/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/040720.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, July 20, 2004, Vol. 8, No. 149 Headlines 12TH AVENUE PARTNERS: Voluntary Chapter 11 Case Summary ACTUANT CORP: 95.7% of 13% Noteholders Agree to Amend Indenture AIR CANADA: Distributes CCAA Circular and Plan of Arrangement AIR CANADA: Wants CCAA Order to Include Newly Incorporated Cos. BULL RUN: Stockholders' Deficit Tops $26 Million at May 31 CATHOLIC CHURCH: Wants to Continue Cash Management System COEUR D'ALENE: Discusses Mineral Reserves to Canadian Investors CORNERSTONE FAMILY: S&P Withdraws CCC+ Credit Ratings COVANTA ENERGY: Object to 21 Mega Bond Insurance Claims D E MANAGEMENT: Case Summary & 11 Largest Unsecured Creditors DATAWORLD SOLUTIONS: Changes Name to Defense Technology Systems ECLIPSE PROPERTIES: Files Liquidating Plan in North Carolina ENRON CORPORATION: Settles Disputes with 10 Counterparties ENRON: Sues 20 Creditors To Recover $6.8MM Preferential Payments FAIRPOINT COMMS: Commences Tender Offers for Public Debt Issues FEDERAL-MOGUL: Insurers to Appeal Plan Solicitation Procedures FLEMING: Asks Court to Approve Affiliated Foods, et al., Agreement FLINTKOTE: Asbestos Committee Gets Nod to Hire Caplin & Dysdale FOOTSTAR INC: Completes Sale of Shoe Zone Stores to Novus, Inc. FREEPORT-MCMORAN: S&P Raises Corporate Credit Rating to B+ FRESH CHOICE: Bankruptcy Prompts Nasdaq Nat'l Market Delisting GEMSTAR TV: Will Release Second Quarter Fin'l Results on Aug. 5 GENTEK INC: Trustee Proposes Adversary Case Mediation Procedures GLOBAL CROSSING: Wants to Transfer Class Actions to New Jersey GOLF TRUST: Inks Settlement Pact With Golf Hosts, Inc., et al. HOLLINGER INT'L: Conrad Black and Hollinger Inc. Pays $30 Million HOLLINGER INTERNATIONAL: Subsidiary Determines Tender Offer Yield INDYMAC BANCORP: Completes Acquisition of Financial Freedom INTERNATIONAL BIOCHEMICAL: Trustee Converts Case to Chapter 7 INTERNET CAPITAL: To Release Q2 Financial Results on August 5 J.L. FRENCH AUTOMOTIVE: S&P Lowers Corp. Credit Rating to CC LEES CHILDREN LLC: Case Summary & 14 Largest Unsecured Creditors METALLURG INC: S&P Lowers Ratings To D On Parent's Nonpayment MIRANT CORP: MirMA Landlords Press For Alternative Rent Payment MOHEGAN TRIBAL: Commences Sr. Debt Offer & Consent Solicitation NATIONAL CENTURY: Liquidating Trust Wants Docs. from 24 Banks NEW HEIGHTS: Wants Nod for Cananwill Premium Finance Agreement NEWMARKET TECH: Formally Changes Company Name & Ticker Symbol NORTEK HOLDINGS: S&P Puts Ratings on Watch Negative On Acquisition NORVERGENCE INC: Closes Doors & Files Chapter 7 Petition in N.J. NORVERGENCE INC: Involuntary Case Summary OWENS CORNING: John Hancock & PPM America Provide Status Report OWENS CORNING: Asbestos Committee Wants Court to Quash Subpoenas PARMALAT GROUP: Discloses Restructuring Plan's Recovery Ratios PARMALAT: Plans To Pick Buyer For Argentine Unit By Month-End PLEJ'S LINEN: Committee Hires Traub Bonacquist as Attorneys RCN CORP: Directors Turn to Winston & Strawn for Legal Counsel RELIANCE FINANCIAL: Discloses Bank Claim Holders & Pro Rata Shares RURAL CELL: To Pay Quarterly Preferred Stock Dividends on Aug. 15 SEALY CORPORATION: Issues Sr. Pay-In-Kind Notes and Common Stock SHOWCASE AUTO: Case Summary & 20 Largest Unsecured Creditors SOLUTIA INC: Wants to Pay Letter of Credit Claims STAR TELECOM: Case Summary & 20 Largest Unsecured Creditors STILLWATER MINING: S&P Places Ratings on CreditWatch Negative STRATUS SERVICES: Extends Pref. Stock Exchange Offer to July 31 SUNNY DELIGHT: S&P Withdraws BB- Corporate Credit Rating TECHNICAL COATINGS: Case Summary & 20 Largest Unsecured Creditors TELEWEST COMMS: Reports Details of Common Stock Distribution TENET HEALTHCARE: Completes Sale of Redding Medical Center Assets TEXAS INDUSTRIES: S&P Revises Outlook To Stable From Negative TRANSMONTAIGNE: Board Okays UBS Assistance in Evaluating Options TRANSMONTAIGNE INC: S&P Affirms BB- Ratings & Revises Outlook TROPICAL SPORTSWEAR: Retains Broker to Market Tampa Facility Sale VLASIC: 8 More Witnesses Take the Stand in $250M Suit vs. Campbell VHJ ENERGY LLC: Case Summary & 15 Largest Unsecured Creditors W. INC.: Case Summary & 20 Largest Unsecured Creditors WCI STEEL: USWA Ratifies Post-Bankruptcy Emergence Labor Contract WEIRTON STEEL: Court Approves Amended Disclosure Statement WEIRTON STEEL: Court Approves Modified Solicitation Procedures WESTPOINT STEVENS: Wants to Extend Key Employee Retention Plan WORLDCOM: Agrees to Resolve Illinois Revenue Department Tax Claims W.R. GRACE: Equity Committee Wants Litigation Protocol Established WRENN ASSOCIATES: Corwin Serves as Special Litigation Counsel * Jefferies Expands Restructuring Practice Into Europe * Large Companies with Insolvent Balance Sheets ********* 12TH AVENUE PARTNERS: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: 12th Avenue Partners, LLC 4072 East 22nd Street, No. 115 Tucson, Arizona 85711 Bankruptcy Case No.: 04-03504 Chapter 11 Petition Date: July 13, 2004 Court: District of Arizona (Tucson) Judge: Eileen W. Hollowell Debtor's Counsel: R. David Sobel, Esq. Leonard Felker Altfeld et al. 250 North Meyer Avenue Tucson, AZ 85701-1047 Tel: 520-622-7733 Fax: 520-622-7967 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. ACTUANT CORP: 95.7% of 13% Noteholders Agree to Amend Indenture --------------------------------------------------------------- As of 5:00 p.m. New York City time, on July 15, 2004, Actuant Corporation reported it had received valid tenders and consents from holders of $27,974,000 aggregate principal amount of its 13% Senior Subordinated Notes due 2009 (CUSIP No. 00508WAB2), which amount represents 95.7% of the outstanding principal amount of the Notes, in connection with the previously announced cash tender offer and consent solicitation for the Notes. This satisfies the Requisite Consents Condition as defined in Actuant's Offer to Purchase and Consent Solicitation Statement dated July 1, 2004. Notes tendered on or prior to the Consent Time may no longer be withdrawn and the related consents may not be revoked, except in the limited circumstances described in the Offer to Purchase. Accordingly, Actuant and the trustee under the indenture intend to promptly execute and deliver a supplemental indenture containing the proposed amendments described in the Offer to Purchase, which will eliminate substantially all restrictive covenants and certain event of default provisions. The proposed amendments will not become operative, however, unless and until Actuant accepts the Notes for purchase in accordance with the terms and subject to the conditions set forth in the Offer to Purchase. If the proposed amendments become operative, holders of all the Notes then outstanding will be bound thereby. A consent payment of $30 per $1,000 principal amount of the Notes will be paid to holders of Notes who validly tendered and did not withdraw such Notes prior to the Consent Time, if and only if Actuant accepts for payment Notes tendered in the tender offer. Holders whose valid tenders are received after the Consent Time, but prior to the expiration of the tender offer, which is 5:00 p.m., New York City time, on July 30, 2004, will receive only the tender offer consideration (as described in the Offer to Purchase), but not the Consent Payment. This announcement is not an offer to purchase, a solicitation of an offer to purchase or a solicitation of consent with respect to any securities. The offer is being made solely pursuant to the Offer to Purchase. About the Company Actuant, headquartered in Milwaukee, Wisconsin, is a diversified industrial company with operations in more than 20 countries. The Actuant businesses are leading companies selling highly engineered position and motion control systems and branded tools. Products are offered under such established brand names as Dresco, Enerpac, Gardner Bender, Kopp, Kwikee, Milwaukee Cylinder, Nielsen Sessions, Power-Packer, and Power Gear. * * * As reported in the Troubled Company Reporter's May 5, 2004 edition, Standard & Poor's Ratings Services assigned its 'BB' rating to the $250 million senior revolving credit facility of Actuant Corp. (BB/Stable/--). Proceeds from the credit facility, maturing Feb. 19, 2009, were used to refinance the company's existing secured revolving credit facility. AIR CANADA: Distributes CCAA Circular and Plan of Arrangement ------------------------------------------------------------- Air Canada provides this update on the airline's restructuring under the Companies' Creditors Arrangement Act: After ratifying labour cost savings agreement, the Circular and Plan of Arrangement is distributed in preparation for August 17, 2004 creditor vote. Following the successful ratification of the outstanding labour agreement with Air Canada Jazz flight attendants late Thursday, July 15, 2004, Air Canada has now satisfied the labour cost savings condition contained in the Deutsche Bank Standby Purchase Agreement and the GE Capital Aviation Services Global Restructuring Agreement. Air Canada is proceeding with all planned activity to meet the September 30, 2004 target for emergence from CCAA. "I would like to thank the Air Canada Jazz flight attendants for recognizing the importance of this ratification vote and for making their vote count," said Robert Milton, President and Chief Executive Officer. "With all labour agreements now concluded, the Circular and Plan of Arrangement have been sent to creditors, in preparation for their vote on the Plan August 17th. These milestones in our restructuring mark further critical steps towards Air Canada successfully exiting from CCAA at the end of September." 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: Wants CCAA Order to Include Newly Incorporated Cos. --------------------------------------------------------------- The Plan of Compromise and Arrangement contemplates that the new corporations to be incorporated by the Air Canada Applicants will be temporarily governed by boards of directors comprised of Air Canada employees. Pursuant to the Initial Companies' Creditors Arrangement Act Order, the Applicants' directors and officers enjoy the protection of a charge -- the Directors' Charge -- over the Applicants' property. Since ACE Aviation Holdings, Inc., the new parent holding company of Air Canada, requires execution of certificates by its directors to advance the Plan and facilitate the Applicants' emergence, the Applicants want to extend the Directors' Charge protection to the directors and officers of the Newco's. Against this backdrop, the Applicants ask the CCAA Court to amend the Initial Order to provide that, for purposes of the Directors' Charge, the term "Applicants" will be deemed to include any corporation incorporated for the purpose of effecting the Plan of Compromise and Arrangement. The Applicants transferred certain assets relating to their customer loyalty business to Aeroplan Limited Partnership. In view of the assignment of the New Aerogold Agreement to Aeroplan, General Electric Capital Canada, Inc., the CCAA Lender, asked the Applicants to seek amendment of the Initial Order to clarify that its charge will extend to any property assigned among the Applicants' affiliates. Pursuant to the Initial Order, GE Canada currently has a charge over all of the Applicants' property other than Returned Aircraft Interests. The present definition of "Applicants' Property" in the Initial Order does not capture assets transferred by the Applicants. The Applicants, thus, ask the Court to extend the definition of "Applicants" under the Initial Order to include assets transferred by an Applicant. 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. 41; Bankruptcy Creditors' Service, Inc., 215/945-7000) BULL RUN: Stockholders' Deficit Tops $26 Million at May 31 ---------------------------------------------------------- Bull Run Corporation (OTC: BULL) reported a net loss of $6.3 million for its third quarter ended May 31, 2004, compared to a net loss of $4.7 million for the same quarter in the prior fiscal year. Current year results were unfavorably affected by a $3.3 million non-cash goodwill impairment charge. The net loss for the nine months ended May 31, 2004 was $9.1 million, compared to a net loss of $10.9 for the same period in the prior fiscal year. Revenues from continuing operations for the current year were $14.3 million for the third quarter and $52.9 million for the nine months ended May 31, 2004. Prior year revenues from continuing operations were $18.2 million for the third quarter and $61.6 million for the nine months ended May 31, 2003. Prior year third quarter and nine-month results also included non-cash non- operating charges of approximately $1.6 million and $5.1 million, respectively, attributable to Bull Run's former equity investment assets, and prior year nine-month results included income of approximately $5.3 million from a discontinued business segment. Interest expense for the recently completed third quarter and nine-month period was $1.1 million and $3.3 million, respectively, compared to the $1.9 and $6.2 million incurred during the comparable third quarter and nine-month period of the prior fiscal year, respectively. Bull Run, through its wholly-owned operating company, Host Communications, Inc., provides comprehensive sales, marketing, multimedia, special event and convention/hospitality services to NCAA Division I universities and conferences, national/global associations, and domestic and international grassroots sports and lifestyle events (including the three-on-three basketball "Hoop- It-Up National Tour" and the "got milk? 3-v-3 Soccer Shootout" national tour). Bull Run's common stock is quoted on the Pink Sheets -- http://www.pinksheets.com/-- a centralized quotation service for OTC securities, using the symbol "BULL". Additional company information and stock quotes are available on the Company's corporate web site at http://www.bullruncorp.com/ At May 31, 2004, Bull Run Corporation's balance sheet shows a stockholders' deficit of $26,445,000 compared to a deficit of $27,002,000 at August 31, 2003. CATHOLIC CHURCH: Wants to Continue Cash Management System --------------------------------------------------------- The Archdiocese of Portland in Oregon's cash management system is maintained through a well-established banking relationship and a series of related accounts, which allow the Debtor to manage and control receipts and disbursements and to account for all transactions. Thomas W. Stilley, Esq., at Sussman Shank, LLP, in Portland, Oregon, relates that the Cash Management System constitutes an ordinary course and essential business practice, and provides significant benefits to the Debtor including, among other things, the ability to: * control funds; * ensure the maximum availability of funds when necessary; * reduce administrative expenses and operational disruption by facilitating the movement of funds and the development of more timely and accurate account balance information; and * continue accounting practices familiar to the Debtor's staff and operational procedures. The Debtor seeks the permission from Judge Perris in the U.S. Bankruptcy Court of the District of Oregon to continue using its existing Cash Management System. Cash Management System In the ordinary course of its operations, the Debtor deposits funds into its operational bank accounts. The Debtor then transfers funds between and among the Operational Bank Accounts as may be necessary or appropriate to pay necessary expenses. The Debtor makes all disbursements to third parties from one of the Operational Bank Accounts designated as the General Fund -- Account No. 370211007015. The Debtor accounts for all transfers between and among the Operational Bank Accounts and reconciles the Operational Bank Accounts monthly so that at the end of each month the inter-account balances are as close to "zero" as possible. At the end of each day, funds in the Operational Bank Accounts are swept into a concentration account and invested overnight in a Victory Money Market Account. The following morning, the funds in the Victory Money Market Account are transferred back to the Operational Bank Accounts in the same proportion as when they were swept the preceding business day. The Debtor maintains accurate and complete accounting records with respect to all transactions between and among the existing accounts -- the Operational Bank Accounts, the Concentration Account, and the Victory Money Market Account -- and with respect to disbursements to third parties. Because of the Debtor's financial structure, Mr. Stilley points out that it would be extremely difficult and expensive to establish and maintain a separate postpetition cash management system. The Debtor requires the ability to continue to utilize its existing Cash Management System so that it may continue its operations uninterrupted. Specifically, the existing Cash Management System allows the Debtor to effectively and efficiently run its ministries. Mr. Stilley assures the Court that the Debtor will maintain records of all transfers and transactions within the Cash Management System to ensure that all transfers and transactions will be documented in its books and records. The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq. and William N. Stiles, Esq. of Sussman Shank LLP represent the debtor in its restructuring efforts. When the debtor filed for chapter 11 protection, it listed estimated assets of $10,000,000 to $50,000,000 and estimated debts of $25,000,000 to $50,000,000. (Catholic Church Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000) COEUR D'ALENE: Discusses Mineral Reserves to Canadian Investors --------------------------------------------------------------- In conjunction with its previously announced tender offer for Wheaton River Minerals (TSX: WRM; AMEX), a Canadian company, Coeur d'Alene Mines Corporation (NYSE: CDE) is presenting its publicly disclosed reserve and resource data in the standard form used in Canada under Canadian National Instrument 43-101 (NI 43-101) at the request of the British Columbia Securities Commission. NI 43- 101 requires a manner of reserve and resource presentation for Canada that is different than the presentation of the same data under Securities and Exchange Commission (SEC) requirements in the United States. The NI 43-101 presentation of this estimated reserve and resource data does not amend or supersede the information provided by Coeur in its filings with the SEC under SEC requirements and Coeur will make such amendments, if any, to the information previously disclosed in SEC filings only pursuant to additional SEC filings. In calculating its mineral resources estimates, Coeur allows for 95 to 100 percent for mine recovery depending upon mining method. For estimating both mineral reserves and mineral resources, Coeur utilizes the same metallurgical recovery for each mineral classification. Additionally, each property has various metallurgical recoveries depending upon the processing method employed. Metallurgical recoveries for milling operations range from 88 to 95 percent for gold and 73 to 96 percent for silver. Metallurgical recoveries at Coeur's Rochester heap leach operation in Nevada realizes gold recoveries of 70 to 92 percent for gold and silver recoveries of 25 to 60 percent, depending upon material type delivered to the leach pad (run-of-mine or crushed ore). Coeur conducts exploration for new mineralization and definition of new mineral resources at each of its properties. Exploration goals are specific to each property based on results from prior exploration and production and then funds are allocated to permit testing of the identified targets. These goals are continuously updated and evaluated based on results received throughout the program. The potential quantity and grade of the mineral deposits that are to be targets of further exploration at Cerro Bayo, Martha, Silver Valley and Kensington are conceptual in nature, there has been insufficient exploration to define the mineral resources on these properties and it is uncertain if further exploration work will result in discovery of the mineral resources. About Coeur d'Alene Coeur d'Alene Mines Corporation is the world's largest primary silver producer, as well as a significant, low-cost producer of gold. The Company has mining interests in Nevada, Idaho, Alaska, Argentina, Chile and Bolivia. * * * As reported in the Troubled Company Reporter's June 3, 2004 edition, Standard & Poor's Ratings Services placed its B- corporate credit and senior unsecured debt ratings on Coeur D'Alene Mines Corp. on CreditWatch with positive implications following the company's announcement that it intends to acquire precious metals mining company Wheaton River Minerals Ltd. in a stock and cash transaction valued at approximately $1.8 billion. "The CreditWatch action reflects what is likely to be a meaningful improvement in Coeur's business and financial profile upon the successful acquisition of lower-cost producer Wheaton," said Standard & Poor's credit analyst Paul Vastola. Standard & Poor's expects that its ratings on Coeur would likely be raised several notches. Standard & Poor's will continue to monitor the transaction for any potential revisions to the deal. The deal remains subject to several conditions and is expected to close by Sept. 30, 2004. CORNERSTONE FAMILY: S&P Withdraws CCC+ Credit Ratings ----------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'CCC+' corporate credit and secured bank loan ratings on Cornerstone Family Services Inc. The company is in the process of being completely restructured, and it is seeking new financing. There is little market interest in the rating on the current bank facility, S&P says. COVANTA ENERGY: Object to 21 Mega Bond Insurance Claims -------------------------------------------------------- Covanta Energy Corporation and its debtors affiliates and subsidiaries ask the U.S. Bankruptcy Court of the Southern District of New York to disallow and expunge 21 Bond Insurance Claims: Claimants Claim No. Amount --------- --------- ------ Ambac Insurance Corp. 2793 to 2803 unspecified Financial Security Assurance 3090 