T R O U B L E D C O M P A N Y R E P O R T E R Thursday, May 27, 2004, Vol. 8, No. 104 Headlines ADELPHIA COMM: Devon's Liquidating Trustee Issues Dec. 2003 Report AFM HOPITALITY: Ontario Securities Commission Orders Cease Trade AGILENT: Improved Financial Profile Prompts S&P's Positive Outlook AIR CANADA: Increases Fares in Response to Rising Fuel Prices AMERCO: Objects To Travelers Casualty's $9.5 Million Claim AMERICAN SEAFOODS: Extends 10-1/8% Senior Note Offer to June 14 ARROW AIR: Creditors' Committee Supports Reorganization Plan ATLANTIC MODULAR: Case Summary & 20 Largest Unsecured Creditors AVADO BRANDS: Wants Exclusive Period Stretched through Sept. 30 AZTAR CORP: S&P Rates $250MM Senior Subordinated Notes at B+ CABLETEL COMMS: Ontario Securities Commission Orders Cease Trade CARIBBEAN RESTAURANTS: S&P Assigns B+ Rating, Outlook Now Negative CITIGROUP COMMERCIAL: S&P Assigns Prelim. Ratings to 2004-C1 Notes COVANTA ENERGY: Objects To Various Big Executory Contract Claims COVENTRY HEALTH: Shareholders to Meet on June 3 in Bethesda, Md. DIAL CORPORATION: Deregisters Shares Following Henkel Merger DIGITAL LIGHTWAVE: Optel to Extend Debt Term & Provide More Funds DIMON INC: S&P Places Low-B Ratings On Credit Watch Negative DONINI INC: Discusses Franchise Operations' April Performance EARLE M JORGENSEN: March 31 Balance Sheet Insolvent by $37 Million ENRON CORP: Asks Court To Authorize Entrada Interests Sale EXIDE TECHNOLOGIES: Agrees to Resolve Dispute with Lead Claimants FACTORY 2-U: Wants to Extend Exclusivity Through May 12, 2005 FARMLAND IND: Court Sets May 31 as Administrative Claims Bar Date FLEMING: Agrees To Settle PBCG Mega-Claim Dispute FLEMING INC: Dallas Group Dangles Bigger Pie Offer to Creditors FLOWSERVE: Receives Wells Notice Relating to SEC Informal Inquiry FOREST OIL: S&P Keeps Negative Ratings Watch over Acquisition Plan GADZOOKS: Want Lease Decision Period Extended through Sept. 30 GOODYEAR TIRE: S&P Lowers Corporate Rating to B+ & Removes Watch HANOVER COMPRESSOR: S&P Rates $200 Million Senior Notes at B HEALTHSOUTH: Senior Noteholders Issue Technical Default Notice HERBST GAMING: Obtains Requisite Consents to Amend Note Indenture HOFFMAN TOOL & DIE: Case Summary & 20 Largest Unsecured Creditors HOST MARRIOTT: S&P Rates Planned $75 Mil Preferred Stock at CCC+ HOUSTON EXPLORATION: S&P Affirms Corporate Credit Rating at BB IA GLOBAL: Acquiring QuickCAT Assets in Early June for $700K Plus IMPERIAL PLASTECH: Agrees To AG Petzetakis' Credit Facility Terms INTEGRATED TELECOM: Del. District Court Upholds Bankruptcy Ruling KAISER: Wants Court Nod on Modified Pension & Retiree Agreements KNOX COUNTY: Secures Exclusivity Extension through June 25 MIRANT CORP: Will File First Quarter 2004 Financial Report Late MONONGAHELA POWER: Fitch Affirms BB+ Rating On Preferred Stock NATIONAL CENTURY: Files Motion To Open Lincoln Hospital Sale Order NATURADE INC: Stockholders' Deficit Widens to $3.5MM at March 31 NATURADE: Health Holdings, et al., Lend More than Half a Million NCI BUILDING: S&P Raises Corporate & Bank Loan Ratings to BB NEIGHBORCARE: Rejects Omnicare's "Blatantly Opportunistic" Offer NETSOL TECHNOLOGIES: Partners with Australian Motor Finance ONE PRICE: Section 341(a) Meeting Scheduled for June 15, 2004 PACIFIC COAST CDO: Fitch Junks Rating on $26MM Preference Shares PARAMOUNT RESOURCES: S&P Revises Outlook To Negative from Stable PARMALAT: Court Appoints U.S. Commissioner To Aid In Fraud Probe PG&E NATIONAL: Wilmington Trust Withdraws NEG Plan Objection PILLOWTEX CORP: Taps University Management as New Collection Agent RELIANCE GROUP: Liquidator To Sell RCG-Moody For $55,500,000 RENT-A-CENTER: S&P Upgrades Corporate Credit Rating to BB+ REPUBLIC ENGINEERED: Secures New $200MM Revolving Credit Facility ROBERTS MANAGEMENT: Case Summary & 15 Largest Unsecured Creditors ROGERS COMMS: Shareholders To Meet Today at 10 AM in Toronto ROANOKE: Revamps Capital Structure with Creation of Class A Shares RUSSELL KIVLER: Case Summary & 38 Largest Unsecured Creditors SAMSONITE: Commences New Offer to Purchase 10-3/4% Senior Notes SK GLOBAL: SK Corp.'s Incoming CEO Heon Shin Thanks Shareholders SOURCE PRECISION: Case Summary & 20 Largest Unsecured Creditors SR TELECOM: Wins $27 Million airstar Contract in South America STANDARD MOTOR: S&P Removes Low-B Ratings From Credit Watch TENNECO AUTOMOTIVE: S&P Lowers Corporate Credit Rating to B+ TRANSWESTERN PIPELINE: S&P Alters Watch Implications to Developing UNITED AIRLINES: Committee Wants To Retain Heidrick As Consultant US AIRWAYS: Agrees to Settle $2.6MM Claim Dispute with Swiss Air UTEX INDUSTRIES: Plan Confirmation Hearing Scheduled for June 16 VENTURE HOLDINGS: Chapter 11 Plan Solicitation Begins May 29 VICWEST CORP: Toronto Stock Exchange Grants Conditional Listing VISTA GOLD: Appoints Michael Richings as Interim President and CEO VIVENDI UNIVERSAL: Commences Cash Tender Offer for Senior Notes VIVENDI: Offers to Purchase EUR 1 Billion of High Yield Notes WACHOVIA REPACKAGED: S&P Assigns BB+ Rating to Residual Trust WESTERN HEMISPHERE: Case Summary & 15 Largest Unsecured Creditors WESTLAKE CHEMICAL: S&P Places Ratings on CreditWatch Positive WINSTAR: Parente Randolph To Get $2MM+ Payment For Acctg. Services WORLDCOM/MCI: Enters Into Enron Settlement Agreement * Dorene Robotti Joins Clear Thinking's Creditors Rights Group * What Does the CM/ECF Acronym Really Stand For? ********* ADELPHIA COMM: Devon's Liquidating Trustee Issues Dec. 2003 Report ------------------------------------------------------------------ Gerard A. Shapiro of Buccino & Associates, Inc., Devon's Liquidating Trustee, provides the Delaware Bankruptcy Court with certain financial information on events for the period October 17 to December 29, 2003. Status of the Closing of the Pending Sale Agreements A. Vermont Telephone This transaction for the Keene, New Hampshire license closed on November 13, 2003. Proceeds from the sale were $57,522 -- net of debt owed to the Federal Communications Commission assumed by Cellco Partnership of $108,953. Additionally, on November 10, 2003, the Devon Trustee paid the FCC $27,920 for arrearages on the FCC debt. B. Lucent The sale of various networking equipment located in New York, Pennsylvania, Maine, New Hampshire and Vermont to Lucent Technologies, Inc., closed on November 26, 2003. Sale proceeds totaled $414,118. In addition, Lucent's allowed Secured Claim was reduced by $1,252,378. C. Buffalo Lake Erie Wireless Systems Co., LLC, (BLEW) The BLEW transaction closed on December 24, 2003. The transaction represented the sale of six FCC licenses in New York and Pennsylvania along with related network equipment. The total agreed sales price was $4,005,000. Proceeds from the sale reached $1,969,843 -- net of: * FCC debt assumed by BLEW of $1,357,414, * FCC debt arrearages paid by BLEW of $565,253, * $50,000 credits given by BLEW for agreed payments made to certain of Devon's landlords, * $12,490 interest credit on the FCC debt, and * a $50,000 escrow to assess potential damages at the various sites. It is likely that BLEW will be entitled to a portion of the escrowed funds. As part of the sale agreement with BLEW, the Devon Trustee was obligated to pay Lucent $901,875 pursuant to a first priority security interest which Lucent had in the related network equipment acquired by BLEW. The payment was made on December 29, 2003. D. Cellco Partnership d/b/a Verizon Wireless The Verizon transaction closed on December 29, 2003. The transaction represented the sale of the three remaining cellular towers owned by Devon. The agreed sales price of $445,000 was adjusted for certain agreed credits to the buyer totaling $60,245. Net proceeds from the sale to the Devon Trustee reached $384,755, of which $340,255 was received on December 29 with the balance to be received by December 31, 2003 out of funds previously escrowed. E. Virginia & Maine Licenses The Devon Trustee is continuing to pursue the sale of one remaining license in Virginia and four remaining licenses in Maine. F. Equipment The Devon Trustee still owns certain network equipment replacement parts held in storage in Buffalo, New York. The Devon Trustee is in the process of having the equipment appraised to solicit bids. Distributions pursuant to the Plan The Devon Trustee has commenced payments of administrative expense clams. On the Effective Date, estimated Administrative Claims totaled approximately $7.7 million. Through December 29, 2003, payments of administrative claims total $1,673,894. The Devon Trustee directed Devon's counsel to disburse funds, from certain escrow funds held by the counsel for Fee Claims. Total disbursements made by Counsel during the period reached $397,663. The Devon Trustee has made distributions totaling $33,289, which is substantially the full amount of the Class 1 Allowed Other Priority Claims. The FCC had a Class 2 Secured Claim, which was estimated as of October 31, 2003 at $10,261,494. Portions of the Claim have been satisfied as a result of the debt assumptions in the Vermont Telephone and BLEW transactions. In addition, effective November 1, 2003, the Devon Trustee tendered 10 licenses that it deemed unsaleable in satisfaction of $7,938,098 of FCC debt. The remaining FCC claim is estimated at $233,800 and is associated with the remaining license in Winchester, Virginia. Lucent's Class 4 Secured Claim has now been fully satisfied as a result of the Lucent and BLEW transactions. Portions of the claim were previously satisfied from transactions conducted by Devon occurring prior to October 17, 2003. Amounts Received and Collected On October 17, 2003, the Devon Trustee received $10,872,564.76 from Devon. The Devon Trustee received $57,522 from the Vermont Telephone transaction, $414,118 from the Lucent transaction, $1,969,842.67 from the BLEW transaction and $370,254.85 from the Verizon transaction. Other receipts aggregated $17,959.51 comprised of $6,004.52 interest earned, $5,060 for November and December rent received on one of the cell towers subsequently sold to Verizon, $3,850 on certain small equipment sales, $1,260.65 of remaining funds transferred from closed Debtor bank account and $1,784 of miscellaneous receipts. Fees and Expenses Paid or Incurred The Devon Trustee has made total payments of $425,748.86 consisting of: * Fees and expenses paid to the Liquidation Trustee totaled $291,451.65 for work performed from the pre-confirmation period through December 13, 2003; * Fees paid to professionals, primarily attorneys, were $115,233.45 exclusive of fee claims paid pursuant to the Plan. In addition, there are billed and unbilled amounts for professional services for the period through December 29, 2003; * A cure payment of $7,650 was made to a former landlord pursuant to a prior transaction closed before the Plan became effective; * An insurance premium of $4,100 was paid to extend commercial liability coverage; * Rental payment pertaining to the towers and office