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/raid1/www/Hosts/bankrupt/TCR_Public/040708.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, July 8, 2004, Vol. 8, No. 139 Headlines ADELPHIA COMMS: Gusses Offer $2.798M for Beaver Creek Property AIR CANADA: Monitor Ernst & Young Provides Liquidation Analysis AIR CANADA: Reports Higher Revenue Passenger Miles in June 2004 ALLPOINTS OFFICE: Case Summary & 20 Largest Unsecured Creditors AMERICAN SEAFOODS: Extends 10-1/8% Senior Debt Offer to July 27 AMERIGAS PARTNERS: Selling 2 Million Shares for $48.7 Million ATLANTIC EXPRESS: S&P Places Ratings on CreditWatch Negative AVAYA INC: Repurchases $131.6M of 11-1/8% Senior Secured Notes BORDEN CHEMICAL: Acquisition News Spurs S&P's Negative Watch CARAUSTER INDUSTRIES: Resets Q2 Financial Webcast to July 28 CARE POINT: Files BIA Proposal to Facilitate Restructuring CATHOLIC CHURCH: Portland Archdiocese Files for Ch. 11 Protection CATHOLIC CHURCH: Portland Archdiocese's Case Summary & Creditors CHALK MEDIA: Partners With Samsung For Online Training Site CHAS COAL: U.S. Trustee Meeting with Creditors on July 29 CIRTRAN CORP: Wins Two New Major Military Contracts COINSTAR INC: Will Webcast Q2 2004 Conference Call on July 29 CONSOLIDATED TRAVEL: Enters into Merger Pact with Knobias Holdings CRITICAL PATH: Shareholders Okay $77MM Debt-to-Equity Conversion CVF TECHNOLOGIES: Faces Possible Delisting From AMEX DAS INTERNATIONAL: First Creditors' Meeting Convenes on July 20 DUANE READE INC: S&P Lowers Corporate Credit Rating to B from B+ EBLE LAND DEVT: Case Summary & 11 Largest Unsecured Creditors EDISON INTERNATIONAL: Board Amends Bylaws for Share Issuance ENRON CORPORATION: Objects to Various Employee Claims ENRON DEVELOPMENT: Enters Into Telecom MHC Loan Settlement Pact ENVIRONMENTAL LAND: Section 341(a) Meeting Slated for July 19 EQUITY NORTHWOODS: Case Summary & 20 Largest Unsecured Creditors FLEMING COMPANIES: Moves To Settle 26 Reclamation/Avoidance Suits FLEMING COS: Wants Court Nod on Calif. Board of Equalization Pact FOREST OIL: Plans to Issue Additional $100 Million 8% Senior Notes FOSTER WHEELER: More Investors Agree Not to Transfer Securities GE COMMERCIAL MORTGAGE: Assigns Low-B Ratings to 6 Classes GREENMAN TECHNOLOGIES: Completes $9M Financing with Laurus Funds GROOVE VILLAGE: Voluntary Chapter 11 Case Summary HALLIBURTON: Launches First Major Project with National Oilwell HAYES LEMMERZ: 75 Adversary Cases Reassigned to Judge Lindsey HOMECOM COMMUNICATIONS: Going Concern Viability is in Doubt HUDSON RESPIRATORY: Teleflex Completes Acquisition INDOSUEZ EASTERN EUROPE: Section 304 Petition Summary INTERPUBLIC GROUP: Negotiates Amendments to Silverstone Lease ISLES CBO: Fitch Downgrades Classes A-1 & A-2 Ratings to BB- JOURNAL REGISTER: S&P Places Ratings on Watch Negative KAISER ALUMINUM: Proposes QAL Sale Bidding Procedures KEY ENERGY: Commences Senior Note Consent Solicitations KIEL BROS OIL: Look for Bankruptcy Schedules by July 15 KMART HOLDING: Appoints Three New Customer Service Executives MED DIVERSIFIED: Provides Update on Bankruptcy Proceedings MERITAGE CORPORATION: Second Quarter Orders Climb 51% MIRAVANT MEDICAL: Guidant Extends $7M to Fund PhotoPoint Programs MORGANS HOTEL: Enters Into a 99-Year Sale-Leaseback with DIVCO NEW WORLD PASTA: Plans to Close Omaha Facility on September 4 NEWPORT INT'L: Subsidiary Inks 3-Year Reselling Pact with V-Link NRG ENERGY: Nelson Debtors To Sell Substantially All Assets OM GROUP: Negotiating With Noteholders to Waive Covenant Defaults OMNE STAFFING: Trustee Wants to Continue David Cohen's Employment OMNI FACILITY: Asks to Hire TRG as Restructuring Consultants OWENS CORNING: Mediator Francis McGovern Walks Away PACIFIC GAS: Court Disallows 75 Ordinary Course Liability Claims PEGASUS SATELLITE: Asks Court to Okay Employee Retention Program PURELY SUPREME: Selling Assets at Auction on July 14 RCN CORP: Shuman Wants Stay Lifted To Collect $200K Settlement REVLON INC: Most 12% Senior Noteholders Consent to Amend Indenture SIX FLAGS: Will Make PIERS Dividend Distribution on August 15 SPIEGEL: Wants Court Nod To Set Up New Hampton Bidding Procedures STEWART ENTERPRISES: Fitch Affirms Senior Notes' Low-B Ratings SURFSIDE RESORTS: Gets Okay to Hire Walter Snell as Attorney TANGO INC: Secures Global Apparel & Footwear Company Contract TEENFORM ASSOCIATES: Case Summary & 8 Largest Unsecured Creditors TOP BON LLC: Case Summary & 12 Largest Unsecured Creditors TORCH RIVER: Executes Drilling Program on High Rock Island TROPICAL SPORTSWEAR: Names 3 Executives to Lead New Business Units UNITED AIRLINES: Balks at American Airlines' $74,500,000 Claim URBANALIEN CORP: Synchronicity Financial Gains Company Control US AIRWAYS: Agrees to Allow UBS AG's $9 Million Claim US AIRWAYS: Says Passenger Load Factor Up 3% in June 2004 UTILITY CORP: Declares Monthly Dividend Payable on July 30 WASTECORP INTL: Court Extends Plan Exclusivity Period to July 30 WATERLINK INC: Court Confirms Chapter 11 Liquidating Plan WESTAFF INC: Names Stephen J. Russo as New Western Zone Manager WINSTAR: Court Authorizes Trustee to Pay Fox Rothschild's Fees WORLDCOM: Cook County Jury Awards $2-Mil Verdict In Slovinski Case W.R. GRACE: Asbestos PD Committee Issue Status Report * Dewey Ballantine Expands Frankfurt Private Equity Practice * FOCUS Management Group USA Expands its Chicago Presence * Penny Friedman to Lead GE Commercial's Central Region Efforts * Pamela O'Neill Joins XRoads' Litigation Analytics as Principal ********* ADELPHIA COMMS: Gusses Offer $2.798M for Beaver Creek Property -------------------------------------------------------------- Adelphia Communications Corporation owns a condominium located at 61 Greystone Court, on the slopes of the Beaver Creek Mountain Valley, in Beaver Creek, Colorado. The Beaver Creek Property was purchased on June 22, 1990 for $899,000. At that time, the property was appraised at $2,863,380. Since March 10, 2004, the Property was listed at an asking price of $2,750,000 with Slifer, Smith & Frampton/Vail Associates, LLC -- a broker located in Avon, Colorado. Shelley C. Chapman, Esq., at Willkie Farr & Gallagher, LLP, in New York, informs the Court that since the Property was listed, the ACOM Debtors received four offers. The highest offer that ACOM received for the Property was Bonnie Garland Guss and Robert Barry Guss' $2,798,200 offer. Ms. Chapman believes that selling the Property to the Gusses would result in a significant gain to the ACOM Debtors, given that the asset is not necessary to their operations. Accordingly, the ACOM Debtors ask the Court to approve their April 4, 2004 Purchase Agreement with the Gusses. The ACOM Debtors also seek the Court's authority to sell the Property to the Gusses free and clear of all liens, claims, interests and encumbrances. In accordance with the Purchase Agreement, the Gusses deposited $50,000 in escrow pending the closing of the Sale. The amount will be released from escrow and applied to the Purchase Price at closing. As set forth in the Purchase Agreement, ACOM is required to obtain the Court's approval of the Sale by July 9, 2004. Ms. Chapman relates that a sale of the Property, at this time, would allow the ACOM Debtors to maximize net potential proceeds and use them in accordance with their DIP credit facility. The Sale is in good faith, Ms. Chapman assures the Court. Legitimate marketing efforts were undertaken and there is no evidence of fraud or collusion in the terms of the proposed Sale. The Buyers are not insiders of the ACOM Debtors. In addition, the Purchase Agreement terms do not personally benefit any ACOM insiders. (Adelphia Bankruptcy News, Issue No. 63; Bankruptcy Creditors' Service, Inc., 215/945-7000) AIR CANADA: Monitor Ernst & Young Provides Liquidation Analysis --------------------------------------------------------------- Ernst & Young, Inc., the Court-appointed Monitor, prepared a liquidation analysis with respect to Air Canada. Based on its analysis, the Monitor determined that if the assets of the Applicants were to be liquidated, there would be no recovery for the Affected Unsecured Creditors. The Applicants are insolvent and unable to meet their debt and other obligations as they become due. If the Required Majority of Affected Unsecured Creditors does not approve the Plan, creditors could take steps to exercise their rights and remedies against the Applicants' assets and property. If the Plan is not implemented, possible alternatives would include a forced sale or liquidation of the Applicants through receivership, exercise of creditors' rights or bankruptcy. Based on certain assumptions, the Monitor estimates that the net realizable value for the Applicants' assets would range from CN$1,100,000,000 to CN$1,500,000,000. Estimated Realizable Net Asset Values (CN$ in Millions) Net Book Value as at Est. Liquidation Value March 31, 2004 Low High -------------- ---------- ----------- Assets: Cash & short-term investments 875.9 897.6 897.6 Accounts receivable 849.7 130.6 189.4 Rotables, spare parts, materials & supplies 243.9 172.9 234.1 Prepaids and deposits 133.2 3.2 17.7 Property & equipment 2,653.2 209.5 302.7 Investments & advances 893.8 - 45.0 Deferred charges 1,914.6 - - Other assets 1,084.4 74.2 123.0 ---------- ---------- ----------- Estimated realizations from assets as at March 31, 2004 8,648.7 1,488.0 1,809.5 Less estimated liquidation & wind-down costs (408.2) (346.5) ---------- ----------- Net realizations available for distribution to creditors 1,079.8 1.463.0 ========== =========== The Monitor's analysis indicates that the estimated proceeds will not be sufficient to satisfy the claims of secured creditors with charges granted priority pursuant to Section 63 of the Initial CCAA Order and creditors with post-filing CCAA claims. A liquidation of the Applicants' assets would trigger an inevitable increase in the claims asserted against the Applicants. Estimated Distribution to Creditors (CN$ in Millions) Low High ---------- ----------- Est. Proceeds Available for Distribution CN$1,079.8 CN$1,463.0 Less estimated priority claims: CRA deemed trust re unremitted source deductions (16.9) (16.9) Pension deemed trust claims (509.7) (131.3) ---------- ----------- 553.2 1,314.8 Secured charges: Administrative Charge (4.2) (4.2) CCAA Lender's Charge re Non-GECAS Obligations (320.1) (320.1) Director's Charge (149.1) (149.1) CCAA Lender's Charge re GECAS Obligations (444.1) (444.1) ---------- ----------- (364.4) 397.2 Post-filing claims re CCAA proceedings (743.0) (743.0) Estimated shortfall before payment of general claims (1,107.4) (345.8) ---------- ----------- Indicated recovery for general claims CN$0 CN$0 ========== =========== Accordingly, the Monitor recommends that Affected Unsecured Creditors vote for the Resolution to approve the Plan. Air Canada's Board agrees that the most likely alternative to the Plan would be a liquidation and distribution of the net proceeds of the Applicants' assets. The Board believes that the Plan will produce a more favorable result for the Affected Unsecured Creditors and employees of Air Canada than a liquidation of the Applicants' assets. The Board also recommends that Affected Unsecured Creditors vote for the Resolution. 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. 40; Bankruptcy Creditors' Service, Inc., 215/945-7000) AIR CANADA: Reports Higher Revenue Passenger Miles in June 2004 --------------------------------------------------------------- Air Canada mainline flew 13.6 per cent more revenue passenger miles in June 2004 than in June 2003, according to preliminary traffic figures. Overall, capacity increased by 9.7 per cent, resulting in a load factor of 79.4 per cent, compared to 76.7 per cent in June 2003; an increase of 2.7 percentage points. In the domestic market, capacity decreased by 0.3 per cent while traffic rose by 7.6 per cent resulting in a domestic load factor of 78.1 per cent - a 5.7 point increase year over year. Jazz, Air Canada's regional airline subsidiary, flew 4.7 per cent more revenue passenger miles in June 2004 than in June 2003, according to preliminary traffic figures. Capacity decreased by 0.4 per cent, resulting in a load factor of 67.8 per cent, compared to 64.5 per cent in June 2003; an increase of 3.3 percentage points. "This third consecutive month of record system load factors is a clear indication that our commercial strategy is paying off," said Montie Brewer, Executive Vice President, Commercial. "Our continued strong performance in the highly competitive domestic market reflects positive consumer response to Air Canada's new fare products which allow customers to choose the fare that best suits their needs. An ongoing recovery in international travel, boosted by our expansion to additional Latin American destinations also contributed to the record 79.4 per cent load factor. 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. ALLPOINTS OFFICE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Allpoints Office.Com, Inc. 3930 Willow Lake Boulevard Memphis, Tennessee 38118 Bankruptcy Case No.: 04-30109 Type of Business: The Debtor sells office furniture and supplies. See http://www.allpointsoffice.com/ Chapter 11 Petition Date: June 30, 2004 Court: Western District of Tennessee (Memphis) Judge: William Houston Brown Debtor's Counsel: P. Preston Wilson, Esq. Gotten, Wilson, Savory & Beard 88 Union Avenue, 14th Floor Memphis, TN 38103 Tel: 901-523-1110 Fax: 901-523-1139 Total Assets: $453,581 Total Debts: $2,594,789 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Richard Mason $645,000 8633 Old Creek Road Memphis, TN 38125 Allsteel - HON Industries $312,873 P.O. Box 92326 Chicago, IL 60675 Carol Mason $295,965 8633 Old Creek Road Memphis, TN 38125 Community Business Finance, Inc. $282,000 P.O. Box 1390 Southaven, MS 38671 Corporate Express $198,000 Armstrong Allen, PLLC $156,371 Stokes, Bartholomew, Evans & $115,611 Petree, PA AMB Property, LP II $97,805 Hon Industries $62,822 Paoli, Inc. $37,865 Richard Mason $33,000 Susan Hurley $28,473 Direct Line $28,220 United States Financial Service, LLC $27,272 CitiCapital (SM) $24,180 Systems Plus $23,329 KRUGER (KI) $17,692 HumanScale $17,636 KEILHAUER $15,370 American Express $13,367 AMERICAN SEAFOODS: Extends 10-1/8% Senior Debt Offer to July 27 --------------------------------------------------------------- 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 July 6, 2004, will be extended to 5:00 p.m., New York City time, on Tuesday, July 27, 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 May 26, 2004 American Seafoods filed Amendment No. 6 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, 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 July 6, 2004, all of our 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, 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. Copies of the registration statement may be obtained from the Securities and Exchange Commission's Internet site. The site's Internet address is http://www.sec.gov/ 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. AMERIGAS PARTNERS: Selling 2 Million Shares for $48.7 Million ------------------------------------------------------------- AmeriGas Partners, L.P., is offering to sell 2,000,000 common units (2,300,000 common units if the underwriters exercise their over-allotment option in full). There will be 54,373,272 common units outstanding after the offering. If the underwriters exercise their over-allotment option in full, the Company will issue an additional 300,000 common units, which will result in 54,673,272 common units outstanding representing 100% of the limited partner interests outstanding. AmeriGas Partners will receive approximately $48.7 million from the sale of the common units, or $56.1 million if the underwriters' over-allotment option is exercised in full, after deducting underwriting discounts and commissions and offering expenses. The Company intends to use the net proceeds that it receives from this offering, including any from the exercise of the underwriters' over-allotment option, to reduce indebtedness under the Company's bank credit agreement and for general partnership purposes. The Company ticker symbol on the New York Stock Exchange is APU. AmeriGas Partners (APU, senior unsecured debt rated 'BB+' by Fitch) is the nation's largest retail propane marketer, serving nearly 1.2 million customers from approximately 650 locations in 46 states. Comprehensive information about AmeriGas is available on the Internet at http://www.amerigas.com/ ATLANTIC EXPRESS: S&P Places Ratings on CreditWatch Negative ------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on Atlantic Express Transportation Corp., including the 'B' corporate credit rating, on CreditWatch with negative implications. The rating action reflects Standard & Poor's increased concerns regarding the company's near-term outlook and liquidity position. The Staten Island, New York-based school bus transportation company, which emerged from Chapter 11 bankruptcy protection in December 2003, has about $150 million of lease-adjusted debt. "The CreditWatch placement reflects concerns over the company's recent disclosure in a registration statement filed with the SEC that it will need additional funding to finance its operations and execute its business plan over the next 12 months," said Standard & Poor's credit analyst Lisa Jenkins. Earlier this year, Atlantic Express stated that it expected to have sufficient liquidity to meet requirements through fiscal 2008 once it completed the refinancing activities then under way. In the recent registration statement, Atlantic Express disclosed that it expects cash flow to be adversely affected by a number of factors, including higher-than-expected fuel costs and other expenses. These disclosures are of particular concern given the company's substantial debt burden, limited liquidity, and competitive end markets. Atlantic Express is the fourth-largest provider of school bus transportation in the U.S. and the leading provider in New York City. School bus services account for about 88% of revenues. The company also provides paratransit services for physically and mentally disabled passengers and other services, including express commuter lines and tour buses. As of March 31, 2004, the company operated a fleet of approximately 6,400 vehicles. Atlantic Express has been in operation for over 30 years and has well-established relationships with many of its customers, primarily school districts in various states. Much of Atlantic Express' revenue base is tied to the New York City Department of Education, which accounted for about 38% of revenues in fiscal 2003. Atlantic Express has had a relationship with the DOE since 1979. The current contract is up for renewal in mid-2005. Atlantic Express' revenue stream is fairly predictable, with contracts typically ranging between one to five years and a high renewal rate. Given the modest size of the company, however, the loss of certain contracts could have a material impact on the company's financial position. In addition, most contracts are fixed price, which leaves the company vulnerable to unexpected increases in costs. Atlantic Express experienced a material increase in costs during fiscal 2002, which contributed to significant liquidity pressures and led the company to file for Chapter 11 bankruptcy protection in August 2002. Despite its emergence from Chapter 11, Atlantic Express remains highly leveraged. For the nine-month period ended March 31, 2004, the company reported a profit of $32.8 million after $58.6 million of forgiveness of indebtedness income, an operating loss of $3.1 million, and EBITDA of $63.1 million. AVAYA INC: Repurchases $131.6M of 11-1/8% Senior Secured Notes -------------------------------------------------------------- Avaya Inc.,(NYSE: AV) a leading global provider of business communications software, systems and services, said it completed cash repurchases of $131.6 million in principal amount of its 11 1/8% senior secured notes during its third fiscal quarter. As a result of the repurchases, the company expects to record a one- time, pre-tax loss of $21.0 million for the third quarter. "These repurchases are consistent with Avaya's objectives of reducing our long-term debt and de-leveraging our balance sheet," said Garry McGuire, chief financial officer, Avaya. These repurchases, along with the previously announced redemption of $224 million in senior secured notes in February 2004, have lowered the outstanding balance of this issue by 55 percent from $640 million to $284 million. The company said that together, the transactions will save a total of approximately $17.7 million in interest expense for fiscal 2004 and $39.6 million annually thereafter. About Avaya Avaya Inc. designs, builds and manages communications networks for more than one million businesses worldwide, including more than 90 percent of the FORTUNE 500(R). Focused on businesses large to small, Avaya is a world leader in secure and reliable Internet Protocol (IP) telephony systems and communications software applications and services. Driving the convergence of voice and data communications with business applications -- and distinguished by comprehensive worldwide services -- Avaya helps customers leverage existing and new networks to achieve superior business results. For more information visit the Avaya website at http://www.avaya.com/ * * * As reported in the Troubled Company Reporter's May 4, 2004 edition, Standard & Poor's Rating's Services revised its outlook on the rating of Avaya Inc. to positive from stable. The 'B+' corporate credit and senior secured debt and 'B' senior unsecured debt ratings were affirmed. The outlook revision reflects improved profitability in recent quarters combined with reduced debt, improving debt protection metrics and increased balance sheet liquidity. BORDEN CHEMICAL: Acquisition News Spurs S&P's Negative Watch ------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on Borden Chemical Inc., including the 'BB' corporate credit rating, on CreditWatch with negative implications, citing the announcement that Apollo Management LP will acquire Borden Chemical. Columbus, Ohio-based Borden Chemical has about $551 million of total debt outstanding. "The CreditWatch placement follows the announcement that Apollo Management LP has entered into a definitive agreement to acquire Borden Chemical for approximately $1.2 billion, including the assumption of outstanding debt," said Standard & Poor's credit analyst Peter Kelly. "The ratings on Borden Chemical could be lowered if, as anticipated, the financial structure resulting from the proposed transaction reflects a significant increase in leverage." More aggressive financial policies employed by new management could also impact credit quality. Standard & Poor's will resolve the CreditWatch after reviewing the business prospects and financial profile of the company pro forma for the proposed transaction, as well as new management's financial policies and operational strategies. Apollo Management is acquiring Borden Holdings, the parent of Borden Chemical, from BW Holdings LLC, an affiliate of Kohlberg Kravis Roberts & Co. The acquisition is subject to regulatory approval and is expected to be completed in the third quarter of 2004. Borden Chemical, with more than $1.4 billion of annual sales, is a leading producer of formaldehyde-based thermosetting resins for the forest products industry, as well as resins for industrial applications. End uses include furniture and construction products, such as structured panels, medium-density fiberboard and particleboard, and coatings for the foundry industry. The company also is the leading global manufacturer of formaldehyde, and consumes much of its production internally. CARAUSTER INDUSTRIES: Resets Q2 Financial Webcast to July 28 ------------------------------------------------------------ Due to a number of other companies reporting on July 27, 2004, Caraustar (Nasdaq: CSAR) has changed the date to host its webcast to review second quarter 2004 financial results to Wednesday, July 28, 2004, beginning at 9:00 a.m. (EDT). What: Caraustar Industries Second Quarter 2004 Financial Results When: Wednesday, July 28, 2004 @ 9:00 a.m. (EDT) Where: http://www.caraustar.com/or http://www.firstcallevents.com/service/ajwz407653794gf12.html How: Live over the Internet -- Simply log on to the web at the address above. Contact: Janice Kuntz, Intellegre, Inc., 404-352-2841 If you are unable to participate during the live webcast, the call will be archived at http://www.caraustar.com/ Caraustar, a recycled packaging company, is one of the largest and most cost-effective manufacturers and converters of recycled paperboard and recycled packaging products in the United States. The company has developed its leadership position in the industry through diversification and integration from raw materials to finished products. Caraustar serves the four principal recycled paperboard product markets: tubes, cores and cans; folding cartons and custom packaging; gypsum wallboard facing paper; and miscellaneous "other specialty" and converted products. * * * Liquidity and Capital Resources In its Form 10-Q for the quarterly period ended March 31, 2004, filed with the Securities and Exchange Commission, Carauster Industries reports: "Our primary sources of liquidity are cash from operations and borrowings under our senior credit facility. Downturns in operations can significantly affect our ability to generate cash. In the first quarter of 2004, we generated $475 thousand in cash from operations, which is $15.6 million lower than the first quarter of 2003. Although the timing or certainty of the following events cannot be assured, we believe that our existing cash and liquidity position will be strengthened through the sale of the real estate at our Chicago, Illinois and Baltimore, Maryland paperboard mills and internal cost reduction initiatives. We believe that our cash on hand at March 31, 2004 of $81.4 million and borrowing availability under our senior credit facility will be sufficient to meet our cash requirements for the year ended December 31, 2004 and the foreseeable future. Additionally, based on our historical ability to generate cash, we believe we will be able to meet our long-term cash requirements. However, if we are unable to generate cash at historic levels our ability to generate cash sufficient to meet long-term requirements is uncertain. The following are factors that could affect our future ability to generate cash from operations: -- Continued contraction in domestic demand for recycled paperboard and related packaging products that our industry experienced in 2000, 2001 and 2002. -- Substitution of paperboard packaging products by alternative products such as flexible packaging and plastics. -- Continued export of domestic manufacturing operations. -- Significant unforeseen adverse conditions in our industry or the markets we serve. "Although we believe that our liquidity will be sufficient to meet expected needs for the foreseeable future, the occurrence, continuation or exacerbation of these conditions could require us to seek additional funds from external sources in order to meet our liquidity requirements. In such event, our ability to obtain such funds would depend on the various business and credit market conditions prevailing at the time, which are difficult to predict and some of which are out of our control. Availability of additional funds could also be materially adversely affected by our substantial existing indebtedness." CARE POINT: Files BIA Proposal to Facilitate Restructuring ---------------------------------------------------------- Care Point Medical Centres Ltd. announced that it has filed a notice of intention to make a proposal pursuant to the Bankruptcy and Insolvency Act. The filing of this notice is intended to provide the Board of Directors of Care Point with time to seek to address the best interests of creditors, suppliers and shareholders while continuing to ensure that the best standards of patient care are met. Care Point described working capital and expense difficulties with the release of its second quarter financial results on May 25, 2004. Due to ongoing financial difficulties, the Board of Directors concluded that the filing of the notice of intention was necessary to facilitate the operation, commercial, financial and corporate restructuring of Care Point. During the period of protection pursuant to the Bankruptcy and Insolvency Act clinical operations at Care Point will continue without interruption. The action taken to restructure will not have any impact on Care Point's level of service or continued commitment to patient care. Care Point will continue providing care to its patients and taking on new patients during the restructuring period. About Care Point Medical Centres Care Point operates a total of fifteen medical clinics in the Greater Vancouver Regional District. These clinics are open approximately 12 hours per day, 364 days of the year. In exchange for a fee, Care Point provides management, facilities, staffing and administrative support for doctors practicing family medicine on a no appointment necessary basis, Paediatrics, Minor Surgery, Urology, Dermatology, and Podiatry. Freed of Administrative duties, the doctors practicing at Care Point are able to devote 100% of their time to medical matters. CATHOLIC CHURCH: Portland Archdiocese Files for Ch. 11 Protection ----------------------------------------------------------------- The Archbishop of Portland, John G. Vlazny, released this letter: Archdiocese of Portland in Oregon Office of the Archbishop July 6, 2004 Dear brothers and sisters in Christ, Today I am doing something I hoped I would never have to do. The Archdiocese of Portland in Oregon is filing for Chapter 11 reorganization in bankruptcy court. When I first mentioned this possibility, in February 2003, I promised that we would do our very best to avoid taking this step. We have worked hard to prevent it. At this point, circumstances beyond my control have created great financial risk. If I am to be a prudent steward of our resources, I believe that the best choice is to seek protection in bankruptcy. This step should allow the Archdiocese and our parishes and schools to operate in normal fashion while difficult financial issues are resolved. This is not an effort to avoid responsibility. It is, in fact, the only way I can assure that other claimants can be offered fair compensation. We have worked diligently to settle claims of clergy misconduct. In the last four years, we have settled more than 100 such claims. Last year alone the Archdiocese paid almost $21 million from its own funds. Major insurers have abandoned us and are not paying what they should on the claims. Two cases are set for trials beginning today. One plaintiff seeks more than $130 million in compensatory and punitive damages, the other $25 million. We have made every effort to settle these claims fairly but the demand of each of these plaintiffs remains in the millions. I am committed to just compensation. These demands go beyond compensation. With 60 other claims pending, I cannot in justice and prudence pay the demands of these two plaintiffs. There is always risk in going to trial. Attorneys for the plaintiffs claim that the assets of all the parishes and schools and of various trust funds holding charitable contributions are available to pay their clients. Under canon law, parish assets belong to the parish. I have no authority to seize parish property. I have assured you that this is something I would not do. Neither can I, nor would I, use other assets held in charitable trust. Seeking the protection of bankruptcy is a just and prudent course of action. This action offers the best possibility for the Archdiocese: to resolve fairly all pending claims, to manage a difficult financial situation and to preserve the ability of the Archdiocese to fulfill its mission. It will also allow us to continue our good works without fear of an impending large verdict. The operation of our parishes and schools will continue as usual. We encourage you to continue your contributions as in the past. Before I made this decision, I sought the advice of the Archdiocesan Finance Council (mostly lay financial advisors), the College of Consultors (who represent the clergy of the Archdiocese), my attorneys and various others. I listened carefully to what they said and concluded that the step I am taking will best ensure the financial stability necessary for the continuation of the good work of the Church in Western Oregon. Once more, I express my profound apologies to those who have been harmed by abuse and I renew my commitment to help you to heal. This decision will help me to do that. Sincerely yours in Christ, Most Reverend John G. Vlazny Archbishop of Portland CATHOLIC CHURCH: Portland Archdiocese's Case Summary & Creditors ---------------------------------------------------------------- Debtor: Roman Catholic Archbishop of Portland in Oregon, and successors, a corporation sole, aka Archdiocese of Portland in Oregon 2838 E. Burnside Street Portland, OR 97214 Telephone (503) 234-5334 Fax (503) 234-2545 Chapter 11 Petition Date: July 6, 2004 Bankruptcy Case No.: 04-37154 Bankruptcy Court: District of Oregon Bankruptcy Judge: The Honorable Elizabeth L. Perris Circuit: Ninth Bankruptcy Counsel: Thomas W. Stilley, Esq. William N. Stiles, Esq. Sussman Shank LLP 1000 SW Broadway, Suite 1400 Portland, OR 92705-3089 Telephone (503) 227-1111 Fax (503) 248-0130 Special Counsel: Thomas Dulcich, Esq. Margaret Hoffman, Esq. James Finn, Esq. Schwabe Williamson & Wyatt PC Pacwest Center, Suites 1600 - 1900 1211 S.W. Fifth Avenue Portland, OR 97204-3795 Telephone (503) 222-9981 Fax (503) 796-2900 Estimated Number of Creditors: 50 to 99 Estimated Assets: $10,000,000 to $50,000,000 Estimated Debts: $25,000,000 to $50,000,000 A. List Of The Debtor's 20-Largest Commercial Creditors Creditor Claim Amount -------- ------------ Arthur J. Gallagher & Co. FIIC #42163 P.O. Box 6000 San Francisco, CA 94160 $46,050 Black and Indian Mission Office 2021 H Street NW Washington, DC 20006 $5,500 Bob Nagel Distributing P.O. Box 14427 Portland, OR 97293 $858 Catholic Sentinel P.O. Box 5087-19 Portland, OR 97208 $1,251 Department of Consumer & Busin P.O. Box 14610 Salem, OR 97309-0445 $5,000 Hahn and Associates, Inc. 434 NW 6th Avenue #203 Portland, OR 97209 $5,710 Holy Family Catholic Church 3732 SE Knapp Portland, OR 97202 $5,000 Key Bank of Oregon 1211 SW Fifth Avenue #400 Portland, OR 97204 $22,300,000 Mexican American Cultural Center P.O. Box 28185 3115 W. Ashby San Antonio, TX 78228 $4,034 Oregon Education Technology Consortium 8995 SW Miley Rd., #101 Wilsonville, OR 97070 $1,070 Oregon Education Technology Consortium 8995 SW Miley Rd., #101 Wilsonville, OR 97070 $925 Oregon Education Technology Consortium 8995 SW Miley Rd., #101 Wilsonville, OR 97070 $1,538 Oregon State University Conference Services 102 Buxton Hall Corvallis, OR 97331 $1,962 Our Lady of Sorrows Catholic Church 5221 SE Knight Portland, OR 97206 $3,000 Rev. Wayne Forbes 7007 SW 46th Avenue Portland, OR 97219 $2,000 Sacred Heart Catholic Church 2411 Fifth Street Tillamook, OR 97141 $3,000 St. John Fisher Catholic Church 7007 SW 46th Avenue Portland, OR 97219 $1,000 St. Joseph School 630 W. Stanton Street Roseburg, OR 97470 $10,000 State Department of Oregon-Employment 875 Union Street NE Salem, OR 97311-0100 $25,000 United Pipe & Supply Co. P.O. Box 66490 Portland, OR 97290 $1,623 B. List Of The Debtor's 20-Largest Tort Litigation Creditors Creditor Claim Amount -------- ------------ B M L c/o Bradley O. Baker, Esq. 15545 Village Park Ct. Lake Oswego, OR 97034 $10,100,000 B V c/o Daniel J. Gatti, Esq. Gatti, Gatti, Maier, Krueger Sayer & Assoc. 