to 3092 unspecified MBIA Insurance Corp. 2222 $53,320,000 MBIA Insurance Corp. 2223 99,960,000 MBIA Insurance Corp. 2224 71,400,000 MBIA Insurance Corp. 2225 39,180,000 MBIA Insurance Corp. 2226 198,050,000 MBIA Insurance Corp. 2227 184,400,000 MBIA Insurance Corp. 2228 69,617,363 Christine L. Childers, Esq., at Jenner & Block, in Chicago, Illinois, relates that the before the Petition Date, the Bond Insurance Claimants issued various municipal bond insurance policies, pursuant to which they insured the payment of the principal and interest on certain bonds issued by municipalities to finance the construction and development of projects in which the Debtors hold an interest. The Bond Insurance Claims assert contingent claims against the Debtors by way of subrogation to the bondholders' rights against the Debtors. Being contingent claims, Ms. Childers asserts that the Bond Insurance Claims must be disallowed under Section 502(c)(1) or 502(e)(1) of the Bankruptcy Code. Headquartered in Fairfield, New Jersey, Covanta Energy Corporation -- http://www.covantaenergy.com/-- is a publicly traded holding company whose subsidiaries develop, own or operate power generation facilities and water and wastewater facilities in the United States and abroad. The Company filed for Chapter 11 protection on April 1, 2002 (Bankr. S.D.N.Y. Case No. 02-40826). Deborah M. Buell, Esq., and James L. Bromley, Esq., at Cleary, Gottlieb, Steen & Hamilton represent the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, they listed $3,280,378,000 in assets and $3,031,462,000 in liabilities. (Covanta Bankruptcy News, Issue No. 60; Bankruptcy Creditors' Service, Inc., 215/945-7000) D E MANAGEMENT: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: D.E. Management, Inc. 4526 Jupiter Drive Salt Lake City, Utah 84124 Bankruptcy Case No.: 04-31212 Chapter 11 Petition Date: July 13, 2004 Court: District of Utah (Salt Lake City) Judge: William T. Thurman Debtor's Counsel: Alan R. Stewart, Esq. 1366 East Holladay Road Salt Lake City, UT 84117 Tel: 801-278-1063 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 11 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ W. Randlyn Wilde $1,000,000 c/o Michael R. Johnson 15 West South Temple, Ste. 1200 S.L.C., UT 84101 Jon McBride $123,509 Cottonwood Landscape, LLC $28,425 Wholesale Flooring $8,250 Ready Mix Concrete $1,200 UTCO Associates, Ltd. $0 Robert L. Hobson $0 Washington Mutual Bank $0 KRO Investments $0 American Pension Services $0 Marianne S. Young Unknown DATAWORLD SOLUTIONS: Changes Name to Defense Technology Systems --------------------------------------------------------------- DataWorld Solutions, Inc. (OTCBB:DWLD) has legally changed the Company's name to Defense Technology Systems, Inc. The Company has been notified by the NASD that effective Friday, July 16, 2004, the company's stock will begin trading under the ticker symbol (OTCBB: DFTS). "We believe our new corporate name better reflects the activities and focus of the Company," said Phil Rauch, DTS's Chief Operating Officer. "During the past six months, we have made tremendous progress, effecting significant improvements to our balance sheet, regaining our listing on the Nasdaq Over the Counter Bulletin Board, building new business relationships and attracting experienced executives to help us grow our security business. This focus has delivered immediate results, as we recently announced a key contract with the U.S. Embassy in Tel Aviv, the acquisition of the patent on the GIL-2001 Security Entrance System and a contract with Amalgamated Bank in New York City. Our Advisory Board has begun to generate many opportunities for us through their extensive relationships. We now believe we are in the position to capitalize on these opportunities. We have never been in a better position to grow and build shareholder value." The Company will continue to manufacture and distribute its data and cable products through its DataWorld Solutions subsidiary and develop its security and defense business through its DWS Defense Systems subsidiary. About DataWorld Solutions, Inc. DataWorld Solutions, Inc. is a multi-regional manufacturer of electronic cable assemblies used in providing connectivity solutions for customers operating a wide range of data systems to include linking or connecting standard or proprietary electronic devices and peripheral components from different vendors to provide solutions for various customer equipment configurations and requirements. DataWorld adds value by providing connectivity solutions, which may include distributed sales for passive components such as electronic connectors, electronic wire and cable, cabinets and racks and patch panels, and active components including hubs, bridges, routers, gateways and modems. DataWorld encourages customers to discuss their unique cabling requirements with its experienced sales/marketing support team so that cost- effective solutions can be provided for customer specific needs. Liquidity and Capital Resources In its Form 10QSB for the quarterly period ended March 31, 2004 filed with the Securities and Exchange Commission, DataWorld Solutions reports: "The Company has current assets of $252,325 (including $11,192 in cash) compared with current liabilities of $6,407,444, resulting in a working capital deficit of $6,155,119 as of March 31, 2004. In addition, the Company incurred a net loss of $3,161,684 for the nine months ended March 31, 2004 and has incurred significant net losses in each of the three preceding fiscal years and has a stockholder's equity deficit of $6,940,412 at March 31, 2004. Such deficits and recurring losses raise questions about the Company's ability to continue as a going concern. "Additionally, the Company's continuation is also threatened by the existence of numerous judgments on trade payables, defaults on various secured indebtedness and delinquencies on certain tax obligations. These conditions could result in the seizure of Company assets and/or its being forced into bankruptcy." ECLIPSE PROPERTIES: Files Liquidating Plan in North Carolina ------------------------------------------------------------ Eclipse Properties, LLC filed its Liquidating Chapter 11 Plan and the accompanying Disclosure Statement with the U.S. Bankruptcy Court for the Eastern District of North Carolina, Raleigh Division. Full-text copies of the documents are available for a fee at: http://www.researcharchives.com/bin/download?id=040718203858 and http://www.researcharchives.com/bin/download?id=040718204318 The Eclipse Properties Debtors believe that under the Plan, creditors will obtain a greater recovery from the estate that what could have been available if the Debtor's estate were converted to chapter 7. The Plan contemplates that the sale of the Debtor's land will fund payments required under the Plan. It is expected that all claims will be paid in full under the Plan. A summary of the Plan provides for 5 classes of claims and interests according to their treatment: Class Treatment ----- --------- 1 - Allowed Will be satisfied in full on or before Administrative the Effective Date, or as agreed. Any Expense Claims disputed claim will be satisfied within five Business Days after entry of a Final Order approving such Claim as an Allowed Administrative Expense Claim, or as may be agreed otherwise. 2 - Allowed Will be paid, together with interest at Priority Tax the statutory rate on or before the Claims Effective Date. The Debtor believes there are no Priority Tax Claims. 3A, 3B, 3C, 3D, All seven claims will not be altered, 3E, 3F and 3G - except that any defaults will be deemed Allowed Secured to have been cured. Will be paid in full Claims on or before the Effective Date. 4 - Allowed Will be paid on a prorata basis from Unsecured funds remaining after payment of Class 1, Claims 2, 3A, 313, 3C, 3D, 3E, 3F, and 3G claims. It is anticipated that there will be sufficient funds to pay Class 4 claims in full. 5 - Equity Will retain their equity interests in the Interests Debtor. Headquartered in Raleigh, North Carolina, Eclipse Properties, LLC filed for chapter 11 protection on April 14, 2004 (Bankr. E.D. N.C. Case No. 04-01415). William P. Janvier, Esq., at Everett Gaskins Hancock & Stevens represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $10,750,000 in total assets and $8,437,447 in total debts. ENRON CORPORATION: Settles Disputes with 10 Counterparties ---------------------------------------------------------- Pursuant to the Amended Safe Harbor Termination Protocol, the Enron Corporation Debtors inform the Court that they have reached settlements with 10 parties with respect to these Contracts: A. Port Townsend Contracts * Confirmation (Swap), dated June 29, 2001, between Enron North America Corporation and Port Townsend Paper Corporation * Revised Confirmation, dated April 3, 2001, between ENA and Port Townsend * Guaranty, dated March 16, 2001, issued by Enron Corporation on ENA's behalf for the benefit of Port of Townsend B. McCauley Invoices * ENA and McCauley Lumber Company, Inc., were parties to one or more prepetition transactions wherein ENA sold lumber to McCauley. In connection with the transactions, ENA issued certain invoices. C. Laminados Contract * Confirmation (Swap) between ENA and Laminados de Barro, S.A. de C.V., dated July 2, 2001 D. Anadarko and Affiliates Contracts * ISDA Master Agreement, dated April 9, 1996, between ENA and Anadarko Petroleum Corporation * Netting Agreement, dated as of August 1, 1998, between ENA and Anadarko Energy Services Company * Two Base Contracts for Short-Term Sale and Purchase of Natural Gas, dated December 1, 1996, between ENA and Anadarko Energy Services Company * Two Confirmations (Swap), dated October 31, 2000, between ENA and Anadarko Energy Services Company * ISDA Master Agreement, dated February 10, 1994, between ENA and Anadarko ESI Company, formerly known as RME Energy Services, Inc., as amended on February 20, 1998 * Confirmation, dated January 10, 2000, between ENA and Anadarko Energy Marketing, Inc. * Confirmation, dated October 1, 1996, between ENA and Anadarko E&P Company, LP * Two contracts between ENA and Norcel Explorer, Inc., now known as Anadarko E&P Company, LP * AES Invoice No. AT00291 dated November 28, 2001, for $436,470 * Telephonic Confirmation dated September 1, 2001 between ENA Upstream and Anadarko Energy Services Company * Three Contracts between Clinton Energy Management Service, Inc., and Anadarko Energy Services Company * Three Enfolio Spot Confirmations between Enron Energy Services, Inc., and Anadarko Energy Services Company * Ten Guaranties issued for the benefit of Anadarko and its affiliates * All electronic trading agreements and password applications between the Debtors and the Anadarko Entities E. Cleco Contracts * Eight Energy Contracts between various Debtors, and Cleco Energy, LLC, and Cleco Marketing & Trading, LLC * Guaranty dated March 20, 2001 executed by Enron Corporation in favor of Cleco Marketing, Cleco Energy and Cleco Power, LLC for $15,000,000 * Three Guaranties executed by Cleco Corporation in favor of the Debtors aggregating $20,000,000 F. PUDJC Contracts * Five Gas Futures Confirmation pursuant to Enfolio Firm General Terms & Conditions between ENA and Public Utilities District of Jefferson and Cocke Counties G. Tiger Natural Gas Contracts * Nine Contracts between Tiger Natural Gas, Inc., and ENA * Invoice Nos. 20617SA, 35005SA, 35004SA, 23722SA, 20344SA, 24988SA, 35618SA, 35010SA, 33509SA, 31718SA, and 35002SA H. Shell Chemical Contracts * Amended Enron Petrochemical Company Confirmation, dated July 17, 2000, between Enron Petrochemicals Company, a division of Enron Liquid Fuels, Inc., and Shell Chemical Company, predecessor to Shell Chemical, LP * Special Terms and Conditions for Sale of Products, dated September 26, 2001, between Enron Petrochemicals and Shell * Ten invoices issued by Shell in connection with the two Contracts I. Northwest Contracts * Three Confirmations between ENA and Northwest Natural Gas Company * Transaction Agreement, dated August 17, 2001, between ENA and Northwest Natural Gas, as amended on October 12, 2001 * All other physical and financial contracts for the delivery or forward delivery of energy or energy production commodities by and between ENA, Enron Energy Services Operations, Inc., Enron Canada Corporation and Northwest Natural Gas, dated on or before December 1, 2001 J. Sevier County Contracts * Three Enfolio Contracts between ENA and Sevier County Utility District * Any other contracts between ENA and Sevier Country concerning the purchase, sale, exchange or trading of physical energy commodities, gas transportation rights, gas transportation capacity, power transmission rights, power transmission capacity and financial derivatives relating to any energy commodity The Settlements provide that: (a) the Counterparties will pay the Debtors the agreed settlement payments; (b) any and all proofs of claim the Counterparties filed against the Debtors are deemed withdrawn with prejudice and, to the extent applicable, will be expunged and disallowed in their entirety; and (c) the Debtors and the Counterparties will exchange mutual releases of claims with respect to the Contracts. (Enron Bankruptcy News, Issue No. 117; Bankruptcy Creditors' Service, Inc., 215/945-7000) ENRON: Sues 20 Creditors To Recover $6.8MM Preferential Payments ---------------------------------------------------------------- On or within 90 days before the bankruptcy petition date, the Enron Corporation Debtors made, or caused to be made, transfers to 20 creditors: Creditor Amount -------- ------ Armstrong Trace $123,199 Asset Securitization Coop 4,500,000 Asten Johnson 22,790 Atlas Power, Inc. 80,252 Atwood & Morrill Co., Inc. 119,700 Automotive Rentals, Inc. 242,628 Curtiss-Wright Flow Control Service 316,170 Curtiss-Wright Flight Systems 75,073 Cushman & Wakefield, Inc. 47,562 Custom Design Marketing 50,819 Custom Metals 45,100 Custom Playgrounds Designs 55,527 Custom Steel Services, Inc. 41,307 Gregg County 47,677 Grinnell Fire Protection 61,609 Grubbs, Hoskyn, Barton & Wyatt 25,281 Guild Electric 21,744 Hanson Concrete South Contral 707,102 Hard Drives Northwest 191,349 Harris Rebar 24,225 ------------- TOTAL $6,799,114 Neil Berger, Esq., at Togut, Segal & Segal, LLP, in New York, relates that: (a) the Transfers constitute transfers of interest of the Debtors' property; (b) the Debtors made, or caused to be made, the Transfers to, or for the benefit of, the Creditors; (c) the Debtors made, or caused to be made, the Transfers for, or on account of, antecedent debts owed to the Creditors prior to the dates on which the Transfers were made; (d) the Debtors were insolvent when the Transfers were made; (e) the Transfers enabled the Creditors to receive more than they would have received if: -- Enron's cases were administered under Chapter 7 of the Bankruptcy Code; -- the Transfers had not been made; and -- the Creditors had received payment of the debt to the extent provided by the Bankruptcy Code. Thus, Mr. Berger contends that the Transfers constitute avoidable preferential transfers pursuant to Section 547(b) of the Bankruptcy Code. In accordance with Section 550(a), the Debtors may recover from the Creditors the amount of the Transfers, plus interest. In the alternative, Mr. Berger asserts that the Transfers are avoidable fraudulent transfers under Section 548(a)(1)(B) since: (a) the Transfers constitute transfers of interest in the Debtors' property; (b) the Transfers were to or for the benefit of the Creditors; (c) the Debtors received less than reasonable equivalent value in exchange for some or all of the Transfers; (d) the Debtors were insolvent, or became insolvent, or had unreasonably small capital in relation to their businesses or their transactions at the time or as a result of the Transfers; and (e) the Transfers were made within one year before the Petition Date. Accordingly, the Debtors ask the Court to: (i) avoid and set aside the Transfers pursuant to Section 547(b); (ii) in the alternative, avoid and set aside the Transfers pursuant to Section 548(a)(1)(B); (iii) direct the Creditors to immediately pay them an amount equal to the Transfers pursuant to Section 550(a), together with interest from the date of the Transfers; and (iv) award them attorneys' fees, costs and other expenses incurred. (Enron Bankruptcy News, Issue No. 117; Bankruptcy Creditors' Service, Inc., 215/945-7000) FAIRPOINT COMMS: Commences Tender Offers for Public Debt Issues --------------------------------------------------------------- FairPoint Communications, Inc. commenced concurrent cash tender offers for all of its outstanding: -- 9-1/2% Senior Subordinated Notes Due 2008, -- Floating Rate Callable Securities Due 2008, -- 12-1/2% Senior Subordinated Notes Due 2010 and -- 11-7/8% Senior Notes Due 2010. In conjunction with the tender offers, FairPoint is soliciting consents from holders of the Notes to effect certain proposed amendments to the indentures governing such Notes. The tender offers and consent solicitations are being made pursuant to: (i) an Offer to Purchase and Consent Solicitation Statement, dated as of July 16, 2004, for the 2008 Notes, (ii) a Consent and Letter of Transmittal, dated as of July 16, 2004, for the 2008 Notes, (iii) an Offer to Purchase and Consent Solicitation Statement, dated as of July 16, 2004, for the 12-1/2% Notes and the 11-7/8% Notes and (iv) a Consent and Letter of Transmittal, dated as of July 16, 2004, for the 12-1/2% Notes and the 11-7/8% Notes. The tender offers and consent solicitations will expire at 11:59 p.m., New York City time, on August 12, 2004, unless one or more of such tender offers and consent solicitations are extended. The purchase price for the 2008 Notes that are validly tendered and accepted for payment on or prior to the Expiration Date will be equal to $1,015.42 per $1,000 principal amount of 9 1/2% Notes and $982.50 per $1,000 principal amount of Floating Rate Notes, plus any accrued and unpaid interest on the 2008 Notes up to, but not including, the payment date for such notes. The purchase price to be paid for each $1,000 in principal amount of the 12-1/2% Notes validly tendered will be (i) the present value on the payment date for such Notes of $1,062.50 per $1,000 principal amount of the 12-1/2% Notes (the amount payable on the first optional redemption date of the 12-1/2% Notes) and all scheduled interest payments on the 12-1/2% Notes from the payment date to May 1, 2005, discounted at a rate equal to the sum of (x) the yield on the 1.625% U.S. Treasury Note due April 30, 2005 and (y) a fixed spread of 50 basis points, minus accrued and unpaid interest up to, but not including, the payment date, minus (ii) an amount equal to the early consent premium. In addition, accrued and unpaid interest will be paid on the tendered 12-1/2% Notes up to, but not including, the payment date for such notes. The purchase price to be paid for each $1,000 in principal amount of the 11-7/8% Notes validly tendered will be (i) the sum of (a) 35% of $1,118.75 per $1,000 principal amount of the 11-7/8% Notes (which is the equity claw-back for the 11-7/8% Notes under the indenture governing such Notes) plus (b) 65% of the present value on the payment date for such Notes of $1,059.38 per $1,000 principal amount of the 11-7/8% Notes (the amount payable on the first optional redemption date of the 11-7/8% Notes) and all scheduled interest payments on the 11-7/8% Notes from the payment date to March 1, 2007, (discounted at a rate equal to the sum of (x) the yield on the 2.25% U.S. Treasury Note due February 15, 2007 and (y) a fixed spread of 50 basis points, minus accrued and unpaid interest up to, but not including, the payment date), minus (ii) an amount equal to the early consent premium. In addition, accrued and unpaid interest will be paid on the tendered 11-7/8% Notes up to, but not including, the payment date for such notes. In addition to the prices above, an early consent premium of $20.00 will be paid for each $1,000 in principal amount of the Notes to holders who tender their Notes and provide their consents to the proposed amendments to the indentures governing the Notes at or prior to the early consent premium deadline of 5:00 p.m., New York City time, on July 29, 2004 unless extended. Holders of Notes tendered after the Early Consent Date will not receive an early consent premium. Notes tendered and consents delivered may not be withdrawn or revoked after the Withdrawal Date. Among other things, the proposed amendments to the indentures governing the Notes would eliminate most of the indentures' principal restrictive covenants and would amend certain other provisions contained in the indentures. Adoption of the proposed amendments requires the consent of the holders of at least a majority of the aggregate principal amount of the 12-1/2% Notes outstanding, a majority of the aggregate principal amount of the 11-7/8% Notes outstanding and a majority of the aggregate principal amount of the 2008 Notes outstanding. Holders who tender their Notes will be required to consent to the proposed amendments and holders may not deliver consents to the proposed amendments without tendering their Notes in the tender offers. Tendered Notes may be withdrawn and consents may be revoked at any time prior to the Withdrawal Date, but not thereafter. The tender offers are subject to several conditions, including, among other things, FairPoint's completion of its proposed Income Deposit Securities offering and senior subordinated note offering and obtaining a new senior secured credit facility; a minimum tender condition; and a requisite consents and execution of the supplemental indentures condition. FairPoint expects to complete the Income Deposit Securities offering and senior subordinated note offering and obtain a new senior secured credit facility on or prior to the expiration date of the tender offers. FairPoint may amend, extend or terminate one or more of the tender offers and consent solicitations in its sole discretion. This announcement, the Company cautions, is neither an offer to purchase nor a solicitation of an offer to sell the Notes. The