a 30-day extension of the Investigation
Period. Citigroup has not yet responded to the request.
GE Capital, to the contrary, consented to an extension of the
Investigation Period until June 30, 2004, without prejudice. The
Committee and GE Capital are in the process of negotiating a
Stipulation and Consent Order to evidence the agreement.
The Committee has asked Citigroup to produce certain documents.
According to Mr. Sirota, Citigroup is meticulously examining all
documents before production to the Committee. Citigroup, likely,
has hundreds, if not thousands, of documents to review.
Citigroup also has not committed to making representatives
available for depositions, despite the Committee's request that
Citigroup produce witnesses for a Rule 2004 examination.
In addition, although the U.S. Debtors have agreed to cooperate
in the production of documents requested by the Committee in
connection with the Investigation, very few documents have been
produced to date.
Despite what the Committee believes are the parties' best
intentions, discovery in connection with the Investigation has
been delayed, and has not proceeded with the speed the Committee
anticipated and requires to be fully informed whether to file an
adversary proceeding against GE Capital or Citigroup by June 1,
2004. For these reasons, the Committee asks the Court to extend
the Investigation Period as to Citigroup until June 30, 2004,
without prejudice to its rights to seek further extensions.
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. 16; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
PENTHOUSE INT'L: From OTCBB, Stock Now Trades on the Pink Sheets
----------------------------------------------------------------
Penthouse International (OTCBB:PHSLE) (Frankfurt:PHSL.F), a
diversified holding company with operating subsidiaries in adult
entertainment, Internet transaction processing and real estate,
announced that effective Monday, May 24, 2004, its shares will no
longer trade on the OTC Bulletin Board. Penthouse's common stock
will continue to trade on the over-the-counter pink sheets under
the symbol PHSL.
The Company will be automatically delisted from the OTC Bulletin
Board for being late in filing Annual Report on Form 10K for the
fiscal year ended December 31, 2003. Penthouse plans to file its
Form 10K within the next seven to ten business days; at which time
it will either file an application to relist on the OTCBB on an
expedited basis or request a waiver from such refiling
requirement. Based on discussions with the compliance department
of the OTCBB, Penthouse and its representatives believe, assuming
it meets all other listing requrements and achieves compliance in
the near future with all of its reporting obligations under the
Securities Exchange Act of 1934, that the OTCBB review and
relisting of the Penthouse common stock could be realized in as
little as two to three business days from the submission of all
applicable documentation.
The filing of Penthouse's Annual Report on Form 10K has been
delayed as a result of a number of factors, including a recent
change in independent accountants, relocation of the corporate
headquarters, and a series of significant transactions Penthouse
completed in the first quarter of 2004. These transactions
included:
-- completion of four transactions involving approximately
$30.7 million in private debt and equity financings;
-- the acquisition of Internet Billing Company;
-- completion of an agreement with certain creditors and
security holders of its General Media subsidiary; and
-- execution of financing commitments to obtain the financing
required to confirm to the General Media plan of
reorganization.
Penthouse also announced three additional business developments
since March 31, 2004:
-- iBill was notified by its processing bank and VISA that it
is the first IPSP to be released from the VISA RIS program.
As a result, iBill will no longer be assessed a monthly fee
of $100,000, or $1,200,000 annually.
-- iBill has entered into contracts to sell its transaction
processing services to several new merchants representing
approximately $21.0 million in estimated new incremental
revenues over the next twelve months.
-- In May 2004, Penthouse entered into an agreement with Access
LLC to provide content to third generation (3G) mobile
phones in Europe. Access is providing content to be
distributed on the T-Mobile network, representing 440
million mobile phone users. Penthouse will share in the
gross revenue of this venture.
As previously reported, Penthouse's subsidiary General Media filed
its Second Amended Plan of Reorganization with the United States
Bankruptcy Court for the Southern District of New York. The plan
is scheduled for a confirmation hearing on June 10, 2004, but is
expected to be moved to mid July at the request of management.
Confirmation of the plan is subject to General Media and the
debtors obtaining debt and equity financing of approximately
$61 million.
If confirmed, the plan will preserve 100% of the equity interests
of Penthouse in its General Media group of subsidiaries.
General Media has also completed the renegotiation of the lease on
its corporate headquarters in Manhattan resulting in an annual
rent reduction exceeding $1,000,000, which is expected to benefit
Penthouse if the Second Amended Plan is confirmed.
"The new management of Penthouse is committed to full and accurate
disclosure to our shareholders. It is imperative that we provide
the most complete information possible on Form 10K and our other
public reports, and we have elected to take measured, disciplined
steps to this end. Our shareholders will ultimately be the
beneficiaries," said Claude Bertin, Executive Vice President and
director of Penthouse. Mr. Bertin also noted, "Our majority
shareholder and our institutional investors have demonstrated
their support for Penthouse this quarter by their substantial
financial commitments. Through our reorganization our operations
have been intensely scrutinized and we are grateful that the
support for Penthouse continues to this day," concluded Mr.
Bertin.
About Penthouse
Penthouse -- whose September 30, 2003 balance sheet shows a total
shareholders' equity deficit of about $70 million -- is an
entertainment company with concentrations in publishing,
licensing, digital commerce and real estate. Historically,
Penthouse revenues have been derived principally from the
PENTHOUSE(TM) related publishing business that was founded in 1965
by Robert C. Guccione and is currently conducted by General Media
and its subsidiaries. The PENTHOUSE brand is one of the most
recognized consumer brands in the world and is widely identified
with premium entertainment for adult audiences. General Media
caters to men's interests through various trademarked
publications, movies, the Internet, location-based live
entertainment clubs and consumer product licenses. General Media
also licenses the PENTHOUSE trademarks to third parties worldwide
in exchange for recurring royalty payments. In March, 2004,
Penthouse acquired iBill. iBill owns proprietary software systems
that manages from end-to-end the sale of online subscriptions and
other downloadable products (memberships; music; ring tones;
games; other software). The iBill user base consists of
approximately 27.0 million consumers in the United States and
approximately 38 other countries.
PER-SE TECH: Form 10-Q Delay Prompts Nasdaq's Delisting Notice
--------------------------------------------------------------
Per-Se Technologies, Inc. (Nasdaq: PSTIE) announced that, as
required, the Nasdaq Listing Qualifications Department notified
the Company that it is not in compliance with NASD Marketplace
Rule 4310(c)(14). The notification is due to the delay in filing
the Company's first quarter 2004 Form 10-Q with the U.S.
Securities and Exchange Commission. The Company previously
reported in its May 13, 2004, release that it expected to receive
this notification.
The Company's delay in filing its Form 10-Q, which was due on May
10, 2004, is the only listing deficiency cited in the
notification. The Nasdaq Listing Qualification Panel that
conducted the Company's appeals hearing on April 29, 2004, to
review the Company's delay in filing its 2003 Form 10-K, will
consider the Company's failure to timely file its Form 10-Q in
rendering its decision.
The Company's 2003 Form 10-K was filed on May 13, 2004, and the
Company is diligently working to complete its first quarter 2004
Form 10-Q. Upon filing the Form 10-Q with the SEC, the Company
expects to be compliant with Nasdaq listing standards.
As reported in the Troubled Company Reporter's March 31, 2004
edition, Standard & Poor's Ratings Services placed its 'B+'
corporate credit and other ratings on Per-Se Technologies Inc. on
CreditWatch with negative implications following the company's
announcement it will not file its 10-K by the March 30, 2004,
extension deadline.
On March 16, 2004, Per-Se filed for an automatic 15-day extension
to file its 10-K so that the company's outside accountant could
complete additional audit procedures as a part of Per-Se's year-
end 2003 audit. Per-Se's outside accountant has advised Per-Se and
its audit committee that additional audit procedures are necessary
in connection with allegations made in early November 2003 of
improper accounting and business activities. Per-Se is unable to
predict at this time when the company's outside accountant will
complete its review or when Per-Se will file its 10-K.
About Per-Se Technologies
Per-Se Technologies (Nasdaq: PSTIE) is the leader in Connective
Healthcare. Connective Healthcare solutions from Per-Se enable
physicians and hospitals to achieve their income potential by
creating an environment that streamlines and simplifies the
complex administrative burden of providing healthcare.
Per-Se's Connective Healthcare solutions help reduce
administrative expenses, increase revenue and accelerate the
movement of funds to benefit providers, payers and patients. More
information is available at http://www.per-se.com/
PG&E NATIONAL: ET Committee Applies To Retain Navigant As Advisor
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors of the ET debtor-
affiliates of PG&E National Energy Group Inc. seek the Court's
permission to retain Navigant Consulting, Inc., as financial and
energy advisors, nunc pro tunc to February 20, 2004.
Navigant Consulting is a nationally recognized financial advisory
firm with offices in 36 cities worldwide and employing over 1,200
consultants. The firm's clients include 80 of the top 100 United
States energy companies. Navigant Consulting has consulted with
independent power producers, investor-owned utilities, secured
lenders, bondholders, private equity funds, law firms, state
regulators, municipal and electric cooperatives and equipment
suppliers in connection with the various energy companies.
Guy S. Neal, Esq., at Sidley Austin Brown & Wood, LLP, in
Washington, D.C., relates that the resources, capabilities and
experience of Navigant Consulting in advising the ET Committee
are crucial to the representation of its constituency's interests
in the ET Debtors' liquidation. An experienced financial and
energy advisor like Navigant Consulting fulfills a critical need
that complements the services offered by the ET Committee's other
restructuring professionals.
According to Mr. Neal, Navigant Consulting will:
(a) evaluate the ET Debtors' assets and liabilities, focusing
primarily on inter and intra-company claims held by and
against the ET Debtors with respect to their affiliates,
and the disposition and distribution of the ET Debtors'
assets in a liquidation plan;
(b) provide the specific valuation, energy expertise and other
financial analyses related to the ET Debtors as the ET
Committee may require in fulfilling its fiduciary duties
to unsecured creditors of the ET Debtors;
(c) provide tax consulting services relating to potential tax
receivables and payables affecting the ET Debtors'
recovery;
(d) prepare, analyze and explain any transactions and issues
arising with respect to one or more liquidation plans for
the ET Debtors; and
(e) provide testimony as necessary in connection with its
other specific duties to the ET Committee.
The ET Committee believes that Navigant Consulting is well
qualified and able to provide these services.
Navigant Consulting will be compensated on an hourly basis in
accordance with the firm's ordinary and customary rates, and
reimbursed of all related and reasonable costs and expenses.
Subject to periodic increases in the normal course of business,
Navigant Consulting's billing rates currently range:
Directors and Managing Directors $300 - 525
Senior Managers and Consultants 200 - 325
Associates and Analysts 170 - 195
Administrative Staff 80
Navigant Consulting managing director, Charles R. Goldstein,
assures the Court that the firm does not represent or hold any
adverse interest to the ET Debtors or the ET Committee. The firm
is a "disinterested person" within the meaning of Section 101(14)
of the Bankruptcy Code.
Headquartered in Bethesda, Maryland, PG&E National Energy Group,
Inc. -- http://www.pge.com/-- develops, builds, owns and operates
electric generating and natural gas pipeline facilities and
provides energy trading, marketing and risk-management services.
The Company filed for Chapter 11 protection on July 8, 2003
(Bankr. D. Md. Case No. 03-30459). Matthew A. Feldman, Esq.,
Shelley C. Chapman, Esq., and Carollynn H.G. Callari, Esq., at
Willkie Farr & Gallagher represent the Debtors in their
restructuring efforts. When the Company filed for protection from
its creditors, it listed $7,613,000,000 in assets and
$9,062,000,000 in debts. (PG&E National Bankruptcy News, Issue No.