1781 Liberty St. SE Salem, OR 97302 $7,000,000 C B c/o William A. Barton, Esq. Barton & Strever PC 214 Coast Highway P.O. Box 870 Newport, OR 97365 $135,050,000 Charles Naylor c/o Daniel J. Gatti, Esq. Gatti, Gatti, Maier, Krueger Sayer & Assoc. 1781 Liberty St. SE Salem, OR 97302 $7,000,000 Curtis Grecco c/o Daniel J. Gatti, Esq. Gatti, Gatti, Maier, Krueger Sayer & Assoc. 1781 Liberty St. SE Salem, OR 97302 $7,000,000 D S c/o Daniel J. Gatti, Esq. Gatti, Gatti, Maier, Krueger Sayer & Assoc. 1781 Liberty St. SE Salem, OR 97302 $7,000,000 Douglas De Jong c/o Daniel J. Gatti, Esq. Gatti, Gatti, Maier, Krueger Sayer & Assoc. 1781 Liberty St. SE Salem, OR 97302 $7,000,000 Earl New c/o Daniel J. Gatti, Esq. Gatti, Gatti, Maier, Krueger Sayer & Assoc. 1781 Liberty St. SE Salem, OR 97302 $7,000,000 G M c/o David L. Slader, Esq. 806 SW Broadway, Suite 400 Portland, OR 97205 $10,800,000 Greg Farris c/o Gary A. Bisaccio, Esq. 2125 SW 4th Avenue, Suite 600 Portland, OR 97201 $20,025,000 J C M c/o Kelly Clark, Esq. O'Donnell & Clark LLP 1706 NW Gisan St., Suite 6 Portland, OR 97209 $5,100,000 J D c/o David L. Slader, Esq. 806 SW Broadway, Suite 400 Portland, OR 97205 $24,300,000 J Doe 12 c/o Kelly Clark, Esq. O'Donnell & Clark LLP 1706 NW Gisan St., Suite 6 Portland, OR 97209 $36,500,000 John Smith c/o Kelly Clark, Esq. O'Donnell & Clark LLP 1706 NW Gisan St., Suite 6 Portland, OR 97209 $5,100,000 K N c/o David L. Slader, Esq. 806 SW Broadway, Suite 400 Portland, OR 97205 $10,800,000 L D c/o J. William Savage, Esq. Rieke & Savage PC 620 SW Fifth Avenue, Suite 1125 Portland, OR 97204 $10,200,000 M F c/o Kelly Clark, Esq. O'Donnell & Clark LLP 1706 NW Gisan St., Suite 6 Portland, OR 97209 $9,200,000 M M c/o Kelly Clark, Esq. O'Donnell & Clark LLP 1706 NW Gisan St., Suite 6 Portland, OR 97209 $5,050,000 P C c/o Scott Beckstead, Esq. 1310 SW Corona Ct. P.O. Box 700 Waldport, OR 97394 $10,200,000 Rodney Kessler c/o Daniel J. Gatti, Esq. Gatti, Gatti, Maier, Krueger Sayer & Assoc. 1781 Liberty St. SE Salem, OR 97302 $7,000,000 CHALK MEDIA: Partners With Samsung For Online Training Site ----------------------------------------------------------- Chalk Media Corp. announces the launch of "theSAMSUNGWAY.ca" online training site. Samsung Electronics Canada Inc. has partnered with Chalk Media to create customized interactive online training courses for Samsung's internal employees and external channel sales partners, such as Future Shop. The innovative online training site, theSAMSUNGWAY.ca, acts as a web-based learning portal that allows sales representatives to learn product and service information in a compelling and interactive environment. Each course teaches the key features, benefits and technologies of Samsung's products as well as sales strategies and tools which will help to show and sell the products. theSAMSUNGWAY.ca also incorporates an AIR MILES(R) Rewards incentive program, whereby participants earn AIR MILES reward miles upon the completion of each interactive training module. The AIR MILES reward miles are then automatically calculated and transferred to the participant's AIR MILES Collector Account. "We are excited to implement online training programs for employees and sales partners and see this type of training as a crucial part of our sales and training strategy for the future," said Andrew Dorcas, Channel Marketing Manager, Samsung Electronics Canada Inc. To date, Chalk Media has launched four interactive course modules for Samsung, and additional learning modules will be offered this year. About Samsung Electronics Canada Inc. Samsung Electronics Canada Inc. is the Canadian-based subsidiary of Samsung Electronics Canada Ltd. of Korea, a major global manufacturer of innovative telecommunications products, consumer electronics, computers and peripherals and semiconductors, with fully-integrated sales, service and marketing activities in 47 countries and R&D activities in 13 research centers around the world. For more information on Samsung Electronics Canada Inc. Samsung products, visit the company's web site at http://www.samsung.ca/ About Chalk Media Corp. Chalk Media (TSX-V: CKM) -- whose March 31, 2004 balance sheet shows a deficit of C$416,886 -- produces network television & in- flight entertainment programming and online training & marketing solutions. The company's television shows, ranging from Dave Chalk Computer Show to Dave Chalk Connected, have won many awards and accolades and have built a highly recognizable brand name. Leveraging this brand has allowed the company to build relationships with a blue-chip customer base and provide them with custom online training and marketing solutions. Chalk Media's custom solutions help industry-leading companies communicate more effectively with their customers, distribution partners and employees. With offices in Toronto, Ontario and Vancouver, British Columbia, Chalk Media works with global organizations such as Samsung, Intrawest, TELUS Mobility, RBC Financial, HSBC, Future Shop, Terasen, Verizon, Sony, Bell Canada, Thomson Carswell and Microsoft. CHAS COAL: U.S. Trustee Meeting with Creditors on July 29 --------------------------------------------------------- The United States Trustee will convene a meeting of Chas Coal, LLC's creditors at 11:30 a.m., on July 29, 2004 at the District Courtroom, City Building, 805 S. Main St, Corbin, Kentucky 40701- 1822. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in London, Kentucky, Chas Coal, LLC -- http://www.chascoal.com/-- is a provider of high quality, low sulfur Eastern Kentucky coal. The Company filed for chapter 11 protection on June 17, 2004 (Bankr. E.D. Ky. Case No. 04-60972). Robert Gregory Lathram, Esq., represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $28,080,624 in total assets and $8,601,895 in total debts. CIRTRAN CORP: Wins Two New Major Military Contracts --------------------------------------------------- CirTran Corp. (OTC BB: CIRT), an international full-service contract electronics manufacturer of printed circuit board assemblies, cables and harnesses, reported it has been awarded two new contract wins with one of the largest international military contractors of multiple United States and other foreign government agencies providing turn-key complex cable assemblies used in one of the major foreign projects. The product's end project will be provided to the Israeli government aircraft industries. If permission granted, CirTran will announce the entities and the size of these contracts and more detailed usage of the product. Trevor M. Saliba, executive vice president of worldwide business development of CirTran Corp., commented, "We are very pleased to announce these new contract wins with our strategic partner. We continue to pursue contract opportunities with multiple government agencies either directly or through strategic partners such as this. We are very positive about the opportunities in the coming months and next year." About CirTran Corp. Founded in 1993, CirTran Corp. has established itself as a premier full-service contract electronics manufacturer by building printed circuit board assemblies, cables and harnesses to the most exacting specifications. CirTran is headquartered in Salt Lake City, with a state-of-the-art 40,000 square foot facility. CirTran also provides "just-in-time" inventory management techniques that minimize the OEM's investment in component inventories, personnel and, related facilities, thereby reducing costs and ensuring speedy time to market. For further information about CirTran, visit the company's Web site located at http://www.cirtran.com/ At March 31, 2004, CirTran Corp.'s balance sheet shows a stockholders' deficit of $4,563,087 compared to a deficit of $4,941,251 at December 31, 2003. COINSTAR INC: Will Webcast Q2 2004 Conference Call on July 29 ------------------------------------------------------------- Coinstar Inc. (NASDAQ:CSTR) will host a conference call on Thursday, July 29, in conjunction with its second quarter earnings release. Earnings will be released at 4:30 p.m. Eastern/ 1:30 p.m. Pacific time after the close of the market on Thursday, July 29. The conference call will be simulcast on the company's Website, and accessible following the live event at http://www.coinstar.com/-- click on about us, investor relations. On the conference call, Coinstar's management will discuss its performance and comment on recent developments. Minimum requirements to listen to the broadcast are: Windows Media Player software; Microsoft Internet Explorer 4.0 or higher or Netscape 4.0 or higher; a computer with a sound card and speakers; and no firewall. About Coinstar Inc. Coinstar Inc. owns and operates a network of nearly 11,000 automated self-service coin-counting machines that provide consumers with a convenient means to convert loose coins into cash. Acquisitions during the past year have laid the foundation for the distribution of a wide variety of prepaid products through point-of-sale and self-service kiosks in over 13,000 drugstores, universities, shopping malls and convenience stores, bringing the total to over 24,000 distribution points throughout the United States, Canada and the United Kingdom. * * * As reported in the Troubled Company Reporter's June 15, 2004 edition, Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Coinstar Inc. The outlook is stable. At the same time, Standard & Poor's assigned its 'BB-' bank loan rating, as well as a recovery rating of '4', to Coinstar's proposed $300 million senior secured credit facilities, comprising a $250 million seven-year term loan due 2011 and a $50 million five-year revolving credit facility due 2009. The '4' recovery rating indicates the expectation for a marginal recovery of principal (25%-50%) in the event of a default. Proceeds of the $250 million term loan will be largely used to fund the cquisition of American Coin Merchandise Inc. Coinstar signed a definitive agreement to acquire ACMI for $235 million, representing about 7.3x ACMI's March 31, 2004 last-12-month EBITDA of $32 million. "The ratings on Coinstar reflect significant customer concentration, the relatively short-term nature of its contracts with retail partners, higher operating risks at ACMI, and potential risks integrating this operation," said Standard & Poor's credit analyst Ana Lai. "These risks are partly mitigated by the company's relatively efficient proprietary coin processing technology, positive operating performance, and adequate credit protection measures." CONSOLIDATED TRAVEL: Enters into Merger Pact with Knobias Holdings ------------------------------------------------------------------ Consolidated Travel Systems, Inc. (OTCBB: COVSA) announced that it has entered into an Agreement and Plan of Reorganization with Knobias Holdings, Inc., an innovative provider of complete financial market intelligence and applications to industry professionals, financial portals, and individual investors, providing for the reverse acquisition of Consolidated by Knobias. As a result of the acquisition, the directors and officers of Knobias will become directors and officers of Consolidated, Consolidated will change its name to "Knobias, Inc.," and it is expected that the Consolidated trading symbol will be changed to better reflect the new name. Pursuant to the merger agreement, Consolidated will acquire all of the outstanding shares of Knobias, which will be converted into the right to receive common stock of Consolidated after the merger. At the time of the merger agreement, Knobias and Consolidated also entered into an agreement with Duncan Capital Group, LLC, pursuant to which Duncan Capital has agreed to contribute to Knobias all of Duncan's interest in the Duncan- Knobias joint venture, Kollage, LLC, in exchange for common stock of Consolidated. The pre-reverse acquisition stockholders of Consolidated will retain approximately 5% of the Consolidated stock, after giving effect to a one for three reverse stock split, to be effected by Consolidated immediately prior to the merger. Stockholders of Consolidated who currently own approximately 83% of the outstanding common stock of Consolidated have entered into agreements with Knobias pursuant to which they have agreed to vote in favor of the transaction. Completion of the reverse acquisition is conditioned upon, among other things, completion of satisfactory due diligence, approval by the stockholders of Knobias, the filing by Consolidated of a definitive information statement with the Securities and Exchange Commission, the completion by Knobias of financing in the amount of at least $2 million, and other customary conditions. Knobias Holdings, Inc. is a financial information services provider that has developed financial databases, information systems, tools and products following over 14,000 U.S. equities. Primarily through it's wholly owned subsidiary, Knobias.com, LLC, Knobias markets its products to individual investors, day-traders, financial oriented websites, public issuers, brokers, professional traders and institutional investors. Knobias offers a range of financial information products from multiple Knobias and third party databases via a single, integrated internet based platform. Knobias is capable of combining third party databases, news feeds and other financial content with internally generated content and analysis to create value-added, cost effective information solutions for all market participants. Its principal executive offices are located at 875 Northpark Drive, Ridgeland, MS 39157, and its telephone number is (601) 978-3399. Information about Knobias and its products and services can be found at http://www.knobias.com/ "We are very excited about the opportunity this presents Knobias in aligning with the proper strategic partners to move forward with the introduction of our Kollage, LLC based products to the marketplace," stated Knobias CEO, Key Ramsey. Consolidated Travel Systems, Inc. has engaged in only sporadic business operations and is deemed a development stage company. It is not currently engaged in any substantial activity other than the search for a possible merger or acquisition candidate. Information about Consolidated can be found in its public filings that can be accessed electronically by means of the Securities and Exchange Commission's website -- http://www.sec.gov/-- as well as from the offices of the SEC. Consolidated's principal executive offices are located at 56 West 400 South, Suite #220, Salt Lake City, Utah 84101, and its telephone number is (801) 322-3401. At March 31, 2004, Consolidated Travel's balance sheet shows a stockholders' deficit of $35,674 compared to a deficit of $32,099 at December 31, 2003. CRITICAL PATH: Shareholders Okay $77MM Debt-to-Equity Conversion ---------------------------------------------------------------- Critical Path, Inc. (Nasdaq:CPTH) announced that at a special meeting held on July 2, 2004, shareholders approved all proposals described in its Proxy Statement dated May 5, 2004, including the conversion of approximately $77 million of outstanding debt into preferred equity of the company. Of the shareholders that submitted votes, approximately 90% voted in favor of the proposals. The company expects to complete the debt-to-equity conversion as soon as possible. Following the debt-to-equity conversion, the company will have reduced its remaining convertible notes outstanding to approximately $5.6 Million. Other than deferred revenue, capital leases and obligations in the ordinary course of business, the company will have no other long- term liabilities. Subscription rights to purchase up to $21 million of Series E Preferred Stock of Critical Path in the previously announced rights offering will be freely transferable, separate from the shares of common stock of the Company, beginning today, July 6, 2004. The rights offering will conclude on July 16, 2004. The dealer-manager for the rights offering is Perseus Advisors, LLC, who can be reached at 415-318-3600. Additional copies of the prospectus and subscription documents for the rights offering can be obtained by writing to the information agent, Georgeson Shareholder Communications, Inc., 17 State Street, 10th Floor, New York, NY 10004, or by calling toll-free, 800-843-1451. Georgeson Shareholder Communications, Inc. will also answer questions and provide assistance concerning the subscription process. A post-effective amendment to the registration statement relating to these securities has been filed with the Securities and Exchange Commission and has been declared effective. The rights offering will only be made by means of a prospectus. This press release shall not constitute an offer to sell or a solicitation of an offer to buy any securities in the rights offering, nor shall there be any sale of any securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. About Critical Path, Inc. Critical Path, Inc. (Nasdaq:CPTH) is a global provider of digital communications software and services, headquartered in San Francisco. More information is available at http://www.criticalpath.net/ At March 31, 2004, Critical Path's balance sheet shows a stockholders' deficit of $90.6 million compared to a deficit of $77.2 million at December 31, 2003. CVF TECHNOLOGIES: Faces Possible Delisting From AMEX ---------------------------------------------------- CVF Technologies Corporation (Amex: CNV) has received notice from the American Stock Exchange (AMEX) Listing Qualifications Staff that CVF is no longer eligible to remain listed on the AMEX, subject to a meeting with the Listing Qualifications Panel at the end of August (or early September). At that time CVF can present its case for a continued listing. The notice from the Staff indicates that CVF does not meet the following listing standards: 1. Section 1003 (a)(i) of the Amex Company Guide in that its stockholders' equity is less than $2 million and it has sustained losses from continuing operations and/or net losses in two of its three most recent fiscal years. 2. Section 1003 (a)(ii) of the Amex Company Guide in that its stockholders' equity is less than $4 million and it has sustained losses from continuing operations and/or net losses in three of its four most recent fiscal years. 3. Section 1003 (a)(iii) of the Amex Company Guide in that its stockholders' equity is less than $6 million and it has sustained losses from continuing operations and/or net losses in five most recent fiscal years. 4. Under Section 1003 (a)(iv) of the Amex Company Guide, in its opinion CVF's financial condition (based on its GAAP consolidated financial statement) raises substantial doubt about the company's ability to continue in the normal course of business as a going concern, as has already been disclosed in CVF's prior filings. CVF has stated in its prior filings that its primary need for cash is to maintain its ability to support the operations and ultimately the carrying values of certain of its investee companies, which currently are experiencing negative cash flows. This statement clearly does not apply to Biorem, which reported $1.3 million in profit in fiscal year 2003 and which CVF currently owns 64% and GemprintTM, which has been self-supporting for the last 2 1/2 years. CVF will continue to trade on the AMEX until the committee has rendered its decision, expected two days after the meeting at the end of August or early September. There can be no assurance that the committee will support CVF's position for continued listing, which is described below. CVF has taken the position that since the non-consolidated statements are the basis of how the company files its tax returns and would also be the primary methodology for bank financing evaluation, that therefore they should be used as the main criteria for deciding CVF's continued listing standards as well. CVF believes that because of its unusual corporate structure, namely that of a publicly traded venture capital company, with a combination of early and later stage companies, it should be treated differently for purposes of assessing its financial strengths. When CVF was a private venture capital company it always reported to its shareholders on a non-consolidated basis and the Company strongly believes that the AMEX should use that same standard for judging our financial status. This will be the basis for its appeal to the Listing Qualifications Panel. However, there can be no certainty that CVF's position will be accepted by the Panel. In the meantime, CVF is exploring ways to increase the liquidity of its stock trading. In this regard, CVF has noticed a significant increased level of interest from Canadian financial institutions and investors over the last several months, particularly because of the success of Biorem. Since most of CVF's companies are based in Canada, CVF believes that a dual listing on a Canadian stock exchange would be appropriate at this time, along with a continued listing on the AMEX, or NASD OTC Bulletin Board, if required. We believe this dual listing could provide increased liquidity for both our U.S. and Canadian shareholders. Therefore CVF is now exploring the possibility of listing on a Canadian exchange. In conclusion, no matter what exchange CVF trades on, its stock price will ultimately be determined by the strength of the fundamentals of its portfolio companies. Those fundamentals are rapidly improving, principally as a result of the financial strength of Biorem which is now enjoying its third year of financial profitability ($1.3 million net profit in the fiscal year ending December 31, 2003), and strong revenue growth. As we have already indicated in a prior press release, CVF will in the future begin producing a pro-forma non-consolidated balance sheet that will help give a clearer picture of its financial strength then is found in its current consolidated GAAP financial statements. The draft non-consolidated financial statements have indicated a net asset value of at least $0.85 per share and this value is expected to increase significantly as a result of the internal growth of its portfolio companies or if some of them go public in the next year or two. CVF Technologies Corporation is headquartered in Williamsville, New York. CVF is a technology development company, whose principal business is sourcing, funding and managing emerging pre-public technology companies with significant market potential. Founded in 1989, CVF's holdings include four companies involved in environmental products and services, and one company focused on information technology. At March 31, 2004, CVF Technologies Corporation's balance sheet shows a stockholders' deficit of $2,700,943 compared to a deficit of $3,732,580 at December 31, 2003. DAS INTERNATIONAL: First Creditors' Meeting Convenes on July 20 --------------------------------------------------------------- The United States Trustee will convene a meeting of D.A.S. International Medica MA's creditors at 10:00 a.m., on July 20, 2004 in Room 2610 at 725 South Figueroa St., Los Angeles, California 90017. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Los Angeles, California, D.A.S. International Medical Marketing, Ltd., filed for chapter 11 protection on June 10, 2004 (Bankr. C.D. Calif. Case No. 04-22972). Stephanie L. Krafchak, Esq., at Kradchak & Associates represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated assets of $10 million and estimated debts of over $1 million. DUANE READE INC: S&P Lowers Corporate Credit Rating to B from B+ ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its outstanding ratings on Duane Reade Inc. The corporate credit rating was lowered to 'B' from 'B+'. All ratings were removed from CreditWatch, where they were placed with negative implications on Dec. 23, 2003. The ratings outlook is stable. At the same time, Standard & Poor's assigned its 'CCC+' rating to Duane Reade Inc.'s proposed $195 million senior subordinated notes due 2011. A 'B' bank loan rating was assigned to the $155 million term loan due 2010, to be issued by Duane Reade Inc. A recovery rating of '2' also was assigned to the term loan, indicating the expectation of a substantial (80%-100%) recovery of principal in the event of a default. A 'B+' rating was assigned to the $250 million revolving credit facility due 2008, to be issued by Duane Reade. A recovery rating of '1' also was assigned to the revolver, indicating a high expectation of full recovery of principal in the event of a default. Duane Reade Inc. is a subsidiary of the holding company and Duane Reade is the operating company. Upon completion of the recapitalization, Duane Reade Inc. and Duane Reade will be co-obligors of the subordinated notes and will each guarantee the other's obligations under the bank facilities. Proceeds from the offerings, together with borrowings under the credit facilities and an equity investment by Oak Hill Capital Partners, will be used to effect a recapitalization of the company. Oak Hill will own approximately 83% of Duane Reade on a fully diluted basis, with management retaining the remaining interest. The currently outstanding $280 million of existing debt will be defeased, and the rating on this debt will be withdrawn in August 2004, when it is expected to be called. "The downgrade is attributable to the company's increased debt leverage and weakened credit protection measures as a result of the merger," said Standard & Poor's credit analyst Diane Shand. "Ratings on Duane Reade reflect the company's leveraged capital structure, thin cash flow protection measures, and narrow geographic focus. These weaknesses are partially offset by its good market position in the favorable chain drugstore industry." New York, New York-based Duane Reade is one of the largest drug chains in the metropolitan area; more than half of its 247 stores are in Manhattan. The company is the market leader in the New York area, with a 27% market share according to the National Association of Chain Drug Stores. CVS Corp. and Rite Aid Corp. are close competitors, with market shares of 24% and 21%, respectively. EBLE LAND DEVT: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Eble Land Development, LLC 16 Adams Drive Burlington, New Jersey 08016 Bankruptcy Case No.: 04-32442 Chapter 11 Petition Date: July 6, 2004 Court: District of New Jersey (Camden) Debtor's Counsel: Christine M. Gravelle, Esq. Markowitz, Gravelle & Schwimmer 3131 Princeton Pike Lawrenceville, NJ 08648 Tel: 609-896-2660 Total Assets: $1,025,000 Total Debts: $908,561 Debtor's 11 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Lucas Real Estate $76,848 Marlin Leasing Equipment leases $52,196 PSE&G Utility $2,500 Vector Security Security equipment $2,500 Nicholson Associates $2,300 Parker McCay & Criscuolo, PA $1,700 Adam's Electrical $1,500 Contractors, LLC Hutchinson Plumbing & $750 Heating New Jersey American Water Co Water services $500 Republic Services of NJ, Inc Trash removal $500 U.S. Small Business Unknown Administration EDISON INTERNATIONAL: Board Amends Bylaws for Share Issuance ------------------------------------------------------------ On May 20, 2004, the Board of Directors of Edison International amended provisions of Edison International's Bylaws to allow Edison International to issue uncertificated shares and to delete certain outdated references. Based in Rosemead, California, Edison International (NYSE: EIX) (S&P, BB+ Corporate Credit and Senior Unsecured Debt Ratings, Stable) is the parent company of Southern California Edison, Edison Mission Energy and Edison Capital. ENRON CORPORATION: Objects to Various Employee Claims ----------------------------------------------------- The Enron Corporation Debtors object to 717 Claims filed by former and current employees because: (a) for 19 Claims aggregating $762,292, the claimant signed a release or waiver for its claim; (b) for 534 Claims aggregating $33,252,701, the Debtors' records show no amount is due to the claimants. Among these Claims are: Claimant Claim No. Amount -------- --------- ------ Christopher F. Calger 1863204 $1,060,000 Gerald H. Christensen 1913000 615,877 Mark Dana Davis, Jr. 1616301 1,240,000 JJ Finnegan 794200 522,100 Mark E. Haedicke 2460400 1,900,000 JP Guinane 1249900 780,090 Wes Nyberg 696200 1,385,354 C.W. Radda 749000 576,112 Donald P. Schroeder, Jr. 1697201 850,000 Hunter Shivery 1653805 1,675,000 Washington G. Thompson 1192000 1,750,000 James W. White 790500 632,386 Othol P. White 742400 598,266 (c) for 21 Claims aggregating $1,615,021, the claimant was not an employee of any Debtor or the liability claims was not a liability of any Debtor; (d) for 80 Claims aggregating $1,769,087, the claimant failed to provide sufficient proof to support the claim and the Debtors' records indicate that no amount is due; (e) for six Claims, the claimant failed to state an amount on the proof of claim and the Debtors' records indicate that no amount is due; and (f) for 57 Claims aggregating $15,218,956, the partial basis of the claim has been duplicated and either will be or has already been resolved on a related claim. Among the largest of these Claims are: Claimant Claim No. Amount -------- --------- ------ Alvin Alexanderson 2461600 $2,894,938 James Crowder 1796601 678,474 Steven Elliott 1774401 3,379,706 Leonard Girard 942900 1,708,795 Gayle W. Muench 1391402 523,476 Julian D. Petersen 1137401 609,899 The Debtors ask the Court to disallow and expunge the Employee Claims. (Enron Bankruptcy News, Issue No. 115; Bankruptcy Creditors' Service, Inc., 215/945-7000) ENRON DEVELOPMENT: Enters Into Telecom MHC Loan Settlement Pact --------------------------------------------------------------- Pursuant to Promissory Note 273, dated as of August 8, 2000, Enron Development Funding, Ltd., advanced, from time to time, $18,534,946 in aggregate principal amount to Telecom MHC Ltd., a non-debtor subsidiary of Enron India Telecom, Ltd. The principal and accrued interest outstanding on the Loan as of December 31, 2003 is believed to be $19,993,014. Martin A. Sosland, Esq., at Weil, Gotshal & Manges, LLP, in New York, relates that the Loan proceeds were invested in Telecom's subsidiary, Broadband Solutions Private Limited. On March 27, 2002, Telecom sold all of its equity interest in Broadband Solutions to Reliance Data Exchange Private Limited for $1,400,000. The Sale Proceeds are on deposit in an interest- bearing account with JPMorgan Chase Bank. Mr. Sosland tells the Court that the Debtors have determined that Telecom should be wound-up and dissolved. As the Settlement Proceeds are the only known assets of Telecom and EDF is its only creditor, by entering into a settlement agreement, EDF and Telecom are facilitating Telecom's orderly liquidation. Mr. Sosland reports that EDF and Telecom have engaged in extensive, arm's-length and good faith negotiations and discussions concerning all issues regarding the Note. The parties agree that: (a) Telecom will pay EDF $1,186,112 plus interest earned, and assign certain assets to EDF; (b) If Telecom presently owns or is entitled to further assets it is currently unaware of, it will also assign to EDF all rights and title to the After Acquired Assets; (c) Both parties release each other from any further claims, obligations, demands, actions and liabilities relating to the Loan; (d) On the Payment Date, to the extent either Party has filed any proofs of claim related to the Loan in either the U.S. Bankruptcy Court or the Cayman Court, the filing Party agrees to withdraw them immediately and furnish the other party with the appropriate documentation reflecting the withdrawal. Pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure, EDF sought and obtained the Court's authority to enter into the Settlement Agreement and implement it in accordance with its terms. (Enron Bankruptcy News, Issue No. 115; Bankruptcy Creditors' Service, Inc., 215/945-7000) ENVIRONMENTAL LAND: Section 341(a) Meeting Slated for July 19 ------------------------------------------------------------- The United States Trustee will convene a meeting of Environmental Land Technology, Ltd.'s creditors at 2:00 p.m., on July 19, 2004 in the U.S. Trustee's Meeting Room at 1110 Vermont Avenue, NW Room 210, Washington, DC 20005. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Washington, District of Columbia, Environmental Land Technology, Ltd., filed for chapter 11 protection on June 8, 2004 (Bankr. D.C. Case No. 04-00926). Donald A. Workman, Esq., at Foley & Lardner represent 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 over $50 million. EQUITY NORTHWOODS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Equity Northwoods Park Limited Partnership 3355 Richmond Road, Suite 231A Beachwood, Ohio 44122 Bankruptcy Case No.: 04-39574 Chapter 11 Petition Date: July 6, 2004 Court: Southern District of Texas (Houston) Judge: Marvin Isgur Debtor's Counsel: Patrick D. Devine, Esq. Ware Snow et al. 2929 Allen Parkway, 42nd Floor Houston, TX 77019 Tel: 713-659-6400 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Ned S. Weingart, Trustee $593,850 17480 Shelburne Road Cleveland, OH 44118 Southwest Equity of America, Inc. $584,713 3355 Richmond Road, Suite 231 Beachwood, OH 44122 Equity Northwoods Park LP Ltd. Partners $191,400 A/W Mechanical Services, LP $64,190 Provident Bank $64,000 Reliant Energy $32,730 Equity Colorado Phase Two, Ltd. $22,135 Kochman, Jackson & Krantz $13,642 R.I.A. Pensacola Limited Partnership $11,323 T & W Construction $5,479 Nationwide Janitorial Corp. $5,035 Equity Beachwood Limited Partnership $5,000 Pristine Systems $4,589 Equity Planning Commission $2,929 Independent Pump Repair $1,895 Gowan, Inc. Mechanical Services $1,347 Equity Planning Corporation $1,235 Duvin, Cahn & Hutton $1,157 Diana Rodriguez $861 Simplex Grinnell $800 FLEMING COMPANIES: Moves To Settle 26 Reclamation/Avoidance Suits ----------------------------------------------------------------- The Fleming Companies, Inc. Debtors intend to settle the reclamation claims, deduction claims, overwire claims, and lawsuits to recover allegedly preferential transfers with these creditors: (1) Cains Foods, LP Cains asserts a reclamation claim for $3,772.70, and a general, unsecured claim for $4,372.84, for a total claim of $8,145.54, against Fleming. Fleming asserts a preference claim against Cains for $7,162.20. The parties agree to settle by signing mutual releases. (2) Caravan Products Co., Inc. Caravan's reclamation claim against Fleming is $5,399.92, and Fleming's preference claim against Caravan is $5,025.17, with an overwire claim for $4,528.03. As settlement, Caravan will pay Fleming $4,528.03, and the parties will exchange mutual releases and waive all claims. (3) Chipper Beef Jerky Chipper asserts a $5,503.68 reclamation claim against the Debtors. Fleming asserts a preference claim for $4,793.40. In settlement, Chipper will pay Fleming $3,833.84. Chipper's reclamation claim will be reclassified as a general unsecured claim. Fleming releases and waives its claims against Chipper. (4) Lidestri Foods, Inc. Lidestri, formerly known as Cantisano Foods, Inc., asserts a $4,565.88 reclamation claim. Fleming, on the other hand, asserts that it is owed: -- $22,384.87 as a recoverable preference; -- $45,666.00 for overwires; -- $1,234.58 as a postpetition deduction; and -- $1,662.64 for prepetition deductions. In settlement, Lidestri will pay Fleming $10,000, and the parties will exchange mutual releases and a waiver of all claims. (5) Future Foods, Ltd. Future Foods asserts a priority claim against Fleming for $5,505.96, and reclamation claims for $27,763.46. Fleming asserts a preference claim against Future Foods for $40,000.99. As settlement, the parties agree to reclassify Future Foods' priority and reclamation claims to general, unsecured, non- priority status. Future Foods will receive an allowed unsecured claim for the total of the two original claims, and the parties exchange releases and waivers. (6) Turtle Wax, Inc. Turtle Wax asserts that Fleming owes it $2,933.83 as reclamation claim. Fleming asserts a preference claim against Turtle Wax for $13,174.65. In settlement, Turtle Wax will pay Fleming $5,000, and the parties exchange releases and waivers. (7) Twin City Poultry Co. TCPC asserts a reclamation claim against Fleming for $6,462.61, and Fleming counters with a preference claim for $2,131.89. In settlement, TCPC will pay Fleming $1,000, and agree to the reclassification of its reclamation claim as a general, unsecured claim in the stated amount. The parties exchange mutual releases and waivers. (8) Uno Foods, Inc. Uno filed a reclamation claim for $10,324. Fleming asserts a preference claim against Uno for $24,435 and an overwire claim for $4,690.50. In settlement, Uno will pay Fleming $6,690.50 and waive its reclamation claims. Uno, however, reserves its general unsecured claims. With the exception of Uno's reserved claims, both parties exchange releases and waivers. (9) Westchester Fire Insurance Co. Westchester filed a reclamation claim against Fleming regarding tax stamps that it believed could be subject to reclamation rights. In January 2004, Westchester and Fleming settled Fleming's preference action against Westchester and, in so doing, Westchester implicitly released its reclamation claims. Accordingly, Westchester now formally withdraws the reclamation claim. (10) Shamrock Foods Co. Shamrock's reclamation claims total $32,378.23, and Fleming's preference claim is for $2,995.48. In addition, Fleming asserts a postpetition deduction claim for $56.97, and a prepetition deduction claim for $21,022.31. In settlement, the parties content themselves with exchanging releases and waivers. (11) Dairy Maid Foods, a Division of Shamrock Foods Co. Dairy Maid says it is owed $4,794.17 as a reclamation claim. Fleming says Dairy Maid owes it $373.86. Both parties settle by exchanging mutual releases and waivers. (12) Ferrara Pan Co. Ferrara's reclamation claims amount to $19,716.20, and Fleming's preference claims total $12,476.21. In addition, Fleming also asserts a postpetition deduction claim for $663.51, and a prepetition deduction claim for $4,993.16. In settlement, the parties agree to reclassify the $6,246.30 portion of Ferrara's reclamation claim as an administrative claim. With the exception of the administrative claim, the parties agree to mutual releases and waivers. (13) Topco Associates, LLC Topco's reclamation claim against Fleming is for $161,984.34, and Fleming counters with a preference claim for $17,346.42. As settlement, Topco will pay Fleming $17,000, and both parties sign mutual releases and waive all claims. (14) Certified Foods Corp. Certified asserts a reclamation claim for $475,482.64 against Fleming. However, Fleming asserts: -- a preference claim for $158,330.24; -- an overwire claim for $349,715.43; and -- a postpetition deduction claim for $29,893.20. To settle their disputes, Certified will pay Fleming $377,102.34, and both parties will sign the usual releases and waivers. (15) Trailblazer Food Products Trailblazer asserts a reclamation claim against the Debtors for $2,340.31. Fleming counters with a preference claim for $3,375.30. Both parties sign mutual releases and waivers to settle the dispute. (16) J&D Foods, Inc. J&D's reclamation claim is for $7,756.25, and Fleming's preference claim is for $7,756.25. To settle the claims, J&D waives its reclamation claim against Fleming and signs a release. In turn, Fleming releases its preferential action against J&D and signs a waiver. (17) Ore-Cal Corp. Ore-Cal, also known as Harvest of the Sea, asserts a reclamation claim against Fleming for $7,546.20. Fleming did not assert any claims against Ore-Cal. Nonetheless, Ore-Cal waives its reclamation claim against Fleming, and both parties sign releases and waivers, to settle the issue. (18) Roaring Spring Water Roaring's reclamation claim is for $2,131.50, against which Fleming asserts a preference claim for $2,883.49. Both settle by signing releases and waivers. (19) Petro-Chem Transport, Inc. Fleming asserts a preference claim against Petro-Chem for $11,498.36. The parties agree to settle the Claim by a mutual release and waiver. (20) Barber Produce, Inc. Barber Produce and Fleming agree to settle Barber Produce's reclamation claim for $33,900 and Fleming's (i) preference claim for $50,960, (ii) postpetition deduction claim for $371.58, and (iii) prepetition deduction claim for $30,300. The parties mutually release each other and waive all claims. (21) Star Mfg. International, Inc. Star filed a reclamation claim for $7,427.95 against Fleming. In turn, Fleming asserted a preference claim for $1,873.55. To settle the dispute, Star agrees to pay Fleming $1,873.55 and the parties mutually release each other. Star also waives its reclamation claim. (22) JTI-Macdonald Corp. Fleming disputes JTI's reclamation claim for $1,990,612.67. Fleming further asserts a preference claim against JTI for $184,501.84. In settlement, each party releases and waives its claim against the other. However, JTI reserves its right to pursue any unsecured creditor claim that it may have against Fleming. (23) Revlon Revlon's reclamation claim totals $2,204.88, and Fleming's preference claim is for $2,464.88. As settlement, Revlon agrees to pay Fleming $1,500, and both parties sign mutual releases and waivers. (24) Gold Kist, Inc. Gold Kist asserts a reclamation claim for $444,266.38, against which Fleming counters with a postpetition deduction claim for $12,068.36 and a prepetition deduction claim for $3,382.74. As settlement, Gold Kist agrees to pay Fleming $15,931.10, and both sign the customary releases and waivers. (25) American Safety Razor Co. ASR has a cutting reclamation claim for $16,465.68, which Fleming overtops with (i) a preference claim for $56,324.46, (ii) an overwire claim for $15,282.26, (iii) a postpetition deduction claim for $30,355.85, and (iv) a prepetition deduction claim for $12,355. As settlement, ASR will pay Fleming $85,663.04, and both parties will sign releases and waivers. (26) Kawamata Farms, LLC Kawamata Farms has a reclamation claim against Fleming for $15,124.48. Fleming has a preference claim for $4,807.40 and a prepetition deduction claim for $13,933.50. Both parties agree to settle by signing a mutual release and waiver of all claims. 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. 37; Bankruptcy Creditors' Service, Inc., 215/945-7000) FLEMING COS: Wants Court Nod on Calif. Board of Equalization Pact ----------------------------------------------------------------- The Fleming Companies, Inc. Debtors ask the Court to approve an Agreement Resolving Prepetition Tax Liabilities, Authorizing Draws on Surety Bonds to Pay Prepetition Tax Liabilities, Releasing Letters of Credit and Resolving Preference Actions with the State Board of Equalization for California. Greenwich Insurance Company, Hartford Fire Insurance Company and Hartford Casualty Insurance Company, Travelers Casualty and Surety Company of America, Westchester Fire Insurance Company, and Fidelity & Deposit Co. of Maryland, a subsidiary of Zurich North America Insurance Company, are all sureties for obligations of the Debtors to the State, and are parties to the settlement. Before the bankruptcy petition date, Fleming Companies, Inc., and Core-Mark International, Inc., sold and distributed cigarettes and tobacco products wholesale in California. The State permitted Fleming and Core-Mark to buy cigarette and tobacco tax stamps and meter settings on a deferred-payment basis, provided that the Debtors supplied security for their deferred tax obligations. Fleming provided the State with a security by causing Hartford to issue and maintain a $500,000 bond. Core-Mark gave California security by causing all of the Sureties to issue and maintain bonds aggregating $46,000,000. Fleming and Core-Mark signed Indemnity Agreements with each of the Sureties, agreeing to indemnify the Sureties against any losses to the Sureties in connection with the bonds. To secure their indemnity obligations, Fleming and Core-Mark caused their secured lenders to issue Letters of Credit to the Sureties. The Tax Dispute As of the Petition Date, Core-Mark and California agree that Core-Mark owed California $19,683,921.05 for unpaid cigarette and tobacco taxes, and Fleming and California agree that Fleming owed the State $415,605.79 for unpaid cigarette taxes. The taxes came due postpetition, and are for undisputed amounts. California has asserted that, in addition to the undisputed Taxes, it is entitled to collect interest from the due date of the Taxes to and including July 25, 2004, aggregating $2,074,325.42, and postpetition penalties aggregating at least $2,004,039 for non-payment of the Taxes. The State says it has a statutory obligation to proceed against the Debtors to collect the Taxes, interest and penalties before it can proceed against the bonds. Core-Mark, Fleming and the Sureties dispute that California is entitled to either the interest or the penalties. The State owes Core-Mark and Fleming $1,349,504.45 for tax refunds, including interest accrued to and including July 25, 2004. The State agrees that Core-Mark and Fleming may set off their tax refunds against their liabilities to the State for the Taxes. Fleming has brought suits against Hartford, Travelers and Zurich to recover alleged avoidance preferences because these companies caused Fleming to increase the amounts of the Letters of Credit securing Fleming's and Core-Mark's indemnity obligations to the Sureties. Hartford and Travelers have raised various defenses, arguing that, since the Letters of Credit are not assets of the Debtors' estates, an increase in their amount cannot form the basis of an avoidance preference. Zurich sought the dismissal of the action for failure to state a cause of action, and the Debtors are to amend their complaint. Zurich objected to the Debtors' Plan on various bases, including issues relating to the bonds. The Settlement Agreement The parties have agreed to settle the disputes over the Taxes, including the interest and penalties, the adversary proceedings, and the objection to the Plan, on these terms: (a) California will make claims against the bonds for the Taxes, net of the tax refunds, and the postpetition interest calculated through July 25, 2004. Claims for the Fleming obligations will be made only against the Fleming Bond, and claims for the Core-Mark obligations will be made on a pro rata basis against the Core-Mark bonds: Surety Pro Rata Amount Pro Rata Share ------ --------------- -------------- Greenwich 5.435% $1,106,375.26 Hartford 5,435% 1,106,375.26 Travelers 15.217% 3,097,850.74 Westchester 52.174% 10,621,202.54 Zurich 21.739% 4,425,501.06 --------------- -------------- 100.000% $20,357,304.86 (b) Each Surety, other than Westchester, will: (i) draw against its Letter of Credit in an amount equal to: (A) the claim made for Taxes and interest by California against the bond issued by the Surety; and (B) any reasonable costs and legal fees incurred by the Surety in connection with the Taxes and the negotiation of the Settlement Agreement; and (ii) following receipt of the proceeds of the Letter of Credit, pay the claim for Taxes and interest made by California against the bond; (c) Westchester will: (i) pay the claim for Taxes and interest made by California against Westchester's bond; and (ii) reimburse itself for any reasonable costs and reasonable legal fees incurred in connection with the Taxes and the negotiation of the Settlement Agreement, all without prejudice to other and prior agreements between Westchester and Fleming; (d) Zurich will give written notice to the financial institution issuing its Letter of Credit that it waives and relinquishes any remaining amount of its Letter of Credit, and agrees that the Letter of Credit may be cancelled; (e) Hartford will give written notice to the financial institution issuing its Letter of Credit that the Letter of Credit will be reduced by the same amount that Hartford's exposure is reduced by the exoneration and discharge of the Hartford bonds. Hartford will continue to hold the Letter of Credit in a reduced amount as security for Fleming's and Core-Mark's indemnification obligations relating to the other bonds not yet exonerated and discharged; (f) Each Surety, other than Zurich and Hartford, will give written notice to the financial institution issuing its Letter of Credit that it waives and relinquishes the amount of its Letter of Credit above any potential remaining liability on outstanding bonds; (g) California waives any claims against Fleming, Core-Mark, the Debtors, their directors, officers and employees, the Sureties, or the bonds for the postpetition penalties, any additional claims arising out of the Taxes and the interest, and any additional claims arising out of any cigarette or tobacco taxes incurred or allegedly incurred by the Debtors before the Petition Date; (h) California withdraws with prejudice its proofs of claim based on or relating to the Taxes; (i) The Sureties waive any rights they may have to compel California to proceed against Fleming and Core-Mark to collect the Taxes and interest before California may make claims against the bonds; (j) Zurich withdraws with prejudice any objection to confirmation of the Plan; and (k) The Debtors waive all causes of action against Greenwich relating to avoidances, and dismisses with prejudice the adversary proceedings against the Sureties in connection therewith. The Settlement Agreement should be approved, Christopher J. Lhulier, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub, PC, in Wilmington, Delaware, argues, because the Letters of Credit will be reduced or released, thereby increasing the Debtors' liquidity by at least $7 million upon consummation of the Settlement Agreement, and by more than $17 million over time. This is a benefit to the Debtors' estates roughly equal to the maximum recovery that the Debtors could achieve in the adversary proceedings, without the related costs of litigation. The Official Committee of Unsecured Creditors has reviewed and approved the Settlement as well. 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. 37; Bankruptcy Creditors' Service, Inc., 215/945-7000) FOREST OIL: Plans to Issue Additional $100 Million 8% Senior Notes ------------------------------------------------------------------ Forest Oil Corporation (Forest) (NYSE:FST) announced that it intends to issue, subject to market conditions, an additional $100 million in aggregate principal amount of 8% senior notes due 2011 in a private placement. Forest intends to use the proceeds of the offering to repay indebtedness under its credit facility. The securities to be offered have not been registered under the Securities Act of 1933, as amended, or any state securities laws and, unless so registered, the securities may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Forest Oil Corporation is engaged in the acquisition, exploration, development, and production of natural gas and liquids 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, Texas, Louisiana, Oklahoma, Utah, Wyoming and Alaska, and in Canada. Forest's common stock trades on the New York Stock Exchange under the symbol FST. For more information about Forest, please visit our website at http://www.forestoil.com/ * * * As reported in the Troubled Company Reporter's June 1, 2004 edition, Standard & Poor's Ratings Services said that it lowered its corporate credit and senior unsecured debt ratings on Forest Oil Corp. to 'BB-' from 'BB'. Standard & Poor's also lowered its senior secured bank loan rating on Forest's credit facility due 2005 to 'BB' from 'BB+' and assigned a recovery rating of '1' to the facility. All of the ratings were removed from CreditWatch where they were placed with negative implications on Jan. 27, 2004. The outlook is stable. The ratings downgrade on Forest reflects the company's increasing dependence on acquisitions to offset its faltered frontier development strategy, its high operating cost structure relative to its peers, and its debt leverage that is not commensurate with an acquire-and-exploit strategy. FOSTER WHEELER: More Investors Agree Not to Transfer Securities --------------------------------------------------------------- Foster Wheeler Ltd. (OTCBB: FWLRF) announced that additional investors have agreed not to transfer their Foster Wheeler securities. Including these additional investors' holdings, institutional investors holding 56.8% of the 6.75% senior notes due 2005, 83.7% of the 6.50% convertible subordinated notes due 2007, 91.5% of certain of the Robbins bonds due 2009, and 19.6% of the 9% trust preferred securities have executed agreements not to transfer their securities. While Foster Wheeler has not yet requested these institutional investors to tender their securities in the offer, Foster Wheeler believes they will do so when requested. The amended exchange offer is subject to review by the Securities and Exchange Commission and other regulatory agencies, and revised offering materials will be distributed as soon as practicable. As previously announced, the exchange offer contemplates the issuance of warrants. The holders of the trust preferred securities would be issued five-year warrants to purchase additional voting equity securities representing, at the minimum required participation level for the trust preferred securities, approximately 15% of the Company's fully diluted equity, and the holders of common stock outstanding prior to the closing of the proposed exchange offer would receive a dividend in the form of three-year warrants to purchase additional voting equity securities representing approximately 5% of the Company's fully diluted equity. The warrants would be exercisable commencing one year after the completion of the exchange offer and would have an exercise price equal to the share price at which the holders of the convertible subordinated notes due 2007 who have tendered their notes in the exchange offer receive a par recovery. The Company currently expects the exercise price to be approximately $0.47. The warrants would be in addition to the other previously described voting equity securities to be issued in the exchange offer. The foregoing reference to the proposed registered exchange offer and any other related transactions shall not constitute an offer to buy or exchange securities or constitute the solicitation of an offer to sell or exchange any securities in Foster Wheeler Ltd. or any of its subsidiaries. Investors and security holders are urged to read the following documents filed with the SEC, as amended from time to time, relating to the proposed exchange offer because they contain important information: (1) the registration statement on Form S-4 (File No. 333-107054) and (2) the Schedule TO (File No. 005- 79124). These and any other documents relating to the proposed exchange offer, when they are filed with the SEC, may be obtained free at the SEC's Web site at www.sec.gov. You may also obtain these documents for free (when available) from Foster Wheeler by directing your request to: John A. Doyle; email john_doyle@fwc.com; telephone 908-730-4270; and address Foster Wheeler Inc., Perryville Corporate Park, Clinton, NJ 08809-4000. About Foster Wheeler Foster Wheeler Ltd. -- whose December 26, 2003 balance sheet shows a total shareholders' deficit of $872,440,000 -- is a global company offering, through its subsidiaries, a broad range of design, engineering, construction, manufacturing, project development and management, research and plant operation services. Foster Wheeler serves the refining, oil and gas, petrochemical, chemicals, power, pharmaceuticals, biotechnology and healthcare industries. The corporation is based in Hamilton, Bermuda, and its operational headquarters are in Clinton, New Jersey, USA. For more information about Foster Wheeler, visit http://www.fwc.com/ GE COMMERCIAL MORTGAGE: Assigns Low-B Ratings to 6 Classes ---------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to GE Commercial Mortgage Corp.'s $1.4 billion commercial mortgage pass-through certificates series 2004-C3. The preliminary ratings are based on information as of July 6, 2004. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the trustee, the economics of the underlying loans, and the geographic and property type diversity of the loans. Classes A-1, A-2, A-3, A-4, B, C, D, and E are currently being offered publicly. Standard & Poor's analysis determined that, on a weighted average basis, the pool has a debt service coverage of 1.51x, a beginning LTV of 94.1%, and an ending LTV of 80.2%. Preliminary Ratings Assigned GE Commercial Mortgage Corp. Class Rating Amount ($) A-1 AAA 89,332,000 A-2 AAA 240,728,000 A-3 AAA 221,265,000 A-4 AAA 301,331,000 B AA 32,727,000 C AA- 15,502,000 D A 27,559,000 E A- 15,502,000 X* AAA 1,377,964,535** A-1A AAA 332,393,000 F BBB+ 15,502,000 G BBB 12,057,000 H BBB- 18,947,000 J BB+ 6,890,000 K BB 6,890,000 L BB- 6,890,000 M B+ 5,167,000 N B 5,168,000 O B- 5,167,000 P N.R. 18,947,535 *Interest-only class. **Notional amount. N.R.-Not rated. GREENMAN TECHNOLOGIES: Completes $9M Financing with Laurus Funds ---------------------------------------------------------------- GreenMan Technologies, Inc. (AMEX: GRN) announced that it has completed a new $9 million financing with Laurus Master Fund, Ltd., a New York-based institutional fund that specializes in direct investments in growing small-cap companies. The new $9 million financing consists of a $5 million convertible, revolving working capital line of credit and a $4 million convertible term loan with over $1 million earmarked for full implementation of our new high-volume tire processing facility in Tennessee. Specific details of this transaction can be found in our Form 8-K which will be filed with the Securities and Exchange Commission on July 7, 2004. "The Laurus Funds financing removes the constraints under which we have been operating since the failure of our previous primary lender in February 2003", said Chuck Coppa, GreenMan's Chief Financial Officer. Mr. Coppa added, "This financing provides us with an immediate capital injection that not only allows us to positively impact our working capital situation but also provides the resources necessary to aggressively move forward in efforts to implement our Tennessee project". "We are pleased to have Laurus Funds as our financial partner. Not having our Georgia waste wire processing capability on line for over a year and not having access to the capital necessary to properly implement our Tennessee project has had a significant negative financial impact on our performance", stated Bob Davis, GreenMan's President and Chief Executive Officer. Mr. Davis added, "We now have access to the capital necessary to not only complete our southeastern initiatives, but to address other accretive opportunities as they may arise and lay the groundwork for further corporate growth." GreenMan was founded in 1992 and today comprises a group of eight affiliated companies that collect, process and market over 30 million scrap tires annually in whole, shredded, or granule form. We are headquartered in Lynnfield, Massachusetts, and currently operate size-reduction operations in California, Georgia, Iowa, Minnesota, Oklahoma, and Wisconsin. We also operate under exclusive agreements to supply whole tires to cement kilns in Florida, Georgia, Illinois, Oklahoma, Tennessee, and Texas. * * * Liquidity and Capital Resources In its Form 10-QSB for the quarterly period ended March 31, 2004 filed with the Securities and Exchange Commission, GreenMan Technologies reports: "As of March 31, 2004, we had $473,290 in cash and cash equivalents and a working capital deficiency of $5,115,102. We understand that the continued, successful sales and marketing of our services and products, the introduction of new products, raising additional growth capital and re-establishing continued profitability from operations will be critical to our future liquidity. "Based on our fiscal 2004 operating plan, we believe that available working capital together with revenues from operations, the sale of common stock and Units pursuant to the revised April 2004 private placement, loans from affiliated and unaffiliated lenders, the remaining availability under our exiting working capital lines of credit, the acquisition of machinery and equipment through capital leases and notes payable, and the possible issuance of common stock and common stock options and warrants in lieu of cash for services rendered should be sufficient to meet our cash requirements through fiscal 2004. As noted, we have identified and are currently negotiating with several immediate financing alternatives which, if successful would enhance our financial position and are diligently working to determine the feasibility of each alternative. No assurances can be given that such financing will be concluded in the near future on favorable terms, if at all. If we are unable to obtain additional financing, we will be forced to curtail certain operations." GROOVE VILLAGE: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Grove Village Apts., Ltd. 16610 North Dallas Parkway, Suite 1000 Dallas, Texas 75248 Bankruptcy Case No.: 04-37360 Type of Business: The Debtor is engaged in the business of Real Estate. Chapter 11 Petition Date: July 5, 2004 Court: Northern District of Texas (Dallas) Judge: Steven A. Felsenthal Debtor's Counsel: Christopher J. Moser, Esq. Quilling, Selander, Cummiskey, et al. 2001 Bryan Street, Suite 1800 Dallas, TX 75201-4240 Tel: 214-871-2100 Fax: 214-871-2111 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. HALLIBURTON: Launches First Major Project with National Oilwell --------------------------------------------------------------- Halliburton's (NYSE:HAL) Baroid Product Service Line, in alliance with National Oilwell, announced the launch of their first major project in Mexico under the new Baroid/National Oilwell Alliance to provide solids control and waste management services and equipment at the rig site. Further, the team was recently awarded a solids control and waste management service and equipment contract in Bangladesh while similar operations are already under way in the United States, Venezuela and Brazil. Under all contracts, Halliburton provides all fluids services at the rig site, including field maintenance, while National Oilwell builds and supplies the necessary equipment and systems. The team is working on projects for both land and offshore operations. "Drilling waste management costs are increasing significantly and are expected to continue to rise as global markets demand higher environmental performance," said Simon Seaton, Halliburton's global operations manager for the Baroid Product Service Line. "The alliance allows Baroid to offer comprehensive waste management services and a complete line of state-of-the-art solids control equipment." The alliance between Baroid and National Oilwell, initiated in September 2003, allows Baroid to offer an increased participation in the solids control and drilling waste management market. "The alliance brings together Baroid's broad experience in waste management, environmental compliance, and solids control optimization with National Oilwell's expertise in rig design, solids control and waste management systems," said Tab Tettleton, Global Product Manager for National Oilwell. "The Baroid/National Oilwell Alliance provides significant advantages to our customers, including vastly improved efficiency in solids control equipment and processes." National Oilwell is a worldwide leader in the design, manufacture and sale of comprehensive systems and components used in oil and gas drilling and production, as well as in providing supply chain integration services to the upstream oil and gas industry. National Oilwell's web address is http://www.natoil.com/ Halliburton, founded in 1919, is one of the world's largest providers of products and services to the petroleum and energy industries. The company serves its customers with a broad range of products and services through its Energy Services and Engineering and Construction Groups. The company's World Wide Web site can be accessed at http://www.halliburton.com/ * * * As reported in the Troubled Company Reporter's