offer and consent solicitation is being made pursuant to each Offer to Purchase and Consent Solicitation Statement and related materials, copies of which will be delivered to all noteholders. Persons with questions regarding the offer and the consent solicitation should contact: * Citigroup, the Dealer Manager and Solicitation Agent, at (800) 558-3745 or (212) 723-6106, or * Global Bondholder Services Corporation, the Information Agent, at (212) 430-3774. FairPoint is one of the leading providers of telecommunications services in rural communities across the country. Incorporated in 1991, FairPoint's mission is to operate and acquire telecommunications companies that set the standard of excellence for the delivery of service to rural communities. Today, FairPoint owns and operates 26 rural local exchange companies located in 17 states. FairPoint serves customers with approximately 267,790 access line equivalents (including voice access lines and digital subscriber lines) and offers an array of services including local voice, long distance, data, Internet and broadband product offerings. * * * As reported in the Troubled Company Reporter's June 8, 2004 edition, Standard & Poor's Ratings Services said that it affirmed the 'B+' corporate credit rating and other ratings of Charlotte, North Carolina-based incumbent rural local exchange carrier FairPoint Communications Inc. The ratings have also been removed from CreditWatch, where they were placed May 5, 2004. The CreditWatch listing reflected concerns that the company's proposed offering of $750 million in income deposit securities, along with the anticipated high common dividend payout associated with these issues, would reduce the company's financial flexibility. The outlook is negative. Standard & Poor's has assigned a 'CCC+' rating to the company's proposed senior subordinated notes due 2019, a major portion of which would be issued under the IDS structure and a small portion outside. Although the specific mix of debt and equity to be issued under the IDS has yet to be determined, the final amount of the senior subordinated notes will not affect FairPoint's corporate credit rating, nor the rating on these notes. Proceeds from a proposed $450 million secured bank credit facility, from the subordinated notes, and from the common equity component of the IDS will be used to refinance essentially all of FairPoint's existing debt and redeem the company's series A preferred stock. FairPoint had total debt of about $920 million, which includes about $101 million of preferred shares subject to mandatory redemption, at March 31, 2004. Given that the IDS offering will likely contain a significant common equity component, total debt is expected to be lower after the refinancing. "While the issuance of the income deposit securities would incrementally weaken FairPoint's financial risk profile, the magnitude is not sufficient to warrant a downgrade," said Standard & Poor's credit analyst Michael Tsao. "However, the reduced financial flexibility underpins the negative outlook." FEDERAL-MOGUL: Insurers to Appeal Plan Solicitation Procedures -------------------------------------------------------------- Certain Underwriters at Lloyd's, London, and London Market Insurance Companies notify the Bankruptcy Court of their intention to appeal the June 14, 2004 Order approving plan solicitation procedures proposed by Federal-Mogul Corporation and its debtor-affiliates. The Insurers will ask the U.S. District Court for the District of Delaware to review Judge Lyons' decision and determine whether or not the Bankruptcy Court erred by: (a) granting the Debtors' Solicitation and Voting Procedures Motion, including the approval of the ballot forms, the form and scope of Plan and Confirmation Hearing Notice, Voting Record Date and the Voting Agent's retention; (b) holding that the voting procedures adopted by the Solicitation Procedures Order are consistent with Section 1126 of the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure; (c) temporarily allowing claims that have not been filed or deemed filed where the allowance would enlarge the rights granted to creditors pursuant to Sections 502(a) and 1126(a); (d) holding that holders of disputed, unliquidated and contingent claims are eligible to vote on confirmation of the Debtors' Plan without filing proofs of claim and otherwise satisfying all of the requirements for proofs of claim under the Bankruptcy Code, Bankruptcy Rules and applicable law; (e) allowing the alleged holders of Asbestos Personal Injury Claims to vote without requiring that the claims be scheduled or filed; (f) failing to set a bar date in accordance with Rule 3003(c)(3) of the Federal Rules of Bankruptcy Procedure; (g) allowing attorneys who have not fully complied with Rule 2019 to cast ballots on behalf of alleged holders of Asbestos Personal Injury Claims; and (h) holding that holders of alleged claims that are not valid claims under state law or under other applicable law, or are otherwise holders of demands, are eligible to vote for or against confirmation of the Plan. Headquartered in Southfield, Michigan, Federal-Mogul Corporation -- http://www.federal-mogul.com/-- is one of the world's largest automotive parts companies with worldwide revenue of some $6 billion. The Company filed for chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan, Esq., James F. Conlan, Esq., and Kevin T. Lantry, Esq., at Sidley Austin Brown & Wood and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, they listed $10.15 billion in assets and $8.86 billion in liabilities. (Federal-Mogul Bankruptcy News, Issue No. 59; Bankruptcy Creditors' Service, Inc., 215/945-7000) FLEMING: Asks Court to Approve Affiliated Foods, et al., Agreement ------------------------------------------------------------------ Fleming Companies, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to approve their settlement with Affiliated Foods Southwest, Inc., 18 store owners, C&S Wholesale Grocers, Inc., and C&S Acquisition, Inc. The Debtors also ask the Court to allow the settlement agreement to be filed under seal to keep its specific terms from public view. The store owners are: (1) Adriens Supermarket, Inc., (2) BAM, Inc., (3) Bogalusa Foods, Inc., (4) BR Foods, LLC, (5) Circle Foods, Inc., (6) CJC Groceries, Inc., (7) Dale's Food store, Inc., (8) Far North, Inc., (8) J. Edward Lamb & Co., Inc., (10) JHJ, Inc., (11) Menards 4-C, Inc., (12) Pontchartrain Foods, Inc., (13) Something More, LLC, (14) THA, LLC, (15) THG, LLC, (16) Tramarbil, Inc., (17) V&K Foods, Inc., and (18) Vinsons Foods, Inc. The store owners are party to facility standby agreements or other grocery supply arrangements, and owe the Debtors $1,086,505.54 on account of outstanding accounts receivable. Some of the store owners are or were sublessees under three subleases with the Debtors for retail stores located at: Store Location Subtenant -------------- --------- 454 Heymann Boulevard, Lafayette, Louisiana BAM 3540 West Pinhook Street, Lafayette, Louisiana Adriens 3842 West Congress Street, Lafayette, Louisiana Adriens Each of the primary leases relating to the subleases has been rejected by the Debtors effective as of October 31, 2003. BAM, Bogalusa, Dale's, Far North, Menards, JHJ, THG, THA, Tramarbil and V&K are parties to franchise agreements and sign agreements with C&S Acquisition. As a result of the sale of the Debtors' Wholesale Distribution Business, C&S holds 11 promissory notes due and owing from the store owners aggregating $4,919,388.10. C&S also holds 10 forgiveness notes due and owing from the store owners totaling $742,183. All of these obligations are in dispute. The Debtors advise the Court that the terms of the Settlement constitute proprietary information of C&S Acquisition because the settlement modifies C&S's recovery on the promissory notes it acquired in the sale. To allow other parties to review the terms of the settlement would jeopardize C&S's benefit of the bargain approved by the Court in the Asset Purchase Agreement. Nonetheless, the Debtors disclose the significant terms of the Settlement: (1) Adriens, BAM, Far North, JHJ, Menards, Something More, THG and TRAMARBIL have agreed to pay the Debtors $360,998.98 in the aggregate, on the account receivable balance. Upon payment of the amount, all of the Debtors' rights with respect to security interests in any collateral, and all guarantee agreements, will be released and terminated, unless the rights are assigned to C&S Acquisition; (2) The Debtors will file a request to assume and assign to C&S the franchise agreements and the sign agreements. Upon payment of $70,000 to C&S and $2,500 to Fleming, the franchise agreements and the sign agreements will be fully effective, and none of the counterparties will be in default; (3) The Debtors and C&S Acquisition authorize Affiliated, at its own expense, to prepare and record any assignment or release with respect to the security agreements encumbering the store owners' assets, or any guarantees; (4) The Debtors, at C&S' direction, will file a request to reject the FSAs, the Congress sublease and the primary lease. Affiliated and the store owners agree to the rejection and termination of these contracts and leases; (5) The Debtors and C&S release Affiliated and the store owners from all liability except for the obligations under the settlement, and any notes assigned to C&S; and (6) The store owners withdraw any claims against the Fleming estates. 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. 39; Bankruptcy Creditors' Service, Inc., 215/945-7000) FLINTKOTE: Asbestos Committee Gets Nod to Hire Caplin & Dysdale --------------------------------------------------------------- The Official Committee of Asbestos Personal Injury Claimants appointed in The Flintkote Company's chapter 11 case, sought and obtained approval from the U.S. Bankruptcy Court for the District of Delaware to hire Caplin & Drysdale, Chartered, as its national counsel. Caplin & Drysdale represents virtually every official committee of asbestos claimants appointed in an asbestos-related chapter 11 proceeding. The Committee anticipates that Caplin & Drysdale will: a) assist and advise the Committee in its consultations with the Debtor and other committees relative to the overall administration of the estates; b) represent the Committee at hearings to be held before this Court and communicating with the Committee regarding the matters heard and issues raised as well as the decisions and considerations of this Court; c) assist and advise the Committee in its examination and analysis of the Debtor's conduct and financial affairs; d) review and analyze all applications, orders, operating reports, schedules and statements of affairs filed and to be filed with this Court by the Debtor or other interested parties in this case; advising the Committee as to the necessity and propriety of the foregoing and their impact upon the rights of asbestos-health related claimants, and upon the case generally; and, after consultation with and approval of the Committee or its designee(s), consenting to appropriate orders on its behalf or otherwise objecting thereto; e) assist the Committee in preparing appropriate legal pleadings and proposed orders as may be required in support of positions taken by the Committee and preparing witnesses and reviewing documents relevant thereto; f) coordinate the receipt and dissemination of information prepared by and received from the Debtor's independent certified accountants or other professionals retained by it as well as such information as may be received from independent professionals engaged by the Committee and other committees, as applicable; g) assist the Committee in the solicitation and filing with the Court of acceptances or rejections of any proposed plan or plans of reorganization; h) assist and advise the Committee with regard to communications to the asbestos-related claimants regarding the Committee's efforts, progress and recommendation with respect to matters arising in the case as well as any proposed plan of reorganization; and i) assist the Committee generally by providing such other services as may be in the best interest of the creditors represented by the Committee. The Committee assures the Court that Caplin & Drysdale does not represent any interest adverse to the Committee and is a "disinterested person" as that phrase is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). The attorneys currently assigned to be principally involved in this case, and their current hourly rates, are: Attorney Billing Rate -------- ------------ Elihu Inselbuch $780 Peter Van N. Lockwood $685 Walter B. Slocombe $560 Albert G. Lauber $540 Julie W. Davis $520 Trevor W. Swett, III $520 Bernard S. Bailor $515 Ronald E. Reinsel $500 Nathan D. Finch $440 Kimberly N. Brown $385 Rita C. Tobin $375 Max Heerman $295 Brian A. Skretny $265 John Cunningham $265 Bree A. Nicolai $185 Paralegals will bill for their services at their current hourly rates of: Paralegal Billing Rate --------- ------------ Robert C. Spohn $180 Andrew D. Katznelson $160 Tracy L. Wantuck $150 Ada I. Odum $150 Headquartered in San Francisco, California, The Flintkote Company is engaged in the business of manufacturing, processing and distributing building materials. The Company filed for chapter 11 protection on April 30, 2004 (Bankr. Del. Case No. 04-11300). Attorneys at Sidley Austin Brown & Wood LLP serve as lead counsel to the Company. James E. O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G. McLamb, Esq., at Pachulski, Stang, Ziehl, Young & Jones serve as local counsel to the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed both estimated debts and assets of more than $100 million. FOOTSTAR INC: Completes Sale of Shoe Zone Stores to Novus, Inc. --------------------------------------------------------------- Footstar, Inc. has completed its previously announced sale of 26 Shoe Zone stores in Puerto Rico to Novus, Inc. for approximately $5.5 million in cash, subject to certain post-closing adjustments. Novus is a leading footwear retailer in Puerto Rico, operating 64 stores through five distinct retail concepts including Novus, La Favorita, Bakers, Wild Pair and Metro. Novus has stated that it intends to continue to operate the stores under the Shoe Zone banner and plans to partner with Footstar to continue to offer many of the same great styles that the Shoe Zone customer has come to expect, including the Thom McAn brand. Dale W. Hilpert, Chairman, President and Chief Executive Officer, said, "The sale of these 26 stores to Novus, coupled with the closing of our nine U.S. Shoe Zone locations announced on March 18th, virtually completes Footstar's exit from the Shoe Zone business, as part of our strategy to refocus on our profitable core Meldisco business and position the Company for a successful emergence from Chapter 11." About Footstar, Inc. Footstar, Inc. -- http://www.footstar.com/-- which filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No.: 04- 22350) on March 3, 2004, is a leading footwear retailer. As of May 1, 2004, the Company operates 2,498 Meldisco licensed footwear departments nationwide and 36 Shoe Zone stores. The Company also distributes its own Thom McAn brand of quality leather footwear through Kmart, Wal-Mart and Shoe Zone stores. Paul M. Basta, Esq. of Weil Gotshal & Manges represents the debtor in its restructuring efforts. When the company filed for bankruptcy protection, it listed total assets of $762,500,000 and total debts of $302,200,000. FREEPORT-MCMORAN: S&P Raises Corporate Credit Rating to B+ ---------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on New Orleans, Louisiana-based Freeport-McMoRan Copper & Gold Inc. to 'B+' from 'B'. At the same time, Standard & Poor's raised its senior unsecured rating to 'B' from 'B-' and its preferred stock rating to 'CCC+' from 'CCC'. The outlook is positive. "The upgrade stems from a reappraisal of the country risks pertinent to Freeport-McMoRan's operations in West Papua, Indonesia," said Standard & Poor's credit analyst Dominick D'Ascoli. Although political, operations disruption, and expropriation risks remain high in Indonesia (sovereign foreign currency rating B/Positive/B, sovereign local currency rating B+/Positive/B), Standard & Poor's believes that these risks have diminished somewhat. However, the ratings on Freeport-McMoRan still remain constrained by Indonesia's weak political institutions, its unpredictable judicial system, and its tenuous provisions for property rights. One could expect the government to renegotiate the terms of the Contract of Work during a period of stress, or local or regional governments to exert added claims on Freeport-McMoRan. Nevertheless, Freeport-McMoRan has taken steps to lessen some of these risks by establishing local trust funds for community development and by hiring a greater proportion of indigenous Papuans. As Indonesia's nascent democratic institutions mature, these risks should recede further. The ratings on Freeport-McMoRan reflect the risks of operating in Indonesia, offset partly by its ownership in one of the lowest- cost copper operations in the world and its strong free cash flow generation. Freeport-McMoRan produced approximately 1.3 billion pounds of copper and 2.5 million ounces of gold in 2003. The company ranks as one of the world's lowest-cost copper producers, benefiting from high gold content in its copper ore and currently high gold prices; low labor costs; and favorable geological conditions. Freeport-McMoRan should be able to sustain a very low cost position, at least until 2015, at which time the company's Grasberg open pit mine depletes. FRESH CHOICE: Bankruptcy Prompts Nasdaq Nat'l Market Delisting -------------------------------------------------------------- Fresh Choice, Inc. (Nasdaq:SALD) received a Nasdaq Staff Determination on July 12, 2004, indicating that, as a result of its recent filing under Chapter 11 of the U.S. Bankruptcy Code, the Nasdaq Staff had determined pursuant to Nasdaq Marketplace Rules 4300 and 4450(f) that its securities will be delisted from the Nasdaq National Market as of the opening of business on July 21, 2004. The Company expects that its common stock will continue to trade on the NASD OTC Bulletin Board under the symbol SALD.OB. The Company continues to operate 46 restaurants 43 of which are under the Fresh Choice and Zoopa brand names in California (37), the state of Washington (2) and Texas (4). The Company's Fresh Choice and Zoopa restaurants offer customers an extensive selection of high quality, freshly-prepared traditional and specialty salads, hot pasta dishes, pizza, soups, bakery goods and desserts in a self-service format. In addition, the Company operates one Fresh Choice Express restaurant, one dual branded Fresh Choice Express and licensed Starbucks retail store and one stand-alone licensed Starbucks retail store in Texas. Headquartered in Morgan Hill, California, Fresh Choice, Inc. -- http://www.freshchoice.com/-- owns and operates a chain of more than 40 salad bar eateries, mostly located in California. The Company filed for chapter 11 protection (Bankr. N.D. Cal. Case No. 04-54318) on July 12, 2004. Debra I. Grassgreen, Esq., at Pachulski, Stang, Ziehl, Young and Jones, represents the Company in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $29,651,000 in assets and $14,348,000 in liabilities. GEMSTAR TV: Will Release Second Quarter Fin'l Results on Aug. 5 --------------------------------------------------------------- Gemstar-TV Guide International, Inc. (NASDAQ:GMST), will release its second quarter financial results on Thursday, August 5, 2004 after the close of the stock market. Following the release, management will host a conference call for investors and analysts at 2:00 p.m. PDT (5:00 p.m. EDT). Jeff Shell, chief executive officer, and Brian D. Urban, chief financial officer, will present management's review of the second quarter's results and discuss their outlook for the company, followed by a question and answer period. The conference call will also be broadcast live via both teleconference and Internet web cast. Investors and analysts may connect to the call by dialing (866) 800-8652 (domestic) or (617) 614-2705 (international). The pass code is "80191996". To listen via web cast, link to the Company's website http://ir.gemstartvguide.com/ Investors unable to listen to the call live may access an audio replay, which will be hosted for one week following the conclusion of the call. To access the replay, call (888) 286-8010 (domestic) or (617) 801-6888 (international). The pass code is "60206443". An audio archive will also be hosted on the Company's investor relations web site at http://ir.gemstartvguide.com/Replays will be available approximately two hours following the conclusion of the call. About Gemstar-TV Guide International, Inc. Gemstar-TV Guide International, Inc., (S&P, BB- Corporate Credit Rating, Stable Outlook) is a leading media and technology company that develops, licenses, markets and distributes technologies, products and services targeted at the television guidance and home entertainment needs of consumers worldwide. The Company's businesses include: television media and publishing properties; interactive program guide services and products; and technology and intellectual property licensing. Additional information about the Company can be found at http://www.gemstartvguide.com/ GENTEK INC: Trustee Proposes Adversary Case Mediation Procedures ---------------------------------------------------------------- GenTek, Inc.'s reorganization plan provides for the creation of a Preference Claim Litigation Trust primarily for prosecuting preference rights for beneficiaries. Pursuant to the Litigation Trust, Jack B. Fishman was designated as preference claim administrator. Mr. Fishman retained Novare, Inc., to assist in administrating the Litigation Trust's business. Mr. Fishman is in the process of recovering Reorganized GenTek's property to satisfy claims, and has pursued preferential transfers through direct contact and negotiations with various preference recipients. To date, Mr. Fishman has filed 197 adversary proceedings against