21; Bankruptcy Creditors' Service, Inc., 215/945-7000)
PILLOWTEX: Summit Properties Submits Better Bid for N.C. Facility
-----------------------------------------------------------------
In April 2004, the Pillowtex Corporation Debtors sought the
Court's permission to sell the warehouse portion of their 112-acre
facility in North Carolina to TBMA Properties, LLC, subject to
higher or better offers at an auction. The Facility, specifically
located at 523 and 572 South New Street, in Eden, Rockingham
County, includes a 533,000 square-foot manufacturing plant, a
water treatment plant, and the 412,000 square-foot warehouse.
Shortly thereafter, Summit Properties Partnership approached
Hilco Real Estate, LLC, the Debtors' broker, with a $3,300,000
offer for the entire Facility. Summit's offer, if consummated,
would represent a higher and better offer compared to TBMA's
offer for the warehouse alone.
Consequently, the Debtors and Hilco commenced negotiations with
Summit regarding definitive documentation for the sale of the
entire Facility. The Debtors and Hilco informed TBMA of Summit's
proposal and the possible withdrawal of the TBMA Sale request.
Summit indicated its intent to continue with the offer and
informed the Debtors that it would assign its rights to its
affiliate, Hollingsworth GP. Accordingly, the Debtors decided to
withdraw the TBMA Sale request.
By this motion, the Debtors seek the Court's authority to sell
the entire North Carolina Facility, free and clear of liens,
claims and encumbrances to Hollingsworth, subject to higher or
better offers at an auction.
The relevant provisions of the Debtors' Sale Agreement with
Hollingsworth are:
* Purchase Price
Hollingsworth will pay the Debtors $3,300,000 in cash,
including a $330,000 earnest deposit already set aside in
escrow with Chicago Title Insurance Co., as Escrow Agent.
* Condition of the Property
The Sale constitutes that of the Facility and the personal
properties within it. Hollingsworth acknowledges that GGST,
LLC, may have rights to all of the equipment and furnishings
in the Facility and that it may receive no Personal Property
as a result of this transaction. The Facility is being sold
in "as is" condition without the Debtors' representations
and warranties.
* Defects in Title
The Debtors will convey title to the Facility by special
warranty deed subject to certain permitted exceptions. From
and after the execution date, the Debtors will not further
encumber or restrict the title to the Facility, permit any
liens, mortgages, deeds of trust, easements or other
encumbrances to be placed against the Facility without
Hollingsworth's prior written consent.
* Closing
The Closing will occur within three business days after the
Court authorizes the consummation of the sale, if:
-- Hollingsworth is the successful bidder at the auction,
which will be conducted no later than June 9,2004; or
-- the Debtors do not receive any qualified competing bid
for the Facility.
* Pro-rations and Adjustments
Ad valorem and similar taxes against the Facility will be
prorated between the Debtors and Hollingsworth at the
Closing, on a 365-day year basis.
* Transaction Costs
The Debtors will be responsible for the cost of preparing
the deed while Hollingsworth will reimburse the Debtors or
pay directly the cost of conducting its due diligence
studies, the Title Policy, the transfer taxes, sales taxes,
recording fees, and the escrow charges imposed by the Escrow
Agent, if any.
* Possession
Possession of the Property, free and clear of all tenants or
other parties in possession, will be delivered to
Hollingsworth at the Closing.
If the sale of the Facility is consummated under the terms
contemplated by the Agreement, the Debtors estimate that Hilco
will be entitled to payment of a $99,000 broker's fee. The
Debtors will pay the Broker's Fee at the Closing.
The Debtors do not anticipate that the Sale will require the
assumption of any leases or executory contracts to which they are
party, or the assignment of any to Hollingsworth. However, the
Debtors reserve their rights to file other pleadings as may be
necessary to assume and assign to the prevailing purchaser any
leases and contracts, if necessary.
The Debtors believe that purchase price provided under the
Agreement represents fair and reasonable consideration for the
Property.
The Debtors assure the Court that Hollingsworth is not an
"insider" pursuant to Section 101(3) of the Bankruptcy Code.
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. 64;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
PLIANT CORP: Sues Sigma Stretch & Atlantis for Patent Infringement
------------------------------------------------------------------
Pliant Corp. announced that it filed a lawsuit on May 19, 2004 for
patent infringement against Sigma Stretch Film and Atlantis
Plastics, Inc. in the United States District Court for the Western
District of Illinois.
The lawsuit alleges that each of the aforementioned companies has
infringed Pliant's rights under U.S. Pat. No. 5,531,393 by making,
using, selling or offering to sell one or more prestretch film
products. Pliant is the exclusive licensee of U.S. Pat. No.
5,531,393 under an agreement with the patent's owner, Saltech,
Inc. Pliant is seeking injunctive relief to enjoin the infringing
activities, monetary damages to compensate for past infringement,
and other relief. Pliant is evaluating possible legal actions
against other potential infringers of U.S. Pat. No. 5,531,393.
Since at least 1993 Pliant has manufactured, marketed and sold
rolls of stretched plastic film, commonly known as "prestretch"
under the registered trademark WINWRAP(R). Pliant enjoys a
significant market share and is a recognized leader in the
prestretch industry.
About the Company
Pliant -- whose March 31, 2004 balance sheet shows a total
stockholders' deficit of $436,432,000 -- is a leading producer of
value-added film and flexible packaging products for personal
care, medical, food, industrial, agricultural and other markets.
Pliant has enjoyed accelerated growth due to an aggressive
technological research and development program, and development of
licensing and promotional campaigns for both its brand names and
its patented technologies. Pliant focuses on a superior
technology platform, supported by continuous technical innovation,
and differentiated customer partnerships.
QUALITY DISTRIBUTION: S&P Revises Outlook on Low-B Ratings to Neg.
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
the 'B+' corporate credit rating, on Quality Distribution Inc. At
the same time, Standard & Poor's assigned a recovery rating of '3'
to wholly owned subsidiary Quality Distribution LLC's $215 million
bank facility, indicating an expectation of meaningful (50% to
80%) recovery of principal in a default scenario. The bank
facility is rated 'B+'. The outlook was revised to negative from
stable.
"The outlook change reflects the potential for a deterioration in
Quality Distribution Inc.'s credit protection measures over the
near-to intermediate-term due to increased spending on new, though
related, business lines, continued expansion of its traditional
bulk tank business, and ongoing litigation issues," said Standard
& Poor's credit analyst Kenneth L. Farer. Despite strong industry
fundamentals, Quality Distribution reported weaker operating
results for first-quarter 2004 compared with the same period of
2003 due to costs associated with the company's entry into the
juice transportation business and an investigation related to
reinsurance issues at the company's insurance subsidiary. The
Tampa, Florida-based bulk tank truck carrier has about
$280 million of lease-adjusted debt.
Ratings on Quality Distribution Inc. reflect its participation in
a low-margin, fragmented industry, combined with a weak financial
profile. Quality Distribution is the largest bulk tank truck
carrier in North America. Through a network of more than 160
terminals, Quality Distribution LLC, a wholly owned subsidiary,
primarily transports a broad range of chemical products. The
company also transports plastics and flat glass and provides
customers and affiliates with supplemental services such as tank
wash and insurance. Over the past few months, the company has
expanded its operations through the acquisition of Bulkmatic
Transport Co.'s liquid trailer fleet and entry into the Florida
juice transportation market. Although the company benefits from a
strong market share in an industry with high barriers to entry,
its customers sometimes have transportation alternatives (rail,
barge), depending on the nature of the shipment.
Ratings could be lowered if credit protection measures deteriorate
over the near- to intermediate-term as a result of start-up and
ongoing costs associated with new business lines, continued
expansion of its traditional bulk tank business, and/or ongoing
potential litigation.
RELIANCE GROUP: Moves To Terminate Pension Plan
-----------------------------------------------
The Reliance Group Holdings, Inc., wants approval from the U.S.
Bankruptcy Court in Manhattan to terminate the Reliance Group
Holdings, Inc., Pension Plan.
RGH has reached an agreement with the Pension Benefit Guaranty
Corporation to terminate the Pension Plan as of January 31, 2004.
Pursuant to the Agreement, the PBGC will be appointed as trustee
of the Pension Plan.
Steven R. Gross, Esq., at Debevoise & Plimpton, recounts that the
Pension Plan was frozen on July 31, 2001. Due to the decline in
the Plan's assets and the increase in its actuarial liability
attributable to the decrease in the interest rate assumption used
to calculate the current liability, RGH was to make installment
payments and a minimum funding contribution to the Pension Plan.
However, after seeking the Bankruptcy Court's permission to make
the Pension Plan contributions, the Official Committee of
Unsecured Creditors objected and Judge Gonzalez denied the
Debtors' request. As a result, RGH neither made the required
April 15, 2003 payment nor the required contributions to the
Pension Plan.
On February 25, 2004, the PBGC issued a Notice of Determination
informing RGH of two related developments:
-- The Pension Plan did not meet the minimum funding standard
under the ERISA and the IRC. As a result, the Pension Plan
will not pay benefits when due as it will be abandoned in
the foreseeable future; and
-- The PBGC intends to terminate the Plan and appoint itself
as statutory trustee.
Accordingly, the PBGC asked RGH to enter into the Agreement to
implement the takeover and termination of the Pension Plan.
The Committee supports the Agreement.
Mr. Gross explains that maintaining the Pension Plan will impose
ongoing significant contribution obligations and administrative
burdens on RGH, which are not supported by the Committee.
Failure to meet the contribution requirements will result in the
imposition of penalties. If RGH refuses to enter into the
Agreement, the termination and takeover of the Pension Plan will
be accomplished by an order of a United States District Court.
Headquartered in New York, New York, Reliance Group Holdings, Inc.
-- http://www.rgh.com/-- is a holding company that owns 100% of
Reliance Financial Services Corporation. Reliance Financial, in
turn, owns 100% of Reliance Reliance Insurance Company. The
Company filed for chapter 11 protection on June 12, 2001 (Bankr.
S.D.N.Y. Case No. 01-13403). When the Company filed for
protection from their creditors, they listed $12,598,054,000 in
assets and $12,877,472,000 in debts. (Reliance Bankruptcy News,
Issue No. 52; Bankruptcy Creditors' Service, Inc., 215/945-7000)
RICA FOODS: Lenders Agree to Amend Trust Agreement
--------------------------------------------------
Rica Foods, Inc. (Amex: RCF) announced that as of May 21, 2004,
the Company entered into an amendment to the Trust Agreement with
certain of its lenders in connection with the Company's debt
restructuring.
On September 22, 2003, certain wholly-owned subsidiaries of the
Company entered into a trust agreement, governed under Costa Rican
law, pursuant to which they established an irrevocable ten-year
trust to guarantee any outstanding indebtedness owed to certain
lenders.
In consideration for the establishment of the Trust, the Principal
Beneficiaries agreed to waive any and all defaults, excluding
defaults resulting from the failure to pay interest as due, that
the Subsidiaries have committed or may have committed prior to
March 22, 2004 with respect to outstanding indebtedness owed to
the Principal Beneficiaries. Accordingly, the Subsidiaries were
relieved of any obligation to make principal payments to the
Principal Beneficiaries until the end of the Amnesty Period. The
Subsidiaries were still required to pay interest to the Principal
Beneficiaries in accordance with the terms of an agreed upon
schedule. After the end of the Amnesty Period, the Subsidiaries
were required to resume the payment of principal.
Pursuant to the Trust Agreement, the Subsidiaries transferred all
of their real and personal assets, including forty parcels of
land, to the Trust. Under the terms of the Trust Agreement, the
value of the Trust Assets would be deemed, for purposes of the
Trust, to be worth 70% of their appraised value, and would, at all
times, have to be equal to a certain percentage of the
indebtedness secured by the Trust.
As of the date of this report, all appraisals have been completed.
The Company believes the Trust Assets have an appraised value
sufficient to collateralize the indebtedness of the Principal
Beneficiaries in accordance with the terms of the Trust Agreement
and may be sufficient to collateralize additional loans in
accordance with the terms of the Trust Agreement.