June 15, 2004 edition, Halliburton (NYSE: HAL) announced that the United States Securities and Exchange Commission (SEC) has commenced a formal investigation into payments made in connection with TSKJ's construction of a natural gas liquefaction facility in Nigeria. TSKJ is a private limited liability company registered in Madeira, Portugal whose members are Technip SA of France, Snamprogetti Netherlands B.V., which is an affiliate of ENI SpA of Italy, JGC Corporation of Japan, and Kellogg Brown & Root, each of which owns 25% of the venture. The United States Department of Justice and the SEC have met with Halliburton to discuss these matters and have asked Halliburton for cooperation and access to information in reviewing these matters in light of the requirements of the United States Foreign Corrupt Practices Act. While Halliburton does not believe that it has violated the Foreign Corrupt Practices Act, Halliburton's own internal investigation of these matters is ongoing and there can be no assurance that government authorities would not conclude otherwise. As previously reported, a French magistrate has been investigating this matter. Representatives of Halliburton have recently met with the French magistrate to express their willingness to cooperate with the investigation. TSKJ and other similarly owned entities have entered into various contracts to build and expand the liquefied natural gas project for Nigeria LNG Limited, which is owned by the Nigerian National Petroleum Corporation, Shell Gas B.V., Cleag Limited (an affiliate of Total), and Agip International B.V. HAYES LEMMERZ: 75 Adversary Cases Reassigned to Judge Lindsey ------------------------------------------------------------- Judge Walrath reassigns 75 more adversary proceedings commenced by the HLI Creditor Trust to Honorable Paul B. Lindsey. (Hayes Lemmerz Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service, Inc., 215/945-7000) HOMECOM COMMUNICATIONS: Going Concern Viability is in Doubt ----------------------------------------------------------- HomeCom Communications Inc.'s financial statements are prepared using generally accepted accounting principles applicable to a going concern, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred significant losses since its incorporation resulting in an accumulated deficit as of March 31, 2004 of approximately $27.9 million. The Company continues to experience negative cash flows from operations. These factors raise doubt about the Company's ability to continue as a going concern. HomeCom's sources of capital are extremely limited. The Company has incurred operating losses since inception and as of March 31, 2004, had an accumulated deficit of $27,886,914 and a working capital deficit of $2,798,300. On March 23, 2001, HomeCom announced its intentions to wind down operations. The Company has entered into an agreement to sell substantially all of the operating assets of its hosting and website maintenance business to Tulix and has entered into an agreement whereby HomeCom licenses certain technologies from Eurotech. If the Company completes the Tulix transaction, HomeCom's primary assets will include cash and accounts receivable that it does not transfer to Tulix, the assets that it licenses from Eurotech, and the consideration that it receives from Tulix in the Asset Sale, consisting primarily of a secured promissory note for $70,000 (although the amount of this note is subject to adjustment) and shares of common stock of Tulix that, when issued, will represent 15% of the outstanding shares of Tulix common stock. Although the Company has pursued financing options it states that it cannot provide assurance that those financing sources, or any other financing that it may obtain in the future (if it is able to obtain financing from any other sources, and the Company provides no assurances that it will be able to obtain any such financing), will enable the Company to sustain its operations. The aforementioned factors raise substantial doubt about the Company's ability to continue as a going concern. HUDSON RESPIRATORY: Teleflex Completes Acquisition -------------------------------------------------- July 6 / Business Wire Teleflex Incorporated (NYSE:TFX) announces the completion of the acquisition of Hudson Respiratory Care, Inc. a leading provider of disposable medical products for respiratory care and anesthesia. With the completion of the acquisition, Hudson becomes part of Teleflex Medical's Medical Products business which designs, manufactures and distributes disposable products for the clinical specialties of anesthesia, respiratory care and urology. Teleflex's agreement to acquire Hudson from entities controlled by Freeman Spogli & Co. and management was previously announced on May 17, 2004. About Teleflex Medical Teleflex Medical, a division of Teleflex Incorporated, is a leading global supplier of disposable medical products, surgical instruments and medical devices. Teleflex Medical markets health care supplies under the Hudson and Rusch brand names and surgical instruments and medical devices under the Beere, CVevolutions, Deknatel, KMedic, Pilling, and Weck brands. The company also offers on-site operating room services for integrated health networks and custom instrument design and manufacture for OEMs. Headquartered in Bannockburn, Illinois, Teleflex Medical employs more than 7,000 people around the world. About Teleflex Teleflex Incorporated (NYSE:TFX) is a diversified industrial company with annual revenues of over $2 billion. The company designs, manufactures and distributes quality engineered products and services for the automotive, marine, industrial, aerospace and medical markets worldwide. Teleflex employs more than 21,000 people worldwide who focus on providing innovative solutions for customers. For more information, see http://www.teleflex.com/ About Hudson Respiratory Care, Inc. Hudson RCI -- http://www.hudsonrci.com/-- is a privately held medical manufacturing firm specializing in disposable products for respiratory care and anesthesia. Corporate headquarters are located in Temecula, California, with a European office in Upplands Vasby, Sweden. Hudson RCI maintains manufacturing facilities in California, Illinois, Mexico, and Malaysia. Distribution centers located in California, Illinois, and the Netherlands service the needs of a vast network of distributors around the world. A team of 80 domestic and international sales representatives, supported by clinical and marketing personnel located in the Temecula and Stockholm offices, provide sales, service, technical support, and clinical information on Hudson RCI's broad range of respiratory care and anesthesia products. At March 31, 2004, Hudson Respiratory Care's balance sheet shows a stockholders' deficit of $168,019,000 compared to a deficit of $167,915,000 at December 31, 2003. INDOSUEZ EASTERN EUROPE: Section 304 Petition Summary ----------------------------------------------------- Petitioners: Stephen J. Akers and Terry Carson, as Foreign Representatives of the Debtors Lead Debtor: Indosuez Eastern Europe Fixed Income Fund, Ltd. McNamara Corporate Services Limited 2nd Floor, 116 Main Street Road Town, Tortola British Virgin Islands Case No.: 04-14571 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Clariden Eastern Europe Debt Fund, Ltd. 04-14572 Safra Eastern Europe Fixed Income Fund, Ltd. 04-14573 Type of Business: The Debtor is a fixed income fund company. Section 304 Petition Date: July 6, 2004 Court: Southern District of New York (Manhattan) Judge: Carter Beatty Petitioners' Counsel: Stephen J. Shimshak, Esq. Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, NY 10019 Tel: 212-373-3133 Fax: 212-757-3990 Estimated Assets: $1 Million to $10 Million Estimates Debts: $50 Million to $100 Million INTERPUBLIC GROUP: Negotiates Amendments to Silverstone Lease ------------------------------------------------------------- The Interpublic Group (NYSE: IPG) announced that it entered into a series of agreements with the British Racing Drivers Club regarding Interpublic's remaining motorsports obligations in the United Kingdom. These agreements give Interpublic and its affiliates the right to terminate lease obligations at the Silverstone auto racing track and related agreements. The termination right will be in effect between November 1 and December 15 of 2004. In connection with these agreements, Interpublic will make a payment to the BRDC of GBP 27 million (approximately $49 million) in two installments. The first installment of approximately $24.5 million was paid at closing by Interpublic, with the balance payable on the date Interpublic exercises its right of termination or as early as September 30, 2004 under certain circumstances. According to David Bell, Interpublic's CEO and President, "The new terms we have negotiated with the BRDC allow us to terminate the Silverstone lease and related obligations, which puts us in position to complete our exit from motor sports before the end of this year. This has been an important priority for the new management team. We are very pleased that the end of this ill- fated foray into venue ownership is finally at hand - it represents further progress in our effort to turn around Interpublic." About Interpublic Interpublic is one of the world's leading organizations of advertising agencies and marketing services companies. Major global brands include Draft, Foote, Cone & Belding Worldwide, Golin/Harris International, Initiative, Lowe & Partners Worldwide, McCann-Erickson, Universal McCann and Weber Shandwick Worldwide. Leading domestic brands include Campbell-Ewald, Deutsch and Hill Holliday. * * * As reported in the Troubled Company Reporter's April 6, 2004 edition, Fitch Ratings affirmed the ratings on The Interpublic Group of Companies, Inc.'s (IPG) senior unsecured debt at 'BB+', multi-currency bank credit facility at 'BB+' and convertible subordinated notes at 'BB-'. The Rating Outlook has been revised to Stable from Negative. Approximately $2.3 billion of debt is affected. The ratings on IPG's debt consider the progress made with its cost structure and strengthened balance sheet as well as the company's position as a leading global advertising holding company and its diverse client base with long term relationships with key accounts. Of concern remains the resolution of the operation of the Silverstone racetrack and the sizeable related liabilities and negative organic revenue growth. The Stable Outlook reflects Fitch's expectation that IPG's turnaround efforts have begun to steady operating earnings and cash flow generation. Also acknowledged are the improvements to IPG's balance sheet and its success in resolving certain non- operating issues that have been a distraction for the company's management, including the shareholder lawsuits and asset dispositions. ISLES CBO: Fitch Downgrades Classes A-1 & A-2 Ratings to BB- ------------------------------------------------------------ Fitch Ratings downgrades two classes of notes issued by Isles CBO, Ltd. / Isles CBO Corp. The following rating actions are effective immediately: --$27,388,938 class A-1 senior notes, due 2010 downgraded to 'BB-' from 'BBB-'; --$214,546,679 class A-2 senior notes, due 2010 downgraded to 'BB-' from 'BBB-'. Isles CBO, a collateralized bond obligation managed by American Express Asset Management Group Inc. was established in October, 1998, to issue $375 million in debt. Payments are made semi-annual in April and October and the reinvestment period ended in October, 2003. In conjunction with the review, Fitch Ratings discussed the current state of the portfolio with the asset manager and the credit quality of the individual assets comprising the portfolio. In addition, Fitch Ratings conducted cash flow modeling utilizing various default timing and interest rate scenarios. Since Fitch's last rating action in June, 2002, the portfolio has experienced negative ratings migration and continued failure of its senior par value and interest coverage tests. Additionally, as of the Trustee report dated May, 2004, Isles CBO maintains over 26% of its portfolio in assets rated 'CCC+' or below. Accordingly, as a result of our analysis, Fitch has determined that the current ratings downgrade reflects the current risk to noteholders. The ratings of the class A-1 notes and the class A-2 notes address the likelihood that investors will receive timely payments of interest, as per the governing documents, as well as the aggregate principal amount by the October, 2010 maturity date. The ratings are based on the quality and mixture of portfolio assets, structural features, collateral coverage and credit enhancement through subordination. JOURNAL REGISTER: S&P Places Ratings on Watch Negative ------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings for Journal Register Co., including the 'BB+' corporate credit rating, on CreditWatch with negative implications. The CreditWatch placement follows Trenton, New Jersey-based JRC's announcement that it has agreed to acquire 21st Century Newspapers Inc. 21st Century Newspapers owns four daily newspapers and 87 non- daily publications, including one of the U.S.'s largest newspaper clusters in Michigan. Under the terms of the agreement, JRC will pay $415 million in cash, which will be financed with the proceeds of a new bank credit facility. The transaction is expected to close during the third quarter of 2004, subject to regulatory approvals. The 21st Century newspaper cluster will become JRC's second- largest cluster based on revenues, after its greater Philadelphia cluster. The Daily Oakland Press and The Macomb Daily will become JRC's second- and third-largest newspapers, respectively, behind JRC's New Haven Register. Pro forma for this transaction, JRC will own 27 daily newspapers with combined daily circulation of approximately 650,000 and Sunday circulation of approximately 675,000, and 327 non-daily publications with combined non-daily distribution of more than 5 million. "In resolving its CreditWatch listing, Standard & Poor's will review the combined company's near- and longer-term growth objectives, integration plans, pro forma financial profile, and overall financial policies," said Standard & Poor's credit analyst Don Wong. "If a downgrade of the corporate credit rating for JRC were the ultimate outcome of Standard & Poor's analysis, it would be limited to one notch." KAISER ALUMINUM: Proposes QAL Sale Bidding Procedures ----------------------------------------------------- Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in Wilmington, Delaware, states that the Kaiser Aluminum Corporation Debtors, in consultation with the Official Committee of Unsecured Creditors, have developed an auction process that establishes a floor price as well as other procedures to ensure the integrity of the sale process for the QAL Interests. The proposed Bidding Procedures are a result of, among other things, the Debtors' obligations under the Collateral Agreement, the absence of a pre- selected stalking horse bidder, and their desire to achieve the highest or otherwise best bid for the QAL Interests. Accordingly, the Debtors ask the Court to approve the proposed bidding procedures for the auction of the QAL Interests. Ms. Newmarch explains that the Bidding Procedures are designed to facilitate a full and fair process to maximize the value of the QAL Interests. The provisions of the proposed Bidding Provisions are: A. Determination of the Sellers Kaiser Alumina Australia Corporation and Kaiser Aluminum and Chemical Corporation will: (a) determine whether any person is a subsequently qualified bidder; (b) coordinate the efforts of qualified bidders, if any, in conducting their due diligence investigations regarding the Debtors, QAL, their businesses or the QAL Interests and liabilities to be assumed generally; (b) receive bids from qualified bidders; and (c) negotiate the sale. Ms. Newmarch points out that only qualified bidders will be permitted to participate in the bidding process. The Debtors will, in consultation with the Creditors Committee, the Official Committee of Asbestos Claimants, and Martin J. Murphy, the legal representative for future asbestos claimants, have the right to amend the bidding process rules or adopt other bidding process rules that are not inconsistent with the terms of any Bankruptcy Court, including the approval of the bidding procedures and which, in the Debtors' reasonable judgment, will better promote the goal of the bidding process. B. Participation Requirements Each person seeking to participate in the bidding process must either: (a) have been contacted by Lazard Freres & Co., before June 18, 2004, in connection with Lazard's efforts to identify potential purchasers of the QAL Interests, have executed a confidentiality agreement provided by Lazard, have demonstrated to the satisfaction of the Debtors that it is otherwise eligible to be designated as a qualified bidder, and will have been notified in writing by Lazard by June 21, 2004 that that person is eligible to submit a bid; or (b) deliver to the Debtors as promptly as practicable, but in any event no later than July 20, 2004: (i) An executed confidentiality agreement provided by Lazard, with any changes approved by the Debtors; (ii) Current financial statements of the Potential Bidder, or if the Potential Bidder is an entity formed for the purpose of acquiring the QAL Interests, current financial statements of the equity holder of the Potential Bidder; and (iii) A proposal regarding: -- the purchase price for the QAL Interests which must be in excess of $525 million and also include the assumption of the Assumed Liabilities and the purchase price adjustments set forth in the Purchase Agreement; -- the structure and financing of the transaction, including information regarding the sources of financing; -- any anticipated regulatory approvals required to close the transaction, the anticipated time frame for obtaining the approvals and any anticipated impediments for obtaining the approvals; -- the nature and extent of additional due diligence it may wish to conduct; and -- any conditions to closing that it may wish to impose in addition to those set forth in the Purchase Agreement, provided, that any proposal submitted by a Potential Bidder may not be conditioned on receipt of financing. Promptly after a Potential Bidder that is not a Previously Qualified Bidder delivers all of the required materials, the Debtors will determine whether the Potential Bidder is a Qualified Bidder, and will notify that Potential Bidder as well as the Creditors Committee, the Asbestos Committee and the Futures Representative, and their counsel, in writing. C. Due Diligence by Eligible Participants At the same time that the Debtors notify the Potential Bidder that it is a Subsequently Qualified Bidder, the Debtors will provide to the Subsequently Qualified Bidder access to the financial information and other data relative to the Debtors, their businesses or the QAL Interests and Assumed Liabilities as the Subsequently Qualified Bidder may reasonably request, provided, that: (a) any information and data will be provided in the form of access to the data room previously established for the transaction and the opportunity to ask questions; (b) responses to questions can be provided to the Subsequently Qualified Bidder in a timely manner before the deadline for submission of bids and without undue cost to the Debtors; and (c) information and data are within the control of the Debtors and, provided, that the Debtors will not be required to give confidential or proprietary information to a Qualified Bidder that is a competitor of the Debtors if the Debtors reasonably believe that disclosure of the information would be detrimental to the interests and operations of the Debtors or if QAL, has determined that the information belongs to QAL, and QAL has declined to release the information. The Debtors will provide a notice to the relevant Qualified Bidder and the Creditors Committee, the Asbestos Committee, the Futures Representative, and their counsel, of any decision to withhold the Debtors' confidential or proprietary information or information from QAL. The Debtors will also provide the Qualified Bidder with a copy of the Purchase Agreement and the related exhibits and schedules. Neither the Debtors nor any of their affiliates are obligated to furnish any information relating to QAL, the QAL Interests, the Assumed Liabilities or the businesses of the Debtors or QAL, to any person other than a Qualified Bidder. Due diligence may include management presentations scheduled by the Debtors, access to physical and online data rooms, on-site inspections and other matters that a Qualified Bidder may request and as to which the Debtors, in their reasonable discretion, may agree. The Debtors will designate employees or other representatives to coordinate all reasonable requests for additional information and due diligence access from a Qualified Bidder. The Debtors may, in their discretion, coordinate due diligence efforts so that multiple Qualified Bidders have simultaneous access to due diligence materials and simultaneous attendance at management presentations or on- site inspections. The due diligence period for all Qualified Bidders will expire at the Bid Deadline, Qualified Bidders are advised to exercise their own discretion before relying on any information regarding the Acquired Assets or liabilities to be assumed provided by anyone other than the Debtors or their representatives. D. Bid Requirements A Bid will state, at a minimum, that: (a) the Qualified Bidder offers to purchase the QAL Interests at a Minimum Bid Price of at least US$525 million or a higher price -- as necessary to cover any "Termination Fee" and the "Minimum Overbid Increment" -- as may be established if the Debtors enter into a stalking horse agreement before the Bid Deadline and otherwise on the terms and conditions set forth in a copy of the Definitive Sale Documentation, marked to show only technical changes to the Definitive Sale Documentation; (b) The Qualified Bidder is prepared to enter into the transaction immediately upon: (i) completion of the auction if the Qualified Bidder is the Successful Bidder and if there is no stalking horse agreement; or (ii) acceptance by the Debtors of the Qualified Bidder's Qualified Bid if the Debtors do not conduct an auction, by tendering the $50 million Deposit -- which can be partially satisfied with the "Good Faith Deposit" -- executing the Purchase Agreement and consummating the transaction not later than 90 days -- or 150 days if the only conditions remaining to be fulfilled after 90 days are receipts of government approvals -- after the execution of the Purchase Agreement; and (iii) each of the Qualified Bidder's offer is binding during the applicable period described in "Return of Good Faith Deposits". A Qualified Bidder will accompany its Bid with written evidence of a commitment for financing or other evidence of ability to consummate the transaction satisfactory to the Debtors and a $10,000,000 Good Faith Deposit. The Good Faith Deposit will be in the form of a bank check or wire transfer pursuant to instructions issued by the Debtors. Each Good Faith Deposit will be held pursuant to an Escrow Agreement, which provides among other things that the Good Faith Deposit will be forfeited if the Qualified Bidder attempts to modify, amend or withdraw its Bid, without the consent of the Debtors, except for proposed amendments to increase the amount or otherwise improve the terms of the Bid, before the time the offer is required to remain binding. Any Good Faith Deposit accompanying a Bid that the Debtors determine not to be a Qualified Bid will be returned promptly after the determination. E. Bid Deadline A Qualified Bidder that desires to make a Bid will deliver written copies of its Bid not later than 11:00 a.m. Eastern Time, on August 10, 2004, to: (a) Jones Day 2727 North Harwood Street Dallas, Texas 75201 Attention: Tony Stewart, Esq. E-mail: wastewart@jonesday.com Fax no. 214-969-5100; (b) Lazard Freres & Co. 30 Rockefeller Plaza, 61st Floor New York, New York 10020 Attention: Perk Hixon E-mail: perk.hixon@lazard.com Fax no. 212-332-5966; and (c) The Debtors c/o Kaiser Aluminum & Chemical Corporation Suite 2500, 5847 San Felipe, Houston, Texas 77057 Attention: General Counsel E-mail: ed.houff@kaiseral.com Fax no. 713-267-3702 Counsel for the Debtors will distribute a copy of each Qualified Bid by facsimile transmission, personal delivery, E- mail or overnight courier service to the Creditors Committee, the Asbestos Committee, the Futures Representative, and their counsel. Given the short time frame that the Debtors will have to evaluate Bids, Qualified Bidders are strongly encouraged to submit their Bids via E-mail. F. Qualified Bids The Debtors will consider a Bid as a "Qualified Bid" only if in the Debtors' business judgment, after consultation with the Official Committees and the Futures Representative, the Bid meets these requirements: (a) It complies in all material respects with the bid requirements disclosed and the terms provided by the Debtors in the Definitive Sale Documentation; (b) It is a proposal that specifies a purchase price of at least the Minimum Bid Price for the Acquired Assets and also includes assumption of the Assumed Liabilities and purchase price adjustments set forth in the Purchase Agreement, and that the Debtors determine has a value at least equal to the terms and conditions provided in the Definitive Sale Documentation -- plus the Termination Fee if the Sellers enter into a Stalking Horse Agreement; (c) It is accompanied by satisfactory evidence of committed financing or other ability to perform; and (d) It is accompanied by a Good Faith Deposit. The Debtors, in consultation with the Official Committees and the Futures Representative, may take into account any changes to the terms of the Definitive Sale Documentation requested by a Potential Bidder in determining whether a Bid is a Qualified Bid. Potential Bidders should be aware that the terms and conditions of the Purchase Agreement are important to ensure that the Debtors comply with certain rights of Comalco under the Collateral Agreement. Any Bid that entails significant changes to the Purchase Agreement will be at a distinct disadvantage. If the Debtors enter into a Stalking Horse Agreement and they do not receive by the Bid Deadline any Bids that they determine to be Qualified Bids, the Debtors will report to the Court, will seek entry of the Sale Order, and will proceed with the Sale pursuant to the terms of the Stalking Horse Agreement. If there is no Stalking Horse Agreement and the Debtors receive by the Bid Deadline only one Bid that they determine to be a Qualified Bid, the Debtors will report to the Court and will in the Debtors' discretion seek entry of the Sale Order and proceed with the Sale pursuant to the terms of the Qualified Bid. G. Potential for Stalking Horse Agreement Between June 18, 2004 and August 3, 2004, the Debtors may discuss or negotiate with any Previously Qualified Bidder or any other Potential Bidder, terms on which the party may be willing to enter into a modified version of the Purchase Agreement that grants to the party certain Bid Protections. If before August 3, 2004, the Debtors and the Stalking Horse enter into a Purchase Agreement that includes Bid Protections, the Debtors will promptly notify all Qualified Bidders of that fact and provide to them a revised set of the Definitive Sale Documentation. H. Bid Negotiations Between the Bid Deadline and the Auction, the Debtors may discuss, negotiate or seek clarification of any Qualified Bid from a Qualified Bidder. Without the Debtors' consent, a Qualified Bidder may not modify, amend or withdraw its Qualified Bid, except for proposed amendments to increase the amount or otherwise improve the terms of the Bid, during the period that the Qualified Bid is required to remain binding under the Bid Requirements. After the receipt of Qualified Bids and before the Auction, the Debtors may negotiate with one or more Qualified Bidders regarding the terms of the applicable Qualified Bids. In conducting the Bid Negotiations, the Debtors may, among other things: (a) solicit modifications to the terms and conditions of any Qualified Bid; and (b) designate the Initial Successful Bid. I. Potential Bid Protections and Selection of Initial Successful Bid The Debtors will have the authority, in their discretion in consultation with the Official Committees and the Futures Representative and to the extent necessary to ensure there is a Qualified Bid and promote more competitive bidding, to grant to the Stalking Horse a termination fee not exceeding $10 million as determined in the Debtors' discretion, which will be payable to the Stalking Horse in full satisfaction of any losses, costs, expenses or claims arising out of the transactions. The Stalking Horse's entitlement to a Termination Fee is expressly conditioned on: (a) the consummation of a sale of all of the QAL Interests to another party; and (b) other additional terms and conditions negotiated by the parties. In addition, the Debtors will have the authority to include customary expense reimbursement provisions in any Purchase Agreement with a Stalking Horse covering circumstances where no Termination Fee is available. Before the Auction, if there is no Stalking Horse Agreement, the Debtors, in consultation with the Official Committees and the Futures Representative, will select the highest or otherwise best Qualified Bid and will notify the Qualified Bidder that submitted the Initial Successful Bid of that fact. If the Debtors enter into the Stalking Horse Agreement with the Stalking Horse, the terms of the Stalking Horse Agreement will constitute the Initial Successful Bid, provided that only the Stalking Horse will be eligible to receive the Bid Protections. Before the Auction, the Debtors will disclose the amount of the Initial Successful Bid to all other Qualified Bidders and provide to each of them a copy of the Definitive Sale Documentation relating to the Initial Successful Bid -- if different from that previously provided to the Qualified Bidders. J. Auction If the Debtors receive two or more Bids that they determine to be Qualified Bids, or if the Debtors enter into the Stalking Horse Agreement and receive at least one additional Bid that they determine to be a Qualified Bid, the Debtors will conduct an Auction at the offices of Jones Day, 222 East 41st Street, New York, New York 10017, on August 16, 2004, beginning at 9:00 a.m. Eastern Time or a later time or other place as the Debtors will notify all Qualified Bidders that have submitted Qualified Bids by the Bid Deadline. Only the Creditors Committee, the Asbestos Committee, the Futures Representative, and their counsel, and those Qualified Bidders that have submitted Qualified Bids by the Bid Deadline -- including the Stalking Horse, if any -- will be entitled to attend the Auction, and only those Qualified Bidders that have submitted Qualified Bids by the Bid Deadline will be entitled to participate in the Auction. Bidding at the Auction will continue until the time as the Successful Bid is determined. Based on the terms of the Qualified Bids received, the number of Qualified Bidders participating in the Auction, and other information as the Debtors determine is relevant, the Debtors, in their reasonable judgment, may conduct the Auction in the manner they determine is reasonably likely to result in the maximum value for the QAL Interests, subject to the an approved Bidding Procedures. At the Auction, Qualified Bidders will be permitted to increase their Qualified Bids. All participating Qualified Bidders will be entitled to be present for all bidding -- although the Debtors may require them to be in separate rooms. At the commencement of the Auction, the identity of each participating Qualified Bidder will be disclosed to all other Qualified Bidders, and the material terms of each Auction Bid will be disclosed to all other participating Qualified Bidders during the Auction. The bidding will be in increments of not less than $2,000,000 greater than the amount proposed in the Initial Successful Bid -- plus in the case of the first Auction Bid the Termination Fee agreed to with the Stalking Horse, if any -- or the most recent Auction Bid, as applicable. For purposes of comparison with other Auction Bids, the dollar amount of any Auction Bid submitted by the Stalking Horse, if any, will be deemed to include an amount equal to the Termination Fee, if applicable. Each Qualified Bidder will have a reasonable amount of time to respond to any Auction Bid. Upon conclusion of the Auction, the Debtors, in consultation with the Official Committees and the Futures Representative, will select and identify the Bid that they determine is the highest or otherwise best Auction Bid, which will be the terms of the Stalking Horse Agreement, if any, if no higher or otherwise better Auction Bids are received. The Debtors will notify all Qualified Bidders at the Auction, before its adjournment, of the Successful Bidder. At the August 23, 2004 omnibus hearing, the Debtors will present to the Court for approval both the Successful Bid and the next highest or otherwise best Bid -- the Backup Bid. K. Acceptance of Qualified Bids Subject to Court approval at the August 23, 2004 omnibus hearing, the Debtors will effect the Sale to the Successful Bidder. If the Successful Bidder fails to consummate an approved Sale for any reason, the party that submitted the Backup Bid will be designated the Successful Bidder and the Debtors will be authorized to effect the Sale without further Court order. L. Sale Order and Authorization to Sell At the Sale Hearing, the Debtors will seek entry of a Sale Order, among other things, authorizing and approving the Sale to the Successful Bidder, as determined by the Debtors in accordance with the Bidding Procedures, pursuant to the terms and conditions set forth in the Purchase Agreement. The Sale Hearing may be adjourned or rescheduled without notice other than by an announcement of the adjourned date at the Sale Hearing. M. Failure to Consummate Purchase If the Successful Bidder fails for any reason to enter into the Purchase Agreement on the terms contained in its accepted Bid, the Good Faith Deposit of the Successful Bidder will be forfeited to the Debtors, and the Debtors specifically reserve the right to seek all available damages from that person as provided in the Purchase Agreement or otherwise. N. Return of Good Faith Deposits Any Good Faith Deposits will be retained by the Debtors and held in escrow in one or more accounts, all Qualified Bids -- or Auction Bids, if higher or otherwise better -- other than the Successful Bid and Backup Bid will remain open and binding until the earlier of: (a) entry of a final and non-appealable order of the Court approving a sale pursuant to the terms of a Successful Bid or Backup Bid; or (b) 10 days after the Auction. Five business days after the earlier of the two dates, the Debtors will return any Good Faith Deposits of Qualified Bidders other than the Successful Bidder and the Backup Bidder. The Backup Bid will remain open and binding until the closing of a sale of the Acquired Assets, and the Good Faith Deposit of the Backup Bidder will be returned within five business days after the closing of the sale of the QAL Interests. The Debtors may: (a) determine, in their business judgment and in consultation with the Official Committees and the Futures Representative, which Qualified Bid, or Auction Bid, if any, is the highest or otherwise best offer; (b) consult with the Official Committees and the Futures Representative during the Bidding Process; and (c) reject, at any time before the Court's order approving the Sale, any Bid that the Debtors determine is: (i) inadequate or insufficient; (ii) not in conformity with the requirements of the Bankruptcy Code, the Bidding Procedures or the terms and conditions of the Purchase Agreement; or (iii) contrary to the best interests of the Debtors, their estates, their creditors or other parties-in- interest. 