various trade entities to recover transfers that are avoidable or recoverable under Sections 544, 547, 548, 550, or 553 of the Bankruptcy Code. Additional Adversary Proceedings will be filed in stages. Mr. Fishman believes that he ultimately may file as many as 800 Adversary Proceedings. The deadline for filing the Adversary Proceedings is October 11, 2004. On April 7, 2004, the U.S. Bankruptcy Court of the District of Delaware set a mandatory mediation program for all Adversary Proceedings that include a preference claim. The procedures established in the April 7 Order are meant to facilitate an expeditious and prompt resolution of the Adversary Proceedings. However, based on the large number of cases involved, the limited resources of the Litigation Trust, and the desire to expedite mediation in the cases, Mr. Fishman proposes to modify the mandatory mediation program to: (a) streamline the mediation process and reduce time and expense for the Court and all parties involved; and (b) assist in the fair and efficient resolution of the Adversary Proceedings. The mediation procedures proposed by the Trustee are consistent with the established mediation program under the April 7 Order. Proposed Mediation Procedures Rachel Lowy Werkheiser, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, PC, in Wilmington, Delaware, relates that if Mr. Fishman is unable to settle an Adversary Proceeding then he will serve on the applicable defendant, a notice that the Adversary Proceeding is referred to mandatory mediation. Mr. Fishman will make the mediation demand no later than 90 days after a response by the defendant. The Mediation Demand will identify the mediator chosen by Mr. Fishman from the then current Register of Mediators and Arbitrators pursuant to Rule 9019-4 of the Local Rules of Bankruptcy Practice and Procedure of the U.S. Bankruptcy Court for the District of Delaware. The Mediation Demand will provide the name, address, and telephone number of the chosen Mediator, and will be served on the chosen Mediator as well. Within 10 days of the Mediation Demand, the Mediator will send a written notice scheduling the mediation to Mr. Fishman and the adversary defendants and their counsel, if known to Mr. Fishman. The Mediation Notice will: (a) identify the manner in which to communicate with the Mediator; (b) schedule the exchange of documents, identification of witnesses, and other evidence that will summarize the positions of each party, which will be required to be submitted within 10 days after service of the Mediation Notice; (c) identify the format of and the procedure to be employed during the mediation; (d) describe who should attend; (e) identify the location of the mediation; and (f) describe the effect of a mediated settlement. The Mediation Notice will provide for a mediation date within 30 to 40 days from the date of the Mediation Notice. The mediation will take place in Chicago, Illinois. According to Ms. Werkheiser, the choice of a single location for the mediation will greatly expedite the resolution of the matters. Mr. Fishman proposes to hold eight matters per day, with mediation scheduled for two-day sessions, occurring once to thrice per month. A single location should also significantly reduce the cost of the mediator's fees and travel costs. After reviewing the preference defendants' locations, the Trustee determined that Chicago is a fair location for the mediations, as it is centrally located for all parties. Furthermore, as Mr. Fishman is located in Chicago, and must attend each of the Mediations, the financial burden on the Litigation Trust will be significantly reduced if Mr. Fishman is permitted to avoid mediation in several different locations. A defendant, nevertheless, may demonstrate that mediation in Chicago is unfairly burdensome. The defendant may request, by formal notice to Mr. Fishman and the Mediator, that mediation be scheduled in Wilmington, Delaware or via telephone appearance. Mr. Fishman reserves his rights to object to the proposed change in mediation location, and to ask that the defendant bear a portion of the costs associated with the change of venue. If Mr. Fishman and the defendant are unable to agree on the location of the mediation or the apportionment of costs, then if necessary, Mr. Fishman will file a notice within 10 days requesting the Court to schedule a telephonic hearing to resolve the dispute. Pursuant to the Preference Claim Litigation Trust Agreement, if a settlement is reached at mediation, then the parties will enter into a settlement agreement. No further action from the Court will be necessary and Mr. Fishman will dismiss the Adversary Proceeding with prejudice upon payment of the settlement amount, if any, within 30 days of the receipt of the payment. If mediation is not successful, then the Mediator will file a notice with the Court, served on all parties to the Adversary Proceeding. After receipt of an Unsuccessful Meditation Notice, the Court will set a trial scheduling conference for the Adversary Proceeding. Stay of Formal Discovery To reduce the costs to all parties, and in particular, to preserve the resources of the Litigation Trust for the creditor beneficiaries, Mr. Fishman requests a stay of formal discovery in each Adversary Proceeding from the date of service of the Mediation Demand through the date of service of the Unsuccessful Mediation Notice, absent leave granted by the Mediator or written request served on Mr. Fishman with at least 10 business days' notice. (GenTek Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., 215/945-7000) GLOBAL CROSSING: Wants to Transfer Class Actions to New Jersey -------------------------------------------------------------- Global Crossing Limited, John Legere and Daniel O'Brien ask the Judicial Panel on Multidistrict Litigation to transfer to the United States District Court for the District of New Jersey all cases relating to alleged misrepresentations or omissions concerning GX's financial condition and accounting practices. The related cases have been filed in United States District Courts in three judicial districts: * the District of New Jersey * the Southern District of New York * the Central District of California, Western Division Jonathan E. Richman, Esq., at Debevoise & Plimpton, LLP, informs the Panel that all actions are in their earliest stages. The lead plaintiff and lead counsel have not yet been appointed and a consolidated complaint has not yet been filed. Moreover, GX has not yet responded to the Complaints and discovery has not yet begun. Mr. Richman notes that all the Actions involve numerous common questions of fact. The various Complaints all charge that GX engaged in allegedly improper accounting practices and made false or misleading statements about its financial condition and earnings, thus "inflating" the price of its stock, to the plaintiffs' alleged detriment. In addition, the pending Actions raise common legal issues that could present a risk of inconsistent pre-trial rulings on substantive and procedural issues -- including overlapping class- certification requests -- if the issues were decided in multiple courts. Mr. Richman asserts that a transfer of all Actions to the New Jersey District Court for coordinated or consolidated pre-trial proceedings under Section 1407 of the Judiciary Procedures Code would: -- eliminate duplicative discovery; -- avoid potentially conflicting rulings and schedules; -- save time and expense for the parties, the attorneys, the witnesses, and the courts; and -- promote the just and efficient prosecution of all Actions. The New Jersey District Court is more convenient for the parties, witnesses, and the judicial system than is any other single district, Mr. Richman says. GX's principal administrative offices are located in New Jersey, many of the company's top executives -- including Messrs. O'Brien and Legere -- are based there, GX's principal financial and accounting functions are based there, and GX's former auditor for 2002 and 2003 is located nearby, in New York City. According to Mr. Richman, the plaintiffs who initially filed cases in other judicial districts would not suffer any prejudice from the transfer. The plaintiffs could be deposed in their states, if necessary, and they would all enjoy numerous efficiencies and cost-savings from coordinating their cases with other similar actions. Headquartered in Florham Park, New Jersey, Global Crossing Ltd. -- http://www.globalcrossing.com/-- provides telecommunications solutions over the world's first integrated global IP-based network, which reaches 27 countries and more than 200 major cities around the globe. Global Crossing serves many of the world's largest corporations, providing a full range of managed data and voice products and services. The Company filed for chapter 11 protection on January 28, 2002 (Bankr. S.D.N.Y. Case No. 02- 40188). When the Debtors filed for protection from their creditors, they listed $25,511,000,000 in total assets and $15,467,000,000 in total debts. Global Crossing emerged from chapter 11 on Dec. 9, 2003. (Global Crossing Bankruptcy News, Issue No. 63; Bankruptcy Creditors' Service, Inc., 215/945-7000) GOLF TRUST: Inks Settlement Pact With Golf Hosts, Inc., et al. ------------------------------------------------------------- On July 15, 2004, Golf Trust of America, L.P., GTA-IB, LLC, Golf Host Resorts, Inc., Golf Hosts, Inc., Golf Host Management, Inc., Golf Host Condominium, Inc. and Golf Host Condominium, LLC entered into a Settlement Agreement relating to the settlement of a number of issues between the parties, including Golf Host Resorts' default under the $79 million loan made by Golf Trust of America, L.P. to Golf Host in June 1997. Pursuant to the Settlement Agreement, GTA-IB, an affiliate of the Lender and of Golf Trust of America, Inc., settled claims relating to the loan to the Borrower and took ownership of the Westin Innisbrook Golf Resort. In connection with the Settlement Agreement, GTA-IB and Westin Management Company South entered into a management agreement providing for Westin's management of the Westin Innisbrook Golf Resort, and Westin and Troon Golf LLC entered into a facility management agreement providing for Troon's management of the golf facilities at the Westin Innisbrook Golf Resort. Golf Trust of America, Inc. (AMEX:GTA) was formerly a real estate investment trust, and is now engaged in the liquidation of its interests in golf courses in the United States pursuant to a plan of liquidation approved by its stockholders. In addition to the four 18-hole golf courses at the Westin Innisbrook Golf Resort, the Company currently owns an interest in four other properties (comprised of 5.0 eighteen-hole equivalent golf courses). Additional information regarding Golf Trust and its interest in the Westin Innisbrook Golf Resort is available in Golf Trust's periodic filings with the SEC and on the Company's website at http://www.golftrust.com/ HOLLINGER INT'L: Conrad Black and Hollinger Inc. Pays $30 Million ----------------------------------------------------------------- Hollinger International Inc. (NYSE: HLR) received approximately $30.0 million from Conrad M. Black and Hollinger Inc., representing amounts that Black and Hollinger Inc. had agreed to repay under a Restructuring Proposal dated November 15, 2003, because they had not been properly authorized on behalf of the Company. After they unsuccessfully challenged the repayment obligations, Black and Hollinger Inc. were ordered to pay these amounts by the Delaware Chancery Court on June 28, 2004. The Court ordered Black to pay $8,693,053.56, plus interest from June 1, 2004; Black and Hollinger Inc. were held jointly liable to repay an additional $21,154,025.92 plus interest from June 1, 2004. The Court-ordered repayments represent amounts that were previously paid to Black and Hollinger Inc. were styled as "non- competition payments" associated with the sale of U.S. community newspaper assets from 1999 to 2001. The payments had not been authorized or approved by either the Audit Committee or the full Board of Directors of the Company. Of the total of $32.15 million in unauthorized "non-competition" payments that were made by the Company during this period, $16.55 million was paid to Hollinger Inc., and approximately $7.2 million was paid to Black. The amounts received today include interest on these amounts from the original date of each of the unauthorized payments as provided for in the November Restructuring Proposal. Both Black and Hollinger Inc. have appealed this judgment. Hollinger International Inc. is a global newspaper publisher with English- language newspapers in the United States, Great Britain, and Israel. Its assets include The Daily Telegraph, The Sunday Telegraph and The Spectator magazine in Great Britain, The Chicago Sun-Times and a large number of community newspapers in the Chicago area, The Jerusalem Post and The International Jerusalem Post in Israel, a portfolio of new media investments and a variety of other assets. * * * As reported in the Troubled Company Reporter's March 17, 2004 edition, Hollinger International Inc. (NYSE: HLR) announced that primarily as a result of the ongoing investigation being conducted by the Special Committee of the Company's Board of Directors, as well as the disruption of management services provided to the Company arising from its ongoing dispute with Ravelston Corporation Limited, the Company is not able to complete its financial reporting process and its audited financial statements for inclusion in the Annual Report on Form 10-K for fiscal year 2003 by the filing deadline. The Company intends to complete its financial reporting process as soon as practicable after the completion of the investigation by the Special Committee, and then promptly file the 10-K. The company's September 30, 2003, balance sheet shows a working capital deficit of about $293 million. HOLLINGER INTERNATIONAL: Subsidiary Determines Tender Offer Yield ----------------------------------------------------------------- Hollinger International Publishing Inc., a subsidiary of Hollinger International Inc. (NYSE: HLR), has determined the tender offer yield in connection with Publishing's previously announced tender offer and consent solicitation for its outstanding 9% Senior Notes due 2010. The total outstanding principal amount of the Notes is $300 million. As described in Publishing's Offer to Purchase and Consent Solicitation Statement dated June 24, 2004 and as previously announced, the Total Consideration for the Notes is determined by reference to the bid-side yield to maturity of the 2-5/8% U.S. Treasury Note due November 15, 2006 as of 10:00 a.m., New York City time, on July 16, 2004, plus 50 basis points. The bid-side yield to maturity of the Reference Security has been determined to be 2.715%, resulting in a total tender offer yield of 3.215%. Assuming for purposes of illustration that the payment date occurs on August 2, 2004, the Total Consideration for each $1,000 in principal amount of Notes would be $1,172.63, plus accrued and unpaid interest to, but not including, the payment date. The Total Consideration includes a consent payment of $30 per $1,000 principal amount of Notes payable to holders who validly tendered their Notes and delivered consents and who did not validly withdraw their Notes or revoke consents on or prior to the Consent Payment Deadline, which expired at 5:00 p.m., New York City time, on July 15, 2004. The tender offer commenced on June 24, 2004 and will expire at 12:00 midnight, New York City time, on July 30, 2004, unless extended. Closing of the tender offer is subject to the satisfaction of certain conditions, including: (i) the consummation of the sale of Telegraph Group Limited to Press Acquisitions Limited, which sale shall have generated sufficient proceeds to allow Publishing to repay all of its borrowings under its existing bank credit facility and to purchase all of the Notes in the tender offer; and (ii) certain other customary conditions. Wachovia Securities is the exclusive Dealer Manager and Solicitation Agent for the tender offer and consent solicitation. Questions regarding the terms of the tender offer or consent solicitation should be directed to Wachovia Securities at (704) 715-8341 or toll-free at (866) 309-6316. The Depositary and Information Agent is Global Bondholder Services Corporation. Any questions or requests for assistance or additional copies of documents may be directed to the Information Agent at (212) 430- 3774 or toll-free at (866) 470-3800. About Hollinger International Publishing Inc. Publishing is a wholly owned subsidiary of Hollinger International Inc., which is a leading publisher of English-language newspapers in the United States, the U.K. and Israel with a smaller presence in Canada. In addition, it owns or has interests in over 250 other publications, including non-daily newspapers and magazines. Included among its 144 paid newspapers are the Chicago Group's Chicago Sun-Times, the U.K. Newspaper Group's The Daily Telegraph and the Community Group's Jerusalem Post. * * * As reported in the Troubled Company Reporter's March 17, 2004 edition, Hollinger International Inc. (NYSE: HLR) announced that primarily as a result of the ongoing investigation being conducted by the Special Committee of the Company's Board of Directors, as well as the disruption of management services provided to the Company arising from its ongoing dispute with Ravelston Corporation Limited, the Company is not able to complete its financial reporting process and its audited financial statements for inclusion in the Annual Report on Form 10-K for fiscal year 2003 by the filing deadline. The Company intends to complete its financial reporting process as soon as practicable after the completion of the investigation by the Special Committee, and then promptly file the 10-K. The company's September 30, 2003, balance sheet shows a working capital deficit of about $293 million. INDYMAC BANCORP: Completes Acquisition of Financial Freedom ----------------------------------------------------------- IndyMac Bancorp, Inc. (NYSE:NDE), the holding company for IndyMac Bank(R) F.S.B., completed its acquisition of Financial Freedom Holdings Inc. "The acquisition of Financial Freedom makes us the largest provider of reverse mortgages in the U.S. and illustrates our strategy of growing market share through niche products that complement our core competency as a single-family residential mortgage lender," commented Michael W. Perry, IndyMac's Chairman and Chief Executive Officer. "With the maturing of the baby boom generation and the appreciation of home prices, the reverse mortgage market has the potential for very healthy growth in the years to come. Joining forces with Financial Freedom, the proven leader in this industry, positions IndyMac to prosper from this demographic wave," continued Mr. Perry. Reverse mortgages allow homeowners age 62 and older to convert home equity into cash. The product is becoming increasingly popular with senior citizens seeking to supplement their retirement income for home maintenance and repair, healthcare funding, estate planning, and discretionary purposes. "IndyMac is pleased to provide reverse mortgages as another option for our senior customers to achieve their retirement objectives," commented Mr. Perry Reverse mortgages offered by IndyMac feature: no recourse to the borrower, no repayment during the borrower's occupancy of the home, and a repayment amount that cannot exceed the value of the home (after costs of sale). Equity may be withdrawn in a lump sum, as annuity-style monthly payments, as a credit line, or any combination thereof. Financial Freedom is a majority-owned subsidiary of IndyMac Bank. The acquisition of Financial Freedom is expected to be a few cents dilutive to IndyMac's earnings in the third quarter due to purchase accounting issues, and accretive thereafter. IndyMac Bancorp, Inc. is the holding company for IndyMac Bank, the largest savings and loan in Los Angeles and the 10th largest nationwide (based on assets). Through its hybrid thrift/mortgage bank business model, IndyMac is in the business of designing, manufacturing, and distributing cost-efficient financing for the acquisition, development, and improvement of single-family homes. IndyMac also provides financing secured by single-family homes to facilitate consumers' personal financial goals and strategically invests in single-family mortgage-related assets. IndyMac utilizes its award-winning e-MITS(R) technology platform to facilitate automated underwriting, risk-based pricing, and rate lock of home loans on a nationwide basis via the Internet at the point of sale. IndyMac provides mortgage products and services through its business relationship division, IndyMac Mortgage Bank, and its consumer direct division, IndyMac Consumer Bank, and invests in certain of its mortgage loan production and mortgage servicing for long-term returns through its Investment Portfolio and Home Equity Divisions. IndyMac's mortgage website is ranked the number one overall mortgage website by Watchfire(R) GomezPro(TM), an Internet quality measurement firm, a position it has held for seven of eight measurement periods since Fall 2000. IndyMac Bank also offers a wide array of Web-enhanced banking services, including deposits, competitive CD and money market accounts, and online bill payment services. IndyMac Bank is FDIC insured. IndyMac's total annualized return to shareholders for the period 1993 through June 30, 2004 of 24%, under its current management team, has exceeded the comparable returns of 13% and 11% for the Dow Jones Industrial Average and S&P 500, respectively, for the same period. For more information about IndyMac and its affiliates, or to subscribe to the Company's Email Alert feature for notification on Company news and events, please visit our website at http://www.indymacbank.com/ * * * As reported in the Troubled Company Reporter's June 24, 2004 edition, Fitch has taken rating actions on the following IndyMac ABS, Inc., home equity issues as follows: Series SPMD 2000-A group 2: --Class AV-1 affirmed at 'AAA'; --Class MV-1 affirmed at 