space of $3,254.24; and * Other operating and administrative expenses totaling $4,059.52 consisting mainly of small utility payments on numerous sites, shipping/postage and bank charges. Liquidating Funding Amount Balances As of the close of business on December 29, 2003, the Trustee held funds totaling $10,609,545.21 in three accounts at a major commercial bank: Account Balance ------- ------- Money market account $4,581,772 Checking account used for disbursements 152,182 Account for distributions of Allowed Claims 5,875,592 (Adelphia Bankruptcy News, Issue No. 59; Bankruptcy Creditors' Service, Inc., 215/945-7000) AFM HOPITALITY: Ontario Securities Commission Orders Cease Trade ---------------------------------------------------------------- The Ontario Securities Commission enters a Cease Trade Order in respect of the Management & Insiders of AFM Hospitality Corporation, Atlantis Systems Corp., Alegro Health Corp. A hearing on the Temporary Cease Trading Order dated May 25, 2004 for failure to make statutory filings will take place on June 7, 2004. * * * A copy of the order: IN THE MATTER OF THE SECURITIES ACT R.S.O. 1990, c.S.5, AS AMENDED (the "Act") AND IN THE MATTER OF LAWRENCE P. HORWITZ, STEPHEN PHILLIPS, WAYNE HANLEY, TERRY SHAIKH, EUGENE FRASER, ANDRE TATIBOUET, PER-ODD KEUL, RONALD ERICKSON, WILLIAM HOFFMAN, GLEN BLAKE, JAMES D. MEIER AND PETER R. LA FEMINA (the "Respondents") NOTICE OF TEMPORARY ORDER AND HEARING _____________________________________ (Subsection 127(9)) WHEREAS the Director made an order under paragraph 2 of subsection 127(1) and subsection 127(5) of the Act on the 25th day of May, 2004, a copy of which is attached, that all trading, whether direct or indirect, by each of Lawrence P. Horwitz, Stephen Phillips, Wayne Hanley, Terry Shaikh, Eugene Fraser, Andre Tatibouet, Per-Odd Keul, Ronald Erickson, William Hoffman, Glen Blake, James D. Meier and Peter R. La Femina in securities of AFM HOSPITALITY CORPORATION cease for a period of fifteen days from the date of the Temporary Order; AND WHEREAS the Temporary Order was made because the Reporting Issuer failed to file: - its audited annual statements for the year ended December 31, 2003 and interim statements for the three-month period ended March 31, 2004 as required under Ontario securities law; AND WHEREAS the Temporary Order was made because the Director was of the opinion that the length of time required to conclude a hearing could be prejudicial to the public interest; AND WHEREAS the Director may revoke the Temporary Order within the fifteen-day period if the Reporting Issuer remedies the Default to the satisfaction of the Director; AND WHEREAS a true copy of this Notice of Temporary Order and Hearing was served this day to the Respondents; TAKE NOTICE that, if the Default continues, a hearing will be held pursuant to section 127 of the Act to consider whether an order should be made under paragraph 2 of section 127(1) of the Act that all trading, whether direct or indirect, in securities of AFM Hospitality Corporation by any of the Respondents cease permanently or for such period as is specified in the order by reason of the continued Default; AND FURTHER TAKE NOTICE that if a Respondent intends to attend at the Hearing, the Respondent must notify the Director of the Respondent's intention to attend in writing, within seven days from the date of service of this Notice; AND FURTHER TAKE NOTICE that where a Respondent has so notified the Director that the Respondent intends to be present at the Hearing, then the Hearing will be held, with respect to that Respondent only, before the Commission pursuant to section 127 of the Act at 20 Queen Street West, 17th Floor, Toronto, Ontario at a date and time to be determined, which shall be within 15 days of the date of the Temporary Order; AND FURTHER TAKE NOTICE that if a Respondent has notified the Director that the Respondent intends to be present at the Hearing and a party fails to attend the Hearing before the Commission, the Hearing may proceed without that party and such party will not receive further notice of the proceedings; AND FURTHER TAKE NOTICE that if a Respondent fails to notify the Director within seven days from the date of this Notice that the Respondent intends to be present at the Hearing, then the Hearing will be held before the Director with respect to the Respondent, without the Respondent pursuant to section 127 of the Act at 20 Queen Street West, 16th Floor commencing on 7th day of June, 2004 at 10:00 a.m., or as soon as possible after that time, and the Respondent will have no opportunity to attend and make submissions at the Hearing; AND FURTHER TAKE NOTICE that the Director may extend the Temporary Order under subsection 127(7) of the Act until the Hearing is concluded or under subsection 127(8) of the Act if satisfactory information is not provided to the Director within the fifteen day period. DATED at Toronto this 25th day of May, 2004. Ontario Securities Commission "John Hughes" ______________________________ John Hughes, Corporate Finance CC: Computershare Trust Company of Canada * * * AFM Hospitality Corporation owns AFM Preferred Alliance Group Inc., AFM Asset Management Inc., AFM Hospitality (USA) Corporation, Northwest Lodging International (USA) Inc., Northwest Lodging International (Canada) Inc., AFM Asset Management Services, Inc., Trigild International, Inc., Special Asset Services, Inc. and Staffing Services International, Inc. It is the exclusive Canadian Master Franchisor for Aston, Best Inns, Hawthorn Suites, Howard Johnson, Knights Inn, La Quinta, Park Plaza, Park Inn, Traveller's Inn and Villager Lodge. AFM Hospitality Corporation operates or has open and/or executed franchise and management agreements with more than 300 hotels, restaurants and other nationally franchised service businesses throughout North America. The company's focus is to increase the number of hotels franchised by the respective brands, franchise new brands, build the portfolio of hotel management agreements, provide valuable resources and hospitality experience to help hotel owners grow their business, and to acquire other franchise businesses related to the hospitality industry, while making available property management services. AFM Hospitality Corporation is a publicly traded company listed on the Toronto Stock Exchange (TSX: AFM) and may be reached at http://www.afmcorp.com/ AGILENT: Improved Financial Profile Prompts S&P's Positive Outlook ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on Palo Alto, California-based Agilent Technologies Inc. to positive from negative. The 'BB' corporate credit and senior unsecured debt ratings were affirmed. The outlook revision reflects a strengthening operating profile, as evidenced by significant improvements in profitability and a return to revenue growth in recent quarters, combined with a liquid balance sheet. "Agilent has sharply improved its profitability over the past three quarters following an extended period of losses. A continuation of current operating performance could result in a higher rating within a few quarters," said Standard & Poor's credit analyst Joshua Davis. The ratings on Agilent continue to reflect volatility in profitability resulting from a three-year downturn in overall operating performance and challenges in gearing the company's cost structure to the reduced revenue levels. This partially is offset by a broad and diverse business profile, entrenched positions in test and measurement and other segments, and relatively strong balance sheet liquidity. Agilent serves the communications, electronics, and life science markets with test, measurement, and other instruments, and also makes semiconductor products. Agilent's operating performance has been recovering sharply in recent quarters because of improvements in market conditions combined with cost-restructuring actions. Many of Agilent's served markets are in recovery, with the wireless, semiconductor and pharmaceutical end markets improving, resulting in a return to revenue growth in Agilent's automated test, semiconductor products and life sciences business segments. Restructuring actions, including reducing headcount by nearly 36% from peak levels and reducing facilities space by 20% by the end of fiscal 2004, have taken out $2 billion of annual costs. Total revenues for the 12 months ended April 30, 2004, grew 11% to $6.7 billion, aided in part by favorable currency impact. EBITDA margins improved to 11% for the same period, compared with negative 6% in the same period a year earlier. Still, Agilent remains short of targeted profitability levels, with gross margins of below 45% in the April 2004 quarter, which is 4%-5% below targeted normalized levels. Agilent's test and measurement segment, its largest segment, generated EBIT margins of only 2% in the April 2004 quarter, well below its peers. The company has targeted further profitability improvements, stemming in part from improved pricing discipline. AIR CANADA: Increases Fares in Response to Rising Fuel Prices ------------------------------------------------------------- Air Canada announced that in response to escalating fuel prices, it is adjusting fares to reflect additional operating costs. The fare increase applies to all fare types including published, web and other special fares for travel on Air Canada, Air Canada Jazz, ZIP and Air Canada codeshare flights. In response to record high costs of jet fuel, base fares for flights within Canada are being increased each way by CAD$7 on short haul flights up to 799 miles and CAD$10 on long haul flights over 800 miles. Fares for flights to and from the United States are being increased each way by CAD$14 (USD$10) on short haul flights up to 1,000 miles and CAD$28 (USD$20) on long haul flights over 1,000 miles. Fares to and from international destinations are being increased by CAD$6 (USD$4) per flight segment. The increases come into effect on tickets issued beginning May 28, 2004 for all domestic Canada and international travel, and are in effect immediately for all U.S. transborder travel. The cost of fuel is the second largest operating expense for airlines after labor and in the case of Air Canada, fuel represented approximately 14 per cent of its operating costs in 2003, and almost 15 per cent in the first quarter of 2004. Headquartered in Saint-Laurent, Quebec Canada, Air Canada -- http://www.aircanada.ca/-- represents Canada's only major domestic and international network airline, providing scheduled and charter air transportation for passengers and cargo. The Company filed for CCAA protection on April 1, 2003 (Ontario Superior Court of Justice, Case No. 03-4932) and Section 304 petition with the U.S. Bankruptcy Court for the Southern District of New York (Case No. 03-11971). Matthew A. Feldman, Esq., and Elizabeth Crispino, Esq., at Willkie Farr & Gallagher serve as the Debtors' U.S. Counsel. When the Debtors filed for protection