The Trust Agreement further provided that if the Subsidiaries
failed to, among other things, make any principal or interest
payment to any of the Principal Beneficiaries when due or became
insolvent, the Subsidiaries would be in breach of the Trust
Agreement. Upon the Trustee's notification to the Subsidiaries of
a Breach, the Subsidiaries would have fifteen days to cure such
Breach. If the Subsidiaries failed to cure the Breach within the
Cure Period, the Trust Agreement required the Trustee to sell the
Trust Assets and use the proceeds of such sale to repay to the
Principal Beneficiaries all outstanding indebtedness due and owed
to them by the Subsidiaries. Any proceeds remaining after
repayment is made in full to all of the Principal Beneficiaries
will be returned to the Subsidiaries. In the event of such sale,
the Trust would terminate in accordance with the terms of the
Trust Agreement.
The Trust Agreement also contemplated that additional Principal
Beneficiaries could sign and become subject to the terms of the
Trust Agreement on the condition that the value of the Trust
Assets continued to be equal to a certain percentage of the
indebtedness secured by the Trust.
Since the establishment of the Trust on September 23, 2003, the
Company has satisfied its debt obligations to nine Principal
Beneficiaries under the Trust Agreement. As of the date of this
report, the Trust has only five Principal Beneficiaries remaining
(Banco Interfin, S.A.; Banco de Costa Rica; Banco Credito Agricola
de Cartago; and Banco Internacional de Costa Rica S.A. (BICSA).
The Trust Agreement Amendment modifies the Trust to reflect the
above-described change in Principal Beneficiaries and eliminates
any distinction in the Trust between Principal Beneficiaries and
Secondary Beneficiaries. Additionally, the Trust Agreement
Amendment modifies certain other provisions of the Trust, some of
which are described below.
The Modified Trust may secure up to an aggregate amount of US$44
million of indebtedness, which indebtedness could take the form of
loans, bonds, or other extensions of credit.
The Trust Agreement Amendment provides for a new Trustee, Banco
Improsa, S.A. The Trust Agreement Amendment further modifies the
Trust by granting certain rights to, as well as imposing certain
obligations upon, the Trustee, including granting to the Trustee
the same rights as a creditor with regards to any mortgages
transferred to the Trust and endorsed to the Trustee.
The assets of the Modified Trust currently include real estate
properties and their corresponding mortgages, registered equipment
and certain intellectual property of the Subsidiaries. All other
types of assets currently in the Trust have been released from the
Trust by the Trustee. However, the Subsidiaries may transfer new
assets to the Modified Trust in order to increase the value of the
Trust Assets. The Trust Agreement Amendment modifies the Trust to
require that the total value of the Trust Assets be, at all times,
equal to or greater than 125% of the aggregate amount of the total
indebtedness secured by the Trust (which, as mentioned above,
cannot exceed the aggregate amount of US$44 million). So long as
this 125% threshold is met and subject to certain other conditions
set forth in the Modified Trust, the Subsidiaries may solicit the
Trustee for the release of some of the Trust Assets. The failure
to maintain the 125% threshold, on the other hand, is grounds for
the foreclosure and sale of the Trust Assets. Upon such an
occurrence or the occurrence of any default of any credit
agreement between a Principal Beneficiary and a Subsidiary, the
Trustee may dispose of the Trust Assets in accordance with the
terms and conditions and following the procedures set forth in the
Trust Agreement, as amended by the Trust Agreement Amendment.
Pursuant to the terms of the Modified Trust, each of the
Subsidiaries has agreed to certain negative covenants. For
instance, without the prior written consent of the Board of
Beneficiaries (as defined below), the Subsidiaries have agreed not
to (i) distribute any annual dividends to its shareholders unless
(A) its total debt to equity ratio is less than 60% and (B) the
amount of the annual dividends is, in the aggregate, equal to or
less than 50% of its profit for that year; (ii) make any change in
its stock ownership; and (iii) make any "insider loans". The Trust
Agreement Amendment does permit the Subsidiaries to make loans of
up to $2.5 million annually to the Company upon certain terms and
conditions.
The Modified Trust requires that the Subsidiaries, with certain
exceptions, (i) maintain an amount of paid-in share capital equal
to or greater than its stated share capital and (ii) maintain a
current ratio, defined as a ratio of current assets to short term
liabilities equal to or greater than 1.3.
In accordance with the Trust Agreement Amendment, a board of
beneficiaries will be established to represent and protect the
rights of the Principal Beneficiaries under the Modified Trust
(Board of Beneficiaries). The Board of Beneficiaries will be
comprised of one representative of each of BICSA, Agricola,
Interfin, Banco de Costa Rica, and, in the event the Company
issues certain debt securities, Sama Puesto de Bolsa S.A. The
board will have certain rights vis-a-vis the Company and the
Trustee including, without limitation, the right to receive and
review certain financial information provided by the Subsidiaries;
notify the Principal Beneficiaries of a situation that might
impair the Trust Assets; appoint a replacement Trustee (from three
candidates chosen by the Subsidiaries); instruct the Trustee to
cancel certain mortgages and other liens over the Trust Assets or
to release certain Trust Assets; and represent the Principal
Beneficiaries in certain decisions, in each case in accordance
with the conditions of the Modified Trust and applicable law. All
decisions of the Board of Beneficiaries will be made upon a
majority vote of its members, with the President of the Board of
Beneficiaries having a tie-breaking vote.
All provisions of the Trust Agreement and the Trust not modified
by the Trust Agreement Amendment are anticipated to remain
unchanged. The Company hopes that with the Trust Agreement
Amendment in place, it will soon be able to finalize the debt
restructuring process it commenced in January 2004.
The Trust Agreement Amendment provides that the Trust will
terminate upon the performance by the Subsidiaries of all of their
obligations under the credit agreements between the Principal
Beneficiaries and the Subsidiaries, including the repayment of all
of the outstanding indebtedness owed to the Principal
Beneficiaries.
SK GLOBAL: Obtains Authority to Use $1.3 Million Cash Collateral
----------------------------------------------------------------
On December 3, 2003, the Court approved separate Cash Collateral
Stipulations between SK Global America, Inc., and Cho Hung Bank,
and Korea Exchange Bank, authorizing the Debtor to use the Banks'
purported cash collateral in the ordinary course of business.
Pursuant to the Cash Collateral Stipulations, the Debtor, Cho
Hung and KEB reserved their rights with respect to the Banks'
asserted liens and security interests in the Debtor's assets and
Cash Collateral. The Debtor granted the Banks replacement liens
to the extent that the Banks are found to have valid,
enforceable, and properly perfected security interests in the
Debtor's assets, and there is a postpetition diminution in the
value of the assets.
The Debtor's principal business involves trade-related
activities, including the importing, exporting, financing and
wholesale and general distribution of steel, grain, chemicals,
textiles and garments, telecommunications equipment and a variety
of other goods in North America and overseas. In the ordinary
course of the Debtor's business, certain goods are shipped from
overseas locations, and are processed and cleared through U.S.
Customs. Customs requires the Debtor to post a surety bond to
secure payment and permit the clearance of the Debtor's goods and
products.
The Debtor's surety bond expired on May 15, 2004. The Debtor's
surety company, American Casualty Company of Reading,
Pennsylvania, advised that it will not renew the bond unless the
Debtor secures the Surety with a letter of credit for $1,300,000.
Wachovia Bank is willing to issue a letter of credit to secure a
new surety bond on the condition that the Debtor establishes and
funds a $1,300,000 collateral escrow account at Wachovia, and
pledges the account and the funds in it to Wachovia as security
for Wachovia's contingent reimbursement claim against the Debtor.
Cho Hung and KEB consent to the Debtor's use of their Cash
Collateral to establish the Collateral Account for Wachovia's
benefit and security.
Accordingly, in a Court-approved stipulation, the Debtor, Cho
Hung, KEB, and Wachovia agree that:
(a) The Debtor is authorized to use $1,300,000 of the Cash
Collateral to fund the Collateral Account -- Wachovia
Account No. 2000013486703 -- for Wachovia's benefit, to
secure its contingent reimbursement claims against the
Debtor;
(b) These provisions are deemed a security agreement,
mortgage, pledge and encumbrance for the purpose of
granting and perfecting Wachovia's security interest in
and first priority lien on the Collateral Account and all
funds there. The security interest in, and first
priority lien on, the Collateral Account and its contents,
are deemed effective and perfected. For security
purposes, all interests in the Collateral Account and its
contents are assigned and transferred to Wachovia;
(c) Wachovia will issue a letter of credit for the sole
benefit of the Surety, equal to $1,300,000, as security
for the Surety's obligations;
(d) The term of the LOC will be from May 15, 2004 until
May 15, 2005, with the LOC to be automatically renewed
pursuant to its terms, unless and until the effective date
of any termination or expiration of the LOC pursuant to
the LOC's terms;
(e) The Debtor is authorized to enter into the Collateral
Agreements, which consist of:
(i) the Reimbursement Agreement -- the Agreement for
Standby Letter of Credit and Continuing Letter of
Credit Agreement; and
(ii) the Security Agreement.
The Debtor is authorized to pay all fees or charges
identified in the Collateral Agreements to Wachovia from
time to time. The Reimbursement Agreement is approved in
its entirety and Wachovia will have all of the rights set
forth in connection with the LOC;
(f) On the LOC's expiration or termination, and the payment of
any amounts due and owing to the Surety, if any, Wachovia
will be entitled to reimbursement for all sums paid under
the LOC or otherwise due under the Reimbursement Agreement
from the Collateral Account pursuant to the terms of the
Reimbursement Agreement. After Wachovia has been fully
reimbursed for all sums due and owing under the
Reimbursement Agreement, it will release its security
interest in the Collateral Account and return any funds
to the Debtor or its successors. The funds will be
subject to the Cash Collateral Stipulations to the
extent the stipulations are still in effect, and Cho Hung
or KEB's claims against the Debtor have not previously
been satisfied pursuant to a Chapter 11 plan confirmed
in the Debtor's case;
(g) The Debtor and its successors are entitled to any interest
earned on the funds in the Collateral Account;
(h) The liens, security interests, collateral assignments and
priorities granted to Wachovia in the Collateral Account
and all funds therein will not be altered or effected by
any Chapter 11 plan filed by the Debtor or a third party,
nor by any action taken by the Debtor, the Banks, or any
third party, nor by the Debtor's incurrence of
indebtedness pursuant to Section 364 of the Bankruptcy
Code or otherwise;
(i) To the extent necessary, the automatic stay is deemed
modified to enable Wachovia to take any action authorized
by these terms and the accompanying documents;
(j) No expenses of administration of the estate will be
charged, pursuant to Section 506(c), or otherwise against
the Collateral Account, or Wachovia; and
(k) These provisions will survive any dismissal or conversion
of the bankruptcy case. (SK Global Bankruptcy News, Issue
No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000)
SOUTHERN CALIFORNIA: Names Barbara Reeves as VP -- Shared Services
------------------------------------------------------------------
Southern California Edison (SCE) announced that its board of
directors has elected Barbara Reeves vice president of the
electric utility's shared services organization.
Reeves has been an associate general counsel with the utility's
law department, focusing on a variety of practice areas, including
electric market structure, litigation, and regulatory matters.
Most recently, she was involved in a management cross-training
assignment in SCE's transmission and distribution department where
she facilitated a number of restructuring initiatives, including
construction contract management.
In her new role, Reeves will manage a multi-functional
organization of more than 700 employees responsible for the
company's procurement and material management, corporate real
estate oversight, transportation services, corporate security and
emergency preparedness, and other cross-departmental services.
Reeves will report to Mahvash Yazdi, senior vice president for
business integration and Chief Information Officer for Edison
International and SCE.