'AA'; --Class MV-2 affirmed at 'A'; --Class BV affirmed at 'BBB' and removed from Rating Watch Negative. Series SPMD 2000-C group 1: --Class AF-5, AF-6, R affirmed at 'AAA'; --Class MF-1 affirmed at 'AA'; --Class MF-2 downgraded to 'BB' from 'BBB'; --Class BF downgraded to 'C' from 'CCC'. Series SPMD 2001-B: --Class AV, AF-6, R affirmed at 'AAA'; --Class MF-1 affirmed at 'AA'; --Class MF-2 affirmed at 'A'; --Class BF downgraded to 'BB' from 'BBB', and removed from Rating Watch Negative. The affirmations on the above classes reflect credit enhancement consistent with future loss expectations. The negative rating action on series 2000-C group 1 class MF-2 and series 2001-B class BF is the result of adverse collateral performance and the deterioration of asset quality outside of Fitch's original expectations. Indymac SPMD 2000-C group 1 contained 12.65% of manufactured housing collateral at closing, and as of April 2004, the percentage of MH increased to 33.6%. To date, MH loans have exhibited very high historical loss severities, causing Fitch to have concerns over the available enhancement in this deal. This deal was structured with mortgage insurance policies provided by both the lender and the borrower on approximately 91.4% of the mortgage pool. Series 2000-C group 1 has had no overcollateralization amount since the May 2003 distribution, and class BF has taken further write-downs, with an ending balance of $2,395,665.85 as of the May 2004 distribution. The twelve-month average monthly loss for this deal is approximately $245,000. Series 2001-B has $1,301,270.46 OC outstanding as of the May 2004 distribution. The twelve-month average monthly loss for this deal is approximately $223,600. The structure in the 2000-C transaction is not cross- collateralized so excess spread cannot be shared by the groups. Both 2000-C and 2001-B transactions are also structured such that bonds that were written down due to losses can be written back up. INTERNATIONAL BIOCHEMICAL: Trustee Converts Case to Chapter 7 ------------------------------------------------------------- Herbert C. Broadfoot II, Esq., the Chapter 11 Trustee for International Biochemical Industries, Inc.'s case wants the U.S. Bankruptcy Court for the Northern District of Georgia, Atlanta Division, to convert the Debtor's Chapter 11 restructuring to a Chapter 7 liquidation. "The Debtor apparently has no ongoing business operations," Mr. Broadfoot tells the Court, adding that there's no prospect for reorganization. Mr. Broadfoot believes that no good purpose is served by proceeding with a Chapter 11 plan of liquidation and that assets of the estate can be administered in Chapter 7 at less expense. Headquartered in Atlanta, Georgia, International BioChemical Industries, Inc. -- http://www.bioshield.com/-- is a maker of concentrated antiviral and antimicrobial products. The Company filed for chapter 11 protection on April 5, 2004 (Bankr. N.D. Ga. Case No. 04-92814). Jesse Blanco, Jr., Esq., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $114,500 in assets and $18,465,934 in debts. INTERNET CAPITAL: To Release Q2 Financial Results on August 5 ------------------------------------------------------------- Internet Capital Group (NASDAQ:ICGE) will release the financial results for its second quarter ended June 30, 2004, on Thursday, August 5, 2004, before the market opens. The Company will host a conference call to discuss the second quarter results on Thursday, August 5th, 2004 at 10:00am ET. Participating on the conference call will be Walter Buckley, chairman and chief executive officer and Tony Dolanski, chief financial officer. The domestic dial-in number for the call is 877-211-0292. The international dial-in number is (706) 679-0702. The Company will also host a live web cast for the call with an attached slide presentation. To access the web cast, go to the ICG web site at http://www.internetcapital.com/and click on the investor information tab and the icon for the second quarter conference call. Please log on to the web site approximately ten minutes prior to the call to register and download and install any necessary audio software. In an effort to address specific areas of interest, participants are encouraged to submit questions to the Internet Capital Group Investor Relations department at ir@internetcapital.com prior to August 5th. Every attempt will be made to respond to all questions either during the Question and Answer portion of the call or shortly thereafter. If you are unable to access the web site but would like a copy of the slide presentation sent to you after the call, please contact our Investor Relations Department, at (610) 727-6900. For those unable to participate in the conference call, a replay will be available beginning August 5th, 2004 at 11:00am until August 12th, 2004 at 11:59pm. To access the replay dial 800-642- 1687 (domestic) or 706-645-9291 (international). The access code is 8746779. The replay and slide presentation can also be accessed on the Internet Capital Group web site: http://www.internetcapital.com/investors/presentations About Internet Capital Group Internet Capital Group is an e-business applications holding company that builds and owns software and services businesses that leverage the Internet to help organizations operate more productively. Founded in 1996, ICG devotes its expertise and capital to maximizing the success of e-business companies that take advantage of the evolution to Internet architectures in key business sectors. * * * In its Form 10-Q for the quarterly period ended March 31, 2004, filed with the Securities and Exchange Commission, Internet Capital Group, Inc. reports: Liquidity and Capital Resources "In May 2004, we issued $60 million of senior convertible notes due in April 2009. We will use the net proceeds to redeem the remaining $39.1 million of December 2004 convertible subordinated notes, general operation requirements and fundings to new and existing partner companies. "We believe existing cash, cash equivalents and short-term investments, proceeds from the potential sales of all or a portion of our interests in certain partner companies and net proceeds from the $60 million senior convertible notes are expected to be sufficient to fund our cash requirements through at least the second quarter of 2005, including commitments to existing partner companies, debt obligations and general operations requirements. "As of March 31, 2004, our available-for-sale securities consist of: 1,053,964 shares of eMerge Interactive common stock, 2,917,794 shares of Verticalnet common stock and 1,083,206 shares of Universal Access common stock. "In the first quarter of 2004, we sold 1,559,481 shares of Onvia.com common stock for $6.5 million in cash, of which $5.8 million was received in early April 2004. "At May 10, 2004, we were obligated for no funding and guarantee commitments to existing partner companies. If a certain consolidated partner company achieves a fair market value in excess of $1.0 billion, we will be obligated to pay, in cash or stock at our option, 4% of the partner company's fair market value in excess of $1.0 billion, up to $70 million to a venture capital firm. One of our executive officers was a limited partner of this venture capital firm. This contingent obligation will expire on the earlier to occur of May 31, 2005 or an unaffiliated company sale, if the valuation milestone is not achieved. Currently, the fair market value of this partner company is well below $1.0 billion. We will continue to evaluate acquisition opportunities and may acquire additional ownership interests in new and existing partner companies in the next twelve months; however, such acquisitions will generally be made at our discretion. If we elect to make additional acquisitions, it may become necessary for us to raise additional funds. We may not be able to raise additional capital and failure to do so could have a material adverse effect on our business. If additional funds are raised through the issuance of equity securities, our existing stockholders may experience significant dilution." J.L. FRENCH AUTOMOTIVE: S&P Lowers Corp. Credit Rating to CC ------------------------------------------------------------ Standard & Poor's Rating Services lowered its corporate credit rating on Sheboygan, Wisconsin-based J.L. French Automotive Castings Inc. to 'CC' from 'B-' and placed it on CreditWatch with negative implications. The action came after the company announced a tender offer that Standard & Poor's would consider to be tantamount to a default if completed as proposed. At the same time, Standard & Poor's lowered its subordinated debt rating on the company to 'C' from 'CCC' and placed it on CreditWatch with negative implications. Once the tender offer is completed, the corporate credit rating will be lowered to 'SD' and the subordinated debt rating will be lowered to 'D'. The 'B-' bank loan rating remains unchanged and will be withdrawn upon refinancing and rating of the company's new credit facility. Upon completion of the tender offer, Standard & Poor's will assign a new corporate credit rating and bank loan rating, which will reflect the company's improved capital structure and financial flexibility pro forma the refinancing. J.L. French is a vertically integrated, value-added manufacturer of aluminum die-cast automotive parts. Total debt outstanding was $629 million at March 31, 2004. J.L. French said its tender offer was for its outstanding 11.5% senior subordinated notes due 2009 for a value of $780 per bond, a substantial discount from the $1,000 par value of the notes. "We view the tender offer as coercive, since the company is experiencing financial distress, and bondholders could eventually face more adverse consequences if the offer is not accepted," said Standard & Poor's credit analyst Heather Henyon. "J.L. French is highly leveraged and has an untenable capital structure." The tender offer is being made in connection with a proposed refinancing of the company's current credit facilities as well as a proposed offering of $165 million in preferred equity securities. The potential investors in the preferred equity offering have indicated that their intention to make their investment is contingent on their satisfaction with the terms and success of the tender offer. Standard & Poor's will review the prospects for operating improvements at the company and evaluate the impact of the proposed financing on the company's credit profile. LEES CHILDREN LLC: Case Summary & 14 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Lees Children L.L.C. c/o Marlene Appel 3550 North Central, #1801 Phoenix, Arizona 85012 Bankruptcy Case No.: 04-12039 Chapter 11 Petition Date: July 9, 2004 Court: District of Arizona (Phoenix) Judge: Charles G. Case II Debtor's Counsel: Shelton L. Freeman, Esq. Deconcini McDonald Yetwin & Lacy PC 2025 North 3rd Street #230 Phoenix, AZ 85004-1472 Tel: 602-282-0500 Fax: 602-282-0520 Total Assets: $3,000,000 Total Debts: $925,324 Debtor's 14 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Dr. Michael Chen 5315 E. Solano Dr. $360,000 5390 San Miguel Ave. Paradise Valley, Paradise Valley, AZ 85253 Arizona 85253 Plumbing by Curtis $4,718 Maricopa County Assessor $4,704 PLI Brokerage, Inc. $1,595 All Star Pool Unknown Arizona Public Service Unknown Arizona-American Water Unknown Company Barbara Lees Unknown CKS Pools Unknown Maureen Gaughan fraudulent Unknown conveyance claim RPS Skanco International homeowner's insurance Unknown Southwest Gas Corporation Unknown Maxim Construction Group Unknown Phil Whitaker Unknown METALLURG INC: S&P Lowers Ratings To D On Parent's Nonpayment ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Metallurg Inc. and its parent Metallurg Holdings Inc. to 'D' from 'CC'. Standard & Poor's also lowered the ratings on Metallurg's 11% senior notes due 2007 and Metallurg Holdings' 12.75% senior discount notes due 2008 to 'D' from 'CC' and 'C', respectively. "The downgrades follow the company's announcement that its parent did not make the $7.7 million interest payment due July 15, 2004, on the 12.75% senior discount notes 2008," said Standard & Poor's credit analyst Dominick D'Ascoli. Despite being current on its debt obligations, Standard & Poor's believes New York, New York-based Metallurg Inc. will seek a general restructuring of its debt obligations and that lenders could receive something less than full value, which is tantamount to default. In the event restructuring efforts fail, the probability of a bankruptcy filing is high. Metallurg produces specialty metals, alloys and metallic chemicals used by manufacturers of steel, aluminum, and superalloys. Weak demand in the past couple of years from the global steel and aluminum industries, as well as significantly reduced demand from major customers in the aerospace sector, have led to lower margins. Reduced margins, combined with an overleveraged capital structure, have put the company in a distressed position. MIRANT CORP: MirMA Landlords Press For Alternative Rent Payment --------------------------------------------------------------- The MirMA Landlords ask the Court to compel Mirant Mid-Atlantic, LLC, to pay the alternative rent due to them until MirMA resumes its reporting status with the Securities and Exchange Commission. Louis R. Strubeck, Jr., Esq., at Fulbright & Jaworski, LLP, in Dallas, Texas, relates that MirMA unilaterally terminated its status as a reporting company with the SEC on August 28, 2003. MirMA's leases with the MirMA Landlords require MirMA to pay alternative rent at an increased rate of 0.50%, totaling about $5,000,000 per year, should it fail to maintain reporting company status under the Exchange Act. MirMA failed to pay the alternative rent due. Mr. Strubeck explains that MirMA's obligation to pay alternative rent corresponds to an increase in interest provided for in notes the MirMA Landlords executed, in favor of certain certificate holders. The increased rent was provided for in the leases to compensate for the loss in liquidity of the certificates issued in connection with the lease transactions due to MirMA's termination of its reporting company status. According to Mr. Strubeck, MirMA's inexplicable decision to terminate its reporting company status is curious since it has the information necessary to complete the required reports and the cost of maintaining reporting company status is a fraction of the alternative rent payable. Regardless of whether the Leases are real or personal property leases, Mr. Strubeck asserts that the payment of Alternative Rent is required because: -- Sections 365(d)(3) and (d)(10) of the Bankruptcy Code requires MirMA to "timely perform all obligations" under a lease; -- none of the "carve outs" specified in Section 365(b)(2) applies to the Leases; -- the Alternative Rent is not a penalty under the New York law, which govern the Leases; -- MirMA's obligation to pay Alternative Rent is a pass through -- it merely parallels the Alternative Rent applicable under the Lessor Notes due to MirMA's failure to maintain its reporting company status; -- the Alternative Rent provides compensation for loss of marketability of the certificates caused by the termination of MirMA's reporting company status; and -- if MirMA is not compelled to pay the Alternative Rent, the MirMA Landlords will be prejudiced because their interests under the Lessor Notes are jeopardized. Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- together with its direct and indirect subsidiaries, generate, sell and deliver electricity in North America, the Philippines and the Caribbean. The Company filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03- 46590). Thomas E. Lauria, Esq., at White & Case LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service, Inc., 215/945-7000) MOHEGAN TRIBAL: Commences Sr. Debt Offer & Consent Solicitation --------------------------------------------------------------- The Mohegan Tribal Gaming Authority has commenced a cash tender offer and consent solicitation for any and all of its $200,000,000 aggregate principal amount of 8-1/8% Senior Notes due 2006 and any and all of its $150,000,000 aggregate principal amount of 8-3/8% Senior Subordinated Notes due 2011, pursuant to the Offer to Purchase and Consent Solicitation, dated July 15, 2004. The Offer is scheduled to expire at 12:00 midnight, New York City Time, on Wednesday, August 11, 2004, unless extended or earlier terminated with respect to either the Senior Notes or the Subordinated Notes at the Authority's sole discretion. The consent solicitation will expire at 5:00 P.M., New York City Time, on Wednesday, July 28, 2004. Holders tendering their Notes will be required to consent to certain proposed amendments to the indentures governing the Notes, which will eliminate substantially all of the restrictive covenants with respect to such Notes. Holders may not tender their Notes without delivering consents or deliver consents without tendering their Notes. The consideration offered for each $1,000 principal amount of Senior Notes validly tendered and not validly withdrawn pursuant to the Offer will be the price (calculated as described in the Tender Offer Statement) equal to (i) the present value on the initial settlement date of $1,000 principal amount of Senior Notes (the amount payable on January 1, 2006, which is the maturity date for the Senior Notes) plus the present value of the interest that would be payable on, or accrue from, the last interest payment date until the Senior Maturity Date, in each case, determined on the basis of a yield to the Senior Maturity Date equal to the sum of (x) the bid- side yield on the 1.875% U.S. Treasury note due December 31, 2005 calculated as described below, plus (y) 50 basis points (such price being rounded to the nearest cent), minus accrued and unpaid interest from the last interest payment date to, but not including, the initial settlement date, minus (ii) $20.00 per $1,000 principal amount of Senior Notes, which is equal to the Consent Payment. The Senior Total Consideration minus the Consent Payment is referred to as the "Senior Tender Offer Consideration." The consideration offered for each $1,000 principal amount of Subordinated Notes validly tendered and not validly withdrawn pursuant to the Offer will be the price equal to (i) the present value on the initial settlement date of $1,041.88 principal amount of Subordinated Notes (the amount payable on July 1, 2006, which is the first date on which the Subordinated Notes are redeemable) plus the present value of the interest that would be payable on, or accrue from, the last interest payment date until the Subordinated Redemption Date, in each case, determined on the basis of a yield to the Subordinated Redemption Date equal to the sum of (x) the bid-side yield on the 2.75% U.S. Treasury note due June 30, 2006 calculated as described below, plus (y) 50 basis points (such price being rounded to the nearest cent), minus accrued and unpaid interest from the last interest payment date to, but not including, the initial settlement date, minus (ii) $20.00 per $1,000 principal amount of Subordinated Notes, which is equal to the Consent Payment. The Subordinated Total Consideration minus the Consent Payment is referred to as the "Subordinated Tender Offer Consideration." Holders of Notes who validly tender, and do not validly withdraw, their Notes in the Offer on or prior to 5:00 P.M., New York City Time, on the Consent Date will receive the Senior Total Consideration or Subordinated Total Consideration, as applicable (if such Notes are accepted for payment), which includes a consent payment in an amount in cash equal to $20.00 for each $1,000 principal amount of Notes tendered on or prior to the Consent Date. Holders who validly tender, and do not validly withdraw, their Notes following the Consent Date but on or prior to midnight, New York City Time, on the Expiration Date will receive the Senior Tender Offer Consideration or the Subordinated Tender Offer Consideration, as applicable (if such Notes are accepted for payment). In addition, Holders who validly tender and do not validly withdraw their Notes in the Offer will also receive accrued and unpaid interest from the last interest payment date to, but not including, the applicable settlement date, payable on the applicable settlement date. The Senior Reference Yield and the Subordinated Reference Yield will be calculated by the Dealer Managers, as defined in the Tender Offer Statement, in accordance with standard market practice, as of 2:00 P.M., New York City Time, on the Consent Date, as reported by Bloomberg Government Pricing Monitor on "Page PX4" or, if any relevant price is not available on a timely basis on the Bloomberg Page or is manifestly erroneous, such other recognized quotation source as the Dealer Managers shall select in their sole discretion. The Authority will publicly announce the pricing information referred to above by press release to business wire by 9:30 A.M., New York City Time, on the next business day after the Price Determination Date. The Offer with respect to the Senior Notes and the Subordinated Notes is subject to the satisfaction of certain conditions, including the Authority's receipt of tenders of Notes representing a majority of the principal amount of such Notes outstanding and financing on terms acceptable to the Authority in an amount sufficient to consummate the Offer. The Offer with respect to the Senior Notes is not conditioned on the success of the Offer with respect to the Subordinated Notes and the Offer with respect to the Subordinated Notes is not conditioned on the success of the Offer with respect to the Senior Notes. The terms of the Offer are described in the Authority's Tender Offer Statement, copies of which may be obtained from Global Bondholder Services Corporation, the information agent for the Offer. The Authority has engaged Citigroup Global Markets Inc., Banc of America Securities LLC and SG Americas Securities, LLC to act as dealer managers and solicitation agents in connection with the Offer. Questions regarding the Offer may be directed to Citigroup Global Markets Inc., Liability Management Group