from its creditors, they listed C$7,816,000,000 in assets and C$9,704,000,000 in liabilities. (Air Canada Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service, Inc., 215/945-7000) AMERCO: Objects To Travelers Casualty's $9.5 Million Claim ---------------------------------------------------------- On June 26, 2003, Travelers Casualty & Surety Company and affiliates filed Claim No. 1 for contingent, unliquidated, general unsecured claim against Amerco. Travelers asserts a $9,543,392 claim "exclusive of renewal premiums, costs and attorney fees which Travelers may become entitled to in the future." The Claim relates to payments that Travelers may be required to make pursuant to seven surety bonds it issued to certain obligees. Bruce T. Beesley, Esq., at Beesley, Peck & Matteoni, Ltd., in Reno, Nevada, points out that although Travelers asserts that "the Debtor is a principal" under the Bonds, the Bonds list this information only: Bond No. Penal Sum Principal Obligee -------- --------- --------- ------- 103604532 $9,112,958 Republic Western Ins. Minnesota Mining, etc. 103525189 42,700 U-Haul of Hawaii, Hawaii Dept. et al. of Land 103604544 9,100 Private Mini Storage The Cat Rental 103604545 285,000 Realty, LP Stores 103604549 85,634 Amerco Real Estate Clark County, NV 103792181 2,000 U-Haul International State of Washington 103798887 6,000 U-Haul Co. of City of Richmond Richmond Virginia Travelers seeks to protect its interest in subrogating Amerco's rights as a purported principal in relation to these Bonds, in the event that Travelers is required to make payments on the Bonds. Alternatively, Travelers asserts that: (i) in connection with certain "Indemnity Agreements," Amerco is required to pay all premiums and to indemnify Travelers if it incurs costs, loss or other expenses in relation to the Bonds; and (ii) through the Claim, it is submitting "claims on behalf of the obligees named in the Bonds and all other persons who may have claims against the Debtor based on which Travelers may become obligated to make any payment or incur expenses under the Bonds." Travelers further contends that its Claim is "an administrative claim under Section 503 of the Bankruptcy Code for obligations arising out of the Debtors' postpetition activities or Bonds in effect postpetition. The Reorganized Debtors object to the Claim because: (a) it does not provide any information to indicate that any obligations are due, and Travelers did not amend the Claim to support the proposition that any amounts became due and owing under the Claim; (b) Travelers does not allege facts sufficient to support a legal liability of the Debtors as principals on the Bonds; (c) Travelers improperly asserts contingent, unliquidated claims on behalf of third parties; and (d) Travelers seeks allowance of an administrative expense through the claims process. Accordingly, the Reorganized Debtors ask the Court to disallow and expunge Claim No. 1, or, alternatively, to the extent deemed necessary by the Court, schedule an evidentiary hearing on Travelers' Claim at the Court's convenience. 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 SEAFOODS: Extends 10-1/8% Senior Note Offer to June 14 --------------------------------------------------------------- American Seafoods Group LLC and American Seafoods Finance, Inc. announced that, as part of their previously announced tender offer and consent solicitation for their outstanding 10-1/8% Senior Subordinated Notes due 2010, they are extending the tender offer expiration date. The tender offer, which had been set to expire at 5:00 p.m., New York City time, on May 24, 2004, will be extended to 5:00 p.m., New York City time, on Monday, June 14, 2004, unless extended by American Seafoods. The closing of the initial public offering and the other financing transactions contemplated by the registration statement on Form S-1 (Registration No. 333-105499) is a condition precedent to the consummation of the tender offer. On April 30, 2004, American Seafoods filed Amendment No. 5 to its registration statement on Form S-1 with the Securities and Exchange Commission. The consent expiration date was 5:00 p.m., New York City time, on September 26, 2003. Holders who desired to receive the consent payment and the tender offer consideration must have both validly consented to the proposed amendments and validly tendered their Notes pursuant to the offer on or prior to the consent expiration date. Holders who validly tender their Notes after the consent expiration date will receive the tender offer consideration, which is $1,170.00 per $1,000 principal amount of Notes, but not the consent payment. As of the close of business on September 26, 2003, which was the consent expiration date and the last day on which validly tendered Notes could have been withdrawn, American Seafoods had received the requisite consents to the proposed amendments to the Indenture governing the Notes. Consequently, the proposed amendments were incorporated in the Third Supplemental Indenture, which was executed and delivered on September 26, 2003, by and among American Seafoods Group LLC, American Seafoods Finance, Inc., the guarantors listed on Schedule A thereto and Wells Fargo Bank Minnesota, National Association, as trustee. The proposed amendments to the Indenture, which will not become operative unless and until the Notes are accepted for purchase by American Seafoods, will eliminate substantially all of the restrictive covenants, certain repurchase rights and certain events of default and related provisions contained in such indenture. As of May 24, 2004, all of the Company's existing senior subordinated notes had been validly and irrevocably tendered. Consummation of the offer is subject to certain conditions, including consummation of certain financing transactions contemplated by the registration statement on Form S-1 filed with the Securities and Exchange Commission by American Seafoods Corporation. Subject to applicable law, American Seafoods Group LLC and American Seafoods Finance, Inc. may, in their sole discretion, waive or amend any condition to the offer or solicitation, or extend, terminate or otherwise amend the offer or solicitation. Credit Suisse First Boston, or CSFB, is the dealer manager for the offer and the solicitation agent for the solicitation. MacKenzie Partners, Inc. is the information agent and Wells Fargo Bank Minnesota, National Association, is the depositary in connection with the offer and solicitation. The offer and solicitation are being made pursuant to the Offer to Purchase and Consent Solicitation Statement, dated September 15, 2003, and the related Consent and Letter of Transmittal, each as modified by American Seafoods' press release, dated September 24, 2003, which collectively set forth the complete terms of the offer and solicitation. Copies of the Offer to Purchase and Consent Solicitation Statement and related documents may be obtained from MacKenzie Partners, Inc. at 212-929-5500. Additional information concerning the terms of the offer and the solicitation may be obtained by contacting CSFB at 1-800-820-1653. American Seafoods, headquartered in Seattle, Washington, is the largest harvester and at-sea processor of pollock and hake and the largest processor of catfish in the United States. ARROW AIR: Creditors' Committee Supports Reorganization Plan ------------------------------------------------------------ The committee of creditors appointed in Arrow Air, Inc.'s chapter 11 proceeding has agreed to a consensual plan of reorganization that will bring the all-cargo airline out of bankruptcy, secure its edge in the international air cargo industry, and protect hundreds of jobs in South Florida's aviation, cargo and international trade industries. A disclosure hearing was held on Wednesday, May 19, in which Arrow, its new secured lender, Arrow Air II, and other non-secured lenders agreed to a substantial plan that provides a favorable restructuring of the company and ensures strong future operations. On June 10, 2004, Chief U.S. Bankruptcy Judge Emeritus A. Jay Cristol is expected to confirm the plan of reorganization, after which Arrow will no longer be operating under Chapter 11 bankruptcy protection and will become a new, reorganized company. "We are extremely pleased to have the full support of our secured lender," said Arrow Air President Frank Visconti. "With this joint plan, Arrow Air will be able to maintain its leading position in the air cargo industry and will remain a viable contributor to the South Florida economy." Arrow Air is the only remaining US registered heavy freight carrier based in Miami, Florida, providing more comprehensive air cargo services between the United States and the Caribbean and South and Central America than any other carrier in the market. Arrow Air has more than 3,500 customers worldwide, serving international and domestic freight forwarders, integrated carriers, passenger and cargo airlines, the U.S. Department of Defense and the United States Postal Service. The three principals of Arrow Air II LLC are Michael T. Tokarz, Phillip T. George, M.D., and James J. Pinto, Esq. Mr. Tokarz is Managing Member of The Tokarz Group, a limited liability company. He serves on numerous corporate boards of directors in the U.S. and abroad, including MVC Capital, Conseco, Inc., Evenflo Company, Inc., Athleta Corporation, Lomonosov Porcelain Company (Russia) and Apertio Limited Partners (UK). Dr. George is co-founder and former chairman of Trivest, Inc. a middle market leveraged buyout firm, which has sponsored acquisitions and recapitalizations totaling more than $1.3 billion over 14 years. A board-certified plastic and reconstructive surgeon with 17 years of clinical experience, Dr. George is now actively involved in the organization and management of multiple investment partnerships and venture capital transactions. He is one of the three founders of Brava, LLC, where he presides as Chairman and CEO. Mr. Pinto is President of the Private Finance Group Corp., an investment and merchant banking firm. He has served as a General Partner for investment partnerships since 1985, including Grace-Pinto LP, which completed transactions in Canada, Great Britain and the United States. He has served on the boards of numerous portfolio companies, as well as public companies traded on the NYSE, American and NASDAQ. ATLANTIC MODULAR: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Atlantic Modular Homes, Inc. 2219 Church Road Toms River, New Jersey 08753 Bankruptcy Case No.: 04-27629 Type of Business: The Debtor manufactures modular homes. Chapter 11 Petition Date: May 24, 2004 Court: District of New Jersey (Trenton) Judge: Kathryn C. Ferguson Debtor's Counsel: Eugene D. Roth, Esq. Law Office of Eugene D. Roth Valley Park East 2520 Highway 35, Suite 303 Manasquan, NJ 08736 Tel: 732-292-9288 Fax: 732-292-9303 Total Assets: $3,900,000 Total Debts: $5,250,844 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service