"Barbara's extensive experience as a lawyer and the knowledge she
has gained during her cross-training will be invaluable in her new
role," Yazdi said. "She is a strong leader who understands the
demands of managing a large, diverse operation and has the skills
and capabilities to advance this organization to an even higher
level of service."
Prior to joining SCE in 1999, Reeves practiced law at several
leading law firms in Los Angeles, including Paul, Hastings; and
Munger, Tolles & Olson. She also worked for the U.S. Department of
Justice, antitrust division in Los Angeles and Washington, D.C.
Reeves earned her bachelor of arts and economics degree at New
College of the University of South Florida, and received her law
degree, cum laude, from Harvard Law School. She lives in Pasadena
with her family.
About Southern California Edison
An Edison International (NYSE: EIX) (S&P, BB+ Corporate Credit
Ratin, Stable) company, Southern California Edison (Fitch, BB
Unsecured Debt and B+ Preferred Share Ratings, Positive) is one of
the nation's largest electric utilities, serving a population of
more than 12 million via 4.5 million customer accounts in a
50,000-square-mile service area within central, coastal and
Southern California.
SOUTHWEST DEVT: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Southwest Development Company
dba Sunset Gardens Apartment
c/o Steve Rau Esq.
77 West El Paso
Clovis, California 93611
Bankruptcy Case No.: 04-14213
Type of Business: The Debtor owns and develops real property.
Chapter 11 Petition Date: May 14, 2004
Court: Eastern District Of California (Fresno)
Judge: W. Richard Lee
Debtor's Counsel: Hagop T. Bedoyan, Esq.
Caswell Bell & Hillison LLP
5200 North Palm Avenue #211
Fresno, CA 93704
Tel: 559-225-6550
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Southwest Business Park Loan $154,000
Estate of Irene Schafer Loan $80,000
Ellen Stoneburg Loan $60,201
Jeff Cerioni Trade Debt $1,030
Mamie Jones Rental Deposit $1,000
Jon and Ashley Patterson Rental Deposit $1,000
Janet Bitter Rental Deposit $1,000
James Valenzuela Rental Deposit $800
Gurinder and Hardip Mann Rental Deposit $800
Gurdip and Shannon Singh Rental Deposit $800
Evelia Arroyo Rental Deposit $800
Doug and Rhonda Cole Rental Deposit $800
Dominique Fernandez Rental Deposit $800
Baldomar and Jackie Aviles Rental Deposit $800
Anthony and Leticia Ramos Rental Deposit $800
Erika Castro Rental Deposit $800
Alexandra and Marcos Ganas Rental Deposit $800
Jeff Austin and Liz Rental Deposit $800
Tierlesky
Jose Blanco Rental Deposit $800
Kristal Curutchet Rental Deposit $800
STAR ACQUISITION: U.S. Trustee Amends Creditors' Committee
----------------------------------------------------------
The United States Trustee for Region 19 amended the membership of
the Official Committee of Unsecured Creditors appointed in Star
Acquisition III, LLC's Chapter 11 cases. The five current
Creditors' Committee members are:
1. Todd Lucas, Treasurer
Blakeman Propane,Inc.
4111 N. Hwy 14-16
Gillette, WY 82716
Tlucas@blakemanpropane.com
Tel: 307 685 7155
Fax: 307 686 1075
2. Conley P Smith
Conley P. Smith Limited
Liability Company
1600 Broadway, Suite 2400
Denver, CO 80202
conleypsmith@aol.com
Tel: 303 542 1800
Fax: 303 892 9299
3. Joe Kagie
Falcon Petroleum LLC
6774 E. Blackhawk Ct.
Highlands Ranch, CO 80130
hjkagie@comcast.net
Tel: 303 346 5321
Fax: 303 346 5322
4. Michael J. Hester, Esq
for Hulls Oilfield Services, Inc.
P.O. Box 2148
Ardmore, Oklahoma 73402
mhesterlaw@aol.com
Tel: 580 226 6060
Fax: 580 226 6061
6. Tim Cleverdon
MBT Marketing Services
306 W. Wall, Suite 1209
Midland, Texas 79701
mbtms@msn.com
Tel: 432 684 8480
Fax: 432 684 1128
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.
Headquartered in Englewood, Colorado, Star Acquisition III, LLC
filed for chapter 11 protection on January 5, 2004 (Bankr. Colo.
Case No. 04-10121). Peter J. Lucas, Esq., at Appel & Lucas, P.C.,
represent the Debtors in their restructuring efforts. When the
Company filed for protection from its creditors, it listed
estimated debts and asset of over $10 million each.
STATE STREET: Case Summary & 22 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: State Street Houses, Inc.
c/o Lanny Horwitz
Two Kennedy Plaza
Utica, New York 13502
Bankruptcy Case No.: 04-63672
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
State Street Associates, L.P. 04-63673
Type of Business: The Debtor is a New York Corporation and legal
title holder of Kennedy Plaza Apartments in
Utica, New York.
Chapter 11 Petition Date: May 21, 2004
Court: Northern District of New York (Utica)
Judge: Stephen D. Gerling
Debtor's Counsel: Camille Wolnik Hill, Esq.
Hancock & Estabrook, LLP
1500 MONY Tower I
P.O. Box 4976
Syracuse, NY 13221-4976
Tel: 315-471-3151
Fax: 315-471-3167
Estimated Assets: $10 Million to $50 Million
Estimated Debts: $10 Million to $50 Million
A. State Street Houses, Inc.'s 2 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
State Street Associates, Indemnity Agreement $15,271,743
L.P. and Promissory Note
c/o Mathematical Bridge payable from
Corp. proceeds of
408 Mariner Drive litigation or sale or
Jupiter, FL 33477 other disposition of
property
City of Utica PILOT payments $606,323
One Kennedy Plaza
Utica, NY 13502
B. State Street Associates' 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
City of Utica PILOT Agreement as $578,528
Comptrollers Office of 9/30/03
One Kennedy Plaza
Utica, NY 13502
Select Energy New York, Inc. Utility services $69,028
provided
A.I. Credit Corp. Trade debt $67,886
Niagara Mohawk Power Utility services $35,628
Corporation provided
City of Utica Roll over water sewer $24,089
Taxes
Upper Mohawk Valley Regional Water and sewer $21,213
Water Board services provided
Lawley Service, Inc. Trade debt $21,068
Raichie Banning Weiss, PLLC Legal services $20,000
provided
Lanny A. Horwitz, Esq. Legal services $20,000
provided
Duane Morris, LLP Legal services $18,705
Provided
Select Energy New York, Inc. Utility services $17,632
provided
Niagara Mohawk Power Utility services $12,772
Corporation provided
Damon & Morey, LLP Legal services $10,151
Provided
Upper Mohawk Valley Regional Water and sewer $7,141
Water Board services provided
L.B. Security Investigations Security services $5,998
Inc. provided
Adorno & Yoss, P.A. Services provided $5,917
Enron Energy Services Trade debt $5,746
Select Energy New York, Inc. Utility services $4,683
provided
Select Energy New York, Inc. Utility services $3,735
provided
Thyssen Krupp Elevator Services provided $5,704
SYNERGY MANUFACTURING: Case Summary & Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Synergy Manufacturing Technology, Inc.
dba CEH Metal Technologies, Inc.
dba Avalanche Industries
dba Scientific Designs, Inc.
dba FMF Metal Products
dba Waddle Metal Products
21000 East 32nd Parkway
Aurora, Colorado 80011
Bankruptcy Case No.: 04-21068
Type of Business: The Debtor provides electronic, mechanical and
fiber optic assembly, metal fabrication,
machining and mobile mounting systems.
See http://www.synergymfg.com/
Chapter 11 Petition Date: May 21, 2004
Court: District of Colorado (Denver)
Judge: Michael E. Romero
Debtor's Counsel: Lee M. Kutner, Esq.
Kutner Miller Kearns, P.C.
303 East 17th Avenue, Suite 500
Denver, CO 80203
Tel: 303-832-2400
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Delta Group, Inc. Trade Debt $262,756
P.O. Box 27561
Albuquerque, NM 87125-7561
Modern Metal and Refining, Trade Debt $238,414
Ltd.
ITT Canon Trade Debt $180,993
Metalwest, LLC Trade Debt $153,557
Force Electronics Trade Debt $129,729
World Micro Components Trade Debt $118,035
Industrial Electric Wire & Trade Debt $112,840
Cable
GETAC, Inc. Trade Debt $104,748
Reliance Steel Co., Inc. Trade Debt $99,758
Smith Enterprises, Inc. Trade Debt $83,662
Tessco Trade Debt $77,170
Kelly Johnson, LLC Trade Debt $67,201
Metal Center, Inc. Trade Debt $64,127
Mobile Installation Trade Debt $62,030
Technologies
Interconnect Devices, Inc. Trade Debt $60,732
General Electric Capital Trade Debt $58,273
Reliance Metal Center Trade Debt $53,120
JP O'Connell Trade Debt $49,553
Franklin Fastener & Supply Trade Debt $48,747
Co.
LEDCO Trade Debt $46,784
TENNECO AUTOMOTIVE INC: S&P Raises Corporate Credit Rating to BB-
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Tenneco Automotive Inc. to 'BB-' from 'B' because of
improving operating performance and a soon-to-be-completed $150
million common equity offering with proceeds to be used to tender
for $130 million of the firm's 11 5/8% senior subordinated notes
due 2009. Other ratings were also raised and all ratings were
removed from CreditWatch where they were placed on April 19,
2004.
The outlook is stable on Lake Forest, Illinois-based Tenneco.
Total outstanding debt at March 31, 2004 was about $1.4 billion.
"Improving operating performance, solid cash flow generation, and
focus on debt reduction should enable the company to offset the
challenges of the automotive supply industry, thereby enabling
Tenneco to sustain credit quality," said Standard & Poor's credit
analyst Daniel DiSenso.
Tenneco is a leading global supplier of emissions control and ride
control products to the automotive original equipment (OE) market
and aftermarket
Future stricter emission control standards and demand for improved
vehicle stability, as well as expected rapid growth of the Chinese
automotive market, create favorable growth prospects for the
company.
TIMKEN COMPANY: Union Blasts Refusal to Go for Federal Mediation
----------------------------------------------------------------
The United Steelworkers of America (USWA) welcomed Sen. John
Kerry's proposal for federal mediation to save the 1,300 Ohio
manufacturing jobs at the Timken Company's Canton facilities, and
called the company's statement that the union had rejected
negotiations "blatantly false."
"Timken's closure announcement is premature, completely
unnecessary and demonstrates the company's profound disloyalty to
Canton steelworkers and the community," said David McCall,
director of USWA District 1 in Ohio, who noted that the company
"is not losing money at its Canton bearing plants. They just want
to make more."
"Timken never even put a proposal on the table," said McCall.
"Instead they ran to the media and cried wolf in the hope of
terrifying thousands of families about the loss of their jobs,
which is about the only thing their strategy has succeeded in
doing.
"Our union's record of boosting productivity to save and reopen
manufacturing plants is a matter of record," McCall added, citing
the union's role through bargaining in resurrecting LTV Steel
operations, and in spearheading steel-industry consolidation
through the purchase of Bethlehem Steel by International Steel
Group (ISG) and United States Steel's acquisition of National
Steel.
"It takes more than talk about 'flexibility' and 'restrictive work
rules' to create a globally competitive facility," McCall said.
"It also requires the company's commitment to eliminate
inefficiency and waste at all levels, to maintain equipment and to
invest in new technologies.
"That's the kind of specific plan our union did propose, and
Timken never even bothered to respond," McCall said.
The union expressed the hope that Timken management would respond
to the call for federal mediation, if Bush makes it, and engage in
good faith bargaining. Timken's owners are major contributors to
the Bush campaign and allowed the president to use the Canton
facilities last year to promote his policies.