at (800) 558-3745 (toll free) or (212) 723-6106 (collect), Banc of America Securities LLC, High Yield Special Products at (888) 292-0070 (toll free) or (704) 388-4813 (collect), and SG Americas Securities LLC, High Yield Capital Markets at (212) 278-5435 (collect). Requests for documentation may be directed to Global Bondholder Services Corporation, the information agent for the Offer, at (866) 857-2200 or, for banks and brokers, (212) 430- 3774. This announcement is not an offer to purchase, a solicitation of an offer to purchase or a solicitation of consent with respect to any securities. The Offer is being made solely by the Offer to Purchase and Consent Solicitation, dated July 15, 2004. The Authority is an instrumentality of the Mohegan Tribe of Indians of Connecticut, a federally recognized Indian tribe with an approximately 405-acre reservation situated in southeastern Connecticut, which has been granted the exclusive power to conduct and regulate gaming activities on the existing reservation of the Tribe located near Uncasville, Connecticut, including the operation of the Mohegan Sun, a gaming and entertainment complex that is situated on a 240-acre site on the Tribe's reservation. The Tribe's gaming operation is one of only two legally authorized gaming operations in New England offering traditional slot machines and table games. Mohegan Sun currently operates in an approximately 3.0 million square foot facility, which includes the Casino of the Earth, Casino of the Sky, the Shops at Mohegan Sun, a 10,000-seat Arena, a 300-seat Cabaret, meeting and convention space and an approximately 1,200-room luxury hotel. More information about Mohegan Sun and the Authority can be obtained by visiting http://www.mohegansun.com/ At March 31, 2004, Mohegan Tribal Gaming Authority's balance sheet shows a capital deficit of $70,175,000 compared to a deficit of $98,592,000 at September 30, 2003. NATIONAL CENTURY: Liquidating Trust Wants Docs. from 24 Banks ------------------------------------------------------------- The Unencumbered Assets Trust, the National Century Financial Enterprises, Inc. Debtors Liquidating Trust, asks the U.S. Bankruptcy Court of the District of Ohio to direct the production of documents from 24 additional third party entities that may be in possession of information relevant to the Trust's evaluation of potential estate claims. According to Sydney Ballesteros, Esq., at Gibbs & Bruns, in Houston, Texas, the 24 entities were the custodial holders of payments or disbursements relating to NCFE securities within the preference period of the bankruptcy. The custodians therefore have relevant information relating to the identity of the beneficial owners of the NCFE securities. This information will help the Trust identify and determine whether certain preference claims exist and should be brought on behalf of the Debtors' estate. The 24 third party entities are: (1) ABN Amro Incorporated/Bond Trading, (2) Bear Sterns Securities Corp., (3) Boston Safe Deposit and Trust Co., (4) Brown Brothers Harriman & Co., (5) Citibank, (6) Credit Suisse First Boston, LLC, (7) Deutsche Bank Securities, Inc., (8) Deutsche Bank Trust Co. (Bankers Trust Co.), (9) First National Bank of Omaha, (10) Harris Trust and Savings Bank, (11) Investors Bank & Trust Co., (12) JP Morgan Chase Bank, (13) JPM/CCS2, (14) JPM/JPMSI, (15) LaSalle Bank National Assn., (16) M&I Marshall & Ilsley Bank, (17) Mercantile-Safe Deposit & Trust Co., (18) Northern Trust Co., (19) Salomon Brothers (Citigroup Global Markets, Inc./Salomon), (20) State Street Bank and Trust Co., (21) The Bank of New York, (22) Wachovia Bank, N.A., (23) Wells Fargo Bank Minnesota, N.A., and (24) WestLB AG. The Trust has concluded that it would not be productive or efficient to engage in a party-to-party effort to obtain materials informally, given the number of parties from which the Trust is seeking materials; the information sought; and the short time remaining for the Trust to assert its claims. Hence, the Trust did not contact the parties in advance. Instead, the Trust will utilize Rule 2004 of the Federal Rules of Bankruptcy Procedure to collect the information it needs. Ms. Ballesteros clarifies that the Trust at this time does not seek authority to take oral examinations of any of the 24 Rule 2004 Subpoena Targets. However, once it has reviewed the documents produced, the Trust reserves the right to file an additional motion under Bankruptcy Rule 2004 to take oral examinations, as well as the right to file additional motions in the future. Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- is the market leader in healthcare finance focused on providing medical accounts receivable financing to middle market healthcare providers. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. D. Ohio Case No. 02-65235). Paul E. Harner, Esq., Jones, Day, Reavis & Pogue represents the Debtors in their restructuring efforts. (National Century Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service, Inc., 215/945-7000) NEW HEIGHTS: Wants Nod for Cananwill Premium Finance Agreement -------------------------------------------------------------- New Heights Recovery & Power, LLC asks the U.S. Bankruptcy Court for the District of Delaware for authority to enter into a premium finance agreement with Cananwill, Inc. The Debtor tells the Court that, in the ordinary course of its business, it maintains various insurance policies to insure against unexpected and accidental losses, including general liability and property insurance. The Debtor finances the annual policy premiums to minimize the cash flow impact of renewing the Insurance Policies. In this regard, the Debtor asks the Court for authority to enter into the insurance finance agreement with Cannanwill, Inc. Under the Insurance Premium Finance Agreement, Cananwill will provide financing to the Debtor to renew the Insurance Policies. The amount to be financed is $60,548 with the total finance charge equaling $1,568. Under the Agreement, the Debtor is obliged to pay Cananwill nine monthly installments of $7,764 each. In return, Cananwill will fund the entire insurance premium at one time and the Debtor will avoid any cash flow problem related to renewing the policies on a lump-sum basis. As collateral to secure the repayment of the indebtedness under the Agreement, the Debtor will grant Cananwill a security interest in all unearned premiums. In addition, Cananwill is appointed as the Debtor's attorney-in-fact with the irrevocable power to cancel the policy and collect the unearned premium in the event that the Debtor defaults. Cananwill will also hold an administrative priority claim for any monies owed under the postpetition Insurance Premium Finance Agreement if the policy is cancelled and the unearned premiums are insufficient to cover the monies owed to it. Headquartered in Ford Heights, Illinois, New Heights Recovery & Power, LLC -- http://www.tires2power.com/-- is the owner and operator of the Tire Combustion Facility and other tire rubber processing facilities. The Company filed for chapter 11 protection on April 29, 2004 (Bankr. Del. Case No. 04-11277). Eric Lopez Schnabel, Esq., at Klett Rooney Lieber & Schorling represents the Debtor in its restructuring efforts. When the Company filed for chapter 11 protection, it listed both its estimated debts and assets of over $10 million. NEWMARKET TECH: Formally Changes Company Name & Ticker Symbol ------------------------------------------------------------- IPVoice Communications Inc. (OTCBB:IPVO) has formally changed the Company's name to NewMarket Technology Inc. In addition, the NASD has notified the company that effective today the company's stock will begin trading under the ticker symbol "NMKT." "Our corporate name now reflects more accurately what our company has developed into over the past year," said Philip Verges, NewMarket Technology's CEO. "NewMarket Technology has expanded into various market sectors by going beyond just Voice over Internet Protocol (VoIP) solutions into offering emerging communication technology solutions and services in the healthcare and homeland security industries." About NewMarket Technology Inc. In 2002, NewMarket -- http://www.newmarkettechnology.com/-- launched a business plan to continuously introduce emerging communication technologies to market. The plan included a financing model for early technologies and an approach to creating economies of scale through a specialized service and support organization intended specifically for the emerging technology industry. The Company posted six consecutive profitable quarters through 2003 and established an annualized $15 million in revenue. In 2003, NewMarket acquired Infotel Technologies in Singapore and IP Global Voice, led by CEO Peter Geddis, a former Executive Vice President and Chief Operating Officer of Qwest Communications (NYSE:Q). In 2004, the Company diversified its communications technology offering into the healthcare and homeland security industries with the respective acquisitions of Medical Office Software Inc. and Digital Computer Integration Corp. RKM IT Solutions of Caracas, Venezuela, was also recently acquired as NewMarket's entry into the Latin American market. * * * In the Form 10-QSB for the quarterly period ended March 31, 2004, filed with the Securities and Exchange Commission, NewMarket reports: Liquidity and Capital Resources "At March 31, 2003, the Company had cash of $16,300 and a working capital deficit of $1,510,700 as compared to cash of $1,395,000 and working capital surplus of $252,000 at March 31, 2004. This improved working capital situation was due primarily to the implementation of the previously herein described new business model implemented in June 2002, which includes as part of the plan the acquisitions made over the last year. In addition we have been successful attracting investment capital to carry out this business model. "Since inception, the Company has financed operations primarily through equity security sales and convertible debt. The nature of the growth strategy of the Company will require further funding to be acquired either through equity or debt. Accordingly, if revenues are insufficient to meet needs, we will attempt to secure additional financing through traditional bank financing or a debt or equity offering; however, because the rapid growth and nature of the acquisitions of the Company and the potential of a future poor financial condition, we may be unsuccessful in obtaining such financing or the amount of the financing may be minimal and therefore inadequate to implement our continuing plan of operations. There can be no assurance that we will be able to obtain financing on satisfactory terms or at all, or raise funds through a debt or equity offering. In addition, if we only have nominal funds by which to conduct our operations, it will negatively impact our potential revenues." NORTEK HOLDINGS: S&P Puts Ratings on Watch Negative On Acquisition ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on Nortek Holdings Inc. and its Nortek Inc. subsidiary on CreditWatch with negative implications, following the recently-announced agreement that Thomas H. Lee Partners will acquire Nortek Holdings in a transaction valued at approximately $1.75 billion. Both Nortek Inc. and Nortek Holdings have a 'B+' corporate credit rating. The CreditWatch listing reflects the likelihood of an increase in borrowings to finance the transaction, which is expected to be funded with 70% debt and 30% equity. "This will result in a weakening of already aggressive leverage ratios," said Standard & Poor's credit analyst Wesley E. Chinn. Providence, Rhode Island-based Nortek is expected to commence a tender offer for all of its existing notes. The CreditWatch will be resolved once Standard & Poor's has had the opportunity to review with management the new capital structure as well as operating fundamentals. Our rating deliberations will also take into consideration the positive aspects of Nortek's credit quality, including a business profile stronger than the current ratings, relatively stable cash flows, and a meaningful cash position. NORVERGENCE INC: Closes Doors & Files Chapter 7 Petition in N.J. ---------------------------------------------------------------- NorVergence, Inc., a Newark, New Jersey-based communications provider, reportedly closed its doors on Friday, July 15, and suspended service to over 7,000 small and medium businesses nationwide. Thereafter, NorVergence filed a Chapter 7 petition with the United States Bankruptcy Court for the District of New Jersey. On June 30, 2004, three of NorVergence's finance companies forced the company into an involuntary Chapter 11 case with $1,378,707 in asserted total claims. The Company elected to liquidate. The Company closed its stores located at 550 and 570 Broad St. and laid off all of its employees. This followed 1,300 firings earlier this month. Judge Rosemary Gambardella has ordered that the large phone companies -- Qwest Communications, Sprint, and T-Mobile -- which sold local, long-distance, Internet, and cellular services to NorVergence can shut off those services at the end of business tomorrow, Wednesday, July 21. Headquartered in Newark, New Jersey, NorVergence, Inc. -- http://www.norvergence.com/-- is a reseller of wireless telecommunications services. The Company filed for chapter 7 protection (Bankr. D.N.J. Case No. 04-32079) on July 14, 2004. Inez M. Markovich, Esq., and Peter J. Deeb, Esq., at Frey, Petrakis, Deeb, Blum, Briggs et al., represents the Petitioners in their restructuring efforts. The Petitioners asserted total claims of $1,378,707. NORVERGENCE INC: Involuntary Case Summary ----------------------------------------- Alleged Debtor: NorVergence, Inc. 550 Broad Street, 12th Floor Newark, New Jersey 07102 Involuntary Petition Date: July 14, 2004 Case Number: 04-32079 Chapter: 7 Court: District of New Jersey (Newark) Petitioners' Counsels: Inez M. Markovich, Esq. Peter J. Deeb, Esq. Frey, Petrakis, Deeb, Blum, Briggs et al. 10 Melrose Avenue, Suite 430 Cherry Hill, NJ 08003 Tel: 856-216-2322 Petitioners: Popular Leasing USA, Inc. c/o R. Daniel Kinealy 15933 Clayton Road, Suite 200 Ballwin, MO 63011 OFC Capital, a Division of ALFA Financial Corp. c/o Robert Leas 576 Colonial Park Drive, Suite 200 Roswell, GA 30075 Partners Equity Capital Company, LLC c/o Martin F. Babicki 655 Business Center Drive, Suite 250 Horsham, PA 19044 Total Amount of Claim: $1,378,707 OWENS CORNING: John Hancock & PPM America Provide Status Report --------------------------------------------------------------- The Designated Members of the Official Committee of Unsecured Creditors -- John Hancock Mutual Life Insurance Company and PPM America, Inc. -- highlight three significant issues: (1) the status of reorganization plan negotiations and the new alignment of the constituencies in the Owens Corning Debtors' Chapter 11 cases; (2) substantive consolidation; (3) to the extent that the District Court does not grant the Debtors' motion for substantive consolidation, the Designated Members intend to prosecute the Bank Guarantee Avoidance Action, as Intervenor. 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. 79; Bankruptcy Creditors' Service, Inc., 215/945-7000) OWENS CORNING: Asbestos Committee Wants Court to Quash Subpoenas ---------------------------------------------------------------- The Official Committee of Asbestos Personal Injury Claimants of Owens Corning and its debtors affiliates and subsidiaries asks the U.S. Bankruptcy Court of the District of Delaware to quash the Subpoena Duces Tecum directed to Joseph Rice and Frederick Baron. The Subpoenas were issued by Robbins, Russell, Englert, Orseck & Untereiner, LLP, counsel to Kensington International Limited. Although Messrs. Rice and Baron have separate counsel to object or respond to the Subpoenas and likely will ask protection from the courts from which the Subpoenas were issued, the Asbestos Committee wants to nullify the Subpoenas in their entirety because they invade the Asbestos Committee's interests in documents that may reside in the files of Messrs. Rice or Baron. Messrs. Rice and Baron are principals in two separate law firms that serve as counsel or co-counsel for individual members of the Asbestos Committee. Messrs. Rice and Baron also serve as counsel or co-counsel to asbestos claimants who are members of official committees of asbestos personal injury claimants in many other pending or completed bankruptcy proceedings. Mr. Rice, Mr. Baron or members of their law firms often send and receive communications to and from the law firm of Caplin & Drysdale, the Asbestos Committee's counsel, as well as counsel to the official committee of asbestos creditors in numerous other bankruptcies. These communications typically contain privileged legal advice or attorney work product about matters at issue in the Owens Corning case. Marla R. Eskin, Esq., at Campbell & Levine, LLC, in Wilmington, Delaware, asserts that large portions of the documents sought by Kensington: (1) are protected by the attorney-client privilege that exists between the Asbestos Committee and its counsel; (2) contain information submitted to a mediator in the context of confidential settlement communications; or (3) are protected by confidentiality agreements entered into between the Asbestos Committee and third parties not presently before the Court. Although the Subpoenas do not indicate to which adversary proceeding or contested matter they relate, the description of the documents requested determine that they relate to Kensington's now-mooted motion to disqualify Professor Francis McGovern. The Court appointed Prof. McGovern to serve as a mediator in the Owens Corning case. Prof. McGovern holds a similar position as a court-appointed mediator in many other asbestos bankruptcy cases and in some instances has been hired directly by companies to negotiate settlements with the representatives of asbestos creditors. As a mediator, Prof. McGovern received communications from the counsel for the Asbestos Committee, in which settlement positions were discussed with the mediator that were not authorized to be disclosed to adverse parties like Kensington. Prof. McGovern's involvement as a mediator in the Debtors' Chapter 11 cases ceased at the end of June 2004. The Court should not permit the discovery, Ms. Eskin insists. Simply put, Kensington uses the mooted disqualification motion as an excuse to engage in an incredibly broad fishing expedition seeking on its face documents that if produced would disclose privileged communications between the Asbestos Committee's counsel and Messrs. Rice and Baron, and the settlement strategies and negotiating positions of the Asbestos Committee to the entity that is the principal objector to the proposed Reorganization Plan. Furthermore, Ms. Eskin argues that the discovery sought is incredibly overbroad and violates the protections for witnesses afforded by Rule 45(c) of the Federal Rules of Civil Procedure. Accordingly, the Asbestos Committee asks the Court to exercise its inherent power over case management and discovery by quashing the Subpoenas in their entirety and issuing a protective order to prohibit the depositions from going forward. 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. 