Federal Withholding $524,850 100 Dey Place Tax Edison NJ Allied Capital Funding LLC Line of Credit $275,000 c/o Broege, Neumann, Fischer 25 Abe Voorhees Drive Manasquan NJ 08736 N.J. Casulty Insurance Insurance Premiums $198,095 Wesco Distribution Supplier $151,084 Camile & Stephen Kroger Customer Claim $134,865 Calley Lumber Co. Supplier $133,523 Dennis & Joyce Pfefferkorn Shareholder loans $127,712 State of NJ/Div. of Taxation GIT-ER $102,036 N.J. Casulty Insurance Co. Insurance Premiums $93,994 Mark Stutzman Customer Claim $88,000 John Leahy & Richard Scuderi Customer Claim $72,727 Universal Forest Products Supplier $72,669 Inc. Help U Build Commission Claim $55,938 L & W Suppy Co. Supplier $53,751 Mr. & Mrs. Wilber Customer Claim $49,217 James & Pamela Accardi Customer Claim $40,000 Neil & Stephanie Mcelroy Customer Claim $38,000 Citi Capitol Goods & services $35,978 Michael & Estelle Remsen Customer Claim $28,150 Citi Capital Vendor Finance Goods & services $25,979 AVADO BRANDS: Wants Exclusive Period Stretched through Sept. 30 --------------------------------------------------------------- Avado Brands, Inc., and its debtor-affiliates are asking the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, to extend the exclusive time within which only the Company has the right to file a chapter 11 plan and solicit acceptances of that plan. The Debtors tell the Court that they need until September 30, 2004, to file the plan and until November 30, 2004, to solicit acceptances of that plan from their creditors. The Debtors report that as evidence of their good faith progress to date, in recent meetings with the Creditors' Committee and postpetition lender, they proposed a go-forward business plan to serve as a basis for the plan of reorganization. As part of this process, the Debtors have undertaken a comprehensive review of their operations and potential operating alternatives for their restaurant brands. The Debtors also are reviewing their extensive real estate portfolio. In order to prudently implement the business plan components prior to emergence, the Debtors believe an extension of the Exclusive Periods is necessary to allow sufficient time in formulating a plan of reorganization based on the elements of their go-forward business plan. Headquartered in Madison, Georgia, Avado Brands, Inc. -- http://www.avado.com/-- is a restaurant brand group that grows innovative consumer-oriented dining concepts into national and international brands. The Company filed for chapter 11 protection on February 4, 2004 (Bankr. N.D. Tex. Case No. 04-31555). Deborah D. Williamson, Esq., and Thomas Rice, Esq., at Cox & Smith Incorporated represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $228,032,000 in total assets and $263,497,000 in total debts. AZTAR CORP: S&P Rates $250MM Senior Subordinated Notes at B+ ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' rating to Aztar Corp.'s proposed $250 million senior subordinated notes due 2014. At the same time, Standard & Poor's affirmed its 'BB' corporate credit and senior secured bank loan ratings on the Phoenix, Ariz.- based company. The 'B+' subordinated debt rating is also affirmed. The outlook is stable. Pro forma for the new notes, Aztar had $648 million in debt and $5.1 million in preferred stock outstanding at March 31, 2004. "The ratings for Aztar reflect its modest debt leverage, offset by cash flow concentration from its flagship Atlantic City property where the company is in the midst of an expansion project," said Standard & Poor's credit analyst Peggy P. Hwan. The securities will be privately placed under Rule 144A of the Securities Act of 1933. Proceeds, net of expenses, will be used to redeem Aztar's existing $235 million 8.875% senior subordinated notes due May 2007 and to repay some bank debt. Ratings stability reflects the expectation that although leverage is expected to increase in the near term as the company completes its Atlantic City expansion through September 2004, the company's portfolio of casino properties will continue to generate cash flow that will allow it to maintain debt leverage close to 4.0x. Aztar operates five casinos: two Tropicana-branded hotel casinos, one located on the Atlantic City boardwalk and the other on the Las Vegas Strip, Nevada; two Casino Aztar-branded riverboats, one located in Caruthersville, Mo. and the other in Evansville, Ind.; and the Ramada Express casino in Laughlin, Nev. For the quarter ended March 31, 2004, Aztar's consolidated EBITDA was $46.8 million, a 5% increase from the prior-year period. Aztar's operating performance was affected by a 6% year-over-year EBITDA decline at the Trop. A.C., which contributes approximately 50% of property-level EBITDA. The first-quarter decline resulted from increased competition in Atlantic City following the opening of the Borgata in July 2003 and effects associated with construction disruption at Trop A.C. and an accident that occurred in October 2003. CABLETEL COMMS: Ontario Securities Commission Orders Cease Trade ---------------------------------------------------------------- The Ontario Securities Commission enters a Cease Trade Order in respect of the Management & Insiders of Cabletel Communications Corp. A hearing on the Temporary Cease Trading Order dated May 25, 2004 for failure to make statutory filings will take place on June 7, 2004. * * * A copy of the order: IN THE MATTER OF THE SECURITIES ACT R.S.O. 1990, c.S.5, AS AMENDED AND IN THE MATTER OF GREG WALLING, LEN COCHRANE, JAMES L. FAUST AND LAWRENCE A. MARGOLIS NOTICE OF TEMPORARY ORDER AND HEARING _____________________________________ (subsection 127(9)) WHEREAS the Director made an order under paragraph 2 of subsection 127(1) and subsection 127(5) of the Act on the 25th day of May, 2004, a copy of which is attached, that all trading, whether direct or indirect, by each of Greg Walling, Len Cochrane, James L. Faust and Lawrence A. Margolis in securities of CABLETEL COMMUNICATIONS CORP. cease for a period of fifteen days from the date of the Temporary Order; AND WHEREAS the Temporary Order was made because the Reporting Issuer failed to file: - its audited annual statements for the year ended December 31, 2003 and interim statements for the three-month period ended March 31, 2004 as required under Ontario securities law; AND WHEREAS the Temporary Order was made because the Director was of the opinion that the length of time required to conclude a hearing could be prejudicial to the public interest; AND WHEREAS the Director may revoke the Temporary Order within the fifteen-day period if the Reporting Issuer remedies the Default to the satisfaction of the Director; AND WHEREAS a true copy of this Notice of Temporary Order and Hearing was served this day to the Respondents; TAKE NOTICE that, if the Default continues, a hearing will be held pursuant to section 127 of the Act to consider whether an order should be made under paragraph 2 of section 127(1) of the Act that all trading, whether direct or indirect, in securities of Cabletel Communications Corp. by any of the Respondents cease permanently or for such period as is specified in the order by reason of the continued Default; AND FURTHER TAKE NOTICE that if a Respondent intends to attend at the Hearing, the Respondent must notify the Director of the Respondent's intention to attend in writing, within seven days from the date of service of this Notice; AND FURTHER TAKE NOTICE that where a Respondent has so notified the Director that the Respondent intends to be present at the Hearing, then the Hearing will be held, with respect to that Respondent only, before the Commission pursuant to section 127 of the Act at 20 Queen Street West, 17th Floor, Toronto, Ontario at a date and time to be determined, which shall be within 15 days of the date of the Temporary Order; AND FURTHER TAKE NOTICE that if a Respondent has notified the Director that the Respondent intends to be present at the Hearing and a party fails to attend the Hearing before the Commission, the Hearing may proceed without that party and such party will not receive further notice of the proceedings; AND FURTHER TAKE NOTICE that if a Respondent fails to notify the Director within seven days from the date of this Notice that the Respondent intends to be present at the Hearing, then the Hearing will be held before the Director with respect to the Respondent, without the Respondent pursuant to section 127 of the Act at 20 Queen Street West, 16th Floor commencing on 7th day of June, 2004 at 10:00 a.m., or as soon as possible after that time, and the Respondent will have no opportunity to attend and make submissions at the Hearing; AND FURTHER TAKE NOTICE that the Director may extend the Temporary Order under subsection 127(7) of the Act until the Hearing is concluded or under subsection 127(8) of the Act if satisfactory information is not provided to the Director within the fifteen day period. DATED at Toronto this 25th day of May, 2004. Ontario Securities Commission (signed) _________________________________ John Hughes, Corporate Finance CC: Computershare Trust Company of Canada * * * Cabletel Communications offers a wide variety of products to the Canadian television and telecommunications industries required to construct, build, maintain and upgrade systems. The Company's engineering division offers technical advice and integration support to customers. Stirling Connectors, Cabletel's manufacturing division supplies national and international clients with proprietary products for deployment in cable, DBS and other wireless distribution systems. More information about Cabletel can be found at http://www.cabletelgroup.com/ As previously announced, as a result of its previously disclosed liquidity issues and working capital shortfall, the Company is currently unable to file its annual financial statements and related MD&A for the year ended December 31, 2003, its interim financial statements and related MD&A for the three months ended March 31, 2004, or its Annual Information Form (AIF) on a timely basis as prescribed by Canadian securities laws. The Company is exploring a restructuring of the Company's corporate shell for a possible sale. Under such circumstances the Company would seek to (i) restructure or resolve creditor claims, and (ii) file financial statements, MD&A and AIF as required. Furthermore, any such resolution may require the Company to seek protection under applicable bankruptcy laws. CARIBBEAN RESTAURANTS: S&P Assigns B+ Rating, Outlook Now Negative ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B+' bank loan rating to quick-service restaurant operator Caribbean Restaurants LLC's proposed $30 million revolving credit facility and $180 million term loan B, which mature in 2009. A recovery rating of '3' was also assigned to the loan, indicating a the expectation of a meaningful recovery of principal (50%-80%) in the event of a bankruptcy or default. The