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. 45; Bankruptcy Creditors' Service, Inc., 215/945-7000) KEY ENERGY: Commences Senior Note Consent Solicitations ------------------------------------------------------- Key Energy Services, Inc. (NYSE: KEG) announced that it is soliciting consents from the holders of its outstanding 6 - 3/8% senior notes due 2013 and 8 - 3/8% senior notes due 2008, to extend until December 31, 2004 the period in which the Company must deliver its 2003 10-K and 2004 10-Q reports. The Company also updated information relating to the restatement of its financial statements and relating to the investigations being conducted by its Audit Committee. The Consent Solicitation is scheduled to expire at 5:00 p.m. (EDT) on July 15, 2004, unless extended or terminated earlier. Holders of Notes who deliver their consent on or prior to 5:00 p.m. (EDT) on July 15, 2004, unless extended or terminated earlier, will be eligible to receive a consent payment of $2.50 per $1,000 principal amounts of Notes validly consented. The Consent Solicitation is conditioned upon the satisfaction of certain conditions, including that consents for a majority of each particular series of notes must be received, a majority of the other series of notes must be received and the supplemental indenture for both series must be executed. A more comprehensive description of the Consent Solicitation and its conditions can be found in the Consent Solicitation Statement. The Company has retained Lehman Brothers to serve as the Solicitation Agent and D.F. King & Co., Inc. to serve as the Information Agent and Tabulation Agent for the Offer. Requests for documents may be directed to D.F. King & Co., Inc., by telephone at (800) 848-2998 (toll-free) or (212) 269-5550 or in writing at 48 Wall Street, 22nd Floor, New York, NY 10005. Questions regarding the solicitation of consents may be directed to Lehman Brothers, at (800) 438-3242 (toll-free) or (212) 528-7581, Attention: Liability Management. This announcement is not an offer to purchase or sell, a solicitation of an offer to purchase or sell or a solicitation of consents with respect to any securities. The solicitation is being made solely pursuant to the Consent Solicitation Statement dated July 6, 2004. On June 1, 2004, the Company received a letter from the trustee purporting to be notice under the indentures governing the 6 - 3/8% notes and 8 - 3/8% notes stating that the Company's failure to file its 2003 Annual Report on Form 10-K and its quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2003, constituted breaches of its financial reporting obligations contained in the indentures, and stating that unless the deficiency was remedied within 90 days, an event of default would occur under the indentures. The Company believes that the notice may be invalid because it does not meet certain requirements for giving notice as required by the indentures. Contrary to the letter from the trustee, the indentures actually would require the Company to cure the deficiency within 60 days of the receipt of a notice. Unless the deficiency is cured or waived within the cure period, the trustee or holders of 25% of the outstanding principal amount of either series of notes would have the right to accelerate the maturity of that series of notes. Notwithstanding the Company's belief that the notice may be invalid, the Company has proceeded with the consent solicitation. The consents are being solicited to amend the indentures to give the Company until December 31, 2004, to comply with the financial reporting covenants in the indentures. Each holder that consents will also be waiving all defaults with respect to the financial reporting covenants in the indentures and any and all rights to cause acceleration of principal on the notes as a result of the defaults. As previously disclosed, the lenders under the Company's revolving credit facility agreed to waive defaults arising from the failure to timely deliver periodic financial statements. The administrative agent for the lenders under the revolving credit facility has advised the Company that, while no event of default has occurred under the revolving credit facility as a result of the trustee's notice of default, it believes a potential event of default has occurred under the revolving credit facility as a result of that notice and that, absent a waiver from lenders holding a majority of the loans under the revolving credit facility, the Company will not be able to borrow or obtain letters of credit under the credit facility until the potential event of default is cured or waived. The Company believes it has sufficient liquidity to provide for its anticipated operating needs while the consent solicitation is pending. Upon successful completion of the consent solicitation, any restriction upon the Company's ability to borrow under the revolving credit facility will be resolved. The Company's primary workers' compensation insurance carrier had previously extended to September 30, 2004, the date by which the Company must deliver audited annual financial statements and reduced the credit ratings triggers. After the Company amended its agreement with its workers' compensation carrier, the Company's Standard & Poor's long-term corporate and senior unsecured debt rating was downgraded from B+ to B and the Company's Moody's senior unsecured issuer rating was downgraded from B1 to B2. As a result of these downgrades the Company must replace the promissory note and bond with letters of credit within 30 days after such downgrade. Such 30-day period was set to expire on July 8, 2004; however, the Company has entered into a letter agreement effective as of July 2, 2004, that requires the Company to provide a letter of credit for the $6 million promissory note within 20 days from July 2, 2004. The worker's compensation carrier agreed that it shall not exercise any other remedies under the agreement until the 20-day period expires. The carrier also agreed that the failure to provide a letter of credit by July 8, 2004, shall not be deemed an event of default. If the Company fails to provide a $6 million letter of credit within the 20-day period, the worker's compensation carrier may then immediately exercise any and all other remedies available under the agreement. The Company has arranged for a letter of credit to be available to meet this obligation. The Company's restatement process is ongoing. To date, the Company has conducted a physical inventory of over 20,000 individual pieces of equipment of its well servicing, drilling, and pressure pumping divisions to determine the equipments' existence, condition and valuation. The Company is attempting to match the equipment that has been physically counted and evaluated with the book values of equipment recorded in its accounting systems. The Company will then undertake to determine the appropriate write- down amounts. The Company is also attempting to determine the fiscal period in which any write-downs or impairments should be recorded. The lack of detail in the Company's accounting records for equipment acquired in years before 2000, including the difficulty in locating source documents for such assets, is affecting the process. With respect to all prior periods, including 2003, evidence necessary to determine exact dates that particular assets might have first been impaired is limited. Restatements of prior year periods will require issuance of audit opinions by our independent auditors on the financial statements for those years. The restatement process is subject to uncertainties. These uncertainties include whether the Company will be able to develop the necessary records or estimates to support the accounting for equipment assets and allocation of the write-downs to particular fiscal years, whether the restatements and audit will be completed in a timely manner, whether the amount of write-downs or impairments will exceed the Company's estimates, and what portions of the write-downs are to be allocated to particular fiscal years. In connection with the restatement process, additional items requiring restatement may be identified. Users of the Company's financial statements should not rely on its previously issued financial statements. As previously disclosed, the Audit Committee of the Company's Board of Directors authorized special outside counsel, Sidley Austin Brown & Wood LLP, to conduct a review of our internal investigation of improprieties in the Company's South Texas division. The Audit Committee also authorized an independent investigation with the assistance of special outside counsel of the adequacy of the Company's public disclosure procedures, its internal controls and other matters that arose in the course of the investigation. As part of this investigation, outside counsel for the Audit Committee examined, among other things, matters related to public disclosures and financial forecasts made by our executive officers, certain transactions involving executive officers, accounting policies and procedures and corporate governance matters. In the course of that investigation, they interviewed many of the Company's current and former employees. The Audit Committee's outside counsel has largely completed its factual inquiries. Counsel has given reports on its preliminary factual findings to the Audit Committee and the Company's Board of Directors. The Audit Committee has not yet reached any conclusions as to what corrective actions it will recommend based on counsel's factual findings. The Audit Committee expects to complete its investigation and make recommendations on corrective actions to the Board of Directors by the end of July 2004. Key Energy Services, Inc. is the world's largest rig-based, onshore well service company. The Company provides diversified energy operations including well servicing, contract drilling, pressure pumping, fishing and rental tool services and other oilfield services. The Company has operations in all major onshore oil and gas producing regions of the continental United States and internationally in Argentina, Canada and Egypt. KIEL BROS OIL: Look for Bankruptcy Schedules by July 15 ------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Indiana, New Albany Division, gave Kiel Bros. Oil Company, Inc., and its debtor-affiliate an extension to file their schedules of assets and liabilities, statements of financial affairs and lists of executory contracts and unexpired leases required under 11 U.S.C. Sec. 521(1). The Debtors have until July 15, 2004 to file their Schedules of Assets and Liabilities and Statement of Financial Affairs. Headquartered in Columbus, Indiana, Kiel Bros. Oil Company, Inc., operates a convenience store and has a wholesale fuel supply business. The Company filed for chapter 11 protection on June 15, 2004 together with its affiliate KP Oil, Inc. (Bankr. S.D. Ind. Case No. 04-92128). Jay Jaffe, Esq., at Baker & Daniels 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. KMART HOLDING: Appoints Three New Customer Service Executives ------------------------------------------------------------- Kmart Holding Corporation (Nasdaq: KMRT) announced the appointment of: * Robert Norton as Senior Vice President, Stores, * Dene Rogers as Senior Vice President, Store Operations, and * David Whipple as Senior Vice President, Associate Resources. Julian Day, Kmart's Chief Executive Officer said, "I have asked these three talented executives to focus their considerable abilities on improving the customer service in our stores. The goal is to deliver a better store experience for our customers while continuing to enhance the profitability of our operations." Robert Norton, SVP, Stores, will have overall responsibility for Kmart's stores, including the field and headquarters' store support organizations. Prior to joining Kmart, Norton served as the Chairman and CEO of FTD Inc. Norton joined FTD as President and CEO in January 1997. Under his strong and owner-oriented leadership, the company more than doubled its profitability and sales. Before leading FTD, Norton held senior positions at Jo- Ann Stores, Inc. and The Sherwin-Williams Company. Dene Rogers, SVP, Store Operations, will have responsibility for the store support organization at headquarters and will drive multi-functional operational improvement initiatives across the store base. Rogers, who will report to Norton, has worked in a variety of capacities at Kmart since joining in October 2003. Before joining Kmart, Rogers was SVP, Business Development at General Electric Capital Corporation, and SVP, Planning, New Products and Development at Starwood Hotels & Resorts Worldwide, Inc. David Whipple, SVP, Associate Resources, is now the senior human resource executive at the Company, whose immediate focus is developing Kmart's store associate population. Whipple joins Kmart after nine years at two U.S. subsidiaries of Netherlands- based Ahold, the world's third-largest food retailer. He served in several executive human resource positions at U.S. Foodservice and at Tops Markets, Inc. Julian Day stated, "We will continue to improve our customer experience and attract, retain, and develop the best associates and store managers in mass market retail. Together, these executives bring a wealth of retail experience, and more importantly, a winning culture and attitude to our Company. With these additions to our leadership team, we expect to accelerate our rate of improvement and elevate our achievement goals" About Kmart Holding Corporation Kmart Holding Corporation (Nasdaq: KMRT), along with its subsidiaries, is a mass merchandising company that offers customers quality products through a portfolio of exclusive brands that include Thalia Sodi, Jaclyn Smith, Joe Boxer, Kathy Ireland, Martha Stewart Everyday, Route 66 and Sesame Street. For more information visit the Company's website at http://www.kmart.com/ (Kmart Bankruptcy News, Issue No. 76; Bankruptcy Creditors' Service, Inc., 215/945-7000) MED DIVERSIFIED: Provides Update on Bankruptcy Proceedings ---------------------------------------------------------- In a report filed on March 12, 2004, Med Diversified, Inc., disclosed that on March 5, 2004, the Company filed Plans of Liquidation and related Disclosure Statements with the U.S. Bankruptcy Court for the Eastern District of New York for Med, as well as two of its wholly owned subsidiaries, Resource Pharmacy, Inc. and Trestle Corporation. The Company also disclosed that on March 5, 2004, it filed a Joint Plan of Reorganization for its wholly owned subsidiaries, Chartwell Diversified Services, Inc., Chartwell Care Givers, Inc. and Chartwell Community Services, Inc., as well as an accompanying Disclosure Statement for the Chartwell Debtors. On March 26, 2004, Med Diversified filed in the Bankruptcy Court the First Amended Plan of Liquidation of Med, the First Amended Plan of Liquidation of Resource and the First Amended Plan of Liquidation of Trestle, as well as the related Disclosure Statements to the First Amended Plans. On March 26, 2004, the Company also filed in the Bankruptcy Court the First Amended Joint Plan of Reorganization for the Chartwell Debtors, as well as the related Disclosure Statement. None of the officers or directors of Med, nor their affiliates, will possess any ownership interest in the Chartwell Debtors once the Chartwell Debtors are reorganized following acceptance of the Joint Plan by the Company's creditor constituencies. The First Amended Plans, the Joint Plan and the related Disclosure Statements thereafter were amended on several occasions, considered at a hearing of the Bankruptcy Court on April 2, 2004, and filed in their then current form with Med Diversified's Form 8-K/A dated April 5, 2004. Subsequently, after further amendments and further hearings before the Bankruptcy Court on April 26, 2004, May 5, 2004, May 12, 2004 and May 17, 2004, the Bankruptcy Court entered orders, on May 19, 2004, approving all four Disclosure Statements. All such definitive Disclosure Statements were being mailed to creditors and other parties in interest on May 21, 2004. All definitive Disclosure Statements and the proposed Plans also may be obtained for a fee through the Bankruptcy Court at https://ecf.nyeb.uscourts.gov/, and from and after May 25, 2004, free of charge on the Company's website at http://www.meddiv.com/ As was provided in Med's First Amended Plan, and in all intervening amendments to such Plan, the Second Amended Plan provides that all of Med's shares will be cancelled on the effective date of Med's Plan of Liquidation. Under applicable law, Med's shareholders are deemed to have rejected Med's Second Amended Plan of Liquidated Dated May 10, 2004 and, therefore, are not entitled to vote to accept or reject the Second Amended Plan. Immediately after confirmation of the Second Amended Plan, a Form 15 will be filed with the SEC, which Form shall deregister Med's shares and, upon such filing, Med's obligation to make periodic filings under the Securities Exchange Act of 1934 will cease. MERITAGE CORPORATION: Second Quarter Orders Climb 51% ----------------------------------------------------- Meritage Corp. (NYSE: MTH) announced all-time quarterly records for home orders and backlog and second quarter records for home closings and home closing revenue. "We are pleased to announce that for the second quarter Meritage has achieved all-time records for sales orders and order backlog. For the first time in the company's history, we ended a quarter with a backlog in excess of 4,000 homes and $1 billion in sales value," stated John Landon, co-chairman and chief executive officer. "We believe that job growth and economic expansion are more than offsetting the modest increases in mortgage interest rates and are helping to drive housing demand." "The dollar value of new orders increased 51% over last year's second quarter, as demand for our homes remains very strong," said Steve Hilton, co-chairman and chief executive officer. "Most notably, order value in our California division was up 147% from the prior year's second quarter and is being driven by a very healthy California housing market along with an 89% increase in actively selling communities. The dollar value of sales orders increased 71% in Arizona, reflecting the robust housing market there, and in a very competitive market, our Texas operations increased the dollar value of its sales orders by 21%." "Although the dollar value of new home orders in Nevada was down 39% compared to the prior year's quarter due to rapid sellouts of existing communities, demand for homes in Las Vegas remains very strong. We anticipate growth in orders and closings in the second half of 2004, as we opened two new communities for sales there during the second quarter and anticipate opening another five over the course of the year, bringing our community count to approximately eight by year-end," added Landon. "Companywide, home closing revenue increased 32% for the quarter, including increases of 59% in California, 39% in Arizona and 23% in Texas over the prior year's second quarter. Our Nevada home closing revenue declined 8% due to the aforementioned reduction in available inventory." The average sales price of homes ordered during the quarter increased 11% to approximately $274,000 from approximately $247,000 during the second quarter of last year, reflecting a shift in mix toward Meritage's higher-priced homes in California and Nevada. Meritage's actively selling communities increased 17% to 137 at June 30, 2004 from 117 at June 30, 2003, and increased 11% over the 123 communities open at the end of last year. "We plan to open approximately 8 to 13 net new communities in the second half, ending the year at around 145 to 150 communities, up 18 to 22% from a year earlier," added Hilton. "We recently closed on our first land acquisition in our startup Denver division. This community is expected to open for sales in the spring of 2005, and we should begin delivering homes there in the fourth quarter of 2005," added Landon. "We believe this is a great time to enter the Denver market, which produced over 18,000 single-family housing starts in 2003, and we anticipate acquiring several more properties during the remainder of 2004." "With our all-time record levels of sales orders and backlog, we are optimistic that 2004 will be our 17th consecutive year of record revenue, which we believe will reach approximately $1.8 to $1.9 billion for the year," said Hilton. "We continue to be encouraged by the state of the homebuilding industry. Although we have seen a moderate increase in mortgage interest rates, we believe the improving economy, job growth and consumer confidence are clearly supporting healthy housing demand." Meritage will hold its second quarter earnings call on Wednesday, July 21, 2004 at 11 a.m. EST (10 a.m. CT, 9 a.m. MT, 8 a.m. PT). To participate in the call, please dial in at least five minutes before the start time. The toll-free domestic dial-in number is 800-243-6403; the international toll-free number is 312-461-0285. A replay will be available from 2 p.m. EST, Wednesday, July 21, 2004 through midnight EST Wednesday, July 28, 2004, by dialing 888-203-1112 (domestic) and 719-457-0820 (international). Confirmation code for the replay is 185725. The call and slide show presentation can be accessed on the company's Web site at http://www.meritagehomes.com/and through CCBN for two weeks at http://www.companyboardroom.com/ Meritage Corporation is one of the nation's largest single-family homebuilders, and is traded on the NYSE, symbol: MTH. Fortune recently named Meritage to its "Fortune 1000" list of America's largest corporations and included the Company as a "top pick from 50 great investors" in its Investor's Guide 2004. Additionally, Meritage is ranked No. 11 of Fortune's Fastest Growing Companies in America, its third appearance in five years. The Company is included in the S&P SmallCap 600 Index, appears on Forbes' "Platinum 400" list and is part of an elite group of only five companies on the list that have exceeded 50% in five-year annualized total return. In its 19-year history the Company has built approximately 30,000 homes, ranging from entry-level to semi-custom luxury. Meritage operates in fast growing states of the South and West, including five of the top ten single-family housing markets in the country. The name Meritage is a coined term from the words merit and heritage, synonymous with the blending of the finest ingredients to produce a superior result. In less than two decades, Meritage Corporation has emerged as one of the nation's leading designers and builders of single-family homes. Meritage Homes will continue to uphold its tradition of providing value, integrity, quality craftsmanship and homeowners' satisfaction as it takes on a new name. For more information about Meritage Homes in the Phoenix Metropolitan area, please call (480) 303-6700 or visit online at http://www.meritagehomes.com/ * * * In its Form 10-Q for the quarterly period ended March 31, 2004, filed with the Securities and Exchange Commission, Meritage Corporation reports: Liquidity and Capital Resources "Our principal uses of capital for the quarter ended March 31, 2004 were the acquisition of Citation Homes, operating expenses, land purchases, and the payment of various liabilities. We use a combination of borrowings and funds generated by operations to meet our short-term working capital requirements. "Cash flows for each of our communities depends on the status of the development cycle, and can differ substantially from reported earnings. Early stages of development or expansion require significant cash outlays for land acquisitions, plat and other approvals, and construction of model homes, roads, utilities, general landscaping and other amenities. Because these costs are capitalized, income reported for financial statement purposes during those early stages may significantly exceed cash flow. Later cash flows may significantly exceed earnings reported for financial statement purposes, as cost of sales includes charges for substantial amounts of previously expended costs. "We believe that our current borrowing capacity, cash on hand at March 31, 2004, and anticipated net cash flows from operations are and will be sufficient to meet liquidity needs for the foreseeable future. We believe our future cash needs will include funds for the completion of projects that are underway, the maintenance of our day-to-day operations, and the acquisition or start-up of additional homebuilding operations, should the opportunities arise. There is no assurance, however, that future cash flows will be sufficient to meet future capital needs. The amount and types of indebtedness that we incur may be limited by the terms of the indenture governing our senior notes and by the terms of the credit agreement governing our senior unsecured credit facility." MIRAVANT MEDICAL: Guidant Extends $7M to Fund PhotoPoint Programs ----------------------------------------------------------------- Miravant Medical Technologies (OTCBB:MRVT), a pharmaceutical development company specializing in PhotoPoint photodynamic therapy (PDT), announced a Collaboration Agreement and a Securities Purchase Agreement (SPA) with Guidant Corporation (NYSE:GDT), a world leader in the treatment of cardiac and vascular disease, headquartered in Indianapolis, Indiana. Guidant agreed to provide up to $7 million capital in support of Miravant's PhotoPoint cardiovascular programs, including an upfront payment of $3 million and additional staged investments based on the achievement of certain milestones through Phase I clinical trials. The development programs include regional treatments for atherosclerosis and atherosclerotic vulnerable plaque, representing large potential markets. Miravant plans to collaborate with Guidant on clinical development from facilities in Santa Barbara and Indianapolis. "We are extremely pleased with Guidant's support and endorsement of PhotoPoint PDT as a potential treatment for patients with serious coronary artery diseases," said Gary S. Kledzik, Ph.D., Miravant chairman and chief executive officer. "The benefit of Guidant's experience and consultation should focus our development efforts and help facilitate our progress towards human clinical studies." "Vulnerable plaque is a silent killer that can cause a heart attack without warning. Guidant is actively pursuing interventional device-based therapies to treat the millions of patients with cardiac and vascular disease who have these potentially deadly lesions," said Dana G. Mead, Jr., president, Vascular Intervention, Guidant Corporation. "We are encouraged by Miravant's preclinical results, and look forward to collaborating with the company to further develop the potential of photodynamic therapy for vulnerable plaque applications." The preclinical studies for PhotoPoint PDT were conducted under the direction of Ron Waksman, MD, Professor of Medicine (Cardiology), Georgetown University and Associate Chief of Cardiology at the Washington Hospital Center; and analyzed under the direction of Renu Virmani, MD, Chair, Cardiovascular Pathology, Armed Forces Institute of Pathology, Washington DC. Dr. Waksman stated, "PhotoPoint PDT has been shown to be very effective in extensive preclinical studies. If these results can be realized in clinical trials, PhotoPoint PDT could make a dramatic difference in our ability to treat patients with atherosclerosis. We are especially encouraged by the potential to reduce the risk of rupture in vulnerable plaques. My colleagues and I at the Washington Hospital Center look forward to continuing our participation in the evaluation and development of this promising new therapy." Intracoronary PhotoPoint PDT Miravant is developing PhotoPoint PDT as a minimally invasive interventional procedure for the treatment of patients with coronary artery disease, including atherosclerosis, atherosclerotic vulnerable plaque and restenosis. Currently under preclinical investigation, the catheter-based treatment uses a systemic light-reactive drug in combination with low power, non- thermal light to treat regions of atherosclerotic plaque in blood vessel walls, including vulnerable plaque. Miravant has established a substantial body of preclinical data to support further investigations of this proprietary technology. In March 2004, preclinical results were presented at the American College of Cardiology, New Orleans, which suggest that PhotoPoint PDT may remove inflammatory cells in atherosclerotic plaque, reduce plaque volume and induce positive mechanisms of healing and repair that are consistent with plaque stabilization. Atherosclerosis and Vulnerable Plaque Heart attacks strike 1.1 million people in the U.S. each year, leading to 460,000 deaths. Most heart attacks are caused by atherosclerosis, a common vascular disease involving lipid-derived plaques in blood vessel walls. It has been recently recognized that certain inflamed plaques are highly unstable and vulnerable to spontaneous rupture, causing an estimated 85% of heart attacks. Intense research efforts are underway to identify and treat vulnerable plaques before they erupt, estimated by analysts to be a multi-billion dollar market. About Miravant Miravant Medical Technologies -- whose March 31, 2004 balance sheet shows a stockholders' deficit of $8,389,000 -- specializes in pharmaceuticals and devices for photoselective medicine, developing its proprietary PhotoPoint photodynamic therapy (PDT) for large potential markets in ophthalmology, dermatology, cardiovascular disease and oncology. PhotoPoint PDT uses photoreactive (light-activated) drugs to selectively target diseased cells and blood vessels. The Company has submitted a New Drug Application (NDA) for the drug SnET2 for the treatment of patients with wet age-related macular degeneration. Miravant's cardiovascular program focuses on life-threatening diseases, with PhotoPoint MV0633 in advanced preclinical testing for atherosclerosis, atherosclerotic vulnerable plaque and restenosis. MORGANS HOTEL: Enters Into a 99-Year Sale-Leaseback with DIVCO -------------------------------------------------------------- An affiliate of Morgans Hotel Group (MHG), formerly known as Ian Schrager Hotels, has entered into a sale-leaseback transaction on its San Francisco Clift Hotel with affiliates of Divco West Properties, a pension fund advisor, under which Divco will pay MHG $71 million and MHG will retain a 99 year leasehold, providing MHG any profit that might ensue from operations or a capital transaction. Clift's plan of reorganization incorporating the sale/leaseback transaction was filed with the United States Bankruptcy Court on June 30, 2004. The plan and the transaction are subject to Bankruptcy Court approval. Approval of the plan by the court is expected to occur in September 2004. Clift's plan of reorganization provides for the satisfaction of all of the company's creditors in full. Ian Schrager, chief executive officer of the MHG, said that he was extremely pleased with the Divco transaction. "The way this deal is structured, it is basically a financing for the Clift," he said. "In addition to allowing us to emerge from Chapter 11, satisfying our lender and trade creditors, it provides for very inexpensive financing. It also provides us with the funds necessary to make improvements to the property and preserves for us the upside we feel there is in the Clift from both an operational and, should we choose to pursue it, capital transaction." Mr. Schrager said that operationally, the Clift has continued to outperform the market and is doing extremely well. "With the issues we were facing now behind us, and, the funds to make further improvements to the property, we are more optimistic than ever about the future," he said. "This is the first of what we expect to be a series of positive announcements we intend to make over the next several weeks." NEW WORLD PASTA: Plans to Close Omaha Facility on September 4 ------------------------------------------------------------- New World Pasta Company announced that it will discontinue manufacturing operations at its Omaha, Nebraska facility on or about September 4, 2004. The facility employs 17 salaried and 79 hourly employees. Production at the Omaha facility will be provided by other New World Pasta manufacturing facilities. "We regret the impact that this closing will have on our dedicated Omaha employees. The closing of this plant was a difficult decision, but it was a necessary one in order for the Company to continue its focus on reducing costs, increasing efficiencies and being competitive in the marketplace," said Lisa Donahue, Chief Executive Officer of New World Pasta Company. 