79; Bankruptcy Creditors' Service, Inc., 215/945-7000) PARMALAT GROUP: Discloses Restructuring Plan's Recovery Ratios -------------------------------------------------------------- Parmalat communicates the recovery ratios relating to the Proposal of Composition with Creditors contained in the Restructuring Plan filed with the Ministry of Production Activities on 21 June 2004. These ratios form the basis for the conversion of the unsecured debt of the 16 companies in Extraordinary Administration and included in the Composition with Creditors, into shares of the Assuming Entity (Assumptor) to which all the assets and liabilities of these 16 companies will be transferred. It should be noted that the Restructuring Plan and the Proposal of Composition with Creditors have not yet been approved by the Minister of Production Activities and that therefore the content published today still cannot be considered as final. For more details regarding the ratios and the criteria adopted in their calculation, Parmalat will post on its website, for the benefit of all creditors, some sections of the Restructuring Plan filed with the Minister of Production Activities (in a non-final version since this has not yet been approved by the Minister). Creditors eligible for the Proposal of Composition with Creditors will also be assigned warrants of the Assumptor. (A) Recovery Ratios Parmalat Finanziaria SpA in Extraordinary Administration communicates that, in relation to the Parmalat Group Restructuring Program filed with the Ministry of Productive Activities by Extraordinary Commissioner Dr. Enrico Bondi on June 21, 2004, according to the calculations carried out and on the basis of information available at the point of filing of the Program, the following table sets out the recovery ratios relating to the unsecured debt towards third parties of the 16 companies in Extraordinary Administration and included in the Proposal of Composition with Creditors contained within the Program: (1) Parmalat Finanziaria SpA, (2) Parmalat SpA, (3) Eurolat SpA, (4) Lactis SpA, (5) Geslat Srl, (6) Parmengineering Srl, (7) Contal Srl, (8) Dairies Holding International BV, (9) Parmalat Capital Netherlands BV, (10) Parmalat Finance Corporation BV, (11) Parmalat Netherlands BV, (12) Olex SA, (13) Parmalat Soparfi SA, (14) Newco Srl, (15) Panna Elena CPC Srl, and (16) Centro Latte Centallo Srl "Recovery ratio" means the ratio between all of the assets and all of the liabilities of each company included in the Proposal of Composition with Creditors. From these recovery ratios will be derived the number of shares of the Assumptor to be assigned to Unsecured Creditors of each company included in the Composition with Creditors. The Proposal of Composition with Creditors foresees: (i) full settlement in cash by the Assumptor of all of the claims from preferential creditors; (ii) full settlement in cash by the Assumptor of all creditor claims accepted on a pre-deduction basis; (iii) partial settlement of the claims of Unsecured Creditors through allocation of Assumptor shares in different proportion, depending on the condition of their debtor company. The creditors will also receive free of charge one warrant (valid to subscribe one share) for each allotted share, up to a maximum of 500 allotted shares. Each Warrant can be exercised to subscribe one share at a price equal to its par value. The Warrants will be exercisable at any time within the tenth day of the month following the month when an exercise application is filed between 2005 and 2015. For details regarding the ratios and the criteria adopted for their calculation, Parmalat will post on its website http://www.parmalat.net/for the benefit of all creditors, some sections of the Program filed with the Minister of Production Activities. It should be noted that the Plan is not yet finalized and as such has not been approved by the MPA. It should also be noted that the recovery ratios [with respect to each of the 16 companies] are based on a provisional reconstruction of the sum of liabilities of each Company included in the Composition with Creditors, since the proceedings allowed under Article 4 bis, Section 5 and 6, of the Law could alter the amount of each Company's sum of liabilities, which, in turn, could affect the assets of other Companies included in the Composition with Creditors (direct or indirect creditors of the former). Because of this situation and of other circumstances that could alter the sum-of-assets to sum-of-liabilities ratios computed, as soon as the lists of accepted claims, claims accepted with reservation and excluded claims are published, final recovery ratios and the resulting allocations of Assumptor shares to the Unsecured Creditors of Companies included in the Composition with Creditors will be published. Recovery Ratio for Company third parties debt ------- ------------------ Parmalat Finanziaria SpA 11.3% Parmalat SpA 7.3% Centro Latte Centallo Srl 100.0% Contal Srl 17.2% Eurolat SpA 100.0% Parmengineering Srl 76.1% Geslat Srl 19.9% Lactis SpA 100.0% Newco Srl 100.0% Panna Elena CPC Srl 100.0% Olex SA 100.0% Parmalat Soparfi SA 26.9% Dairies Holding International BV 100.0% Parmalat Capital Netherlands BV 0.0% Parmalat Finance Corporation BV 4.6% Parmalat Netherlands BV 2.3% * [Soparfi and Parmalat Finance Corp. issued bonds guaranteed by Parmalat SpA.] [D]ue to the guarantee, creditors will receive Recovery Ratios from both issuer and guarantor (save for Parmalat Soparfi bond due 2032 which is assisted by a subordinated guarantee from Parmalat SpA). * [Parmalat Capital Netherlands issued bonds guaranteed by Finanziaria.] [D]ue to the guarantee, creditors will receive Recovery Ratios from both issuer and guarantor. * [Parmalat Netherlands issued bonds guaranteed by Finanziaria and Parmalat SpA.] [D]ue to the guarantees, creditors will receive Recovery Ratios from issuer and guarantors. [Parmalat Netherlands also issued] private placements assisted by Parmalat SpA guarantee; due to the guarantee, creditors will receive Recovery Ratios from issuer and guarantor. For the sake of clarity, see the two examples below: (1) Example 1: Bondholder of EUR1,000 issued by Parmalat Finance Corporation BV. Bondholder will receive Recovery Ratio of Parmalat Finance Corporation BV and of the guarantor Parmalat S.p.A.: 4.6% + 7.3% = 11.9%. For EUR1.000 of bonds, the creditor will receive 119 shares and 119 Warrants of Assumptor (2) Example 2: Bondholder of EUR1,000 issued by Parmalat Capital Netherlands BV. Bondholder will receive Recovery Ratio of Parmalat Capital Netherlands BV and of the guarantor Parmalat Finanziaria SpA: 0% + 11.3% = 11.3%. For EUR1,000 of bonds, the creditor will receive 113 shares and 113 Warrants of Assumptor. (B) Method for the Determination of the Recovery Ratios [T]he description of the method applied for the calculation of the recovery ratios readers are [provided in] the Program. Given that by "recovery ratio" it is meant the ratio between the sum of assets and the sum of liabilities of each company in the Proposal of Composition with Creditors, the following elements have been taken into account: -- The total assets of each company subject to the Composition with Creditors are, where applicable, principally composed of: (i) operating business (only for some companies); (ii) equity interests; (iii) Cash and cash equivalents, if any; (iv) Receivables (i.e. receivables from third parties and intercompany receivables); -- The main components of the sum of liabilities of each Company included in the Composition with Creditors are: (i) Financial liabilities to third parties (i.e., bank loans, publicly-traded bonds, privately placed bonds, derivatives, promissory notes, etc.); (ii) Financial liabilities toward third parties for senior guarantees provided to lenders on behalf of Parmalat Group companies. Because of their very nature, subordinated guarantees were not taken into account. All other guarantees were taken into account, regardless of whether they had been issued: (a) by companies under Extraordinary Administration to creditors of companies now in a state of insolvency, or (b) by companies under Extraordinary Administration to creditors of companies not in a state of insolvency; (iii) Trade accounts payable to unsecured third party creditors; (iv) Intercompany financial and trade payables. A breakdown of the indebtedness of Companies included in the Composition with Creditors is provided in [the Program]. (C) Allocation of the Assumptor's Shares to the Unsecured Creditors of Each of the Companies Included in the Composition with Creditors The Assumptor's shares will be allocated [] to each of the Companies included in the Composition with Creditors based on the recovery ratios. . . . More specifically, each Company's Unsecured Creditors (excluding intercompany credits of Companies under Extraordinary Administration that are included in the Composition with Creditors, that will not receive Assumptor's shares) will receive a percentage of the Assumptor's shares determined by weighting the total of their claims (i.e., the sum of liabilities of the Company in question) on the basis of the applicable recovery ratio and determining their weight within the context of the Assumptor's final stockholder base. Debt Weighted % of the According to Assumptor's Company Ratios Shares ------- ------------- ----------- Parmalat Finanziaria SpA 155.3 8.3% Parmalat SpA 901.0 47.9% Centro Latte Centallo Srl 2.3 0.1% Contal Srl 24.0 1.3% Eurolat SpA 304.5 16.2% Parmengineering Srl 6.3 0.3% Geslat Srl 23.4 1.2% Lactis SpA 24.1 1.3% Newco Srl 1.4 0.1% Panna Elena CPC Srl 7.3 0.4% Olex SA 0.3 0.0% Parmalat Soparfi SA 154.4 8.2% Dairies Holding International BV 22.5 1.2% Parmalat Capital Netherlands BV 0.0 0.0% Parmalat Finance Corporation BV 239.1 12.7% Parmalat Netherlands BV 13.7 0.7% ------------- ----------- TOTAL 1,879.6 100.0% Headquartered in Wallington, New Jersey, Parmalat USA Corporation -- http://www.parmalatusa.com/-- generates more than 7 billion euros in annual revenue. The Parmalat Group's 40-some brand product line includes milk, yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices and employs over 36,000 workers in 139 plants located in 31 countries on six continents. The Company filed for chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04- 11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP represent the Debtors in their restructuring efforts. On June 30, 2003, the Debtors listed EUR2,001,818,912 in assets and EUR1,061,786,417 in debts. (Parmalat Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service, Inc., 215/945-7000) PARMALAT: Plans To Pick Buyer For Argentine Unit By Month-End ------------------------------------------------------------- Parmalat SpA intends to lock in the sale of its Argentine unit before August 1, 2004. Parmalat opened the bidding for its Argentine and Uruguayan operations in early May 2004 and the deadline for bids to be submitted to the Milan office of KPMG, LLP, who is managing the sale, was May 21. Six groups have expressed interest for Parmalat Argentina and representatives from the interested companies and investment funds will be touring the Argentine unit in the coming weeks. Parmalat may select a buyer during the last week of July 2004. The potential buyers include Saputo Inc. of Canada, another dairy company. The other interested parties include investment groups Coinvest, American Invest Group, Dolphin Fund and Pegasus. HSBC Holdings also indicated interest for the Argentine operations but as a minority shareholder. Southern Cross, a private equity fund, and businessman Sergio Taselli, a shareholder in train operator Metropolitano, have pulled out. Headquartered in Wallington, New Jersey, Parmalat USA Corporation -- http://www.parmalatusa.com/-- generates more than 7 billion euros in annual revenue. The Parmalat Group's 40-some brand product line includes milk, yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices and employs over 36,000 workers in 139 plants located in 31 countries on six continents. The Company filed for chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04- 11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP represent the Debtors in their restructuring efforts. On June 30, 2003, the Debtors listed EUR2,001,818,912 in assets and EUR1,061,786,417 in debts. (Parmalat Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., 215/945-7000) PLEJ'S LINEN: Committee Hires Traub Bonacquist as Attorneys ----------------------------------------------------------- The Official Unsecured Creditors Committee appointed in Plej's Linen Supermarket SoEast Stores, LLC's chapter 11 cases sought and obtained approval from the U.S. Bankruptcy Court for the Western District of North Carolina, Charlotte Division, to hire Traub Bonacquist & Fox LLP as its general counsel. Michael S. Fox, Esq., assures the Court that he, his partners and his firm are "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). Traub Bonacquist is expected to: a) provide legal advice with respect to the Committee's powers and duties and keep the Committee informed of developments; b) assist the Committee in evaluating the legal basis for, and effect of, the various pleadings that will be filed by the Debtor and other parties in interest in these cases; c) investigate the acts, conduct, assets, liabilities, and financial condition of the Debtors; d) assist the Committee in evaluating the monthly reports and evaluating and negotiating the Debtors' or any other party's plan of reorganization and any associated disclosure statement; e) consult with the Debtors and their professionals concerning administration of the case and development of exit strategy, disclosure statement and plan; t) commence and prosecute any and all necessary and appropriate actions and/or proceedings on behalf of the Committee in this case; g) appear in Court in all appropriate matters to advance the interests of the Committee; and h) perform all other legal services for the Committee which may be necessary and proper in these proceedings. The principal attorneys and paralegals presently designated to represent the Committee and their current hourly rates are: Regular Discounted Attorney Hourly Rate Hourly Rate -------- ----------- ----------- Michael Fox $535 $455 Adam Friedman $410 $350 Katie Richardson $240 $200 Paralegal --------- Reyko Delpino $150 $125 Headquartered in Rock Hill, South Carolina, Plej's Linen Supermarket SoEast Stores LLC, with its debtor-affiliates, are engaged primarily in two core businesses: retail sale of first quality program home accessories for bed, bath, window, decorative and house wares and limited closeout and discontinued opportunistic merchandise; and wholesale distribution of similar bed and bath textiles. The Company filed for chapter 11 protection on April 15, 2004 (Bankr. W.D. N.C. Case No. 04-31383). John R. Miller, Jr., Esq., and Paul R. Baynard, Esq., at Rayburn Cooper & Durham, P.A., represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, it estimated debts and assets of over $10 million. RCN CORP: Directors Turn to Winston & Strawn for Legal Counsel -------------------------------------------------------------- Winston & Strawn, LLP, is an international law firm of nearly 900 attorneys, with considerable experience in practice areas including litigation, corporate, tax and securities law. Winston & Strawn also has considerable experience, expertise and knowledge with respect to reorganizations under Chapter 11 of the Bankruptcy Code. RCN Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Winston & Strawn, as of June 7, 2004, as special counsel to represent the members of RCN's Board of Directors. Winston & Strawn will provide the Board of Directors with legal services and advice in connection with the Debtors' Chapter 11 cases, including: -- corporate governance matters; -- the Board of Directors' fiduciary duties; -- matters concerning the Securities and Exchange Commission, the Federal Communications Commission or any other federal, state or local regulatory agency; and -- any investigations and securities class actions or shareholder derivative actions. Winston & Strawn will also advise the RCN Board of Directors with respect to other matters including, but not limited to: (a) conducting legal research, collection and review of documents, interviews of relevant current and former officers, directors and employees of the Debtors and other tasks in connection with the Proceedings; (b) reviewing developments in the Debtors' cases and advising the Board of Directors in connection the developments; (c) providing legal advice to the Board of Directors in support of its ongoing responsibilities with respect to the Debtors' operations, including attendance at meetings of the Board of Directors and its committees; (d) representing and providing services requested by the Board of Directors in connection with any litigation that may be brought against it; (e) if necessary, appearing before the Bankruptcy Court, any district or appellate courts, and the United States Trustee on the Board of Directors' behalf with respect to certain matters; and (f) providing the full range of legal services and advice normally associated with related contested matters or litigation. RCN Corporation Senior Vice President and Chief Restructuring Officer Anthony M. Horvat clarifies that Winston & Strawn will not be involved in interfacing with the Court and will not be primarily responsible for the Debtors' general restructuring efforts. However, the firm may, on occasion, interface with the Court to the extent necessary to assist the Debtors and their bankruptcy counsel. Winston & Strawn will coordinate with, and assist Skadden, Arps, Slate, Meagher & Flom, LLP, in connection with the Debtors' Chapter 11 cases. Winston & Strawn will be compensated based on its hourly rates for services performed in its representation of the Board of Directors. The firm's hourly rates range from: Partners $325 - 695 Counsel and Associates 160 - 440 Paraprofessionals 105 - 175 David Neier, a partner at Winston & Strawn, assures the Court that the firm is a "disinterested person," as the term is defined in Section 101(14) of the Bankruptcy Code. Winston & Strawn has no connection with, and holds no interest adverse to, the Debtors, their estates, their creditors, or any other party-in- interest in the matters for which the firm is to be retained. 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. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000) RELIANCE FINANCIAL: Discloses Bank Claim Holders & Pro Rata Shares ------------------------------------------------------------------ Reliance Financial Services Corporation discloses the identities of the holders of its Bank Debt: Entity Pro Rata Bank Claim Share ------ ------------------------- ABN AMRO Bank N.V. 7.23810% Credit Lyonnais S.A. 8.49524% Deutsche Bank Trust Co. Americas 10.01905% Firstrust Bank 3.80952% Bank of Montreal 7.23810% Wachovia Bank (f/k/a First Union) 7.23810% JPMorgan Chase Bank 8.49524% SPS High Yield Loan Trading 2.16141% AG Capital Funding Partners, LP 2.12632% Amroc Capital Funding Partners 21.06667% High River, LP 8.49524% Silver Oak Capital, LLC 6.37895% --------- Total 100.00000% SPS High Yield Loan Trading is an affiliate of JPMorgan Chase Bank. High River Limited Partnership has an ownership interest in Amroc Capital Funding Partners' portion of the RFSC bank debt through a participation interest. Icahn & Co. has an ownership interest in both AG Capital Funding Partners' portion and Silver Oak Capital's portion of the RFSC bank debt through a participation interest. Reliance Financial owes the Bank Debt holders: Loan Principal Interest Due Total ---- --------- ------------ ----- Revolving Loan $137,500,000 $8,941,310 $146,441,320 Term Loan 100,000,000 6,502,778 106,502,778 ------------ Total $252,944,097 Headquartered in New York, New York, Reliance Group Holdings, Inc. -- http://www.rgh.com/-- is a holding company that owns 100% of Reliance Financial Services Corporation. Reliance Financial, in turn, owns 100% of Reliance Reliance Insurance Company. The Company filed for chapter 11 protection on June 12, 2001 (Bankr. S.D.N.Y. Case No. 01-13403). When the Company filed for protection from their creditors, they listed $12,598,054,000 in assets and $12,877,472,000 in debts. (Reliance Bankruptcy News, Issue No. 56; Bankruptcy Creditors' Service, Inc., 215/945-7000) RURAL CELL: To Pay Quarterly Preferred Stock Dividends on Aug. 15 ----------------------------------------------------------------- The quarterly dividends on Rural Cellular Corporation's (Nasdaq:RCCC) 12-1/4% Junior Exchangeable Preferred Stock will be paid on August 15, 2004, to holders of record on August 1, 2004. The Junior Exchangeable Preferred Stock dividend will be paid in shares of Junior Exchangeable Preferred Stock at a rate of 3.0625 shares per 100 shares. Fractional shares for the Junior Exchangeable Preferred Stock will be paid in cash. The Company's Board of Directors has determined not to declare the quarterly dividend payable on the 11-3/8% Senior Exchangeable Preferred Stock. This dividend would have been payable in cash on August 15, 2004, to holders of record on August 1, 2004. Rural Cellular Corporation (Nasdaq:RCCC), based in Alexandria, Minnesota, provides wireless communication services to Midwest, Northeast, South and Northwest markets located in 14 states. As of March 31, 2004, Rural Cellular Corporation's balance sheet shows a total shareholders' deficit of $542,522,000 compared to a deficit of $526,830,000 at December 31, 2003. SEALY CORPORATION: Issues Sr. Pay-In-Kind Notes and Common Stock ---------------------------------------------------------------- Sealy Corporation, the ultimate parent company of Sealy Mattress Corporation and Sealy Mattress Company, issued $75.0 million aggregate principal amount of senior subordinated pay-in-kind (PIK) notes and $37.5 million of common stock to certain institutional investors in transactions exempt from registration under the Securities Act of 1933. The notes accrue interest in-kind at 10% per year, compounded semi-annually. Sealy Corporation is not required to pay accrued interest on the notes in cash for the entire time that the notes are outstanding. The notes mature on July 15, 2015, following the maturities of substantially all other existing indebtedness of Sealy Mattress Company, including its $685 million senior secured credit facility, $100 million senior unsecured term loan and $390 million senior subordinated notes. At maturity, the outstanding principal amount of the notes, along with any accrued and unpaid interest, will be paid in cash by Sealy Corporation. Sealy Corporation may redeem the notes at its option at any time, in whole or in part, at an initial price of 105% of the principal amount thereof plus all accrued interest not previously paid in cash, which price declines to 102.5% after the first anniversary of issue, 101% after the second anniversary of issue and 100% after the third anniversary of issue. At any time prior to the third anniversary of issue, Sealy Corporation may also use the proceeds of an equity offering to redeem any or all of the notes at its option at a price of 101% of the principal amount thereof plus all accrued interest not previously paid in cash. In addition, upon a change of control of Sealy Corporation and the repayment of Sealy Mattress Company's senior secured credit facility, holders of the notes will be able to require Sealy Corporation to repurchase the notes at a price of 101% of the principal amount thereof plus all accrued interest not previously paid in cash. The terms of the notes include covenants and events of default similar to those contained in the 8.25% senior subordinated notes due 2014 issued by Sealy Mattress Company in connection with the merger of Sealy Corporation with affiliates of Kohlberg Kravis Roberts & Co. L.P. (KKR) on April 6, 2004. The $112.5 million in gross proceeds from the transactions will be returned to existing investors in Sealy Corporation by a combination of cash distributions to shareholders and option holders as well as share repurchases of Sealy Corporation common stock. As a result of the issuance, KKR and certain of Sealy Corporation's stockholders, including affiliates of Bain Capital LLC, that retained ownership interests in Sealy Corporation in connection with the merger with KKR will retain approximately 82.9% and 7.6%, respectively, of the outstanding common stock of Sealy Corporation. Sealy is the largest bedding manufacturer in the world with sales of over $1 billion in 2001. The Company manufactures and markets a broad range of mattresses and foundations under the Sealy(R), Sealy Posturepedic(R), Sealy Crown Jewel(R), Sealy Correct Comfort(R), Stearns & Foster(R), and Bassett(R) brands. Sealy has the largest market share and highest consumer awareness of any bedding brand in North America. Sealy employs more than 6,000 individuals, has 31 plants, and sells its products to 3,200 customers with more than 