proceeds from the term loan, together with the proceeds from the issuance of $75 million of unrated subordinated notes and $2 million of borrowings under the revolving credit facility, will be used to fund a portion of the $335 million acquisition of CRI, to repay existing debt, and for general corporate purposes. At the same time, Standard & Poor's revised the outlook on CRI to negative from positive due to the change in the amount and composition of a pending debt transaction, and the resulting increase in the interest expense burden. The existing ratings on the company, including the 'B+' corporate credit rating, were affirmed. CRI is the third-largest franchisee of Burger King restaurants, with 165 of them. All of its stores are located in Puerto Rico. "Ratings on CRI reflect the company's highly leveraged capital structure, the risks of operating in the extremely competitive quick-service restaurant industry, the company's small size, and its regional concentration," said Standard & Poor's credit analyst Diane Shand. "These weaknesses are partially offset by CRI's dominant position in the Puerto Rican market, autonomy within the Burger King system, consistently good operating performance, and light maturity schedule." CRI's overall business risk is influenced heavily by strong competition in the fast-food segment, especially from McDonald's and Subway in Puerto Rico. The company derives strength from its exclusive franchise agreement with Burger King for the Puerto Rican market and the unique characteristics of that market. The company is the dominant player in the $950 million Puerto Rican fast-food market. It controls 17% of total units and 25% of total revenues. Subway, with an 18% share of total fast-food units, and McDonald's, with 12%, are its closest competitors. The company also competes with other quick-service eating establishments, mom- and-pop takeouts, pizza restaurants, convenience food stores, delis, and supermarkets. Demographics in the region are favorable for quick-service restaurants. Puerto Rico has a higher percentage than the U.S. of people between the age of 15 and 34, and of low- to moderate-income families -- both segments are the heaviest consumers of fast food. In addition, the population density in Puerto Rico is 10 times that of the U.S., and labor and occupancy costs are also lower than in the U.S. CRI has generated consistently good operating results since 1991, and Puerto Rico is one of the few locations worldwide in which Burger King performs in line with McDonald's. CRI stores generate average annual revenue of $1.5 million, which is 50% higher than the average U.S.-based Burger King and slightly below the revenue of a U.S.-based McDonald's. Nevertheless, the company's narrow geographic focus leaves it susceptible to changes in the Puerto Rican economy. For example, the company was negatively affected by the downturn in the region's economy in 2001 and 2002: Same-store sales and operating margins declined in both years. However, operating performance has since improved due to good store execution and improvements in the economy. CITIGROUP COMMERCIAL: S&P Assigns Prelim. Ratings to 2004-C1 Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its preliminary ratings to Citigroup Commercial Mortgage Trust 2004-C1's $1.18 billion commercial mortgage pass-through certificates series 2004- C1. The preliminary ratings are based on information as of May 25, 2004. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the fiscal agent, the economics of the underlying loans, and the geographic and property type diversity of the loans. Classes A-1, A-2, A-3, A-4, B, C, D, and E are currently being offered publicly. The remaining classes will be offered privately. Standard & Poor's analysis determined that, on a weighted average basis, the pool has a debt service coverage of 1.43x, a beginning LTV of 94.3%, and an ending LTV of 80.9%. Preliminary Ratings Assigned Citigroup Commercial Mortgage Trust 2004-C1 Class Rating Amount ($) A-1 AAA 68,457,000 A-2 AAA 162,500,000 A-3 AAA 224,418,000 A-4 AAA 546,724,000 B AA 31,039,000 C AA- 13,302,000 D A 26,605,000 E A- 13,302,000 F BBB+ 14,780,000 G BBB 11,824,000 H BBB- 19,214,000 J BB+ 5,913,000 K BB 5,912,000 L BB- 5,912,000 M B+ 5,912,000 N B 2,956,000 P B- 4,434,000 Q N.R. 19,214,717 PM(1) N.R. 3,322,214 X-1* AAA 1,182,418,797** X-2* AAA N/A * Interest-only class. ** Notional amount. N.R.-Not rated. N/A Not applicable. COVANTA ENERGY: Objects To Various Big Executory Contract Claims ---------------------------------------------------------------- The Covanta Energy Corporation Debtors ask the Court to disallow and expunge 119 proofs of claim that relate to claims filed by parties to Assumed Executory Contracts for defaults, or balance owed. The Executory Contract Claims include: Claimant Claim No. Amount -------- --------- ------ Babcock & Wilcox 2162 - 2164 $741,656 Babcock & Wilcox 2167 741,656 City & County of Honolulu 2429 1,537,814 City of Alexandria 3678 287,685 DPW - Stanislaus County 3668 329,626 Fairfax Solid Waste Authority 2702 857,815 Marion County 2462 24,551,120 Martin GMBH FUR UMWELT-UND 1925 2,468,339 Parkson Corporation 2753 407,608 Town of Babylon Industrial Development Agency 3180-01 80,220,000 Town of Huntington 2820-01 290,321,932 According to Christine L. Childers, Esq., at Jenner & Block, in Chicago, Illinois, the Executory Contract Claims are not valid outstanding obligations of the Debtors because: -- the Covanta Second Reorganization Plan was confirmed and the Executory Contracts have been assumed; and -- the Claimants will receive cure amounts related to those Assumed Executory Contracts as laid down in the Cure Notices or otherwise ordered by the Court. Headquartered in Fairfield, New Jersey, Covanta Energy Corporation -- http://www.covantaenergy.com/-- is a publicly traded holding company whose subsidiaries develop, own or operate power generation facilities and water and wastewater facilities in the United States and abroad. The Company filed for Chapter 11 protection on April 1, 2002 (Bankr. S.D.N.Y. Case No. 02-40826). Deborah M. Buell, Esq., and James L. Bromley, Esq., at Cleary, Gottlieb, Steen & Hamilton represent the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, they listed $3,280,378,000 in assets and $3,031,462,000 in liabilities. (Covanta Bankruptcy News, Issue No. 57; Bankruptcy Creditors' Service, Inc., 215/945-7000) COVENTRY HEALTH: Shareholders to Meet on June 3 in Bethesda, Md. ---------------------------------------------------------------- The Annual Meeting of Coventry Health Care, Inc. Shareholders will be held on Thursday, June 3, 2004, at 9:30 a.m., Eastern Daylight Saving Time, at the Bethesda Marriott, 5151 Pooks Hill Road, Bethesda, Maryland 20814, Telephone (301) 897-9400. At the meeting, the shareholders will act on the following matters: 1. To elect three Class I Directors to serve until the annual meeting of shareholders in 2007; 2. To approve the 2004 Incentive Plan; 3. To ratify the appointment of Ernst & Young, LLP as the Company's independent auditors for 2004; and 4. To transact such other business as may properly come before the meeting or at any adjournment(s) thereof. All shareholders of record of the Company's common stock at the close of business on Monday, April 5, 2004, are entitled to vote at the 2004 Annual Meeting or at any adjournment of the meeting. Coventry Health Care (A.M. Best, bb+ Senior Unsecured Debt Rating) is a managed health care company based in Bethesda, Maryland operating health plans and insurance companies under the names Altius Health Plans, Coventry Health Care, Coventry Health and Life, Carelink Health Plans, Group Health Plan, HealthAmerica, HealthAssurance, HealthCare USA, PersonalCare, SouthCare, Southern Health and WellPath. The Company provides a full range of managed care products and services, including HMO, PPO, POS, Medicare+Choice, Medicaid, and Network Rental to 3.1 million members in a broad cross section of employer and government-funded groups in 14 markets throughout the Midwest, Mid-Atlantic and Southeast United States. More information is available on the Internet at http://www.cvty.com/ DIAL CORPORATION: Deregisters Shares Following Henkel Merger ------------------------------------------------------------ The Dial Corporation has deregistered all the shares of common stock of the Company previously registered under its Registration Statement on Form S-8 (File No. 333-67619) and remaining available thereunder. In connection with its merger with Henkel KgaA and Henkel Merger Corporation, the Company will no longer offer common stock as an investment option under either The Dial Corporation Amended and Restated Management Deferred Compensation Plan or The Dial Corporation Amended and Restated Directors Deferred Compensation Plan. * * * As previously reported, Standard & Poor's Ratings Services revised its rating outlook for household products manufacturer Dial Corp., to positive from stable. At the same time, Standard & Poor's affirmed its ratings on Dial. Standard & Poor's rates the Company's $250,000,000 of 7% Notes due August 15, 2006, and $250,000,000 of 6-1/2% Notes due September 15, 2008, in low-B territory. DIGITAL LIGHTWAVE: Optel to Extend Debt Term & Provide More Funds ----------------------------------------------------------------- Digital Lightwave, Inc. (Nasdaq:DIGL) announced that on May 21, 2004, the board of directors of Digital Lightwave, Inc. approved and ratified a non-binding term sheet with Optel Capital, LLC to provide financing and to restructure its outstanding debt with Optel Capital, LLC and Optel, LLC. Optel is controlled by Dr. Bryan J. Zwan, the Company's majority stockholder and chairman of the board of directors. Extension of Maturity Date Pursuant to the Term Sheet, Optel would agree to extend the maturity of approximately $18.4 million of outstanding principal plus accrued interest evidenced by those several secured promissory notes issued by the Company to Optel from July 31, 2004 until December 31, 2005. Additional Advances In addition the parties are negotiating the amount of additional proceeds which Optel may advance to the Company to assist it in satisfying its pending settlement and restructuring obligations and short term working capital needs. The amount of the Subsequent Advances will be determined by the parties prior to executing definitive documents and would be made on a secured basis and on substantially the same terms as the Outstanding Debt. Convertible Debt In exchange for extending the maturity date and providing additional funds, all of the Outstanding Debt and the amount of all Subsequent Advances would become convertible into common stock of the Company at the option of Optel at any time prior to the extended maturity date. The conversion price of such debt would be equal to the lesser of (i) $1.05 (equal to 100% of the average of the daily volume-weighted average price