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. NEWPORT INT'L: Subsidiary Inks 3-Year Reselling Pact with V-Link ---------------------------------------------------------------- GrassRoots Communications, Inc., a subsidiary of Newport International Group, Inc. (OTCBB:NWPO) announced that it has signed a reselling agreement with V-Link Solutions, Inc. V-Link, which provides a full array of WI-FI and broadband services to major hotels including Hilton, Embassy Suites, Sheraton and Hyatt Regency as well as servicing corporate and hospitality clients, will market GRCI's advanced web-conferencing and online collaboration tools to its clients under a revenue sharing agreement. Under the terms of this agreement V-Link will introduce GRCI's web enabled conference room solution which includes a touch screen white board as well as computer to phone conferencing. V-Link will also market GRCI's business and pro editions to its entire business network. "Web enabling conference rooms in the hospitality arena as well as offering hotel properties full voice, video and collaboration under a WI-FI blanket represents a potential multi-million dollar opportunity to Newport International," commented Cery Perle CEO of Newport and GRCI. "V-Link will be a key partner for us a leading provider of broadband and WI-FI solutions to this industry and we are thrilled that they have chosen to partner with us." V-Link is expected to begin marketing and implementing the software to its clients immediately. Comments Abbas Sadriwalla, CEO, V-Link, "Mobile business people have always been a key market for technology solutions that help them stay connected to colleagues and customers cost effectively. VoIP and Collaboration Tools fall into this category of cost effective connectivity solutions, and we are pleased to expand our range of third party technologies with GRCI's web enabled conferencing software, which allows mobile workers to share files and communicate via voice and video simultaneously." About V-Link Solutions, Inc. Fort Lauderdale based V-Link Solutions is one of the fastest growing WI-FI services companies in continental north America, and is uniquely positioned within the WI-FI services market as a complete solutions provider. V-Link is amongst a small handful of companies to have its own proprietary WI-FI back end technology to secure, monitor, manage and bill end users of WI-FI networks, a technology it offers as a managed service. It also offers a menu of innovative applications which work off WI-FI networks to increase productivity and reduce costs, such as Site Logix for hotels and resorts, VoIP applications for multiple verticals, and kiosk solutions. V Link has a strong footprint within the hospitality and travel industries and is now expanding aggressively into other verticals and geographies. About Newport International Group, Inc. (OTCBB:NWPO) Newport International Group Inc. -- http://www.newport-international-group.com/-- through its subsidiary, GrassRoots Communications, Inc. (GRCI), provides reliable, affordable web conferencing and collaboration technology, previously affordable only to Fortune 500 companies. Offering fast, real-time collaboration, video, and voice, GRCLive saves time and improves the efficiency and effectiveness of business communication. A free two-week trial period - found at GRCLive.com -- offers the individual and small-business owner the opportunity to become acquainted with GRCLive. At March 31, 2004, Newport International Group's balance sheet shows a stockholders' deficit of $1,261,896. NRG ENERGY: Nelson Debtors To Sell Substantially All Assets ----------------------------------------------------------- Debtors LSP-Nelson Energy, LLC, and NRG Nelson Turbines, LLC, own a partially constructed, 1,180 megawatt gas-fired, combined cycle electric generating facility, situated on approximately 90 acres of land at 1311 Nelson Road in Nelson, Illinois. The Nelson Project's construction is 65% complete. The Nelson Project was designed as a natural gas fired, combined cycle, electric generating station, which presently contains one gas turbine generator set, four supplemental-fired heat recovery steam generators and four steam turbines -- the Turbine Assets. The Turbine Assets are supported by numerous auxiliary energy systems, which support the generation and delivery of electricity -- the Auxiliary Assets. The Nelson Entities entered into certain executory contracts and own certain permits and the land on which the facility is located -- the Project Support Assets. The Nelson Project is not complete and, therefore, is not operating. Samuel S. Kohn, Esq., at Kirkland & Ellis, in New York, relates that the Nelson Assets, which comprise of the Turbine Assets, the Auxiliary Assets and the Project Support Assets, have significant carrying costs and the completion of the Nelson Project is not a viable option for the Nelson Debtors. As of the Nelson Debtors' Petition Date, the Nelson Debtors had secured debt amounting to not less than $1,081,000,000 pursuant to a Credit Agreement dated May 8, 2001, among NRG Finance Company I, LLC, the financial institutions from time to time parties to the credit agreement as lenders, Credit Suisse First Boston, New York Branch as Agent, and each of the other agents and arrangers listed on the Loan Documents. The Lenders have asserted valid security interests in all of the assets, estates, right, title and interest of the Nelson Debtors. Notably, the Nelson Debtors have no equity in the Nelson Assets, as the Lenders' Secured Claim far exceeds the estimated value of the Nelson Assets. In October 2003, the Nelson Debtors consulted their financial advisors in an effort to evaluate their investment in the Nelson Assets. After extensive analysis, the Debtors determined that the sale of the Turbine Assets on an individual basis would be the prudent course under the circumstances. The Debtors also determined that the disposition of the Nelson Assets by an experienced liquidator familiar with these types of assets would yield the highest recovery possible. Accordingly, with the Agent and the Lenders' consent, the Debtors sought and obtained the Court's authority to engage Thomassen Amcot International, LLC, as their broker for the limited purpose of selling the Turbine Assets. Thereafter, the Debtors and Thomassen began marketing the Turbine Assets. The marketing efforts involved contacting directly well over 130 energy industry related companies, including large power generation companies, both in North America and overseas. After engaging in extensive marketing efforts, the Nelson Debtors, in consultation with the Agent, on the Lenders' behalf, have determined that the sale of all of the Nelson Assets to one or more buyers, subject to higher and better offers in accordance with certain auction and bidding procedures would yield the greatest recovery for their estates and creditors. Accordingly, the Nelson Debtors ask the Court to approve the sale of the Nelson Assets, free and clear of liens, claims and encumbrances to the Successful Bidder. NRG Energy, Inc. owns and operates a diverse portfolio of power- generating facilities, primarily in the United States. Its operations include baseload, intermediate, peaking, and cogeneration facilities, thermal energy production and energy resource recovery facilities. The company, along with its affiliates, filed for chapter 11 protection (Bankr. S.D.N.Y. Case No. 03-13024) on May 14, 2003. Debtors' counsel are James H.M. Sprayregen, P.C., Matthew A. Cantor, Esq., and Robbin L. Itkin, Esq. of Kirkland & Ellis. When the company filed for protection from its creditors, it listed total assets of $10,310,000,000 and total liabilities of $9,229,000,000. (NRG Energy Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000) OM GROUP: Negotiating With Noteholders to Waive Covenant Defaults ----------------------------------------------------------------- OM Group, Inc. (NYSE: OMG) announced that it is in discussions with the largest holders of its outstanding 9.25% Senior Subordinated Notes due 2011 in order to obtain a waiver of covenant defaults under the indenture governing the Notes. The covenant defaults resulted from the company's delay in filing its 2003 Form 10-K and its 2004 first quarter Form 10-Q with the SEC. As previously announced, the company has delayed filing its 2003 Form 10-K until the completion of an anticipated restatement of its financial statements for 1999 through 2003 and resolution of SEC comments on previous company filings. The restatement is the result of an ongoing independent investigation by the company's audit committee. Under a default notice delivered by the indenture trustee for the Notes, the noteholders (or the indenture trustee at the direction of the noteholders) have the right under certain circumstances, but are not obligated, to accelerate payment of the Notes after July 4, 2004 since the company did not file its 2003 Form 10-K by that date. Defaults under the indenture can be waived by holders of a majority in aggregate principal amount of the Notes. As a result of recent discussions with the company, several large holders, including the largest holder of the company's Notes, have furnished waivers of all covenant defaults under the indenture relating to delayed SEC filings until October 31, 2004. On the basis of its discussions with these and other holders, the company believes it will be able to obtain similar waivers from additional holders and in doing so reach the majority threshold required. While discussions to date have included only the largest holders, the company anticipates paying a fee to all noteholders in connection with obtaining these waivers. The company paid the scheduled interest payment on the Notes that was due on June 15, 2004, from its existing cash without incurring any additional borrowing. The company also has been discussing these matters with its lenders participating in its revolving credit facility and expects to receive a waiver from those lenders regarding the delay in filing the 2003 Form 10-K and related matters once the company has received waivers from the majority of the noteholders. As a result of preliminary discussions with a lender, the company has been informally presented with terms through which the company could pay off the Notes should the need arise. The conversations with noteholders and lenders have primarily focused on: Audit Committee Investigation and Financial Restatements. The investigation by the company's audit committee is nearing completion, and the independent audit associated with the restatement process is progressing concurrently with the investigation. The company currently anticipates that the restatement will be completed and its 10-K will be filed by October 31, 2004. Current Operating Outlook. The company remains on track to deliver 2004 second-quarter results that, as indicated in its May 4, 2004 press release, will be significantly improved from a year ago, but lower than the 2004 first-quarter results due to planned routine maintenance shut-downs of the company's cobalt and nickel refineries, and reduced available quantities of lower-cost cobalt inventory. The company continues to benefit from strong conditions in its cobalt and nickel markets. Cobalt prices remain firm at around $24 per pound. Nickel prices, while lower earlier in the second quarter, have increased to approximately $6.70 per pound. The company currently plans to produce 9,100 metric tons of refined cobalt and 52,500 metric tons of nickel in 2004, compared to 8,100 metric tons and 51,000 metric tons, respectively, in 2003. The company anticipates its cash on hand at June 30, 2004 will be $46 million after interest payments on the Notes and payments that the company was contractually obligated to make under the terms of the Precious Metals sales agreement. Class-Action Lawsuit. The class-action lawsuit, filed in November 2002 relating to the decline in the company's stock price after the third quarter 2002 earnings announcement, has been expanded to include the full restatement period and now also includes the company's independent auditors, Ernst & Young, as a defendant. About OM Group, Inc. OM Group is a leading, vertically integrated international producer and marketer of value-added, metal-based specialty chemicals and related materials. Headquartered in Cleveland, Ohio, OM Group operates manufacturing facilities in the Americas, Europe, Asia, Africa and Australia. For more information, visit the company's Web site at http://www.omgi.com/ OMNE STAFFING: Trustee Wants to Continue David Cohen's Employment ----------------------------------------------------------------- Charles M. Forman, Trustee for Omne Staffing, Inc.'s chapter 11 cases wants to continue David Cohen's employment to assist him in the administration of the Debtors' estates. The Trustee, in the exercise of his business judgment, believes that it would be in the best interest of the Debtors' estates for Mr. Cohen to continue providing consulting services on an ongoing basis. Accordingly, the Chapter 11 Trustee asks the U.S. Bankruptcy Court for the District of New Jersey to authorize Mr. Cohen's employment to assist the Trustee in working to resolve substantial issues concerning workers compensation claims against the Debtors and other related issues. Michael E. Holt, Esq., at Forman Holt & Eliades, LLC reports that it is estimated Mr. Cohen's services will require no more than 100 additional hours of time. At the agreed upon rate of $200 per hour for Mr. Cohen's services, that would result in additional fees of no more than $20,000. Headquartered in Cranford, New Jersey, Omne Staffing, Inc., filed for chapter 11 protection on April 9, 2004 (Bankr. D. N.J. Case No. 04-22316). John K. Sherwood, Esq., at Lowenstein Sandler 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. OMNI FACILITY: Asks to Hire TRG as Restructuring Consultants ------------------------------------------------------------ Omni Facility Services, Inc., and its debtor-affiliates want permission from the U.S. Bankruptcy Court for the Southern District of New York to employ TRG, Inc., as their independent contractor to provide them management and consulting services. John Harrington will act as the Debtors' Chief Restructuring Officer. The Debtors tell the Court that TRG is one of the country's leading turnaround and crisis management firms. The firm's extensive and expertise in managing troubled companies and facilitating successful "going concern" sales of the assets of distressed companies. TRG will provide these non-exclusive services to the Debtors: a) service by Mr. Harrington as the CRO; b) management of Omni's day-to-day operations and oversight of the other Debtors' managers; c) oversight of the management of the Debtors' cash; d) advice to Omni's Board of Directors on the performance of the business on a regular basis or as requested and recommend actions to improve the value of the Debtors; e) general financial advice as it pertains to the Debtors' chapter 11 cases; and f) any and all matters that may arise from time to time in association with the engagement. TRG's professional fees range from $175 to $475 per hour. Headquartered in South Plainfield, New Jersey, Omni Facility Services, Inc. -- http://www.omnifacility.com/-- provides architectural, janitorial, landscaping, and electrical services. The Company filed for chapter 11 protection on June 9, 2004 (Bankr. S.D.N.Y. Case No. 04-13972). Frank A. Oswald, Esq., at Togut, Segal & Segal LLP represents the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $80,334,886 in total assets and $100,285,820 in total debts. OWENS CORNING: Mediator Francis McGovern Walks Away --------------------------------------------------- At a status conference on June 10, 2004, the Owens Corning Debtors advised the Court that Professor Francis McGovern has resigned as the mediator in their cases. However, Joseph Rice, Esq., at Ness Motley, Loadholt, Richardson & Poole, in Charleston, South Carolina, the lead negotiator for asbestos victims with outstanding claims, qualifies that Prof. McGovern's resignation is unrelated to the several requests for his ouster. Prof. McGovern had said he "had done all he could," Laurence Viele at Bloomberg News reports Mr. Rice said. "There's no reason for a mediator." Prof. McGovern, according to Mr. Rice, had indicated last month that he would not work on the Debtors' cases after most parties had reached common ground. Kensington's counsel, Isaac Pachulski, Esq., at Stutman, Treister & Glatt, in Los Angeles, California, believes that Prof. McGovern was affected by the controversy. "We view the fact he is resigning only after we filed our motion as telling," Mr. Viele reports Mr. Pachulski said. Kensington and Springfield will continue to seek the disgorgement of $2,000,000 that Prof. McGovern received for his mediation services. 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. 78; Bankruptcy Creditors' Service, Inc., 215/945-7000) PACIFIC GAS: Court Disallows 75 Ordinary Course Liability Claims ---------------------------------------------------------------- Pacific Gas and Electric Company objects to 104 asserted claims, which constitute ordinary course liability under the Confirmed Reorganization Plan. The Ordinary Course Liability Claims assert either: (a) postpetition liability for services, breach of contract or tort obligations of the Debtor; (b) postpetition liabilities related to the Debtor's power procurement activities; or (c) claims related to the California Department of Water Resource's postpetition procurement of power on behalf of the Debtor. Under the Plan, Ordinary Course Liabilities are to be paid in full and performed in the ordinary course of business. Disputed Ordinary Course Liabilities are to be determined, resolved, or adjudicated in the ordinary course of business in a manner as if the Debtor's Chapter 11 case had not been commenced. The Ordinary Course Liabilities will not be deemed Allowed Claims as of the Plan effective date. Accordingly, the Ordinary Course Liabilities will not be paid on the Effective Date. Rather, the Ordinary Course Liabilities will be paid or otherwise satisfied in the Debtor's ordinary course of business and under applicable law. Furthermore, after a review of the Claims, PG&E determined that, to the extent that each Claim asserts administrative status, there is no basis for it. The Claims fail to provide any support for, let alone establish, that they are entitled to administrative expense treatment under Section 503(b)(1) of the Bankruptcy Code. At the Debtor's request, the Court disallows 75 Ordinary Course Liability Claims in full, which will be satisfied in the ordinary course of the Debtor's business at a time and manner as the Debtor is obligated to satisfy, under applicable law. The disallowed Ordinary Course Liability Claims include: Claimant Claim No. Claim Amount -------- --------- ------------ Wayne Behrens 3815 N/A Duke Energy Oakland, LLC - $593,773 Gene Durand 669 N/A Dynergy Power Marketing, Inc. - 2,915,798 Quality Stores, Inc. - N/A Reliant Energy Services - 0 San Diego Gas & Electric Company - Unknown Southern California Edison Company - 2,364,379 David A. Tribble - 87,441 Victoria Sandoval Khan - N/A Williams Energy Services - 60,315,958 Headquartered in San Francisco, California, Pacific Gas and Electric Company -- http://www.pge.com/-- a wholly-owned subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest combination natural gas and electric utilities in the United States. The Company filed for Chapter 11 protection on April 6, 2001 (Bankr. N.D. Calif. Case No. 01-30923). James L. Lopes, Esq., William J. Lafferty, Esq., and Jeffrey L. Schaffer, Esq., at Howard, Rice, Nemerovski, Canady, Falk & Rabkin represent the Debtors in their restructuring efforts. On June 30, 2001, the Company listed $23,216,000,000 in assets and $22,152,000,000 in debts. (Pacific Gas Bankruptcy News, Issue No. 79; Bankruptcy Creditors' Service, Inc., 215/945-7000) PEGASUS SATELLITE: Asks Court to Okay Employee Retention Program ---------------------------------------------------------------- The Pegasus Satellite Communications, Inc. Debtors' management consists of highly regarded industry veterans who have significant knowledge of their operations and of key factors for success in the Direct Broadcast Satellite business. The managers, who make the day-to-day decisions that determine the operating profitability of the Debtors, are extremely valuable not only to the Debtors but also to other players in those markets. Traditionally, the Debtors have been able to hire and retain the best and brightest managers through competitive salaries and benefit programs, as well as an employee-friendly work environment. However, due to the increased responsibility of the Debtors' employees and the heightened uncertainties associated with the Chapter 11 cases and the Litigation, many of the Debtors' management employees are considering alternative employment. In particular, the Debtors' employees are well aware of the high stakes of the Debtors' litigation against DirecTV, Inc., and the National Rural Telecommunications Cooperative. Accordingly, many of the Debtors' management personnel are extremely concerned about their job security. Robert J. Keach, Esq., at Bernstein, Shur, Sawyer & Nelson, in Portland, Maine, tells Judge Haines that the NRTC's purported notice of termination effective as of August 31, 2004 made most employees believe that they will be out of work by the end of summer and that they have no choice but to consider alternative employment. Without the safety net of an employee retention plan, Mr. Keach asserts that the Debtors will likely face a mass exodus of employees. Given the attacks on the Debtors' business, the Debtors need to maintain the infrastructure of their business through the ongoing efforts of their existing employees. To provide a measure of security and certainty to management employee participants, the Debtors, hence, seek the Court's authority to implement and make payments pursuant to an employee retention plan. Mr. Keach stresses that given the ongoing campaign by DirecTV and the NRTC against the Debtors and the pending Litigation, the Employee Retention Plan is absolutely critical to the Debtors' ability to retain their management employees. The Employee Retention Plan The Debtors' compensation consultants, Hewitt Associates, LLC, reviewed current levels of compensation for the Debtors' management employees and concluded that it is comparable to the existing marketplace. The Debtors asked Hewitt to develop the Employee Retention Plan. The Employee Retention Plan covers 100 management employees with responsibilities relating to the Debtors' satellite division. There are 29 management employees in the Debtors' broadcast division who are not covered under the Employee Retention Plan since those managers are not as affected as the Debtors' satellite division managers by DirecTV and the NRTC's egregious conduct and the Litigation. The Employee Retention Plan provides for a variety of incentives and benefits to the Debtors' 100 management employees, with responsibilities relating to the Debtors' satellite division. The 100 management employees comprise of: -- 49 managers, -- 33 directors, -- nine vice presidents, -- one senior vice president, and -- eight senior officers. The Employee Retention Plan consists of three components -- the monthly award component, the retention award component, and the severance component. The term of the Employee Retention Plan is from July 1, 2004 through June 30, 2005. Monthly Award Component The Monthly Award Component of the Employee Retention Plan is geared at providing the Covered Employees with a moderate level of guaranteed incentive on a monthly basis over the course of the Retention Period. The monthly incentive amount is equal to 1/12 of the Covered Employees' individual prepetition annual target amount for fiscal year 2004 under the Debtors' existing Corporate and Satellite Short-Term Incentive Plan. At the end of each month, the Covered Employees under the Monthly Award Component will receive the greater of: (i) the amount actually earned under the Debtors' existing Short-Term Incentive Plan; or (ii) the Monthly Incentive Amount. The Debtors estimate that the monthly cost for the monthly award component is $261,000, which is about $1 million cheaper, per annum, than the three-tiered Short-Term Incentive Plan. Retention Award Component Under the Retention Award Component, the Covered Employees are awarded certain amounts for continuing in the Debtors' employ through the Retention Period. Amounts awarded under the Retention Award Component are credited into a pool on a monthly basis -- on the first day of each month -- in an amount based on this schedule: Level 07/01/04 - 08/01/04 09/01/04 - 12/01/04 ----- ------------------- ------------------- Manager 1.25 weeks of base salary 1 week of base salary Director 2.5 weeks of base salary 2 weeks of base salary Vice Pres. 5 weeks of base salary 4 weeks of base salary Senior VP 7.5 weeks of base salary 6 weeks of base salary Senior Officer 10 weeks of base salary 8 weeks of base salary Level 01/01/05 - 02/01/05 03/01/05 - 06/01/05 ----- ------------------- ------------------- Manager 0.625 week of base salary 0.5 week of base salary Director 1.25 weeks of base salary 1 week of base salary Vice Pres. 2.5 weeks of base salary 2 weeks of base salary Senior VP 3.75 weeks of base salary 3 weeks of base salary Senior Officer 5 weeks of base salary 4 weeks of base salary Accrued account balances under the Retention Award Component will be paid to the Covered Employees as of December 31, 2004 and June 30, 2005. However, the accrued balances may be paid out earlier in the event of: (i) an involuntary employment termination other than for cause; or (ii) the Debtors' emergence from bankruptcy. If a Covered Employee voluntarily terminates his or her employment prior to payout, that employee will forfeit all amounts not yet paid under the Retention Award Component. Based on the current number of Covered Employees, the Debtors estimate that the aggregate payment under the Retention Award Component on December 31, 2004 is $3,686,000. From December 31, 2004 through June 30, 2005, the Debtors anticipate that they may have to re-evaluate their staffing needs. Thus, the Debtors are unable to ascertain the approximate cost of the retention award component. However, based on the current number of Covered Employees, the estimated aggregate payout under the Retention Award Component on June 30, 2005 is $1,843,000. Severance Component Pursuant to the Severance Component, the Covered Employees are guaranteed a certain payout upon involuntary termination for reasons other than unsatisfactory performance. Minimum severance payouts under the Severance Component are: Employee Level Minimum -------------- ------- Manager 6.5 weeks Director 13 weeks Vice President 26 weeks Senior Vice President 39 weeks Senior Officer 52 weeks The severance amounts represent about one-half of the severance amounts that each employee ordinarily would have received under the Debtors' prepetition severance policy, which was at a competitive market level. The Debtors estimate that the maximum cost for the Severance Component -- if all of the Covered Employees were terminated -- is $3,686,000. The Debtors want to pay the Severance Component on an administrative expense basis. Payment under that component would be conditioned on each Covered Employee executing a valid release of all claims arising out of that employee's employment or termination, in a form satisfactory to the Debtors. The Severance Component will supersede any prepetition severance plans for the Covered Employees. Employee Retention Plan Must be Approved Mr. Keach contends that even if the Debtors are unsuccessful in the Litigation and can no longer provide DirecTV programming to their subscribers, it is essential to have the Debtors' current infrastructure in place to enable them to venture into projects and to offer services comparable to the ones provided with respect to DirecTV. The Debtors cannot afford to lose any of their key personnel at this critical time. Therefore, the Employee Retention Plan must be approved. Headquartered in Bala Cynwyd, Pennsylvania, Pegasus Satellite Communications, Inc. -- http://www.pgtv.com/-- is a leading independent provider of direct broadcast satellite (DBS) television. The Company, along with its affiliates, filed for chapter 11 protection (Bankr. D. Me. Lead Case No. 04-20889) on June 2, 2004. Leonard M. Gulino, Esq., and Robert J. Keach, Esq., at Bernstein, Shur, Sawyer & Nelson, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,762,883,000 in assets and $1,878,195,000 in liabilities. (Pegasus Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) PURELY SUPREME: Selling Assets at Auction on July 14 ---------------------------------------------------- Purely Supreme Foods, L.L.C., is selling its refrigerated side dish processing business at action on July 14, 2004. The opening bid will be $2,690,528 and bidding will continue in $50,000 increments. Purely Supreme owns a patented process using a steam- cook-chill procedure in a modified atmosphere that results in better taste and texture and a higher price point on the retail shelf. The sale includes the Debtor's intellectual property and a 35,000 square-foot leased plant that can produce 15 million pounds of potato products annually. Bids must be delivered to the Company by the close of business on Monday, July 12, 2004. For detailed information, contact: Bill Fehr Purely Supreme Foods, L.L.C. 800 N. Main St., Suite 200 Meridian, ID 83642 Telephone (208) 888-3791 bill@PurelySupremeFoods.com Purely Supreme Foods, L.L.C., aka Redi Foods, LLC, filed for chapter 11 protection on March 25, 2004 (Bankr. D. Id. Case No. 04-40606) to halt a levy. Eric L. Olsen, Esq., at Racine, Olson, Nye, Budge & Bailey, Chartered, in Pocatello, Idaho, represents the company. When the company filed for bankruptcy protection it estimated its total assets at less than $10 million to total debts at more than $10 million. RCN CORP: Shuman Wants Stay Lifted To Collect $200K Settlement -------------------------------------------------------------- Jennifer Shuman asks the Court to lift the automatic stay to allow her to proceed with her settlement with Debtor RCN Corporation's insurer. Pursuant to the New Jersey Law Against Discrimination, Ms. Shuman filed a gender and pregnancy discrimination case against RCN Corp. with the Law Division, State of New Jersey, County of Middlesex. On March 22, 2004, the parties reached a settlement for $200,000. Ms. Shuman's counsel, Neal M. Unger, relates that RCN Corp. maintains insurance coverage under an Employment Practices Liability Insurance Policy with American International Insurance Group Company, National Union Fire Insurance Company of Pittsburgh, PA. This policy provides coverage for Ms. Shuman with regards to the settlement. Furthermore, AIG has agreed to pay the full amount of the monetary settlement to Ms. Shuman. "Lifting the automatic stay and permitting Ms. Shuman's settlement to proceed is reasonable since no sums are to be paid by the Debtors, and therefore, there is no impairment of the bankruptcy estate," Mr. Unger explains. Headquartered in Princeton, New Jersey, RCN Corporation -- http://www.rcn.com/-- is a provider of bundled Telecommunications services. The Company, along with its affiliates, filed for chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 04-13638) on May 27, 2004. Frederick D. Morris, Esq., and Jay M. Goffman, Esq., at Skadden Arps Slate Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,486,782,000 in assets and $1,820,323,000 in liabilities. (RCN Corp. Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) REVLON INC: Most 12% Senior Noteholders Consent to Amend Indenture ------------------------------------------------------------------ Revlon, Inc. (NYSE: REV) and its wholly-owned subsidiary, Revlon Consumer Products Corporation, together announced that, in connection with the tender offer and consent solicitation by RCPC with respect to any and all of RCPC's 12% Senior Secured Notes due 2005, approximately 82% of the total issued and outstanding principal amount of the 12% Notes have been validly tendered, representing a sufficient number of consents to certain amendments to the indenture. RCPC also indicated that, in order to allow holders of the 12% Notes additional time in light of the July 4th holiday weekend, it is extending the deadline for tendering and receiving the full tender consideration with respect to the 12% Notes from 5:00 PM EDT on July 6, 2004 to 5:00 PM EDT on July 8, 2004. In connection with extending the Early Consent Date, RCPC has also extended the date on which it will set the price for the 12% Notes from 2:00 PM EDT on July 6, 2004 to 2:00 PM EDT on July 8, 2004. The amendments to the indenture will eliminate substantially all of the restrictive covenants contained in the indenture governing the 12% Notes and release the guarantees of RCPC's obligations, and the collateral securing the obligations of RCPC and the guarantors, under the indenture. The supplemental indenture incorporating the amendments, as described in the Offer to Purchase for Cash and Consent Solicitation dated June 22, 2004 will not become operative unless RCPC's tender offer for the 12% Notes is consummated in accordance with its terms. This press release announces the Withdrawal Deadline, as described in the Offer to Purchase; accordingly, holders who have validly tendered 12% Notes as of this time are no longer permitted to withdraw their 12% Notes and the related consents. In addition, holders who tender 12% Notes between now and the July 21, 2004 expiration date of the tender offer will not be permitted to withdraw their 12% Notes and the related consents. Holders of the notes can obtain copies of the offer to purchase and related materials from D.F. King & Co., Inc., the Information Agent, at (800) 949-2583 (toll free) or (212) 269-5550 (collect). Citigroup Global Markets Inc. is acting as Dealer Manager. Questions regarding the solicitation can be addressed to Citigroup at (800) 558-3745 (toll free) or (212) 723-6106 (collect). Holders of the 12% Notes may obtain a hypothetical quote of the consideration to be paid by calling either the Dealer Manager or the Information Agent. In addition, promptly following the final calculation of the consideration for the 12% Notes, the Company will publicly announce, by press release, the pricing information. None of Revlon, RCPC, Citigroup or the Information Agent makes any recommendations as to whether or not holders should tender their notes pursuant to the tender offer and no one has been authorized by any of them to make such recommendations. Holders must make their own decisions as to whether to tender notes and, if so, the principal amount of notes to tender. About Revlon Revlon is a worldwide cosmetics, fragrance, and personal care products company. The Company's vision is to deliver the promise of beauty through creating and developing the most consumer preferred brands. Websites featuring current product and promotional information can be reached at http://www.revlon.com and http://www.almay.com/Corporate investor relations information can be accessed at http://www.revloninc.com/ At March 31, 2004, Revlon Inc.'s consolidated balance sheet shows a stockholders' deficit of $956.4 million compared to a deficit of $1.72 billion at December 31, 2003. SIX FLAGS: Will Make PIERS Dividend Distribution on August 15 ------------------------------------------------------------- Six Flags, Inc. (NYSE: PKS and PKSPrB) announced it has fixed August 1, 2004 as the record date for payment of a dividend for the quarter ending August 15, 2004 to the holders of its Preferred Income Equity Redeemable Shares, each such PIERS representing one one-hundredth of a share of the Company's 7 1/4 % Convertible Preferred Stock. Payment of the dividend, which will be paid 100% in cash, will be made on August 15, 2004. The dividend will aggregate $.453125 per PIERS. About Six Flags Six Flags is the world's largest regional theme park company. In its Form 10-Q for the quarterly period ended March 31, 2004, Six Flags, Inc. reports: "Our principal sources of liquidity are cash generated from operations, funds from borrowings and existing cash on hand. Our principal uses of cash include the funding of working capital obligations, debt service, investments in parks (including capital projects and acquisitions), preferred stock dividends and payments to our partners in the Partnership Parks. We did not pay a dividend on our common stock during 2003, nor do we expect to pay dividends in 2004. We believe that, based on historical and anticipated operating results, cash flows from operations, available cash and available amounts under our credit agreement will be adequate to meet our future liquidity needs, including anticipated requirements for working capital, capital expenditures, scheduled debt and preferred stock requirements and obligations under arrangements relating to the Partnership Parks, for at least the next several years. Our current and future liquidity is, however, greatly dependent upon our operating results, which are driven largely by overall economic conditions as well as the price and perceived quality of the entertainment experience at our parks. Our liquidity could also be adversely affected by unfavorable weather, accidents or the occurrence of an event or condition, including terrorist acts or threats, negative publicity or significant local competitive events, that significantly reduces paid attendance and, therefore, revenue at any of our theme parks. In that case, we might need to seek additional financing. In addition, we expect to refinance all or a portion of our existing debt on or prior to maturity and to seek additional financing. The degree to which we are leveraged could adversely affect our ability to obtain any new financing or to effect any such refinancing." SPIEGEL: Wants Court Nod To Set Up New Hampton Bidding Procedures ----------------------------------------------------------------- The Spiegel Group Debtors ask the Court to approve these bidding procedures for the sale of New Hampton Realty Corp., Inc.'s real property in Hampton, Virginia: (a) Qualified Overbids The Debtors have agreed with American Port Services, Inc., to require an initial Qualified Overbid of greater than: (i) $2,000,555 -- which amount represents the sum of: * $1,898,100, the Purchase Price payable by American Port; * $47,455, the Break-up Fee; and * $55,000, the amount of the Initial Overbid Increment, plus (ii) all other consideration to New Hampton under the Purchase Agreement. (b) Delivery of Overbid and Good Faith Deposit A Qualified Overbidder who desires to make a bid must deliver its good faith deposit via wire transfer to Account No. 3752186004 at Bank of America in Dallas, Texas, ABA No. 111000012, Account Name: Spiegel, Inc., in an amount equal to or greater than $292,265 -- which amount represents the sum of: * $189,810 -- the amount of the Down Payment; plus * $47,455 -- the amount of the Break-up Fee; plus * $55,000 -- the Initial Overbid Increment, and must deliver a copy of its Required Bid Documents to each of: * Shearman & Sterling LLP 599 Lexington Avenue New York, New York 10022 Attention: Jill Frizzley, Esq. jfrizzley@shearman.com * Bouhan, Williams & Levy LLP The Armstrong House 447 Bull Street Savannah, Georgia 31401 Attention: John G. Lientz, Esq. jglientz@bouhan.com * New Hampton Realty Corp. c/o Spiegel, Inc. 3500 Lacey Road Downers Grove, Illinois 60515-5432 Attention: Terry Pieniazek terry_pieniazek@spgl.com * Keen Realty LLC 60 Cutter Mill Road, Ste. 407 Great Neck, New York 11021 Attention: Harold Bordwin hbordwin@keenconsultants.com Craig Fox cfox@keenconsultants.com * CB Richard Ellis Inc. 150 West Main Street, Suite 1100 Norfolk, Virginia 23510 Attention: Pat Mugler pat.mugler@cbre.com Gresham Wall gresh.wall@cbre.com * Chadbourne & Parke LLP Counsel to the Creditors Committee 30 Rockefeller Plaza New York, New York 10112 Attention: David M. LeMay, Esq. dlemay@chadbourne.com * Kaye Scholer LLP Counsel to the postpetition secured lenders 425 Park Avenue New York, New York 10022 Attention: Gary B. Bernstein, Esq. gbernstein@kayescholer.com so as to be received not later than September 9, 2004 at 4:00 p.m. (c) Auction If the Debtors determine, in consultation with their professionals and the Creditors Committee, that one or more Qualified Overbids has been timely tendered, the auction, if required, will commence at 10:00 a.m. on Wednesday, September 15, 2004, before the Honorable Cornelius Blackshear, United States Bankruptcy Judge for the Southern District of New York, United States Bankruptcy Court, at Courtroom 601, One Bowling Green, in New York or at a later time as determined by the Court. (d) Determination of the Highest and Best Bid At the conclusion of the auction, the Debtors will, in consultation with the Creditors Committee: * review each Qualified Overbid on the basis of financial and contractual terms and other factors relevant to the sale process, including those factors affecting the speed and certainty of consummating the Sale; and * identify the successful bid and the second highest and best offer for the purchase of the New Hampton Property. The Debtors may, in consultation with the Creditors Committee: * determine which Qualified Overbid, if any, is the highest or otherwise best offer; and * reject, at any time before the Court enters an order approving a Qualified Overbid, any bid -- other than that of American Port -- that they determine to be: (i) inadequate or insufficient; (ii) not in conformity with the requirements of the Bankruptcy Code, the Bidding Procedures or the terms and conditions of the Purchase Agreement; or (iii) contrary to New Hampton's or the Debtors' best interests, their estate and their creditors. (e) The Sale Hearing A hearing to approve the sale of the New Hampton Property to American Port or, alternatively, to the Successful Bidder will be conducted immediately following the auction on September 15, 2004 at 10:00 a.m., before the Honorable Cornelius Blackshear, or at a later time as determined by the Court. If the Successful Bidder fails to consummate an approved sale, after the Sale Hearing, because of a breach or failure to perform on the part of the Successful Bidder, the Back-up Bid, as disclosed at the Sale Hearing, will be deemed to be the Successful Bid and the Debtors will be authorized, but not required, to consummate the sale with the Back-up Bidder without further Court order. (f) Failure to Close If any sale of the Property to a Qualified Overbidder other than American Port fails to close for any reason and American Port has made the next to highest and best bid, then it will purchase the Property on the terms and conditions set forth in the Purchase Agreement -- except the Closing Date will be extended for a reasonable period of time, not to exceed 30 days, to allow American Port to complete the purchase -- and at the final purchase price bid by American Port at the auction, without requiring further Court Approval. (g) Return of Good Faith Deposit The Good Faith Deposits of all Qualified Overbidders will be retained by the Debtors and all Qualified Overbids will remain open and irrevocable until the Closing of a Sale, provided, however, that if no Closing of a Sale occurs on or before 90 days after the Sale Hearing, the Debtors will return each of the Good Faith Deposits to the Overbidder that made the Good Faith Deposit. If a Successful Bidder fails to consummate an approved sale because of a breach or failure to perform on the part of the Successful Bidder, the Debtors will not have any obligation to return the Good Faith Deposit, and the Good Faith Deposit irrevocably will become New Hampton's property and will not be credited against the purchase price of the subsequent buyer. Headquartered in Downers Grove, Illinois, Spiegel, Inc. -- http://www.spiegel.com/-- is a leading international general merchandise and specialty retailer that offers apparel, home furnishings and other merchandise through catalogs, e-commerce sites and approximately 560 retail stores. The Company filed for Chapter 11 protection on March 17, 2003 (Bankr. S.D.N.Y. Case No. 03-11540). James L. Garrity, Jr., Esq., and Marc B. Hankin, Esq., at Shearman & Sterling represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $1,737,474,862 in assets and 1,706,761,176 in debts. (Spiegel Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., 215/945-7000) STEWART ENTERPRISES: Fitch Affirms Senior Notes' Low-B Ratings -------------------------------------------------------------- Fitch Ratings has affirmed the ratings of Stewart Enterprises Inc. as follows: --Senior secured bank credit facility 'BB+'; --Senior subordinated notes 'BB-'. The affirmation reflects recently stabilized trends in the funeral and cemetery segment, further debt reduction and recent improvement in profit margins due to price increases, and cost reduction resulting from a restructuring program. Fitch believes that the mortality rate should generally trend upwards due to projected demographic changes. Cemetery sales will be cyclical. Concerns remain about the gradual trend toward lower-priced cremations and the effect this may have on Stewart's profit margins and cemetery business. Simultaneously, Fitch is withdrawing all ratings and will no longer provide analytical coverage of the issuer due to the lack of market interest. SURFSIDE RESORTS: Gets Okay to Hire Walter Snell as Attorney ------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida gave its stamp of approval to Surfside Resorts and Suites, Inc., to hire Snell & Snell, P.A. as its attorney. Walter J. Snell, Esq., will lead the team in providing services to the Debtor. The Debtor expects the firm to: a) advise and counsel the debtor-in-possession concerning the operation of its business in compliance with Chapter 11 and order of this Court; b) prosecute and defend any cause of action on behalf of the debtor-in-possession; c) prepare, on behalf of the debtor-in-possession, all necessary applications, motions, reports and other legal papers; d) assist in the formulation of a plan of reorganization and preparation of a disclosure statement; and e) provide all other services of a legal nature. Mr. Snell will bill the Debtor his current hourly rate of $225 per hour. Headquartered in Ormond Beach, Florida, Surfside Resort and Suites, Inc., operates vacation resort, restaurant and lounge. The Company filed for chapter 11 protection on June 9, 2004 (Bankr. M.D. Fla. Case No. 04-05948). Walter J. Snell, Esq., represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $19,598,145 in total assets and $9,289,843 in total debts. TANGO INC: Secures Global Apparel & Footwear Company Contract ------------------------------------------------------------- Tango Incorporated (OTCBB:TNGO) announced that it has completed the initial shipment for its new client -- a well-known, global apparel and footwear company -- whose name the Company has elected to not disclose at this time for competitive reasons. This particular client was brought on board by Tango's new executive sales team, which was formed specifically to increase the Company's revenue in 2004. The client has indicated to Tango Pacific, Tango Incorporated's garment manufacturing subsidiary, that it is interested in purchasing over $705,000 worth of production per quarter, renewable for several quarters. According to Todd Violette, Chairman and COO of Tango Incorporated, "The significant turnaround that we initiated last year and the Company's investment in a new executive sales team is beginning to pay off, as is illustrated by the landing of this new client, which ranks among the top five in the apparel and footwear business. I'm confident that our new team will continue to parlay the strong reputation Tango Pacific has established in the screenprinting industry into more business and increased revenues. The Company has taken the necessary steps to bring increased value to our shareholders. This new client, along with other new business that we are anticipating, has moved us closer to the Company's goal of being profitable by the fourth quarter of our FY2004." About Tango Tango Incorporated -- whose January 31, 2004 balance sheet shows a stockholders' deficit of $1,053,342 -- is a leading garment manufacturing and distribution company, with a goal of becoming a dominant leader in the industry. Tango pursues opportunities, both domestically and internationally. Tango provides major branded apparel the ability to produce the highest quality merchandise, while protecting the integrity of their brand. Tango serves as a trusted ally, providing them with quality production and on time delivery, with maximum efficiency and reliability. Tango becomes a business partner by providing economic solutions for development of their brand. Tango provides a work environment that is rewarding to its employees and at the same time having aggressive plan for growth. Tango is currently producing for many major brands, including Nike, Nike Jordan and Chaps Ralph Lauren. Go to http://www.tangopacific.com/for more information. TEENFORM ASSOCIATES: Case Summary & 8 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Teenform Associates, L.P. 237 South Street Morristown, New Jersey 07960 Bankruptcy Case No.: 04-32379 Chapter 11 Petition Date: July 6, 2004 Court: District of New Jersey (Newark) Debtor's Counsel: Morris S. Bauer, Esq. Ravin Greenberg PC 101 Eisenhower Parkway Roseland, NJ 07068-1028 Tel: 973-226-1500 Estimated Assets: $1 Million to $10 Million Estimated Debts: $100,000 to $500,000 Debtor's 8 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Strategic Alliance Realty $54,844 Realty Management Associates, LP $25,582 Petillo Enterprises $23,879 Berger & Bornstein $21,649 Hamilton Group $18,842 Northeast Fire Protection, Inc. $7,280 Ritter & Plante Associates, LLC $1,250 Rasmussen Construction $897 TOP BON LLC: Case Summary & 12 Largest Unsecured Creditors ---------------------------------------------------------- Lead Debtor: Top Bon, LLC 24 North Bryn Mawr Avenue, Suite 265 Bryn Mawr, Pennsylvania 19010 Bankruptcy Case No.: 04-28574 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Top Bon of Mall at Robinson, LLC 04-28575 Top Bon of Monroeville Mall, LLC 04-28576 Type of Business: The Debtor operates fast food cinnamon bun bakeries. Chapter 11 Petition Date: June 29, 2004 Court: Western District of Pennsylvania (Pittsburgh) Judge: M. Bruce McCullough Debtors' Counsel: John M. Steiner, Esq. Leech Tishman Fuscaldo & Lampl LLC Citizens Bank Building, 30th Floor 525 William Penn Place Pittsburgh, PA 15219 Tel: 412-261-1600 Estimated Assets Estimated Debts ---------------- --------------- Top Bon, LLC $500,000 to $1 M $1 M to $10 M Top Bon of Mall at Robinson $0 to $50,000 $0 to $50,000 Top Bon of Monroeville Mall $0 to $50,000 $0 to $50,000 A. Top Bon, LLC's 2 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Citizens Bank $199,000 National City Bank $50,000 Cinnabon, Inc. $38,000 B. Top Bon of Mall at Robinson's 6 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Duquesne Light $658 B.E. Refrigeration $596 Verizon $397 Roto-Rooter $257 Columbia Gas of Pennsylvania $64 Forest City Enterprises Unknown C. Top Bon of Monroeville Mall's 4 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Monroeville Mall Merchants $4,590 Mike the Balloon Guy $625 Keystone Electrical Systems $571 Verizon $514 TORCH RIVER: Executes Drilling Program on High Rock Island ---------------------------------------------------------- Torch River Resources Ltd. announced that the proposed 2000 meter drilling program on High Rock Island commenced July 7, 2004. High Rock Island is located 150 kilometres north of Winnipeg, Manitoba. Work begins on the Juniper Vein known from six previous drill holes to have values up to three ounces of gold per ton. The Juniper Vein is ten to twenty meters wide and is open at length. The drilling services are provided by a company controlled by Ronald Burko, who is an officer and director of Torch. At April 30, 2004 Torch River Resources, Ltd.'s balance sheet shows a deficit of C$358,354 as compared to a deficit of C$222,107 at April 30, 2003. TROPICAL SPORTSWEAR: Names 3 Executives to Lead New Business Units ------------------------------------------------------------------ Tropical Sportswear International Corporation (Nasdaq:TSIC), a designer, producer and marketer of high-quality branded and retailer private branded apparel, has named senior executives to lead three new strategic business units designed to better serve the Company's customers. Richard J. Domino, President of TSI, said that the formation of these strategic business units and the designation of these executives to head them, would position the company to provide customers with access to innovative products and marketing solutions made possible by TSI's extensive experience and expertise. "A key part of the growth of our Company will be transitioning from a manufacturing to a marketing driven business model," said Domino. "Having improved our financial position recently, we are now focusing on identifying opportunities to deliver greater value to our customers." John T. Berg, Jr. has been named Senior Vice President, General Manager of the Branded division which includes the Savane brand. Mr. Berg, with over 25 years of experience in the apparel business, joined TSI in a sales position in 1994. He later became a Vice President and Regional Sales Director and, in 2002, was promoted to Senior Vice President of Sales for the Savane division. Prior to joining TSI, Mr. Berg was a buyer and merchandiser with May Corporation. He has a BS in Marketing from Indiana University. Frank D. Keeney has been named Senior Vice President, General Manager of TSI's Private Brand division. With over 27 years experience in the apparel industry, Mr. Keeney has been Senior Vice President of Sales for Private Brand and was previously Senior Vice President of Sales of the Duck Head division. Prior to working at TSI, he held positions with Haggar Corporation, Arrow, and IZOD, where he was Executive Vice President of Sales & Marketing of IZOD Menswear. He has a BA in Economics from Ithaca College. Steven S. Barr has been named Senior Vice President, General Manager of the Mass Merchant division. With over 15 years experience in the apparel industry, he has held several positions at TSI since 1989, most recently as Senior Vice President of Sales and Marketing and previously as a Key Account Manager and Vice President of Sales for Farah Incorporated. Prior to joining the company, Mr. Barr was with Dean Witter for five years. He has a BA degree in Accounting from Texas Tech University. "The depth of experience these three individuals possess is impressive and will be supported by market research and product innovation," Domino continued. "We are developing ways to leverage our deep-rooted expertise to help our customers better manage brands through strategies designed to create and increase demand for products, accelerate inventory turnover and achieve higher margins. Through the use of these business units, these executives and their teams, and the resources available to them, we will be able to provide outstanding value to our customers." TSI is a designer, producer and marketer of high-quality branded and retailer private branded apparel products that are sold to major retailers in all levels and channels of distribution. Primary product lines feature casual and dress-casual pants, shorts, denim jeans, and woven and knit shirts. Major owned brands include Savane, Farah, Flyers(TM), The Original Khaki Co., Bay to Bay, Two Pepper, Royal Palm, Banana Joe, and Authentic Chino Casuals. Licensed brands include Bill Blass and Van Heusen. Retailer national private brands that we produce include Puritan, George(TM), Member's Mark, Sonoma, Croft & Barrow, St. John's Bay, Roundtree & Yorke, Geoffrey Beene, Izod, and White Stag. TSI distinguishes itself by providing major retailers with comprehensive brand management programs and uses advanced technology to provide retailers with customer, product and market analyses, apparel design, and merchandising consulting and inventory forecasting with a focus on return on investment. * * * In its Form 10-Q for the quarterly period ended April 3, 2004, Tropical Sportswear International Corporation reports: "On June 6, 2003, we renewed our revolving credit line. The Facility provides for borrowings of up to $95 million, subject to certain borrowing base limitations. Borrowings under the Facility bear variable rates of interest based on LIBOR plus an applicable margin (5.6% at April 3, 2004), and are secured by substantially all of our domestic assets. The Facility matures in June 2006. The Facility contained significant financial and operating covenants if availability under the Facility falls below $20 million. These covenants include a consolidated fixed charge ratio of at least .90x and a ratio of consolidated funded debt to consolidated EBITDA of not more than 5.25x. The Facility also includes prohibitions on our ability to incur certain additional indebtedness or to pay dividends, and restrictions on our ability to make capital expenditures. "The Facility contains both a subjective acceleration clause and a requirement to maintain a lock-box arrangement, whereby remittances from customers reduce borrowings outstanding under the Facility. In accordance with Emerging Issues Task Force 95-22, "Balance Sheet Classification of Borrowings Outstanding under Revolving Credit Agreements That Include Both a Subjective Acceleration Clause and a Lock-Box Arrangement", outstanding borrowings under the Facility of $23.3 million have been classified as short-term as of April 3, 2004. "On December 15, 2003, we paid the semi-annual interest payment of $5.5 million to the holders of our senior subordinated notes. On December 16, 2003, availability under our Facility fell below $20 million, triggering financial covenants which we violated. This caused us to be in technical default under the Facility. On January 12, 2004, we amended the Facility with Fleet Capital, which among other things reduced aggregate borrowings to $70 million. The default under the Facility was waived on January 12, 2004 by the terms of the Amended Facility. Although our Amended Facility provides for borrowings of up to $70 million, the amount that can be borrowed at any given time is based upon a formula that takes into account, among other things, our eligible accounts receivable and inventory, which can result in borrowing availability of less than the full amount. Additionally, the Amended Facility contains a $10 million availability reserve base and higher rates of interest than the Facility. The $10.0 million availability reserve base was met as of April 3, 2004 and through the date of this filing. The Amended Facility also contains monthly financial covenants of minimum EBITDA levels which began February 2004, and a consolidated fixed charge coverage ratio and consolidated EBIT to consolidated interest expense ratio which begin March 2005. The fiscal 2004 minimum EBITDA levels are cumulative month amounts beginning in the second quarter of fiscal 2004. The minimum EBITDA threshold for fiscal 2004 ranges from $1.8 million for the two months ending February 29, 2004 to $11.8 million for the nine months ending October 2, 2004. We were in compliance with the EBITDA covenants as of April 3, 2004, and had $13.2 million available for borrowing under the Amended Facility. While we believe our operating plans, if met, will be sufficient to assure compliance with the terms of the Amended Facility, there can be no assurances that we will be in compliance through fiscal 2004. "Our estimate of capital needs is subject to a number of risks and uncertainties that could result in additional capital needs that have not been anticipated. An important source of capital is our ability to generate positive cash flow from operations. This is dependent upon our ability to increase revenues, to generate adequate gross profit from those sales, to reduce excess inventories and to control costs and expenses. Another important source of capital is our ability to borrow under the Amended Facility. We have historically violated certain covenants in our borrowing agreements, and to this point, we have been able to obtain waivers from our lenders allowing us continued access to this source of capital. However, there can be no assurances that we will be able to obtain waivers from our lenders should a violation occur in the future. If our actual revenues are less than we expect or operating or capital costs are more than we expect, our financial condition and liquidity may be materially adversely affected. We may need to raise additional capital either through the issuance of debt or equity securities or additional credit facilities, and there can be no assurances that we would be able to access the credit or capital markets for additional capital." UNITED AIRLINES: Balks at American Airlines' $74,500,000 Claim -------------------------------------------------------------- American Airlines, Inc., filed Claim No. 36785 on May 8, 2003 seeking $74,500,000 for petroleum contamination from the United Airlines Inc. Debtors at three separate sites: Terminal 9 at John F. Kennedy $70,000,000 International Airport The Bulk and Satellite Fuel 4,300,000 Facilities at JFK LaGuardia Airport 300,000 The Debtors ask the Court to disallow the Claim. Kenneth Berlin, Esq., at Skadden, Arps, Slate, Meagher & Flom, explains that American released the Debtors from liability at JFK several years ago. The Debtors abandoned Terminal 9 in 1991 and subleased it to American. Pursuant to the sublease, American released the Debtors from all existing and future claims. Also, the Debtors did not contribute to the contamination at the site. In the event the Claim is valid, American would only be entitled to receive the Debtors' equitable share of the costs to remediate the contamination, which would be less than $500,000. The Debtors were not responsible for the Facilities at JFK. According to the Claim, the $300,000 represents a 2% allocation, of liability which the New York State Department of Conservation has assigned to American for the site. American fails to demonstrate why the Debtors should be responsible for the 2% allocation that the NYSDC has already determined is American's pro rata share of the costs. There is no basis for American to recover $4,200,000 that relates to the Facilities at JFK. In December 1999, the Port Authority informed all JFK tenants that they would be subject to a pollution tax of 0.00478 per gallon of fuel to pay for remediation costs at the site. The amount was assessed on all users of the site. This portion of the Claim should be disallowed as unsubstantiated. 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. 