"We can absolutely make Timken's bearing operations in Canton more
productive," said McCall, "but only if the company makes a
commitment to invest in its facilities, our workers and the Canton
community, instead of making blatantly false statements."
As reported in the Troubled Company Reporter's May 18, 2004
edition, Timken Company began a series of meetings with the
union and associates in the Canton bearing operations in September
2003 to discuss what needed to be done to make the plants
competitive. At that time, the company made it clear that the
Canton bearing operations could not continue to operate in their
current form. The company indicated it was willing to make the
investments necessary to create a focused, competitive operation
in the Canton bearing plants if these investments were accompanied
by contract modifications. Since then, the company and the union
have been unable to agree on the necessary changes.
Production at the Canton bearing plants has declined 27 percent
over the last five years as the cost structure of the operations
made it difficult to win new business.
About Timken Company
The Timken Company (NYSE: TKR) (Moody's, Ba1 Senior Unsecured
Debt, Senior Implied and Senior Unsecured Issuer Ratings) --
http://www.timken.com/-- is a leading global manufacturer of
highly engineered bearings and alloy steels and a provider of
related products and services with operations in 27 countries. A
Fortune 500 company, Timken recorded 2003 sales of $3.8 billion
and employed approximately 26,000 at year-end.
TRANSWESTERN PIPELINE: Fitch Places Ratings on Watch Positive
-------------------------------------------------------------
Fitch Ratings has placed Transwestern Pipeline Co.'s 'B+'
indicative senior unsecured debt, 'BB' rated $150 million four-
year revolving credit facility and its $400 million five-year term
loan on Rating Watch Positive following the announcement by Enron
Corp. that it has reached agreement with NuCoastal LLC for the
sale of Transwestern's parent holding company, CrossCountry
Energy, LLC. The transaction price is approximately $2.2 billion,
including the assumption of $430 million of Transwestern debt.
NuCoastal is owned by Kelso & Company, ArcLight Capital Partners
LLC, Citigroup, and Oscar Wyatt, Jr. Prior to today's rating
action, The Rating Outlook was Positive for Transwestern's debt.
The transaction has the support of Enron's Official Unsecured
Creditor's Committee and requires the approval of the Bankruptcy
Court, which will oversee a bidding process that will be open to
other potential purchasers. Enron is expected to file the sale
agreement with the Bankruptcy Court early next week. In addition
to the Bankruptcy Court approval, the transaction will require
certain regulatory and governmental approvals and is expected to
close by the fourth quarter of 2004. Furthermore, lenders to
Transwestern's Bank Facilities must approve a change of ownership
control.
On March 31, 2004, Enron transferred its pipeline interests,
including its 100% ownership in Transwestern to CrossCountry. The
pipelines have common management but are financed separately.
CrossCountry has no debt. Enron's plan of reorganization
contemplates that CrossCountry shares will be held for the benefit
of Enron creditors and subsequently distributed to creditors in
accordance with the plan. An alternative option was the sale of
CrossCountry.
The Rating Watch Positive status reflects an anticipated speedier
resolution to Transwestern's separation from Enron ownership
through the sales process. However, given the bidding procedures,
the ultimate ownership structure and resulting operating and
financial plans for Transwestern remains uncertain. Fitch could
take further rating action as these issues are resolved. The
current below-investment grade status of Transwestern's ratings
reflects the general uncertainty of the Enron bankruptcy. On a
practical level, Enron related risk has inhibited Transwestern
from accessing capital markets as an investment grade debt issuer.
Absent Enron risks, Transwestern's current and prospective
standalone credit measures are consistent with investment grade
for a FERC regulated pipeline. EBITDA to interest should exceed
5.0 times (x) and debt to EBITDA approximate 3.0x for 2004.
Operating performance remains stable and has not been materially
impaired by the burden of Enron's bankruptcy as shippers and
vendors have continued to contract with Transwestern under normal
terms. Long-term expansion prospects are good.
UAL CORP: Agrees To Pay $1.25 Million Amendment Fee To DIP Lenders
------------------------------------------------------------------
James H.M. Sprayregen, Esq., at Kirkland & Ellis, says that in
recent weeks, the UAL Corp. Debtors and their DIP Lenders have
negotiated additional amendments to the DIP Credit Facilities.
The Amendments provide for these modifications to the DIP Credit
Facilities:
(a) An extension of the June 30, 2004 maturity date of the
Club DIP Facility to December 31, 2004;
(b) A 1% interest rate reduction under the DIP Credit
Facilities, and a future 1% interest rate reduction under
the Club DIP Facility and the Bank One DIP Facility. If
the Air Transportation Stabilization Board approves the
guaranty of the exit financing to be obtained by the
Debtors:
-- under the Bank One DIP Credit Agreement, the Applicable
Margin for Floating Rate Loans will be 3.5% per Annum,
and the Eurodollar Loans will be 4.5% per annum; and
-- under the Club DIP Facility, each ABR Loan will bear
interest at a rate per annum equal to the Alternative
Base Rate plus 3.5%, and each Eurodollar Loan will bear
interest at a rate per annum equal to the Adjusted
LIBOR Rate for a particular interest period in effect
for that borrowing plus 4.5%;
(c) A reduction of the $800 million outstanding Total
Commitments of the Revolving Credit and Letter of Credit
Facility under the Club DIP Facility to $200 million;
(d) The elimination of Stage II, by deleting references to
Stage I, Stage II and Stage II Threshold contained in the
Club DIP Facility;
(e) A revision of certain covenants under the DIP Credit
Facilities, including:
(i) an increase in the Capital Expenditures ceiling
under the Club DIP Facility to $375,000,000 during
the period from April 1, 2004 to December 31, 2004;
(ii) an adjustment of the EBITDAR covenants contained in
the DIP Credit Facilities. The Debtors covenant
with the Club DIP Lenders that they will not permit
EBITDAR to fall below:
Minimum
For the Rolling 12-Month Cumulative
Period Ending EBITDAR
------------------------ ----------
May 31, 2004 $1,369,000,000
June 30, 2004 1,333,000,000
July 31, 2004 1,364,000,000
August 31, 2004 1,354,000,000
September 30, 2004 1,463,000,000
October 31, 2004 1,507,000,000
November 30, 2004 1,511,000,000
Additionally, the definition of EBITDAR is modified
to account for settlement payments made in
connection with the Chicago O'Hare municipal bond
transaction.
(iii) the imposition of additional reporting requirements
for the Debtors' use of Slots, Primary Foreign
Slots and Primary Routes.
In exchange for these amendments to the DIP Credit Facilities,
the Debtors agree to pay JPMorgan Chase Bank and Citicorp USA a
$1,250,000 Amendment Fee.
The Debtors ask the Court to approve the Amendments as these
reduce their obligations under the DIP Credit Facilities, and
enhance their operational and financial flexibility. The Debtors
also seek permission to pay the Amendment Fees.
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. 48; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
UNITED AIRLINES: Fails to Reach Consensual Agreement with Retirees
------------------------------------------------------------------
United Airlines is expected to file a motion in bankruptcy court
to slash retiree health care benefits, despite the concerted
efforts of United's retiree coalition to come to a consensual
agreement with airline management. The retiree coalition
represents nearly all unionized, salaried and management workers
who retired before July 1, 2003.
United Airlines Flight Attendant Master Executive Council
President Greg Davidowitch, of the Association of Flight
Attendants-CWA, AFL-CIO, issued the following statement regarding
United's ill-fated plan:
"As much as we believe United's proposal to slash retiree medical
benefits is unreasonable and inconsistent with Section 1114 of the
Bankruptcy Code, we have been meeting with the company in an
effort to address the challenges before us and to avoid
destructive litigation and any subsequent effect on flight
attendants.
"We had hoped that the current management of United Airlines would
make a good faith effort to reach a consensual agreement. Instead,
in response to the retiree coalition's proposals, the company's
negotiators repeatedly made entrenched proposals fundamentally
unchanged from the original proposal presented in March. Clearly,
United's actions are not conducive to good faith negotiations.
"To say that we are disappointed about United's actions in
bankruptcy court today would be an understatement, however, the
flight attendants continue to be committed to the success of our
company. Management's platitudes about their concern for the
viability of our airline ring hollow since management's actions at
the negotiating table speak louder than words. Any goodwill that
existed a year ago has been squandered.
"Over the course of the past year, it is apparent that the
relationship necessary for a successful reorganization is non-
existent due to the continued overreaching by the management of
United Airlines."
More than 46,000 Flight Attendants, including the 21,000 flight
attendants at United, join together to form AFA, the world's
largest flight attendant union. AFA is part of the 700,000 member
strong Communications Workers of America, AFL-CIO. Visit us at
http://www.unitedafa.org/
About United
United, United Express and Ted operate more than 3,500 flights a
day on a route network that spans the globe. News releases and
other information about United may be found at the company's Web
site at http://www.united.com/
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.
URECOATS: Working Capital Deficit Increases to $5.6M at March 31
----------------------------------------------------------------
Urecoats Industries Inc. (AMEX: URT) announces a net loss of
$1.69 million, or $0.059 per share, for the quarter ended March
31, 2004 as compared to a net loss of $2.1 million or $0.161 per
share, for the same period in 2003. Revenue for the quarter ended
March 31, 2004 was $0.65 million, as compared to $1 million for
the comparative period in 2003.
The strategic initiatives implemented in the second half of 2003
reduced operating expenses by over $0.89 million dollars as
compared to the same period in 2003. These savings were offset by
non-recurring costs relating to litigation reserves and severance,
which were addressed in the first quarter of 2004. The net result
is a reduction in the Company's Operating Loss of $0.45 million
for the current period.
"Our strategic and operating initiatives are delivering positive
results," stated Michael T. Adams, President of Urecoats
Industries Inc. "While we have gained control over our costs and
expenses on a going forward basis, we are still clearing up
certain near term non-recurring matters, the results of which are
reflected in our first quarter financial results," Mr. Adams
continued. "The key events for the first quarter of 2004 focused
on introducing our new RSM Thousand Series(TM) products to the
marketplace, commencing manufacturing operations for our RSM
Series(TM) products, hiring our new chief financial officer, and
initiating business segment reporting designed to aid our
shareholders in understanding how management will be measuring its
results," concluded Mr. Adams.
Financial Condition, Liquidity and Capital Resources
The Company had $131,477 of cash on hand at March 31, 2004 as
compared to $42,718 at December 31, 2003, which represents an
increase of $88,759. During the three months ended March 31, 2004,
the Company's working capital deficit increased by approximately
$1,633,222 to $5,594,594. This increase in the working capital
deficit was primarily due to a $1,370,000 increase in the level of
funding from the Chairman, a $584,667 increase in accounts payable
and accrued expenses and a $326,316 increase in prepaid expenses
and other current assets. The Company's ability to continue as a
going concern is dependent on management's ability to successfully
execute its business plan, which includes increasing revenues
while decreasing operating costs and expenses, as well as,
increasing operational cash flow, continued funding of the
Company's operations by the Chairman, and obtaining additional
funding from private placements of debt and/or equity securities.
If management is unsuccessful in obtaining one or more of the
above mentioned goals, the Company's ability to continue as a
going concern would be adversely impacted. However, until the
Company's revenues increase so as to exceed the Company's
operating expenses, the Company will continue to utilize funding
from the Chairman, or other alternative sources of funding, to the
extent available. To the extent fundings from the Chairman are
insufficient to pay the Company's operating expenses, the Company
will require alternative sources of funding. There can be no
assurance that any alternative sources of financing will be
available to the Company at such point in time, or if obtainable,
on terms that are commercially feasible.
Going Concern Qualification
The report of the Company's independent registered public
accounting firm on the Company's consolidated financial statements
as of and for the year ended December 31, 2003, expressed
substantial doubt about the Company's ability to continue as a
going concern. Factors contributing to this substantial doubt
include recurring losses from operations and net working capital
deficiencies.