of the Company's common stock quoted on the NASDAQ during the period of five consecutive trading days ending on, but not including, the date of the initial execution of the Term Sheet, or May 12, 2004), (ii) 100% of the average of the daily volume-weighted average price of the Company's common stock quoted on the NASDAQ during the period of five consecutive trading days ending on, but not including, the date the parties execute the definitive agreements contemplated in the Term Sheet, or (iii) 100% of the average of the daily volume- weighted average price of the Company's common stock quoted on the NASDAQ during the period of five consecutive trading days ending on, but not including, the date the Company obtains disinterested stockholder approval of the transactions contemplated in the Term Sheet. The conversion price would be subject to adjustment for stock splits, stock dividends and recapitalizations and would be subject to broad-based anti-dilution adjustments for issuances by the Company of equity securities at a purchase price per share less than the conversion price. All of the debt would continue to be secured by a first priority security interest in all of the assets of the Company. Warrants In addition, the Company would issue Optel two warrants to purchase common stock as soon as practicable following stockholder approval of the transactions contemplated by the Term Sheet. Each warrant would be exercisable into that number of shares of common stock equal to the number of shares into which the Outstanding Debt and Subsequent Advances would be convertible and would have an exercise price equal to the conversion price of such debt. The first warrant would be exercisable for a period of 5 years following its date of issuance (the "Long Term Warrant") and the second warrant would be exercisable for a period of 180 days following the effective date of the registration statement covering the resale of the common stock issuable upon conversion of the debt or exercise of the warrants (the "Short Term Warrant" and together with the Long Term Warrant, the "Warrants"). The Long Term Warrant would include a cashless net exercise provision, but the Short Term Warrant would only be exercisable for cash or cancellation of indebtedness. The exercise price of the Warrants would be subject to the same anti-dilution protection as the conversion price of the convertible debt. Corporate Approvals On May 21, 2004, the board of directors of the Company, based on the recommendation of the special committee of the board, consisting of its independent directors, approved the Term Sheet. Dr. Zwan abstained from voting on the approval of the Term Sheet. In connection with its deliberations regarding the Term Sheet, the special committee engaged Houlihan Smith & Company, Inc. as its financial advisor. Houlihan completed an independent analysis and provided the special committee with an opinion that the transaction was fair, from a financial point of view, to the Company's stockholders, other than Dr. Zwan. Optel has made it a condition to its debt becoming convertible and the issuance of the Warrants that such transactions be approved by a majority of the stockholders of the Company whom are not affiliated with Optel or any of its affiliates. Optel has also indicated to the Company that in the event a majority of such stockholders do not approve such transactions, the Outstanding Debt plus the principal and accrued interest outstanding on all of the Subsequent Advances would become due and payable in full on July 31, 2004; provided, that if the date of the meeting of stockholders of the Company at which the transactions contemplated in the Term Sheet are to be approved occurs later than July 31, 2004, Optel would extend such date until the first date following the date of such meeting, but in no event later than September 15, 2004. Registration Rights The Company would be required to file a registration statement covering the resale of the shares of common stock issuable upon conversion of the Outstanding Debt, the principal and accrued interest outstanding on all of the Subsequent Advances, the Warrants and up to an additional 5,000,000 shares of common stock currently held by Optel and its affiliates as soon as practicable following stockholder approval of the transactions contemplated by the Term Sheet. "In light of the general improvement in the economy and the increased business activity of the Company, the proposed transactions will provide the Company with the resources which will allow it to focus on growing the business," commented Mr. Robert Moreyra, chairman of the special committee of the board of directors reviewing and approving the Term Sheet. "For the past two years, the Company, along with many other companies in the industry, has been downsizing and restructuring. Over that period, Optel stood by the Company providing capital when the Company was unable to secure other financing alternatives. As of today, the Company has restructured most of its debt obligations, and refocused and aligned its strategic plan and product development roadmap. The transactions proposed by Optel will assist management in completing its debt restructuring and executing its strategic plan." Jim Green, President and CEO of the Company, stated that, "We have a plan for growth and if we are able to complete the Optel financing and restructuring, management will have an opportunity to direct its focus to a return to profitability." The Term Sheet is non-binding and for discussion purposes only and is subject to the execution and delivery of definitive documents. About Digital Lightwave, Inc. Digital Lightwave, Inc. -- whose March 31, 2004 balance sheet shows a stockholders' deficit of $23,557,000 -- provides the global communications networking industry with products, technology and services that enable the efficient development, deployment and management of high-performance networks. Digital Lightwave's customers -- companies that deploy networks, develop networking equipment, and manage networks -- rely on its offerings to optimize network performance and ensure service reliability. DIMON INC: S&P Places Low-B Ratings On Credit Watch Negative ------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'BB' corporate credit rating and other ratings on independent leaf tobacco processor DIMON Inc. on CreditWatch with negative implications. Negative implications means that the ratings could be affirmed or lowered following completion of Standard & Poor's review. About $475 million of rated debt of Danville, Virginia-based DIMON is affected. "The CreditWatch placement follows the company's announcement that besides the original charge DIMON expected to take with regard to the restructuring its U.S. operations' production capacity, the restructuring charge will now be expanded to cover operations in other regions," said Standard & Poor's credit analyst Jayne M. Ross. In addition, the company also expects to incur a much larger net loss. "This loss will include the effects of the previously announced change in leaf tobacco sourcing and weakness in the U.S. dollar as well as the impact of inventory valuation issues and higher costs related to insurance and professional fees in the shorten fiscal year ended March 31, 2004." Standard & Poor's expects to meet with management in the near-term to discuss the company's business strategies and financial policies. DIMON is one of the leading tobacco dealers and processors with worldwide operations in over 30 countries. DONINI INC: Discusses Franchise Operations' April Performance ------------------------------------------------------------- Following an internal review, President and CEO Peter Deros of Donini, Inc., (OTCBB, "DNNI") announced the operational performance of the 26 Pizza Donini franchise locations for the month of April. Sales for the month were $725,823 (Can) with the largest store earning $39,585 (Can) in sales and the smallest store earning $20,750 (Can) in sales. This compares favorably with the previous month in which total sales reached $700,420 (Can) from franchise store operations. Total orders taken at the Company's (514-383-6000) call center for the month were 25,770, indicating an average order ticket of $16.18 (Can). Orders for the previous month were 23,979 indicating an increase in orders and an increase in the average ticket price. "Overall we were pleased with our results for the month of April, however we are not yet satisfied that our franchises are operating at optimal efficiency. We believe that with proper marketing, new product mixes, and corporate support, our franchisees can grow sales by 5 - 7% within the next 12 months," stated Peter Deros. The Company earns $25,000 (Can) on each sale of franchises, plus an additional 5% royalties on all franchise sales, and additional revenues from sales of sauces, dough and other proprietary ingredients. The Company also earns 6% for each order taken by its 35 agent position call center via Donini's single point phone number, (514-383-6000). The Company recently announced it had received an interim financing commitment of $1.0 million US dollars, and Mr. Deros stated that the transaction will close prior to the end of May 2004 on terms that are very advantageous to the Company and stockholders. About the Company Founded in 1987, Pizza Donini -- whose February 29, 2004 balance sheet shows a total stockholders' equity deficit of $1,030,904 -- has 29 franchised units and Company owned stores, has a business to business operation, marketing ingredients to other stores and operates a call center dedicated solely to supporting its own operations and that of it's franchisees. EARLE M JORGENSEN: March 31 Balance Sheet Insolvent by $37 Million ------------------------------------------------------------------ The Earle M. Jorgensen Company (EMJ) reported results for the Company's fourth fiscal quarter of 2004 and fiscal year ended March 31, 2004. Revenues increased 30.9% to $322.1 million and operating income increased 16.7% to $24.5 million for the fourth quarter of fiscal 2004, when compared to $246.0 million and $21.0 million, respectively, for the same period in fiscal 2003. The Company had record revenues for the quarter, with tonnage shipped up approximately 22% from the prior year quarter. Net income for the fourth quarter of fiscal 2004 was $10.0 million versus $8.0 million for the same period in fiscal 2003. The 2004 fourth quarter financial results include a charge to record inventory on a last in first out basis (LIFO) of $13.8 million. Revenues increased 13.1% to $1,040.4 million in fiscal 2004 when compared to $919.9 million for fiscal 2003. Operating income increased 36.0% to $69.5 million for fiscal 2004, as compared to $51.1 million for fiscal 2003. Fiscal 2003 included a loss of $12.3 million resulting from early termination of debt. Net income for fiscal 2004 was $15.3 million compared to $2.4 million for the same