52; Bankruptcy Creditors' Service, Inc., 215/945-7000) URBANALIEN CORP: Synchronicity Financial Gains Company Control -------------------------------------------------------------- Urbanalien Corporation (OTCBB:UBAL), a Nevada corporation, announced that Form 8k has been filed with the SEC to report a change in control of the Company to Synchronicity Financial Limited (SFL). Further to this, Anila Ladha and Shamira Jaffer; the sole officers and directors of the company; have both resigned their positions from the company and will each return 1,000,000 common shares back to treasury. Mr. Peter Verbeek has been named President, Director and Chairman of the Board of Urbanalien Corporation. The Company also announced that it has retired $315,000 of debt and can now focus in restructuring the company, allowing it to position itself to pursue suitable acquisition candidates which it is believed will further enhance shareholder value. About Urbanalien Corporation Urbanalien Corporation -- whose March 31, 2004 balance sheet shows a stockholders' deficit of $417,092 -- has been fully dependent upon its current management and/or significant shareholders to provide sufficient working capital to preserve the integrity of the corporate entity. The Company was incorporated in July of 2001 under the laws of the State of Nevada and effective January 5th, 2004, was quoted on the NASD OTCBB. During 2001, 2002 & 2003, the Company devoted its activities to establishing an interactive kiosk terminals business in various public venues. Due to the lack of sufficient funds, the company was not able to carry out its original business plan. US AIRWAYS: Agrees to Allow UBS AG's $9 Million Claim ----------------------------------------------------- On October 31, 2002, UBS AG, Stamford Branch, successor by merger to Union Bank of Switzerland, filed Claim No. 4435 against US Airways Group Inc., which included claims relating to aircraft bearing Tail No. N859US. UBS engaged in discussions with the Reorganized Debtors and has reached a stipulation to resolve this matter. Claim No. 4435 is allowed as a general unsecured Class USAI-7 for $9,000,000 with respect to Tail No. N859US. All other claims relating to Tail No. N859US are disallowed. (US Airways Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service, Inc., 215/945-7000) US AIRWAYS: Says Passenger Load Factor Up 3% in June 2004 --------------------------------------------------------- US Airways reported its June 2004 passenger traffic Tuesday. Mainline revenue passenger miles for June 2004 increased 5.4 percent on a 1.5 percent increase in available seat miles compared to June 2003. The passenger load factor was 81.6 percent, which is a 3.0 percentage point increase compared to June 2003. For the second quarter 2004, mainline revenue passenger miles increased 8.7 percent on a 4.0 percent increase in available seat miles compared to the same period in 2003. The passenger load factor for the quarter 2004 was 78.9 percent, a 3.5 percentage point increase compared to the second quarter 2003. Mainline revenue passenger miles for the first six months of 2004 increased 9.7 percent on a 5.3 percent increase in available seat miles compared to the same period in 2003. The passenger load factor for the first six months of 2004 was 74.7 percent, a 3.0 percentage point increase compared to the same period in 2003. The three wholly owned subsidiaries of US Airways Group, Inc. -- Allegheny Airlines, Inc., Piedmont Airlines, Inc., and PSA, Inc. - - along with MidAtlantic Airways, reported a 55.8 percent increase in revenue passenger miles for June 2004 on 29.7 percent more capacity compared to June 2003. The passenger load factor was 67.6 percent, an 11.3 percentage point increase compared to June 2003. Second quarter 2004 revenue passenger miles for the three wholly owned US Airways Express carriers and MidAtlantic increased 42.8 percent on a 22.7 percent increase in available seat miles compared to the second quarter 2003. The passenger load factor for the second quarter 2004 was 63.6 percent, an 8.9 percentage point increase compared to the same period in 2003. For the first six months of 2004, revenue passenger miles for the three wholly owned US Airways Express carriers and MidAtlantic increased 24.7 percent on a 10.8 percent increase in available seat miles compared to the first six months of 2003. The passenger load factor for the first six months of the year was 58.2 percent, a 6.5 percentage point increase compared to the same period in 2003. Mainline system passenger unit revenue for June 2004 is expected to increase between 2.0 percent and 3.0 percent compared to June 2003. Customer reaction to US Airways' new low GoFares, which were introduced in Philadelphia in May and in the Washington area in mid-June, has been positive, resulting in an 85.2 percent June load factor in Philadelphia GoFares markets, compared to an 81.1 percent mainline load factor across the rest of the US Airways system. The 81.6 percent June mainline load factor was the highest load factor for any June in the company's history. The 78.9 percent second quarter load factor was also a record load factor for US Airways in any second quarter, and marks the fourth consecutive record quarterly load factor. US Airways ended the month of June by completing 99.1 percent of its scheduled departures. About the Company US Airways is the nation's seventh-largest airline, serving nearly 200 communities in the U.S., Canada, Europe, the Caribbean and Latin America. US Airways, US Airways Shuttle and the US Airways Express partner carriers operate over 3,300 flights per day. For more information on US Airways flight schedules and fares, contact US Airways online at usairways.com, or call US Airways Reservations at 1-800-428-4322. * * * As reported in the Troubled Company Reporter's May 7, 2004 edition, Standard & Poor's Ratings Services said it lowered its ratings on US Airways Group Inc. and its US Airways Inc. subsidiary, including lowering the corporate credit ratings to CCC+ from B-, and removed all ratings from CreditWatch, where they were placed on Dec. 10, 2003. The rating outlook is negative. "The downgrade was based on the difficult challenge faced by US Airways as it seeks to rapidly lower its operating expenses in response to mounting pressure from low-cost competitors," said Standard & Poor's credit analyst Philip Baggaley. The company is seeking further major cost-saving concessions from its labor groups, who already took pay cuts in 2002 and 2003, and failure to conclude those negotiations successfully over the next several quarters could force US Airways to undertake significant asset sales and/or file for bankruptcy a second time. During this process there is also some risk that US Airways will, as part of its overall restructuring, seek to renegotiate public debt obligations. Near-term liquidity is adequate, with $978 million of unrestricted cash at March 31, 2004. Ratings on US Airways Inc.'s various enhanced equipment trust certificates, excepting those that are insured, were lowered, as well. Downgrades were in most cases more extensive than the one- notch downgrade of US Airways' corporate credit rating, reflecting decreased confidence that the airline would be able to reorganize successfully if it were to enter a second bankruptcy proceeding. These obligations are, however, backed by modern technology Airbus aircraft that are considered good collateral. UTILITY CORP: Declares Monthly Dividend Payable on July 30 ---------------------------------------------------------- The Board of Directors of Utility Corp. has declared a regular dividend distribution of $0.118 per Class C Share payable on July 30, 2004 to holders of record at the close of business on July 16, 2004. Shareholders are entitled to receive dividends as declared by the Board of Directors of Utility Corp. It is the Company's policy to declare and pay equal monthly dividends on the outstanding Class C Shares based on dividends received and interest earned less expenses. Utility Corp. is a mutual fund corporation whose investment portfolio consists primarily of publicly-listed common shares of selected Canadian utility companies. The Class C Shares of Utility Corp. are listed for trading on The Toronto Stock Exchange under the symbol UTC.C. At November 21, 2003, Utility Corp.'s balance sheet shows a deficit of C$862,464 compared to a deficit of C$898,904 at May 21, 2003. WASTECORP INTL: Court Extends Plan Exclusivity Period to July 30 ---------------------------------------------------------------- Wastecorp. International Investments Inc. (TSX Venture: Stock Symbol "WII"), advises that the US Bankruptcy Court - District of New Jersey has extended the exclusivity period in which to file a plan of reorganization to July 30, 2004, from April 1, 2004, and the exclusivity period during which to solicit acceptances has also been extended to September 28, 2004, from May 31, 2004. Wastecorp. intends to present a plan of reorganization during the exclusivity period. On May 12, 2004, Wastecorp. filed a preliminary disclosure statement, as requested by US Bankruptcy Court - District of New Jersey. On June 1, 2004, ITT filed its objections to the disclosure statement. A hearing was scheduled for June 22, 2004, in this regard; however, on June 18, 2004, the hearing date was adjourned to July 13, 2004. Wastecorp. continues to attempt to negotiate a consensual settlement with ITT Industries Inc., the largest creditor, in an effort to confirm an agreement that would enable Wastecorp. to evolve from Chapter 11, in the most effective manner. Wastecorp. continues to manage and control its operations, as a debtor-in-possession. The Board of Directors of Wastecorp., continues to support and work with management and Wastecorp.'s legal team to negotiate a settlement to evolve from Chapter 11, which is in the best interest for all of our creditors, shareholders, stakeholders, and that protects the on-going business interests of Wastecorp. WATERLINK INC: Court Confirms Chapter 11 Liquidating Plan --------------------------------------------------------- Waterlink, Inc. (OTCBB:WLKNQ) announced that the United States Bankruptcy Court for the District of Delaware had entered the Findings of Fact, Conclusions of Law and Order Under Section 1129 of the Bankruptcy Code and Rule 3020 of the Bankruptcy Rules Confirming the Modified Joint Consolidated Chapter 11 Plan of Liquidation of the Debtors and the Committee Pursuant to Chapter 11 of the United States Bankruptcy Code. The Plan confirmed by the Bankruptcy Court will result in the liquidation of all remaining assets of the Company, the proceeds from which will be used to partially satisfy unsecured creditors. Copies of the Confirmation Order and the Plan have been attached as an exhibit to the Company's report on Form 8-K filed with the U.S. Securities and Exchange Commission. Pursuant to the Confirmation Order, the Plan has been confirmed, is enforceable and will take effect within the next two weeks. Under the Plan, the holders of Class 5 Equity Interests will receive no distribution on account of their shares. On the Effective Date, all equity interests in the Company will be extinguished. There will be no amounts or other property distributed to common stockholders of Waterlink. The Plan further provides that on the Effective Date, the current officers and directors of Waterlink shall be deemed to have resigned and the Liquidating Trustee, Theodore Gavin, shall be the sole officer and director of the Company. Waterlink had previously announced, on February 4, 2004, that it and its wholly owned operating subsidiary, Barnebey Sutcliffe Corporation, had agreed to a purchase agreement with Calgon Carbon Corporation, a Delaware corporation, for the Buyer to purchase substantially all of the assets and business operations of Waterlink, including the operations of Barnebey Sutcliffe Corporation and the subsidiaries of Waterlink in the United Kingdom. The purchase agreement was approved by the Bankruptcy Court at a hearing held on February 3, 2004, and a copy of the purchase agreement was attached as an exhibit to the Company's report on Form 8-K filed with the SEC on February 9, 2004. Waterlink has been an international provider of integrated water and air purification solutions for both industrial and municipal customers. Waterlink's offices are located in Canton, Ohio, USA. At March 31, 2004, Waterlink's balance sheet shows a stockholders' deficit of $6,816,000 compared to a deficit of $10,926,000 at September 30, 2003. WESTAFF INC: Names Stephen J. Russo as New Western Zone Manager --------------------------------------------------------------- Westaff, Inc. (Nasdaq:WSTF) announced the appointment of Stephen J. Russo as Senior Vice President, Western Zone, to oversee Westaff's operations in the six western states including California, Oregon, Washington, Idaho, Northern Nevada and Utah. Westaff is a staffing solutions provider -- delivering temporary and direct placement of administrative, light industrial and light technical staff headquartered in Walnut Creek, California. "Steve is a results-driven leader, with a strong track record of executing critical growth strategies," said Westaff President and CEO, Dwight Pedersen. "With his business acumen and leadership, Steve will make a significant impact on our western zone operation in both service delivery and bottom line performance." Russo, who lives in Walnut Creek, returns to Westaff after nine years of increasingly responsible positions at Staffing Resources (Dallas, TX) and Nelson Staffing (Sonoma, CA) where he was instrumental in driving their growth, acquiring new businesses and managing multiple operations. Steve spent the past two years as President and COO of U1 Consulting Group of San Francisco, where he lead growth and profitability in IT staffing during the dot com recession. During his previous term at Westaff, he served as Vice President, Treasurer between 1991 and 1995, where he merged corporate functions of Treasury, Tax, Unemployment and staff payroll to streamline operations. Between 1995 and 2004 he demonstrated outstanding operational leadership in re-building infrastructures and leading through challenging transitional phases at staffing companies during both expansion and retraction economies. Steve is an expert in building teams, systems and processes. "Returning to Westaff is about opportunity; there is an excellent base here and room for growth and enhancements in both performance and markets," commented Russo. "It's all about adding value to enhance what's already in place by working to remove barriers and motivating people to achieve their peak potential. I'm very excited to come back to Westaff at this time." About Westaff Inc. Westaff provides staffing services and employment opportunities for businesses in global markets. Westaff annually employs approximately 150,000 people and services more than 14,000 client accounts from more than 260 offices located throughout the U.S., the United Kingdom, Australia, New Zealand, Norway and Denmark. For more information, please visit our Web site at http://www.westaff.com/ * * * Liquidity and Capital Resources In its Form 10-Q for the quarterly period ended January 24, 2004, filed with the Securities & Exchange Commission, Westaff, Inc. reports: "In addition to its borrowings under debt facilities, the Company's liquidity is dependent upon a variety of factors including its operating performance, accounts receivable, the timing of cash inflow and outlays and other economic factors, many of which are outside the control of management. There can be no assurance that the Company will not face potential cash shortfalls, which, even if for a short period of time, could have a material adverse effect on the Company's business and financial condition. If the Company were to experience significant or prolonged cash shortfalls, the Company would need to pursue additional debt or equity financing; however there can be no assurance that such alternatives could be obtained. "The Company and its lending agents executed a fourth amendment to the Company's Multicurrency Credit Agreement which, among other things, eliminated events of default on an EBITDA covenant as of November 1, 2003 and through January 24, 2004. In the event the Company is out of compliance with one or more covenants in the future, there can be no assurance that its lenders would grant a waiver or amendment with respect to those covenants, which could have a significant adverse effect on the Company's financial condition and operations." WINSTAR: Court Authorizes Trustee to Pay Fox Rothschild's Fees -------------------------------------------------------------- Sheldon K. Rennie, Esq., an associate at Fox Rothschild, in Wilmington, Delaware, relates that during the period from January 26, 2002 through January 30, 2004, the firm rendered services to Christine C. Shubert, the Chapter 7 Trustee in Winstar Communications, Inc.'s chapter 11 proceedings, related to: (1) the analysis of the Debtors' assets and operations, including prosecution of avoidance actions; (2) the sale of the Debtor's assets; (3) case management, including preparing agendas and binders and finalizing pleadings for filing; (4) the administration of the Debtors' 401(k) plan; (5) the Debtors' business operations; (6) reviewing, litigating and resolving claims against the Debtors' estate; (7) procurement of financing; (8) the Debtors' Plan & Disclosure Statement; (10) requests to lift the bankruptcy stay; (11) tax issues; (12) fee and employment objections; and (13) reviewing, litigating and resolving disputes against the estate. Fox Rothschild also prepared fee and employment applications for the Trustee and her professionals. From January 26 through May 31, 2002, Fox Rothschild assessed a total of $148,764 in fees and $26,990 in actual expenses. Fox Rothschild incurred $107,280 in fees and $26,214 in actual and necessary expenses for the period from June 1 through September 30, 2002. From October 1, 2002 through February 28, 2003, the firm incurred $133,831 in fees and $22,049 in actual expenses. From March 2 through July 31, 2003, the firm incurred $207,827 in fees and $20,224 in expenses. The firm assessed $300,159 in fees and $22,127 in expenses from August 1, 2003 through January 30, 2004. At Fox's request, Judge Rosenthal authorizes the Trustee to pay the firm's fees and expenses. (Winstar Bankruptcy News, Issue No. 57; Bankruptcy Creditors' Service, Inc., 215/945-7000) WORLDCOM: Cook County Jury Awards $2-Mil Verdict In Slovinski Case ------------------------------------------------------------------ On June 16, 2004, a Cook County jury returned a verdict of $2,081,600 against Defendant James Elliott, a former CEO of a telecommunications company. The Plaintiff, Jerry Slovinski of Naperville, was the CFO of Elliott's company. At a meeting in July of 1996, Elliott told financial executives of MCI/World Comm that his firm did not have financial statements because Slovinski failed to prepare them, saying Slovinski was not doing his job, coming in late and leaving early, sneaking out to workout, and "chasing p---- all day." The jury awarded Slovinski $81,600.00 for his emotional distress and $2,000,000 in punitive damages. The Honorable Robert E. Gordon presided over the two-day trial at the Daley Center. The case was entitled Jerry Slovinski vs. James Elliott and Cherry Communications, 01 L 9564. The case against Cherry Communications was dismissed after Cherry went into bankruptcy several years ago. The Plaintiff Slovinski was represented by attorney Tom Leahy of Leahy & Hoste, 321 North Clark Street, Suite 2222, Chicago, Illinois 60610. Phone: 312/372-8893. Cell: 312/501-8893. The Defendant James Elliott was represented by Jeffrey Patrick Guzak, 1618 Colonial Parkway, Inverness, Illinois 60067. Phone: 847/705- 8195. Slovinski alleged that Cherry owed MCI/World Comm millions of dollars for long distance telephone service and was in danger of losing further phone access when MCI/ World Comm asked Elliott to show them Cherry's financial statements. Elliott went to the meeting and told the MCI/World Comm controller David Myers that the statements had not been prepared because of Slovinski's failure to do his job. Elliott failed to appear for his deposition before trial on several occasions, so a default judgment was entered against him. The case went to trial solely on the issue of damages. Headquartered in Clinton, Mississippi, WorldCom, Inc., now known as MCI-- http://www.worldcom.com-- is a pre-eminent global communications provider, operating in more than 65 countries and maintaining one of the most expansive IP networks in the world. The Company filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the Debtors listed $103,803,000,000 in assets and $45,897,000,000 in debts. On April 20, the company (WCOEQ, MCWEQ) formally emerged from U.S. Chapter 11 protection as MCI, Inc. This emergence signifies that MCI's plan of reorganization, confirmed on October 31, 2003, by the U. S. Bankruptcy Court for the Southern District of New York is now effective and the company has begun to distribute securities and cash to its creditors. (Worldcom Bankruptcy News, Issue No. 56; Bankruptcy Creditors' Service, Inc., 215/945-7000) W.R. GRACE: Asbestos PD Committee Issue Status Report ----------------------------------------------------- On behalf of the Official Committee of Asbestos Property Damage Claimants, Theodore J. Tacconelli, Esq., at Ferry Joseph & Pearce, PA, states that the W.R. Grace & Co. Debtors have been dealing with "significant liabilities" resulting from their manufacture of asbestos-containing products. However, "despite popular misconception, historically Grace settled or suffered judgments for asbestos property damage which exceeded payments made by Grace in respect to asbestos personal injury claims." Due to the widespread market of Grace products, and the fact that its products made their way into commercial and residential buildings throughout the United States, asbestos property damage will continue to be an enormous financial liability that Grace must address as part of its reorganization. Unfortunately, Mr. Tacconelli reports, little has happened in Grace's bankruptcy case to facilitate its reorganization. By any standard, the most significant accomplishment to date was the settlement for more than $1 billion of the fraudulent transfer litigation by the PD Committee and the PI Committee, which Grace not only opposed, but intervened in and aligned itself with the defendants. Mr. Tacconelli also apprises Judge Buckwalter of the delays to the Debtors' cases resulting from the controversy over Judge Wolin's continued participation, and the stays of the cases by Judge Wolin and the Third Circuit Court of Appeals. Mr. Tacconelli also gives an overview of the fraudulent transfer litigation. Mr. Tacconelli is pleased that Judge Buckwalter has signed the long-delayed Order approving the settlement of the fraudulent transfer suits against Sealed Air and Fresenius. However, Mr. Tacconelli notes that Judge Wolin withdrew the reference from the Bankruptcy Court to determine the fees and expenses incurred in connection with the fraudulent transfer claims by the counsel for the PD Committee, the PI Committee, and Grace, as well as Milberg Weiss. Since Judge Wolin had already approved 80% of the fees applied for, the counsel assumed the withdrawal affects only the 20% holdback. But since all matters were stayed by Judge Wolin, that included the professionals' fee applications. Mr. Tacconelli hopes that the approval of the settlement will mean that the approval of the balance of the fees will now come to the forefront. (W.R. Grace Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service, Inc., 215/945-7000) * Dewey Ballantine Expands Frankfurt Private Equity Practice ------------------------------------------------------------ International law firm Dewey Ballantine LLP announced that, as the next stage in its German expansion, it has hired Private Equity/Corporate partner Dr. Benedikt von Schorlemer from the Duesseldorf office of Baker & McKenzie. This addition follows closely on the heels of the recruitment in May of partners Dr. Hanno Berger and Dr. Marcus Federle. Dr. von Schorlemer will strengthen Dewey Ballantine's newly established Private Equity practice in Frankfurt which was launched last month with the hire of Dr. Federle from Norton Rose. "The appointment of Benedikt represents another significant step for Dewey Ballantine in the continued development of our German practice," said Sanford W. Morhouse, co-chairman of the Management Committee and chairman of the Global Private Equity Group at Dewey Ballantine. "Benedikt has an excellent reputation in his practice areas. His appointment demonstrates the Firm's strong focus on the growing Private Equity business across Europe." Dr. von Schorlemer began his legal career at Baker & McKenzie in Frankfurt and moved to Duesseldorf in 1999 to help Baker establish a new office. He has worked on both corporate M&A and Private Equity transactions for clients such as E-Plus Mobilfunk, Degussa, Schott Glas, Bridgepoint, Barclays Private Equity and Ventizz Capital Partners. Recently, he advised Littelfuse, Inc. in the acquisition of a majority stake in the publicly listed Heinrich Industrie AG. Dr. Hanno Berger, senior partner of the Frankfurt office, said, "Benedikt is a valuable addition to our German team. We are delighted with this development and excited about providing our clients with an extended capability in Private Equity." Dr. von Schorlemer commented, "I am looking forward to working on a dynamic team with my new colleagues in Frankfurt as well as across the expanding network of Dewey Ballantine offices. The Private Equity market in Germany is moving forward rapidly, and we intend to become a major participant along with the Firm's growing client base." About Dewey Ballantine Dewey Ballantine LLP, founded in 1909, is an international law firm with more than 550 attorneys located in New York, Washington, D.C., Los Angeles, East Palo Alto, Houston, Austin, London, Warsaw, Budapest, Prague, Frankfurt, Milan and Rome. Through its network of offices, the firm handles some of the largest, most complex corporate transactions, litigation and tax matters in such areas as M&A, private equity, project finance, corporate finance, corporate reorganization and bankruptcy, antitrust, intellectual property, sports law, structured finance, and international trade. Industry specializations include energy and utilities, healthcare, insurance, financial services, media, consumer and industrial goods, technology, telecommunications and transportation. * FOCUS Management Group USA Expands its Chicago Presence --------------------------------------------------------- FOCUS Management Group USA, Inc., is expanding its Chicago presence to accommodate major local growth of its crisis management consulting business in the Midwest. The new office is located at 9501 W. Devon, Suite 701, Rosemont, IL 60018. "Our customer base is steadily increasing, and as a result we saw a need to expand our coverage in the Chicago area to be able to best serve our clients," said President J. Tim Pruban, who is pleased to announce this development as part of FOCUS Management Group's nationwide growth plans. "The new office provides an ideal platform for our Midwest team of professionals to be able to respond in a timely manner to the varied demands of our business partners in the area." FOCUS Management Group offers nationwide capabilities in turnaround and crisis management, business restructuring and asset recovery. Headquartered in Tampa, FL, with offices in Chicago, Greenwich, Los Angeles and Nashville FOCUS Management Group provides turn-key support to debtors, committees, financial institutions, equity sponsors and other stakeholders. The Company provides a comprehensive array of services including turnaround and crisis management, interim management, operational analysis and process improvement, bank and creditor negotiation, asset recovery and recapitalization assistance, and also acts as Investment Bankers to distressed companies. Over the past decade, FOCUS Management Group has successfully assisted hundreds of clients operating in diverse industries, guiding them to maximize performance or asset recovery. Adverse situations are FOCUS Management Group's forte - finding winning solutions in a timely manner when faced with the most discouraging of circumstance is what separates FOCUS Management Group from the competition. For additional information about FOCUS Management Group, please visit http://www.focusmg.com/or call 800-528-8985. * Penny Friedman to Lead GE Commercial's Central Region Efforts --------------------------------------------------------------- GE Commercial Finance's Restructuring group announced that it has named Penny G. Friedman, senior vice president, to lead its origination efforts for the Central Region. Based in Chicago, Ms. Friedman will report to Stuart Armstrong, managing director. Part of GE Commercial Finance Corporate Lending, the Restructuring group secures financing for companies restructuring either out of court or in a bankruptcy proceeding, as well as companies emerging from bankruptcy. Loans typically range from $30 million to $2 billion. Recent financings include plan of reorganization financing for Kmart and Thermadyne, and debtor-in-possession financing for NRG Northeast Generating Co. and Budget Group. Ms. Friedman leads a team that includes Elias Makris, senior vice president, who is based in Dallas; Howard Steinberg, senior vice president, based in Toronto and responsible for originations in Canada; and Mac Fowle, vice president, Angela Harmon, vice president, and Katie Phelps, sales associate, all based in Chicago. Ms. Friedman joined GE in 1994 from the corporate finance group of Heller Financial Corporation. She began her career in the financial services division of Arthur Andersen & Co. Ms. Friedman is a certified public accountant and an active member of the Turnaround Management Association. She is a graduate of the University of Illinois with a B.A. degree in accounting and from the University of Chicago where she earned an M.B.A. degree in finance and marketing. About GE Commercial Finance Corporate Lending GE Commercial Finance Corporate Lending offers financing to clients from middle-market companies to large corporations. Products and services include asset-based financing, cash flow lending and corporate restructuring. Corporate Lending is a leading global provider of financing solutions for investment and non-investment grade companies - committed to supporting clients at all stages of the business cycle. For more information on the businesses and products of GE Commercial Finance Corporate Lending, please visit www.gelending.com. GE Commercial Finance, which offers businesses around the globe an array of financial products and services, has assets of over $220 billion and is headquartered in Stamford, Connecticut. General Electric (NYSE: GE) is a diversified technology, media and financial services company dedicated to creating products that make life better. For more information, visit the company's website at http://www.ge.com/ * Pamela O'Neill Joins XRoads' Litigation Analytics as Principal ---------------------------------------------------------------- XRoads Solutions Group, a leading international, multi-faceted consulting firm, announced that Pamela M. O'Neill, has joined the firm as a Principal in the firm's Litigation Analytics, Valuations & Investigative Services (LVI) practice. Ms. O'Neill brings over 17 years of financial experience to her position, including significant experience in valuation consulting, advising clients for purposes of aiding negotiations, and pricing and structuring mergers, acquisitions and divestitures. She also provides valuation consulting services for the purposes of fairness and solvency opinions, purchase price allocation, business dispute, shareholder dissolution, and gift and estate tax planning and compliance. Ms. O'Neill has been retained as an expert witness in several litigation consulting engagements and has prepared and delivered expert testimony litigated in New York. In her new role, Ms. O'Neill will be based in New York and report to Larry D. Morriss Jr., a Principal and LVI Practice Leader. "Over the past several years, we have seen tremendous growth in demand for our valuation-related services," said Dennis Simon, Managing Principal of XRoads. "We are extremely pleased to have someone of Pamela's caliber join our team. Her extensive experience in providing valuation consulting services in business disputes, bankruptcies, reorganizations, shareholder dissolutions and other circumstances will be a great asset to the firm as we continue to grow the LVI practice." Before joining XRoads Solutions Group, Ms. O'Neill was a Managing Director at Avail Consulting and was previously a Principal with the Deloitte & Touche Financial Advisory Services practice. During her ten-year tenure at Deloitte, Ms. O'Neill supervised over 375 financial consulting engagements and performed valuation analyses across a variety of industries, including financial services, retail, manufacturing, travel, entertainment, technology, and hospitality. "In its short history, XRoads' LVI division has grown into one of the premier litigation analytics practices in the U.S.," said Ms. O'Neill. "I am excited to be a part of the exceptional team XRoads has assembled and look forward to contributing to the continued success of the LVI practice." Ms. O'Neill earned both her M.B.A and a B.S. in Finance from the College of Business and Economics at Lehigh University. About XRoads Solutions Group XRoads Solutions Group, founded in 1997, is an international, multi- faceted consulting firm serving most major industry sectors. The firm's core business practices include Corporate Restructuring; Operations Improvement; Litigation Analytics; Investment Banking; Case Management Services; Investigative Services; and Valuations, Solvency and Fairness Opinions. XRoads Solutions Group has offices in New York, NY; Irvine, CA; Kansas City, MO; Dallas, TX; and Houston, TX. For more information, please call 877 XRoads9 or 212-610-5690. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. 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 publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $675 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***