As mentioned in the Financial Condition, Liquidity and Capital
Resources section, the Company is dependent on the continued
funding currently being received from the Chairman to continue
operations. The discontinuance of such funding, and the
unavailability of financing to replace such funding, could result
in the Company ceasing operations.
About Urecoats Industries Inc.
Urecoats Industries Inc. is an emerging growth company, operating
two wholly owned subsidiaries, RSM Technologies, Inc. (f/k/a
Urecoats Manufacturing, Inc.) and Infiniti Products, Inc. (f/k/a
Infiniti Paint Company, Inc.). RSM Technologies, Inc. acquires,
develops, markets, and sells spray applied elastomeric coatings,
to the roofing, waterproofing, corrosion, and construction
industries. Infiniti Products, Inc. develops, manufactures,
markets, sells, and distributes coatings, paints, and sealants to
the construction, paint, roofing, and waterproofing industries.
For more information, visit http://www.urecoats.com/
US AIRWAYS: Flight Attendants Hire Fin'l Analyst to Evaluate Plan
-----------------------------------------------------------------
The US Airways flight attendant leadership, represented by the
Association of Flight Attendants-CWA, AFL-CIO, held a meeting to
discuss and review the transformation plan US Airways
management presented to the AFA Master Executive Council on
Thursday.
The transformation plan includes a target of $116 million per year
in concessions from the flight attendants. A decision was made to
retain a financial analyst and pension actuary to examine the
company's financial documents and evaluate the legitimacy of the
target number.
"Before the flight attendants can even consider moving forward
with a third round of concessionary negotiations, we need to feel
confident that management has a viable blueprint to turn this
airline around," said AFA US Airways Master Executive Council
President Perry Hayes. "Hiring an expert to analyze the company's
finances and targeted cuts will allow us to make an informed
decision that is in the best interest of our flight attendants."
In two rounds of concessionary negotiations in 2002, US Airways
flight attendants provided the airline with approximately $649
million in cost savings through 2008.
More than 45,000 flight attendants, including the 5,200 flight
attendants at US Airways, join together to form AFA, the world's
largest flight attendant union. AFA is part of the 700,000 member
strong Communications Workers of America, AFL-CIO.
* * *
As reported in the Troubled Company Reporter's May 10, 2004
edition, US Airways, Inc., emerged from bankruptcy protection in
March 2003 and has continued to incur losses from operations. For
the quarter ending March 31, 2004, USAir reports a $181 million
net loss. That loss wipes-out all shareholder equity in the
carrier and the company's Mar. 31 balance sheet now shows a $64
million shareholder deficit. At the parent company level, US
Airways Group, Inc.'s March 31 balance sheet shows $30 million in
shareholder equity.
Possible Chapter 22
Given the Company's continued operating losses, the Company is
pursuing a transformation plan to further reduce cost per
available seat mile to levels competitive with low-cost carriers
such as America West and JetBlue. Key elements of this plan
include changes in marketing and distribution techniques; employee
compensation, benefits and work rules; and airline scheduling and
operations. The Company expects to begin implementation of the
actions needed to achieve the cost reductions by mid-year 2004.
However, since the plan will require changes in the Company's
collective bargaining agreements, there can be no assurance that
the plan can be achieved. While the Company's preference is to
complete its transformation on a consensual basis, failure to
achieve the above-described competitive cost structure will force
the Company to reexamine its strategic options, including but not
limited to asset sales or a judicial restructuring.
US STEEL: Appoints Karl Csensich General Manager -- Raw Materials
-----------------------------------------------------------------
United States Steel Corporation (NYSE: X) announced the
appointment of Karl F. Csensich to the position of general
manager-raw materials with responsibility for the company's raw
materials supplies for domestic and European operations. In his
new position, which is effective June 1, Csensich will report to
John H. Goodish, executive vice president-operations.
"With his broad international experience, Karl is the perfect
choice to lead our efforts to ensure that United States Steel
Corporation has dependable supplies of coal, coke, iron ore and
scrap for our global steelmaking operations," Goodish said, "and
Karl will be charged with making certain the company has access to
a stable supply of the highest quality raw materials at the lowest
possible cost."
Csensich began his career with U. S. Steel in 1971. He was
promoted through a series of financial positions at Geneva Works
(Utah) and various Pittsburgh facilities and was named comptroller
of USX Engineers and Consultants, now UEC Technologies LLC, at the
company's Pittsburgh headquarters in 1999. He served in that
capacity until December 2000, when he was named vice president of
accounting for U. S. Steel Kosice (USSK), a position he held until
his promotion to senior vice president and chief financial officer
of USSK in June of 2003.
U.S. Steel, through its domestic operations, is engaged in the
production, sale and transportation of steel mill products, coke,
and iron- bearing taconite pellets; the management of mineral
resources; real estate development; and engineering and consulting
services and, through its European operations, which include U. S.
Steel Kosice, located in Slovakia, and U. S. Steel Balkan located
in Serbia, in the production and sale of steel mill products.
Certain business activities are conducted through joint ventures
and partially owned companies. United States Steel Corporation is
a Delaware corporation.
* * *
As reported in the Troubled Company Reporter's February 4, 2004
edition, Standard & Poor's Ratings Services assigned its
preliminary 'BB-' senior unsecured and preliminary 'B'
subordinated debt ratings to United States Steel Corp.'s $600
million universal shelf. The company may also issue preferred
stock under the shelf.
At the same time, Standard & Poor's affirmed all its existing
ratings, including the 'BB-' corporate credit rating on U.S. Steel
and revised its outlook on the company to stable from negative.
Total debt for the Pittsburgh, Pennsylvania-based company was $2.2
billion (including operating leases) for the December 2003
quarter.
"The outlook revision reflects the anticipated improvements in the
company's financial profile owing to its ongoing cost-reduction
initiatives, as well as benefits from management's actions to
moderate potentially high cash outlays for its pension obligations
in the next few years," said Standard & Poor's credit analyst Paul
Vastola.
The ratings reflect the company's aggressive financial leverage--
including its underfunded postretirement benefit obligations--and
challenging market conditions, which overshadow its good liquidity
and its improved market share and cost position following its May
20, 2003, acquisition of National Steel Corp. The company also
benefits from a product mix that is more diverse than its
competitors. Following its acquisition of the assets of National,
U.S. Steel's domestic steel production capability increased to
19.4 million tons, making it the largest integrated steel producer
in North America.
VIROPHARMA: Conv. Plus Cash Notes Exchange Offer to Expire Today
----------------------------------------------------------------
ViroPharma Incorporated (Nasdaq:VPHM), a pharmaceutical company
focused on developing and commercializing products that address
serious diseases treated by physician specialists and in hospital
settings, including cytomegalovirus (CMV) and hepatitis C (HCV),
announced that a conversion consideration determination period for
its exchange offer of new 6% Convertible Senior Plus Cash
Notes(sm) due June 1, 2009 has concluded.
Pursuant to the terms of the exchange offer, the base share amount
and the auto-conversion price is to be fixed as of the second
trading day immediately preceding the expiration date of the
exchange offer, which will be May 25, 2004, unless extended by
ViroPharma as permitted by the terms of the exchange offer. "We
may extend the expiration date or amend any of the terms or
conditions of the exchange offer, including imposing a minimum
participation condition, for any reason. In the case of an
extension or a material amendment, we will issue a press release
or other public announcement no later than 9:00 a.m., New York
City time, on May 26, 2004. No decision has been made whether to
extend the expiration date or amend the terms of the exchange
offer."
Unless ViroPharma extends or amends the offering, as described in
the prospectus for this offering each Plus Cash Note will be
convertible into 257.62 shares of ViroPharma common stock (the
base share amount) plus $500 in cash, which ViroPharma may elect
to pay with shares of its common stock under certain
circumstances. ViroPharma may auto-convert the Plus Cash Notes any
time the closing price of its common stock exceeds $3.88 for 20
trading days during any consecutive 30 trading day period, subject
to the terms of the Plus Cash Notes.
The base share amount was determined by dividing (i) the result of
subtracting the $500 plus cash amount from $952.38, by (ii) the
simple average of the closing bid price of ViroPharma's common
stock on May 17, 18, 19, 20, and 21, 2004. The auto-conversion
price was determined by dividing (i) the result of subtracting the
$500 plus cash amount from $1,500 by (ii) 257.62, which is the
number of base shares. In the event the exchange offer is
extended, the number of shares into which each Plus Cash Note will
be convertible will be recalculated pursuant to the terms of the
offer.
On April 28, 2004, ViroPharma commenced an offer to exchange up to
$99,122,500 aggregate principal amount of its new 6% Convertible
Senior Plus Cash Notes(sm) due 2009 for up to all of the
$127,900,000 aggregate principal amount of its currently
outstanding 6% Convertible Subordinated Notes.
The exchange offer is scheduled to expire at 12:00 midnight, New
York City time, on May 25, 2004, unless extended.
U.S. Bancorp Piper Jaffray Inc. is serving as the dealer manager
for the exchange offer. U.S. Bank National Association is serving
as the exchange agent. A prospectus, letter of transmittal and
other materials related to the exchange offer, are available free
of charge from the information agent, Georgeson Shareholder
Communications Inc., 17 State Street, 10th Floor, New York, New
York 10004 (800-259-3515). The prospectus, the letter of
transmittal and other materials related to the exchange offer, may
also be obtained free of charge at the Securities and Exchange
Commission's website, http://www.sec.gov/
At March 31, 2004, ViroPharma Incorporated's balance sheet shows a
stockholders' deficit of $23,930,039 compared to a deficit of
$7,509,295 at December 31, 2003.
WEIRTON STEEL: Enters Into Bondholders Settlement Agreement
-----------------------------------------------------------
The Weirton Steel Corporation Debtors sought and obtained the
Court's authority to enter into a settlement agreement with J.P.
Morgan Trust Company, National Association, in its capacity as
indenture trustee and collateral agent, the Informal Committee of
Senior Secured Noteholders and each of the individual members of
the Informal Committee who are signatories to the Settlement
Agreement.
Bondholder Background
In mid-2001, the Debtors developed and implemented a strategic
restructuring plan designed to reduce operating costs, improve
liquidity and working capital position, restructure long-term
debt and reposition its business focus. According to Mark E.
Freedlander, Esq., at McGuireWoods, in Pittsburgh, Pennsylvania,
the restructuring plan included the exchange of:
(a) $110,066,000 of 11 3/8% senior notes due 2004 and
$104,920,000 of 10 3/4% senior notes due 2005 for
$118,242,300 aggregate principal amount of 10% Senior
Secured Notes due 2008; and
(b) $45,530,000 of 8 5/8% 1989 Pollution Control Bonds for
$27,348,000 aggregate principal amount Secured Pollution
Control Revenue Refunding Bonds Series 2002.
As collateral for the Notes and the Bonds, the Debtors granted
the Bondholders liens subordinate to the lien position of the
Debtors' prepetition revolving credit lenders in certain
operating fixed assets of Weirton including the hot strip mill,
the number 9 tandem mill and the tin assets.
Pursuant to the Final DIP Order, the Debtors provided adequate
protection to the Bondholders to the extent of diminution, if
any, in value of the Bondholder Collateral in the form of:
(a) junior replacement liens on and security interests in
substantially all of the Debtors' assets; and
(b) a superpriority administrative claim pursuant to Sections
503(b) and 507(b) of the Bankruptcy Code.
Sale of the Debtors' Assets
On February 25, 2004, the Debtors and the ISG Weirton, Inc., and
International Steel Group, Inc., entered into an Amended and
Restated Asset Purchase Agreement, pursuant to which ISG Weirton
agreed to purchase substantially all of the Debtors' assets,
subject to higher and better offers.