period in fiscal 2003. Fiscal 2004 results included a gain of $1.2 million from the sale of surplus property, $4.9 million of pre-tax income for redemption of life insurance policies and a charge related to LIFO of $14.3 million. Maurice S. Nelson, Jr., EMJ's President and Chief Executive Officer stated, "We are very pleased with our record fourth quarter results. We were well positioned to respond to the recent dramatic changes in the industrial metals market. Our goal is to maintain a consistent source of metals to our customers who depend on EMJ for their materials supplies." "Nearly all of the industries that we serve have shown dramatic growth in demand, and most of our locations shipped record volumes in the fourth quarter." EMJ also announced that the proposed restructuring of the combined capital structure of EMJ with Earle M. Jorgensen Holding Company, Inc., its parent company, had been delayed. Because of the delay, additional negotiations among Holding's security holders and changes to the structure of the transaction are required before it can proceed. As EMJ noted in January, the transaction would not have affected its day-to-day operations, and likewise, the delay will not affect its customers, suppliers and employees, who will continue to deal with the Earle M. Jorgensen Company. At March 31, 2004, Earle M. Jorgensen Company's balance sheet shows a stockholders' deficit of $37,359,000 compared to a deficit of $48,016,000 at March 31, 2003. About the Company EMJ is one of the largest independent distributors of metal products in North America with 36 service and processing centers. EMJ inventories more than 25,000 different bar, tubing, plate, and various other metal products, specializing in cold finished carbon and alloy bars, mechanical tubing, stainless bars and shapes, aluminum bars, shapes and tubes, and hot-rolled carbon and alloy bars. ENRON CORP: Asks Court To Authorize Entrada Interests Sale ---------------------------------------------------------- Enron North America Corporation and ECT Merchant Investments Corporation ask the Court to: (a) allow their consent to the sale of (i) the Class A membership interests in Entrada Energy Ventures, LLC, by ECTMI Trutta Holdings, LP, and (ii) the Class B membership interests by Joint Energy Development Investments II Limited Partnership, in accordance with the terms and conditions of the Purchase Agreement, dated April 27, 2004, by and among the Sellers JEDI II and Trutta, and Crescendo Resources, LLC; (b) authorize the consummation of the contemplated transactions; and (c) approve the settlement by and among ENA, ECTMI, Trutta, Entrada, Enron Capital Management II Limited Partnership, and Enron Capital Management III Limited Partnership. Martin A. Sosland, Esq., at Weil, Gotshal & Manges, LLP, in New York, relates that JEDI II owns 100% of the Class B Interests and Trutta owns 100% of the Class A Interests of Entrada. Entrada's primary investment is an 87.79% ownership interest in Crescendo Energy, LLC. Crescendo Energy's business focuses on the acquisition, production, and processing of low BTU gas reserves located in the Douglas Creek Arch region of Colorado and Utah. In addition, Crescendo Energy offers contract-processing services for similar third-party reserves. Crescendo Energy processes low BTU gas via a recently constructed gas processing and treating facility, which is known as the Badger Wash Gas Plant. ECM II, an indirect wholly owned limited partnership of ENA, is the general partner of JEDI II and holds a 1% interest. JEDI II's limited partners are ECM III, an indirect wholly owned limited partnership of ENA, which owns a 49% interest, and the California Public Employees' Retirement System, a unit of the State & Consumer Services Agency of the State of California, which owns the remaining 50% interest. Through ECM II and ECM III, ENA holds a 50% interest in JEDI II. Brook I, LLC, an indirect, wholly owned subsidiary of ENA, is the general partner of Trutta and the remaining interests of Trutta are directly owned by ECTMI and indirectly owned by Whitewing Associates, L.P. The sole member of Brook I is ECTMI. Marketing Efforts Mr. Sosland informs the Court that the Sellers have been conducting extensive marketing efforts for the sale of the Interests since September 2003. In marketing the Interests, the Sellers focused on investors interested in natural gas reserves located in the Rocky Mountains. The Sellers contacted or were contacted by 58 potential bidders. Out of this initial group, 16 requested data room access, which consequently resulted in offers from five bidders. In conjunction with the evaluation of the offers received, JEDI II and Trutta have negotiated with Crescendo Resources for the purchase of the Interests and to serve as a stalking horse in connection with the auction of the Interests. The Purchase Agreement After extensive and substantial arm's-length negotiations, the Sellers and Crescendo Resources agreed on these terms and conditions: A. Purchase Price and Adjustments The consideration to be paid by Crescendo Resources for the Interests consists of: (a) $6,170,000, as this amount may be adjusted prior to closing, and as may be adjusted post-closing, of which 50% will be paid to JEDI II and 50% will be allocated to Trutta; and (b) as set forth on Schedule 3.1(a) to the Purchase Agreement, (1) the discharge and payment in full of certain indebtedness of Entrada, and (2) the agreement to cause Entrada to continue to pay in the ordinary course of business all principal, interest, and expenses of all indebtedness, including without limitation, any guaranty of any indebtedness of its subsidiaries outstanding by Entrada. B. Deposit Crescendo Resources will deposit with the Escrow Agent $1,000,000 of which 50% will be allocated to JEDI II and 50% will be allocated to Trutta. Pursuant to the Escrow Agreement and the Purchase Agreement, the Deposit will either be applied towards the Initial Purchase Price, returned to Crescendo Resources or be paid to each Seller proportionally to their Interests, as applicable. C. Closing The Closing will take place on the second Business Day after the conditions to Closing have been satisfied or waived by the parties entitled to waive the condition. D. Termination of the Purchase Agreement The Purchase Agreement is terminable prior to the Closing Date: (a) by the written consent of Sellers and Crescendo Resources; (b) by any of the Sellers or Crescendo Resources if the Closing has not occurred on or before June 28, 2004; or (c) by either party, as the case may be, as provided in the Purchase Agreement. E. Break-Up Fee In the event of an Alternative Transaction, the Sellers will pay Crescendo Resources $430,000 from the proceeds at closing of an Alternative Transaction in amounts proportional to their interests in Entrada to Crescendo Resources under the circumstances set forth in the Purchase Agreement; provided, however, that in the event that the Purchase Agreement terminates pursuant to Section 4.2(b) of the Purchase Agreement and Sellers consummate an Alternative Transaction where the aggregate Consideration for the Alternative Transaction exceeds the Consideration and the closing date of the Alternative Transaction falls within 60 days after termination, then, in that event, the Break-up Fee will be the aggregate amount that the Consideration in the Alternative Transaction exceeds the aggregate Consideration under the Purchase Agreement up to an amount not to exceed $430,000, to be paid by Sellers from the proceeds at the closing of the Alternative Transaction. According to Mr. Sosland, the contemplated transaction should be approved because: (a) ENA and ECTMI's interest in the Interests is not integral to nor contemplated to be a part of their reorganization; (b) The Purchase Agreement was negotiated at arm's length; (c) The Purchase Price represents fair market value for the Interests; and (d) The Debtors are not aware of any liens, claims or encumbrances relating to the Interests. Settlement of Dispute In August 2000, Crescendo Energy sold volumetric production payment to Entrada. At that time, Mr. Sosland says, ENA owned the Class A membership interest in Entrada and JEDI II owned the Class B membership interest. On December 7, 2000, ENA assigned its Class A membership interest in Entrada to ECTMI, which then assigned it to Trutta. On December 28, 2000, Entrada sold the VPP to Brazos VPP Limited Partnership. The next day, Entrada distributed around $3,800,000 in respect of equity to each of JEDI II and ECTMI. However, the distribution to ECTMI should have been to Trutta as owner of the Class A membership interest in Entrada. To facilitate the sale of the Interests and resolve the Misdistribution, Trutta, ECTMI, Entrada, ECM II, ECM III and ENA agree that: (1) Trutta will waive its claim against Entrada for the Misdistribution as provided in Section 7.18 of the Purchase Agreement; (2) Trutta will have an allowed non-subordinated unsecured claim against ECTMI and its bankruptcy estate for $3,828,139; and (3) on the Closing Date, ECM II and ECM III will pay Trutta $237,500 as Settlement Payment. Mr. Sosland contends that the Settlement Agreement resolves the claims regarding the Misdistribution and facilitates the sale of the Interests. Moreover, the Settlement Agreement saves substantial administrative expenses and preserves the assets of ECTMI's estate. (Enron Bankruptcy News, Issue No. 108; Bankruptcy Creditors' Service, Inc., 215/945-7000) EXIDE TECHNOLOGIES: Agrees to Resolve Dispute with Lead Claimants ----------------------------------------------------------------- As directed by the Court at the March 31, 2004 status conference, Antoine Dodd and 109 lead claimants delivered to the Court a memorandum of law in support of their proposed procedure for establishing a sufficient claims reserve. Steven K. Kortanek, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, in Wilmington, Delaware, asserts that for the 109 child claimants, the disputed claims reserve is the single most important issue in the entire Exide Technologies' Chapter 11 cases. The Lead Claimants seek $207,597,811 for their claims alone. The Lead Claimants believe that they provide the most appropriate means for the Court to address the issue of the reserve amount. Mr. Kortanek relates that the most important feature of the Lead Claimants' rights is their jury trial right. Nothing in the Bankruptcy Code can adversely impact this right. It is for that fundamental reason that bankruptcy courts may not, under any circumstances, estimate personal injury tort claims for purposes of claims allowance or distribution. Yet the Court's prospective approval of a $20,000,000 reserve, by giving discretion to the Committee to fix the reserve at that number, is indistinguishable from a prohibited estimation for distribution or allowance purposes. Mr. Kortanek asserts that instead of a de facto estimation via the Plan, or a multi-day mini-trial, the appropriate procedural mechanism to address the Lead Claimants' reserve request is akin to the standards courts apply to emergency protection under Rule 65 of the Federal Rules of Civil Procedure. Mr. Kortanek contends that the primary, almost exclusive focus of the Court ought to be on the balance of hardships and the risk of irreparable harm. This is so because the Debtors and the Committee threatens to distribute as much of the plan consideration as possible, as soon as possible to the Effective Date, in amounts which would present a clear risk of forfeiture to the child claimants. Mr. Kortanek avers that the Debtors and the Committee seek to either obliterate the children's jury trial rights by the reserves set in the Plan or have the Court engage in a mini-trial focusing on issues of ultimate success or failure of the underlying claims. The Debtors and the Committee's proposal is simply another thinly veiled effort to restrict the children's jury trial rights by pricing them out of their fundamental rights. According to Mr. Kortanek, it is also critical to make the threshold of determination of whether the Debtors and the Committee can show that liquidating the Lead Claimants' claim would cause "undue delay" in the administration of these Chapter 11 cases. This showing bears on what procedure for estimation is appropriate at this juncture -- the kind of emergency injunctive showing proposed by the Lead Claimants or a very substantive estimation with live testimony proposed by the Debtors and the Committee. The trial attorneys representing the Lead Claimants are prepared to move with extreme speed to try all of the cases. Many could be tried within a matter of months after the Effective Date, while others could be tried as quickly as a year to 18 months to the Effective Date. It is ironic in the extreme that any delay in liquidating the claims would be the sole responsibility of the Debtors or the Committee. Mr. Kortanek states that there is no way around the fact that some form of estimation is required of the Lead Claimants' claims to fix the appropriate reserve. The Lead Claimants believe that the appropriate standard and methodology under these circumstances warrants a two-step process: (1) The Court would determine whether the Debtors and the Committee have submitted or can timely submit evidence that makes a substantial showing in opposition to the "best case" damages total of $207 million sought by the Lead Claimants. Absent a substantial showing, the Court would be well within its discretion to direct the fixing of the Plan Reserve for these claims in the full amount sought, while preserving all parties' rights as to the liquidation of the claims in an expedient manner; and (2) If the Debtors and the Committee can make a substantive showing in opposition to the Lead Claimants' showing on the papers, then the Court should conduct a hearing limited to the submission of papers and arguments of counsel, akin to a motion for a preliminary injunction. Debtors Respond The Debtors have particular knowledge of the Lead Claimants' claims and have previously determined, after careful analysis, that they are not likely to exceed $20,000,000 in the aggregate. Whether based on the Lead Claimants' original request for an estimation hearing or their modified request for an "injunction," and regardless of their 11th-hour attempts to shift the burdens to the Debtors and the Committee, the Lead Claimants' purported entitlement to over $207 million is unfounded and should not be accepted by the Court, even as a temporary measure. James E. O'Neill, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., in Wilmington, Delaware, relates that the Debtors did not principally rely on their many substantive concerns and objections to the Lead Claimants' claims. The issues were reviewed and considered, but tempered by consideration of the history of results in other lead claims. As a result, the Debtors produced a reserve estimate of $20,000,000, addressing principally all claims the Lead Claimants advanced. Nothing presented by the Lead Claimants demonstrated otherwise. In the absence of proper evidence of lead exposure and of proper diagnoses, the claims cannot be viewed as correct even on a prima facie basis. Accordingly, the Debtors ask the Court to deny the Lead Claimants' request. Settlement The Lead Claimants, the Debtors and the Committee agree to settle the dispute. Among other things, the parties agree to fully liquidate the Lead Claimants' claims as Allowed Class P4-A Claims. The Lead Claimants are entitled to receive their Pro Rata share of distribution made to the Allowed Class P4-A Claimholders under the Plan, provided that the terms of the Settlement are subject to a final documentation among the parties. Headquartered in Princeton, New Jersey, Exide Technologies is the world-wide leading manufacturer and distributor of lead acid batteries and other related electrical energy storage products. The Company filed for chapter 11 protection on April 14, 2002 (Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. On April 14, 2002, the Debtors listed $2,073,238,000 in assets and $2,524,448,000 in debts. (Exide Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., 215/945-7000) FACTORY 2-U: Wants to Extend Exclusivity Through May 12, 2005 ------------------------------------------------------------- Factory 2-U Stores, Inc., and its debtor-affiliates are asking the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive periods to file a chapter 11 plan of reorganization and solicit acceptances of that plan. The Debtor points out that this case is considerably complex -- it involves the restructuring of a business that includes more than 200 stores spread out over ten states. Moreover, as a publicly traded company, this case remains under scrutiny from various reporting agencies and the public. While the total amount of claims in this case is not enormous, the complexity of the business and the financial problems facing it make this case very complex. Although this case is not yet four months old, the Debtor has been diligent in attempting to reorganize its business as quickly as possible. Given the condition of this business upon the filing of this case and the magnitude of problems facing the Debtor, it is clear that it is moving as quickly as can reasonably be expected. Moreover, because of the seasonality of the Debtor's business, it must wait until well after the 2004 holiday sales season before it can formulate a plan of reorganization. The Debtor reports that it has not yet been able to commence meaningful negotiations with its creditors, including the need for financial results after the 2004 holiday sales season. However, it is also clear that the Debtor is acting in good faith, has communicated and worked with its major creditor groups and is making significant progress in reorganizing its business. The Debtor has had extensive discussions with its postpetitition lenders and the Committee concerning its business plan and operations and has sought, and obtained, a consensus with the Committee on all major issues raised thus far. The Debtor assures the Court that it is and will remain current on all of its undisputed postpetition obligations, and has availability under the postpetition financing facility to ensure that the Debtor remains current. The Debtor believes that cause exists to extend its exclusive right to file a plan through May 12, 2005 and to solicit acceptances of that plan through July 12, 2005. 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. FARMLAND IND: Court Sets May 31 as Administrative Claims Bar Date ----------------------------------------------------------------- Pursuant to the Second Amended Joint Plan of Reorganization filed by Farmland Industries, Inc., and its debtor-affiliates, the Effective Date of the Plan is May 1, 2004 as ordered by the U.S. Bankruptcy Court for the Western District of Missouri. All requests for payment of administrative claims arising before May 1, 2004 and all proofs of claim on account of the rejection of executory contracts or expired leases, must be filed with the Clerk of Court and served on the liquidating trustee and its counsel, Foley & Lardner, LLP, at the Claim Delivery Address by May 31, 2004. All final requests for compensation and reimbursement by professionals for services rendered before May 1, 2004 and substantial contribution claims, of any, must be filed with the Clerk of Court and served on counsel for the liquidating trustee at the Claim Delivery Address by June 15, 2004. The Claim Delivery Address is: If sent by mail If sent by messenger --------------- -------------------- FI Liquid Trust FI Liquid Trust Attn: Claims Attn: Claims P.O. Box 56798 8475 Western way, Suite 110 Jacksonville, FL 32241-6798 Jacksonville, FL 32256 For further information, you may visit the website at http://www.filiquidatingtrust.com/ Farmland Industries is one of the largest agricultural cooperatives in North America with about 600,000 members. The firm operates in three principal business segments: fertilizer production; pork processing, packing and marketing; and beef processing, packing and marketing. The company, along with its affiliates, filed for chapter 11 protection (Bankr. Mo. Case No. 02-50557) on May 31, 2002 before the Honorable Jerry W. Venters. The Debtors' Counsel is Laurence M. Frazen, Esq. of Bryan Cave LLP. When the company filed for chapter 11 protection, it listed total assets of $2.7 billion and total debts of $1.9 billion. FLEMING: Agrees To Settle PBCG Mega-Claim Dispute ------------------------------------------------- As of its bankruptcy petition date, the Fleming Companies, Inc. Debtors sponsored five pension plans: (1) Fleming Companies, Inc., Pension Plan; (2) Pension Plan of S. M. Flickinger Co., Inc.; (3) Godfrey Company Subsidiaries Pension Plan; (4) ABCO Markets, Inc., Retirement Plan for Arizona Warehouse and Distribution Employees; and (5) Core-Mark International, Inc., Non-Bargaining Employees Pension Plan. On October 31, 2003, the Debtors filed distress termination applications with the Pension Benefit Guaranty Corporation to terminate the Remaining Pension Plans and the Fleming Pension Plan. To date, only the Fleming Pension Plan has been terminated pursuant to an agreement effective February 12, 2004, between the PBGC and Fleming Companies, Inc., which established the Fleming Pension Plan's termination date as January 1, 2004, and appointed the PBGC statutory trustee of the Plan. The PBGC has filed 17 proofs of claim pursuant to Title IV of the ERISA alleging: (i) unfunded benefit liabilities on plan termination; (ii) due and unpaid minimum funding contributions; and (iii) missed PBGC premium payments. Fifteen of these claims were filed on September 11, 2003 -- three claims with respect to the unfunded benefit liabilities, due and unpaid minimum funding contributions, and missed PBGC premiu