On April 9, 2004, JPMorgan, as Indenture Trustee, objected to the
proposed sale. JPMorgan also asserted its Diminution Claim based
an alleged decline in value of the Bondholder Collateral since
the Petition Date. JPMorgan asserted:
-- its right under the Final DIP Order to a Section 503(b) and
507(b) superpriority claim; and
-- adequate protection of its replacement liens and security
interests.
The Informal Committee and Corsair Special Situations Fund, L.P.,
also objected to the proposed sale.
On April 12 and 13, 2004, the Debtors conducted an auction, at
which the ISG Parties and JPMorgan, through WSC Acquisition
Corporation -- an acquisition entity formed by Corsair and
another member of the Informal Committee -- submitted several
rounds of competing bids for the Sale Assets. On April 15,
Weirton's Board of Directors determined that ISG's bid was the
highest and best bid for the Sale Assets. On April 20, 21 and
22, 2004, the Court conducted an evidentiary hearing and
considered the arguments of counsel to determine whether to
approve the sale of the Assets to the Buyer. On April 22, the
Court approved the Sale of the Assets to ISG Weirton. The Court
also determined that the Debtors could sell the Bondholder
Collateral to ISG Weirton free and clear of the Bondholders'
liens in exchange for $20.4 million upon closing of the sale to
ISG Weirton. The Sale Order was automatically stayed through
May 3, 2004, by operation of Rules 6004(g) and 6006(d) of the
Federal Rules of Bankruptcy Procedure.
On April 23, 2004, JPMorgan, the Informal Committee and Corsair
filed Notices of Appeal of the Sale Order. On April 26, the
Court denied the Bondholders' requests to stay the Sale Order
pending the adjudication of the Appeals.
On April 26, 2004, JPMorgan and the Informal Committee sought to
stay the Sale Order pending their appeals. On April 27, Corsair
also filed a similar request. On April 30, the United States
District Court for the Northern District of West Virginia held a
hearing on the Stay Motions and continued the stay the Sale Order
through May 7, 2004, pending the documentation of a settlement in
principle reached between the Debtors and the Bondholders.
The Debtors and the Bondholders entered into a Settlement
Agreement. The salient terms of the Settlement Agreement are:
A. In full and complete satisfaction of any and all claims of
JPMorgan against the Debtors, including the Diminution
Claim, all claims under Sections 503(b) and 507(b) of the
Bankruptcy Code, and all claims under the Final DIP Order, the
Debtors will pay:
(a) (i) the unpaid fees and expenses incurred through the
Closing Date of:
* JPMorgan and its counsel,
* Compass Advisers, LLC,
* Imperial Capital, LLC, and Hatch Consulting, and
* Akin Gump Strauss Hauer & Feld LLP; and
(ii) to Ritchie Capital Management, LLC, or any of its
affiliates and Corsair Partners, LLC, or any of its
affiliates for reimbursement of amounts expended by
Ritchie or Corsair Partners for:
* the fees and expenses paid to International Steel
Associates, Inc.;
* fees and expenses paid to Post Advisory Group,
LLC;
* fees and expenses paid to Deutsche Bank Trust
Company Americas and Deutsche Bank Securities,
Inc.;
* fees and expenses paid in connection with the
documentation of the $35 million unsecured loan
commitment from certain holders of the Senior
Secured Notes;
* fees and expenses paid to Compass Advisors, LLC;
and
* the funding of the $1 million indemnification
deposit held by JPMorgan, in no event, however,
to exceed $9,600,000, at the time of closing
under the Purchase Agreement;
(b) the excess, if any, of $9,600,000 over the amount paid
pursuant to Section 1(a) of the Settlement Agreement will
be paid at the Closing to the order of JPMorgan for the
benefit of the holders of the Senior Secured Notes,
including the Members; and
(c) after payment in full by the Debtors of all allowed
administrative priority claims of the Debtors' estates and
after the Debtors have liquidated all of their remaining
assets that are reasonably able to be liquidated, the
lesser $6,000,000 less 10% of the recovery by the
Noteholders between $32 million and $36 million -- the
Bonus Pool -- or all remaining assets in the Debtors'
estates less the Bonus Pool pursuant to the terms of the
Liquidating Plan, will be paid to the order of JPMorgan
for the benefit of the holders of the Senior Secured
Notes, including the Members. To the extent practical,
the Debtors may make earlier distributions consistent with
the needs of the Debtors' estates.
Amounts payable will be in addition to the $20.4 million
payable to JPMorgan under the Sale Order.
B. Each of the Informal Committee, JPMorgan and Corsair will
dismiss with prejudice their Appeals of the Sale Order
immediately on the payment of $20.4 million pursuant to the
Sale Order on account of the Bondholder Secured Claim and the
Payment of the consideration in the amounts set forth in the
Settlement Agreement.
C. The Informal Committee and the Members, on the one hand, and
the Debtors, on the other hand, will release and waive any and
all claims against each other, immediately on the payment of
$20.4 million pursuant to the Sale Order on account of the
Bondholder Secured Claim and the Payment of the consideration
in the amounts set forth in the Settlement Agreement. The
releases to be granted by JPMorgan, the Informal Committee and
the Members will also extend to the Debtors' present and
former officers, directors, employees, attorneys,
accountants, investment bankers, financial advisors and
agents.
D. Provided that the Liquidating Plan is filed with the
Bankruptcy Court on or before June 7, 2004, and the
Liquidating Plan contains provisions consistent in all
material respects with the Settlement Agreement, each Member
irrevocably agrees:
(a) to timely submit a ballot in voting their portion of the
Secured Claim in favor of the Liquidating Plan filed by
the Debtors; and
(b) unless and until the Settlement Agreement has been
terminated, not revoke or withdraw the vote.
At the Debtors' request, the Court also approves Amendment No. 3
to the Purchase Agreement, which includes these terms:
(a) ISG Weirton's waiver of Sections 7.2(c), 7.2(g), 7.2(h)
and 7.2(o)of the Purchase Agreement that was previously
contingent on the Closing occurring on or before May 4,
2004, will remain in effect provided that the Closing
occurs on May 17, 2004, or thereafter by mutual consent of
the Debtors, ISG Weirton and ISG; and
(b) The Debtors will waive all actions assertable under
Chapter 5 of the Bankruptcy Code. (Weirton Bankruptcy News,
Issue No. 26; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
WESTSIDE GRAVEL: Case Summary & 6 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Westside Gravel, LLC
22480 Road L
Cortez, Colorado 81321
Bankruptcy Case No.: 04-20834
Type of Business: The Debtor is engaged in the business of gravel
production.
Chapter 11 Petition Date: May 19, 2004
Court: District of Colorado (Denver)
Judge: Sidney B. Brooks
Debtor's Counsel: Peter J. Lucas, Esq.
Appel & Lucas, P.C.
1917 Market Street, Suite A
Denver, CO 80202
Tel: 303-297-9800
Fax: 888-849-8018
Total Assets: $2,660,500
Total Debts: $1,905,300
Debtor's 6 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Bank of Durango Lienholder of $1,400,000
125 Sawyer Drive
Durango, CO 81313
BF Limited provides financial $270,000
P.O. Box 17881 consideration for
Albuquerque, NM 87107 business equipment
Jerry Lucas prior interest holder $165,000
Thomas A. Ross unknown $67,000
Brennan Oil-Texaco Products provided fuel for $3,300
equipment and
operations
Robert Johnson Lessor of gravel pit unknown
WEYERHAEUSER: Will Appeal Mixed Verdict in Alder Antitrust Lawsuit
------------------------------------------------------------------
Weyerhaeuser Company (NYSE: WY) said it would appeal a portion of
a verdict rendered May 20, 2004 in favor of Washington Alder by a
jury in U.S. District Court in Portland, Oregon. As part of the
same verdict, however, the jury unanimously found in favor of
Weyerhaeuser when it determined that the plaintiff failed to prove
a case that there was monopolization of an alder saw log market or
damages after December 2001.
The jury was instructed by the trial judge that Weyerhaeuser had
monopolized a claimed alder saw log market in the Pacific
Northwest from June 1999 to December 2001, based on an earlier
case that is currently under review by the U.S. Court of Appeals
for the Ninth Circuit. The court dismissed an alternative claim
that Weyerhaeuser had monopolized an alleged alder lumber market.
As a result, Weyerhaeuser will take an after-tax charge of about
$10.5 million, or 4 cents per share, in the second quarter.
The jury in Portland awarded damages of $5,287,743, which under
applicable law will be trebled to $15,863,229 before taxes.
Weyerhaeuser will post a bond to cover the jury award pending
appeal.
"We are pleased the jury ruled in our favor that we did not
monopolize the alder saw log market," said Robert A. Dowdy,
Weyerhaeuser senior vice president and general counsel. "The
judge's instructions precluded the jury from ruling on that
question for the period 1999 to 2001 based on an earlier verdict
that is on appeal. We believe that the monopolization issues will
ultimately be decided in favor of Weyerhaeuser and that this
verdict and the earlier one will be reversed on appeal. In the
meantime, we will continue to vigorously defend ourselves."
Weyerhaeuser Company (NYSE: WY)(Fitch, BB+ Senior Unsecured Long-
Term Ratings, Stable Outlook), one of the world's largest
integrated forest products companies, was incorporated in 1900.
In 2003, sales were $19.9 billion. It has offices or operations
in 18 countries, with customers worldwide. Weyerhaeuser is
principally engaged in the growing and harvesting of timber; the
manufacture, distribution and sale of forest products; and real
estate construction, development and related activities.
WHITTEN PUMPS: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Whitten Pumps, Inc.
dba Whitten Supply Co.
dba Water Well Specialties
502 County Line Road
Delano, California 93215
Bankruptcy Case No.: 04-14313
Type of Business: The Debtor provides water well drilling and
pump manufacturing operations.
Chapter 11 Petition Date: May 19, 2004
Court: Eastern District Of California (Fresno)
Judge: W. Richard Lee
Debtor's Counsel: T. Scott Belden, Esq.
Klein, DeNatale, Goldner, Cooper, Rosenlieb &
Kimball, LLP
4550 California Ave 2nd Floor
P.O. Box 11172
Bakersfield, CA 93389-1172
Tel: 661-395-1000
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Roscoe Moss Company Purchase of Materials $473,906
P.O. Box 31064
Lincoln Heights Station
Los Angeles, CA 90031-0064
101 Pipe & Casing Purchase of Materials $271,134
30101 Agoura Court, Ste 201
Agoura Hills, CA 91301
Preferred Pump of California Purchase of Parts $89,363
Greg's Petroleum Service Complaint for Breach $64,872
Bitco Sales Purchase of Materials $42,476
Waterman Industries Purchase of Materials $40,990
Oiltools, Inc. Equipment Rental $39,048
Sinclair Well Products & Purchase of Materials $35,957
Service
State Compensation Insurance Insurance Premiums $27,569
Fund
American Pipe & Tubing Purchase of Parts $25,895
Blue Shield of California Insurance Premiums $22,832
Stewart Electric Supply Inc. Purchase of Supplies $22,691
Stewart Electric Supply Inc. Purchase of Supplies $22,691
Flowserve Pump Division Purchase of Parts $20,758
Jim's Supply Co., Inc. Purchase of Parts $20,521
Richard and Shirlee Whitten Rent in Arrears $20,000
Partnership
United Distribution Purchase of Materials $19,930
Pacific Electric Motors Purchase of Parts $18,206
Ernie's Tong Service Equipment Rental $15,972
Air Liquide America Corp. Purchase of Fuel $14,979
WICKES: Secures Exclusive Right to File Plan Until August 17
------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the Northern District of
Illinois, Wickes, Inc., obtained an extension of its exclusive
periods. The Court gives the Debtor, until August 17, 2004, the
exclusive right to file its plan of reorganization and until
October 18, 2004, to solicit acceptances of that Plan.
Headquartered in Vernon Hills, Illinois, Wickes Inc.
-- http://www.wickes.com/-- is a retailer and manufacturer of
building materials, catering to residential and commercial
building professionals, repairs and remodeling contractors and
project do-it-yourself consumers. The Company filed for chapter 11
protection on January 20, 2004 (Bankr. N.D. Ill. Case No. 04-
02221). Richard M. Bendix Jr., Esq., at Schwartz Cooper
Greenberger & Krauss represents the Debtor in its restructuring
efforts. When the Company filed for protection from its creditors,
it listed $155,453,000 in total assets and $168,199,000 in total
debts.
WISER OIL: Agrees to Forest Oil Acquisition for $10.60 Per Share
----------------------------------------------------------------
The Wiser Oil Company (NYSE:WZR) announced that it has agreed to
be acquired by Forest Oil Corporation (NYSE:FST) for $10.60 per
share in cash through a tender offer. The Boards of Directors of
both companies have unanimously approved this transaction and
Wiser shareholders owning approximately 41% of the common stock
have agreed to tender their shares pursuant to the offer.
Wiser's Chairman and Chief Executive Officer George K. Hickox, Jr.
commented, "This transaction represents the culmination of our
strategic repositioning of Wiser that began four years ago. We
believe that Forest is well positioned to exploit the projects and
prospects we have assembled. The Board of Directors and management
team of the Company believe this offer represents a fair value for
the Company's assets and exploration potential in the United
States and Canada. Our employees have been key to the company's
success and Forest's offer reflects the value they have created
for our shareholders."
Under the terms of the merger agreement, the all cash transaction
is structured as a first step tender offer for all of the common
shares of Wiser at $10.60 per share, followed by a cash merger to
acquire for $10.60 per share any shares of Wiser that remain
outstanding after the closing of the tender offer. Forest has
agreed to commence the tender offer within 7 business days. The
tender offer is subject to customary closing conditions, including
regulatory approvals and the valid tender of at least a majority
of Wiser's outstanding shares of common stock. A vote of Wiser's
stockholders will be required only if less than 90% of Wiser's
shares are tendered in the Forest offer.
Additional details regarding the tender offer and the transaction
will be disclosed in the tender offer documents that will be filed
concurrently with the commencement of the tender offer.
Petrie Parkman & Co. acted as financial advisor and rendered a
fairness opinion to Wiser in connection with the transaction. Reed
Smith LLP provided legal advice to Wiser in this transaction.
About Forest Oil
Forest Oil Corporation is engaged in the acquisition, exploration,
development and production of natural gas and crude oil in North
America and selected international locations. Forest's principal
reserves and producing properties are located in the United States
in the Gulf of Mexico, Alaska, Louisiana, Oklahoma, Texas, Utah,
and Wyoming, and in Canada in Alberta and the Northwest
Territories.
About The Wiser Oil Company
The Wiser Oil Company is a Dallas, Texas based independent energy
company engaged in the acquisition, development and production of
oil and natural gas in the United States and in Canada.
* * *
As reported in Troubled Company Reporter's May 20, 2004 edition,
Standard & Poor's Ratings Services lowered the corporate credit
ratings on independent oil and gas exploration and production
company Wiser Oil Co. to 'B-' from 'B' following a review of
recent financial and business results. The outlook remains
negative.
"The negative rating action reflects the failure by Wiser to stem
the erosion of its reserves (down 10% over the past three years),
adequately improve its cost structure ($5.40 as of Dec. 31, 2003),
and improve liquidity despite record hydrocarbon prices," noted
Standard & Poor's credit analyst Paul B. Harvey.
The negative outlook reflects the continued weak liquidity brought
on by an aggressive capital-spending program and a continued high
cost structure that has limited cash flow for debt repayment. If
hydrocarbon prices retreat to historical averages, liquidity would
likely become impaired and ratings would be negatively affected.
WOMEN FIRST: Looks to Miller Buckfire for Financial Advice
----------------------------------------------------------
Women First Healthcare, Inc., is asking for approval from the U.S.
Bankruptcy Court for the District of Delaware of its application
to employ Miller Buckfire Lewis Ying & Co., LLC as its financial
advisor.
The Debtor reports that Miller Buckfire will render investment
banking services to the Debtor in connection with a possible
restructuring, financing or sale transaction, including:
a) familiarizing itself with the business, operations,
properties, financial condition and prospects of the
Debtor;
b) advising and assisting the Debtor in structuring and
effectuating the financial aspects of such a transaction
or transactions;
c) if the Debtor determines to undertake a sale, identifying
and negotiating with potential acquirors in connection
with a sale, including preparation of sale memoranda and
presentation materials, as appropriate;
d) if the Debtor determines to undertake a restructuring,
providing financial advice and assistance to the Debtor in
developing and seeking approval of a restructuring plan,
including participating in negotiations with entities or
groups affected by the plan;
e) if the Debtor determines to undertake a financing,
identifying and negotiating with potential investors in
connection with a financing, including preparation of
financing memoranda and presentation materials, as
appropriate; and
f) rendering such other financial advisory services as may
from time to time be agreed upon by the Debtor and the
firm.
Miller Buckfire will provide services in exchange for:
a) a $100,000 initial fee, which will be credited against any
Sale Transaction Fee, Restructuring Transaction Fee or
Financing Transaction Fee;
b) a $100,000 monthly financial advisory fee;
c) if the Debtor consummates a Sale, then upon consummation,
a Sale Transaction Fee equal to the sum of:
(i) 2.0% of the Aggregate Consideration up to
$50,000,000, plus
(ii) 1.50% of the Aggregate Consideration in excess of
$50,000,000; provided, however, that the minimum
Sale Transaction Fee payable to Miller Buckfire will
be $1,000,000;
d) if the Debtor consummates a Restructuring, then upon
consummation, a Restructuring Transaction Fee equal to
$1,000,000; and
e) if the Debtor consummates a Financing Transaction, then upon
consummation, a Financing Transaction Fee equal to:
(i) 0.75% of the gross proceeds of any indebtedness
issued that is secured by a first lien,
(ii) 1.5% of the gross proceeds of any indebtedness
issued that is secured by a second or more, junior
lien, unsecured or subordinated and
(iii) 3.0% of the gross proceeds of any equity financing
Headquartered in San Diego, California, Women First HealthCare,
Inc. -- http://www.womenfirst.com/-- is a specialty
pharmaceutical company dedicated to improve the health and
well-being of midlife women. The Company filed for chapter 11
protection on April 29, 2004 (Bankr. Del. Case No. 04-11278).
Michael R. Nestor, Esq., and Sean Matthew Beach, Esq., at Young
Conaway Stargatt & Taylor represent the Debtor in its
restructuring efforts. When the Company filed for protection from
its creditors, it listed $49,089,000 in total assets and
$73,590,000 in total debts.
WRENN ASSOCIATES: Retaining Francis Rich as Business Consultant
---------------------------------------------------------------
Wrenn Associates, Inc., wants to employ Francis P. Rich, Jr., as a
special consultant in its on-going chapter 11 restructuring.
The Debtor tells the U.S. Bankruptcy Court for the District of New
Hampshire that J.F.R. Consulting, LLC will:
a. assist in evaluating Wrenn Associates overall financial
and operational condition as a company over the last five
years;
b. assist in formulating a comprehensive business plan with
company management for the successful completion of a
confirmed Chapter 11 Reorganized Plan;
c. assist in implementing short term initiatives and cost
cutting objectives on construction projects in progress
and future projects under contract;
d. assist present management with the proper financial and
business information that will be needed to be presented
to the bankruptcy court;
e. act on behalf of the company as an agent/representative to
negotiate with present and future clients;
f. act on behalf of the company as an agent/representative to
negotiate with sub-contractors and suppliers;
g. make formal presentations to future lending institutions
and bonding companies;
h. assess and make recommendations to the stockholders and
officers of the company that could result in improved
efficiencies and profitability; and
i. assist in any other action charged by the stockholders and
officers of the company.
Mr. Rich, being President of J.F.R. Consulting, will be most
responsible in this engagement. The Debtor will compensate him his
usual hourly rate of $200 per hour.
Headquartered in Merrimack, New Hampshire, Wrenn Associates, Inc.
-- http://www.wrenn.com/-- is a construction management firm.
The Company filed for chapter 11 protection on
April 16, 2004 (Bankr. D. N.H. Case No. 04-11408). William S.
Gannon, Esq., represents the Debtor in its restructuring efforts.
When the Company filed for protection from its creditors, it
listed $4,037,000 in total assets and $7,778,494 in total debts.
YCO HOLDINGS INC: Voluntary Chapter 7 Case Summary
--------------------------------------------------
Debtor: YCO Holdings, Inc.
18351 Kuykendahl Road, #354
Spring, Texas 77379-8158
Bankruptcy Case No.: 04-34482
Type of Business: The Debtor is a subsidiary of publicly traded
Supreme Holdings, Inc. YCO Holdings, Inc., and
its YCO Services, Inc., and Your Corner Office,
LLC subsidiaries were discontinued on October 8,
2003. See http://www.suhoinc.com/
Chapter 7 Petition Date: March 29, 2004
Court: Southern District of Texas (Houston)
Judge: William R. Greendyke
Debtor's Counsel: Richard L. Fuqua, II, Esq.
Fuqua & Keim
2777 Allen Parkway, Suite 480
Houston, TX 77019
Tel: 713-960-0277
Total Assets: $12,087
Total Debts: $4,808,275
* Large Companies with Insolvent Balance Sheets
-----------------------------------------------
Total
Shareholders Total Working
Equity Assets Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------------ ------- --------
Airgate PCS Inc. PCSAD (293) 574 (364)
Alliance Imaging AIQ (40) 683 44
Akamai Technologies AKAM (175) 279 140
Amazon.com AMZN (1,036) 2,162 568
Blount International BLT (397) 400 83
Blue NLE Inc. NILE (27) 62 16
Cell Therapeutic CTIC (83) 146 72
Centennial Comm CYCL (579) 1,447 (99)
Choice Hotels CHH (118) 267 (42)
Cincinnati Bell CBB (640) 2,073 (47)
Cubist Pharmaceuticals CBST (18) 223 91
Delta Air Lines DAL (384) 26,356 (1,657)
Deluxe Corp DLX (298) 563 (309)
Diagnostic Imag DIAM 0 20 (3)
Echostar Comm DISH (1,033) 7,585 1,601
Graftech International GTI (97) 967 94
Imax Corporation IMAX (51) 246 (11)
Imclone Systems IMCL (271) 382 (3)
Kinetic Concepts KCI (246) 665 228
Lodgenet Entertainment LNET (129) 283 (6)
Lucent Technologies LU (3,371) 15,765 2,818
Memberworks Inc. MBRS (20) 248 (89)
Millennium Chem. MCH (45) 2,398 637
McDermott International MDR (363) 1,249 (24)
McMoRan Exploration MMR (31) 72 5
Northwest Airlines NWAC (1,775) 14,154 (297)
Nextel Partner NXTP (13) 1,889 277
ON Semiconductor ONNN (499) 1,161 213
Pinnacle Airline PNCL (48) 128 13
Primus Telecomm PRTL (96) 751 (26)
Per-Se Tech Inc. PSTI (21) 171 (1)
Qwest Communications Q (1,016) 26,216 (1,132)
Sepracor Inc SEPR (619) 1,020 256
St. John Knits Int'l SJKI (65) 234 69
I-Stat Corporation STAT (1) 64 33
Syntroleum Corp. SYNM (2) 47 14
Triton PCS Holdings TPC (180) 1,519 52
UST Inc. UST (115) 1,726 727
Valence Tech VLNC (18) 36 4
Vector Group Ltd. VGR (3) 628 142
Western Wireless WWCA (224) 2,522 15
*********
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.
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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
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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, Rizande B. Delos Santos, Paulo
Jose A. Solana, Jazel P. Laureno, 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
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*** End of Transmission ***