7,400 retail outlets worldwide. Sealy is also a leading supplier to the hospitality industry. At February 29, 2004, Sealy Corporation's balance sheet shows a stockholders' deficit of $61,850,000 compared to a deficit of $76,162,000 at November 30, 2003. SHOWCASE AUTO: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Showcase Auto Plaza 3737 McHenry Modesto, California 95356 Bankruptcy Case No.: 04-92709 Type of Business: The Debtor is an auto dealer and provides auto service and repair. See http://www.showcaseautoplaza.com/ Chapter 11 Petition Date: July 15, 2004 Court: Eastern District Of California (Modesto) Judge: Thomas Holman Debtor's Counsel: Donald W. Fitzgerald, Esq. Felderstein Fitzgerald Willoughby & Pascuzzi LLP 400 Capitol Mall #1450 Sacramento, CA 95814-4434 Tel: 916-329-7400 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Pacific State Bank Trade Debt $600,000 P.O. Box 1649 Stockton, CA 95201-1649 KIA Motors America Trade Debt $119,324 Reynolds and Reynolds Trade Debt $51,425 Modesto Bee Trade Debt $29,296 Enterprise Rent A Car Trade Debt $28,751 Motor Parts Trade Debt $22,253 Alexandria Perrin Trade Debt $22,815 Acclaimed Health Services Trade Debt $6,666 Newgen Results Trade Debt $5,821 Chevron Trade Debt $5,789 Partsline Trade Debt $5,742 Threshold Communications Trade Debt $5,742 Calif Auto Assoc. Trade Debt $5,290 National Credit Center Trade Debt $5,180 American Heritage Life Trade Debt $5,070 CL Bryant, Inc. Trade Debt $4,958 Advanced Auto Body Trade Debt $4,520 Quigley Nor Cal Trade Debt $4,386 In Touch Trade Debt $4,280 Budget Tire Trade Debt $4,100 SOLUTIA INC: Wants to Pay Letter of Credit Claims ------------------------------------------------- Solutia, Inc., wants to pay certain claims related to fully secured letters of credit by allowing a set-off against and payment from the cash collateral securing those claims. Citibank Letters of Credit Before the Petition Date, Citibank issued 13 letters of credit, 12 of which were issued for Solutia's account and one of for the account of Solutia UK, Ltd., a non-debtor subsidiary of Solutia. As of the Petition Date, the estimated aggregate face amount of the Citibank L/Cs was $75,200,000. The account parties' obligations to Citibank under the Citibank L/Cs are secured by funds maintained in an account with Citibank, Account No. 3055- 7563. As of the Petition Date, the Citibank L/C Account held about $76,600,000 in funds, and Citibank had a perfected lien on, and right of set-off against, the funds in that account. Pursuant to a January 20, 2004 Court Order, all of the Citibank L/Cs, except for one, were deemed to be issued under the DIP Loan Agreement and secured by the collateral package securing all of the Debtors' obligations under the DIP Loan Agreement. Because separate collateral was provided, Citibank released and transferred to Solutia about $48,700,000 from the Citibank L/C Account, leaving $28,000,000 as collateral. Citibank accrued claims for fees, costs and expenses in connection with the Citibank L/Cs. As of the June 30, 2004 Accrual Date, the Citibank L/C Fees totaled more than $267,000, made up of more than $205,000 in letter-of-credit fees and more than $62,000 in other costs and expenses. On January 9, 2004, one of the Citibank L/Cs, No. NY-00928- 30033349, for which Solutia is the Account Party, was drawn by the beneficiary, Toray Industries Inc., for $26,900,000. The draw on the Toray L/C gave rise to a reimbursement claim by Citibank against Solutia in that amount, which is secured by the funds in the Citibank L/C Account. Since the Toray L/C Draw Date, interest has accrued and continues to accrue on the claim. As of the Accrual Date, the accrued interest totaled $800,000. Interest continues to accrue on the claim at the rate of $4,400 per day. As of the Accrual Date, the total accrued amount of the Toray Claim and the Citibank L/C Fees was about $27,900,000, and about $28,000,000 remained in the Citibank L/C Account. Chase and HSBC Letters of Credit Before the Petition Date, The Chase Manhattan Bank, NA, issued 13 letters of credit and HSBC Bank USA issued one letter of credit, all for Solutia's account. As of the Petition Date, the estimated aggregate face value of the Chase/HSBC L/Cs was $35,500,000. Citibank is the collateral agent for Chase and HSBC with respect to the Chase/HSBC L/Cs and it maintains a Citibank account, Account No. 3051-5371, to secure obligations for certain designated letter of credit obligations, including all obligations related to the Chase/HSBC L/Cs and obligations relating to these other letters of credit: -- three letters of credit issued by Citibank for which Solutia was the account party; -- 11 letters of credit issued by KBC Bank, N.V.; and -- certain letters of credit issued by HSBC for which non- debtor subsidiaries of Solutia were the account parties. As of the Petition Date, the Designated L/C Account held about $52,000,000, and Citibank had a perfected lien on, and right of set-off against, the funds in the account for the benefit of the issuers of the Designated L/Cs. Shortly after the Petition Date, Citibank released to Solutia $13,000,000 of the collateral from the Designated L/C Account in connection with certain transactions authorized by the Financing Order related to the Additional Citibank L/Cs. Citibank has released to Solutia an additional $10,000,000 from the Designated L/C Account to reflect that, after the cancellation of certain underlying letters of credit, the collateral in that account far exceeded the claims it was securing, leaving about $28,800,000 of collateral in the Designated L/C Account for the benefit of Citibank and the issuers of the remaining Designated L/Cs. The obligations secured by the collateral in the Designated L/C Account include: A. As of the Accrual Date: (a) the estimated aggregate face amount of the Chase/HSBC L/Cs was about $23,600,000; (b) claims accrued by Chase and HSBC before the Petition Date for fees, costs and other expenses in connection with the Chase/HSBC L/Cs, total $317,000, with $270,000 owing to Chase and $47,000 owing to HSBC; and (c) claims accrued by Chase and HSBC after the Petition Date for fees, costs and expenses in connection with the Chase/HSBC L/Cs, total $668,000 with $529,000 owing to Chase and $139,000 owing to HSBC; B. Before the Additional Citibank L/Cs were deemed issued under the DIP Loan Agreement, Citibank had accrued claims for fees, costs and expenses in connection with the Additional Citibank L/Cs. As of the Accrual Date, the Additional Citibank L/C Claims totaled at least $201,000, consisting of at least $142,000 in letter-of-credit fees and $59,000 in other costs and expenses; and C. As of the Accrual Date, the estimated aggregate face amount of the Europe L/Cs was $2,400,000. The Non-Debtors continue to pay fees and satisfy other obligations in connection with the Europe L/Cs in the ordinary course of their businesses. Accordingly, Solutia asks the Court to lift the automatic stay to allow it to pay: (a) the Citibank L/C Claims by permitting Citibank to realize on, and set off against, funds in the Citibank L/C Account, and to apply those funds in full and final payment of the Citibank L/C Claims; and (b) any remaining Citibank L/C Claims, the Additional Citibank L/C Claims, the Prepetition Chase/HSBC L/C Fees and the Postpetition Chase/HSBC L/C by permitting Citibank to realize on, and set off against, funds in those amounts in the Designated L/C Account, and to apply those funds in full and final payment of the remaining Citibank L/C Claims, the Additional Citibank L/C Claims, the Prepetition Chase/HSBC L/C Fees and the Postpetition Chase/HSBC L/C Fees. Headquartered in St. Louis, Missouri, Solutia, Inc. -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Company filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. (Solutia Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000) STAR TELECOM: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Star Telecom Network Inc. 21243 Ventura Boulevard #241 Woodland Hills, California 91364 Bankruptcy Case No.: 04-14758 Type of Business: The Debtor is a distributor of prepaid phone cards at wholesale prices. See http://www.starprepaid.com/ Chapter 11 Petition Date: July 14, 2004 Court: Central District of California (San Fernando Valley) Judge: Arthur M. Greenwald Debtor's Counsel: David W. Levene, Esq. Levene, Neale & Bender 1801 Avenue of Stars, Suite 1120 Los Angeles, CA 90067 Tel: 310-229-1234 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Global Crossing $1,700,000 1080 Pittsford-Victor Road Pittsford, NY 14534 Mercury Telecomm (WCCS) $250,000 Union Telecard Alliance $216,345 Locus Telecommunications, Inc. $99,205 Harvard Label $97,920 Verso Technologies (NACT) $66,200 World Communication Group $56,576 Mundetel $50,000 Dacom America $31,797 Primo Graphics $27,495 Legend Labels & Card Printing $22,700 T-Cast $14,918 Network IP $13,456 Telstar $10,655 Coast United Advertising $9,000 Birch, Stewart, Kolasch & Birch $6,963 Fed Ex $6,716 Kehr Schiff Crane $5,715 Office Team $4,363 Accountemps $4,110 STILLWATER MINING: S&P Places Ratings on CreditWatch Negative ------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB-' corporate credit rating and other ratings on Columbus, Montana-based Stillwater Mining Co. on CreditWatch with negative implications. The rating action follows the company's announcement that workers at its Stillwater mine have gone on strike. "While Standard & Poor's views the likelihood of a prolonged strike as low, a strike of more than several months at Stillwater's key mine, which accounts for about 75% of its production, could adversely impact the company's liquidity profile," said Standard & Poor's credit analyst Dominick D'Ascoli. The strike has stalled the company's efforts to refinance its existing bank facility. Standard & Poor's expects Stillwater to use its liquidity of around $60 million while the strike is in effect. Standard & Poor's will continue to monitor the strike situation. Upon a quick resolution of the strike, the ratings would be removed from CreditWatch and affirmed. Should the strike be prolonged, ratings could be lowered. STRATUS SERVICES: Extends Pref. Stock Exchange Offer to July 31 --------------------------------------------------------------- Stratus Services Group, Inc., the SMARTSolutions(TM) Company (OTC Bulletin Board: SSVG) (formerly OTC Bulletin Board: SERV), is again extending, until July 31, 2004, the expiration date of its exchange offer to the holders of its Series E Preferred Stock. This news release shall not constitute an offer to exchange or sell, or the solicitation of an offer to exchange or buy, nor shall there be any exchange or sale of these securities in any State in which such offer, exchange, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State. Stratus is a national provider of business productivity consulting and staffing services through a network of twenty-seven offices in seven states. Through its SMARTSolutions(TM) technology, Stratus provides a structured program to monitor and reduce the cost of a customer's labor resources. Through its Stratus Technology Services, LLC joint venture, the Company provides a broad range of information technology staffing and project consulting. * * * As reported in the Troubled Company Reporter's March 25, 2004 edition, at December 31, 2003, Stratus Services Group, Inc. had limited liquid resources. Current liabilities were $23,601,396 and current assets were $15,806,407. The difference of $7,794,989 is a working capital deficit, which is primarily the result of losses incurred during the years ended September 30, 2003, 2002 and 2001. Current liabilities include a cash overdraft of $349,179, which is represented by outstanding checks. These conditions raise substantial doubts about the Company's ability to continue as a going concern. The Company's continuation of existence is dependent upon the continued cooperation of its creditors, its ability to generate sufficient cash flow to meet its continuing obligations on a timely basis, to fund the operating and capital needs, and to obtain additional financing as may be necessary. SUNNY DELIGHT: S&P Withdraws BB- Corporate Credit Rating -------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'BB-' corporate credit rating on Sunny Delight Beverages Company, originally assigned on May 20, 2004. Additionally, Standard & Poor's withdrew its 'BB-' bank loan ratings and '3' recovery ratings for the company's $150 million first-lien dollar term loan due 2011, $100 million first-lien euro term loan due 2011, and $50 million five-year revolving credit facility. The 'B' bank loan rating and '5' recovery rating for Sunny Delight's $35 million second-lien senior secured bank loan due 2011 were also withdrawn. Standard & Poor's has withdrawn the ratings because these financing transactions were never completed. TECHNICAL COATINGS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Technical Coatings Laboratory, LLC 205 Old Farms Road Avon, Connecticut 06001 Bankruptcy Case No.: 04-22105 Type of Business: The Debtor manufactures hot-stamping foils, coatings and paints used to enhance greeting cards, book jackets, labels and other items. See http://www.e-tcl.com/ Chapter 11 Petition Date: July 12, 2004 Court: District of Connecticut (Hartford) Judge: Robert L. Krechevsky Debtor's Counsel: James Berman, Esq. Zeisler and Zeisler 558 Clinton Avenue P.O. Box 3186 Bridgeport, CT 06605 Tel: 203-368-4234 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Toray Plastics (America, Inc.) $288,299 Lumirror Division 50 Belver Avenue North Kingstown, RI 0852 Edwards & Angell, LLP $155,182 Dock Resins Corporation $88,693 First New England Capital 2 LP $86,944 Astro Chemicals, Inc. $76,289 Greenville Marketing $75,074 Dispersion Services $56,778 Monson Companies $53,366 Mozel $51,436 Legette, Brashears & Graham $48,860 Amerada Hess Corporation $44,780 Haggett, Longobardl & Co., LLC $43,125 Penn Color $42,779 DuPont Teijin Films $41,336 McDoo & Allen Quaker Color $38,120 Ensign-Bickford Realty Corp. $31,081 Callahan Company $29,194 Electro Power, Inc. $29,191 New England Chemcentral $29,078 Sun Chemical (MA) $29,005 TELEWEST COMMS: Reports Details of Common Stock Distribution ------------------------------------------------------------ Telewest Communications plc reports the passage of the "bar dates" for the schemes of arrangement comprising part of its financial restructuring. With the passage of the bar dates, the Schemes are closed to claims for which no notice has been received and Telewest will proceed with the distribution of the common stock of Telewest Global, Inc. to its creditors and shareholders in accordance with the attached distribution schedule. Trading in Telewest Global's common stock on the Nasdaq National Market will commence on 19 July 2004 under the symbol "TLWT". Distribution Schedule Telewest Note and Debenture Holders Pursuant to the relevant schemes of arrangement an escrow agent will distribute 241,325,000 shares of Telewest Global common stock (representing 98.5% of Telewest Global's outstanding common stock) to the holders of Telewest's and its Jersey finance subsidiary's notes and debentures. The shares will be distributed amongst the various notes and debentures as follows: Notes Aggregate Approximate Multiplier Approximate principal total number number of amount of shares of shares per common stock $1,000 per to be GBP1,000 of distributed (C) principal(1) __________________________________________________________________ 9.625% Senior Debentures due 2006 $300,000,000 12,434,919 1.220 41.450 __________________________________________________________________ 11% Sr. Discount Debentures Due 2007 $1,536,413,000 65,458,708 1.254 42.605 __________________________________________________________________ 11.25% Sr. Notes due 2008 $ 350,000,000 14,792,798 1.244 42.265 __________________________________________________________________ 9.875% Sr. Notes due 2010 GBP 180,000,000 12,053,718 1.971 66.965 __________________________________________________________________ 9.875% Sr. Notes due 2010 $ 350,000,000 14,079,319 1.184 40.227 __________________________________________________________________ 5.25% Sr. Convertible Notes due 2007 GBP 299,500,000 18,499,185 1.818 61.767 __________________________________________________________________ 9.875% Sr. Discount Notes due 2009 GBP 325,000,000 18,462,118 1.672 56.807 __________________________________________________________________ 9.25% Senior Discount Notes due 2009 $ 500,000,000 17,055,545 1.004 34.111 __________________________________________________________________ 11.375% Sr. Discount Notes due 2010 $ 450,000,000 14,065,729 0.920 31.257 __________________________________________________________________ 6% Sr. Convertible Notes due 2005 (Issued by Telewest's Jersey finance and including the benefit of Telewest's Guarantee) $1,000,000,000 37,814,386 1.113 75.629 __________________________________________________________________ 5% Accreting Convertible Notes due 2003 GBP 293,600,050 16,608,566 1.665 56.569 __________________________________________________________________ Total: (2) 241,324,991 __________________________________________________________________ (1) Principal outstanding at maturity in the case of the 11.375% Senior Discount Notes due 2010. (2) The aggregate total obligation, measured as the sum of the principal amounts of each note or debenture multiplied by the relevant multiplier (C), is $7,102,976,985. To determine the number of shares that the holder of a note or debenture is entitled to receive in connection with a given note or debenture, multiply the principal amount of the note or debenture held by the applicable multiplier (C), divide that number by $7,102,976,985 (A) and multiply by 241,325,000 (B): (principal amount of note or debenture held x C) x B ------------------------------------------------ A It is anticipated that the distribution of shares will be completed on 19 July 2004. No fractional shares will be distributed to the holders of notes and debentures. Fractional interests will be aggregated and sold on the open market. The net proceeds of such sales will be paid to the UK National Society for the Prevention of Cruelty to Children. Telewest Shareholders Pursuant to the Telewest scheme of arrangement, Telewest shareholders on the register of members on 14 July 2004 will be allocated in aggregate, 3,675,000 shares of Telewest Global common stock (representing 1.5% of Telewest Global's outstanding common stock). The shares of common stock will be distributed to eligible shareholders as set forth below. Number of Telewest Number of Telewest ADRs Number of shares of Ordinary Shares Telewest Global common stock received __________________________________________________________________ 804.4004 4.022002 1 __________________________________________________________________ Fractional share entitlements will not be distributed to shareholders. Instead, fractional share entitlements will be aggregated and sold on the open market. The net proceeds of such sales will be paid in cash in pounds sterling (without interest) pro rata to each shareholder entitled to a fractional share. Telewest Global, the newly-restructured broadband communications and media group, currently operates a network covering approximately 4.9 million homes in the UK and provides multi- channel television, telephone and internet services to approximately 1.74 million UK households, and voice and data telecommunications services to around 67,000 business customers. Its content division, Flextech, is the BBC's partner in UKTV. Together they are the largest supplier of basic channels to the UK pay-TV market. For further information go to http://www.telewest.co.uk/media/ TENET HEALTHCARE: Completes Sale of Redding Medical Center Assets ----------------------------------------------------------------- A subsidiary of Tenet Healthcare Corporation (NYSE:THC) has completed the sale of certain hospital assets of Redding Medical Center in Redding, Calif., to Shasta Regional Medical Center, LLC, an affiliate of Hospital Partners of America Inc. Gross proceeds from the sale of the 246-bed hospital are estimated at approximately $55 million from the sale of property and equipment. Net after-tax proceeds, including the liquidation of working capital, are expected to be approximately $57 million. At this time, proceeds from the sale will be retained by Redding Medical Center, Inc., the subsidiary that formerly owned the hospital. Redding Medical Center, Inc. also will retain substantially all of its pre-closing liabilities. HPA, a privately held company based in Charlotte, N.C., was founded to acquire and operate hospitals, in partnership with physicians, across the country. Tenet Healthcare Corporation, through its subsidiaries, owns and operates acute care hospitals and related health care services. Tenet's hospitals aim to provide the best possible care to every patient who comes through their doors, with a clear focus on quality and service. Tenet can be found on the World Wide Web at http://www.tenethealth.com/ * * * As reported in the Troubled Company Reporter's June 21, 2004 edition, Standard & Poor's Ratings Services said that the ratings and outlook on Tenet Healthcare Corp. (B/Negative/--) will not be affected by an increase in the size of the company's new senior unsecured note issue due in 2014, to $1 billion from $500 million. Tenet used $450 million of the proceeds to repay debt due in 2006 and 2007, and the balance will be retained in cash reserves. Despite the additional debt and interest costs, Standard & Poor's considers the additional liquidity provided by the cash, as well as the effective extension of maturities, to be offsetting factors. The ratings already consider expectations of weak operating performance and cash flow over the next year while the negative outlook incorporates the risk of ongoing litigation and investigations related to the hospital chain's operations. TEXAS INDUSTRIES: S&P Revises Outlook To Stable From Negative ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on structural steel and cement producer Texas Industries Inc. to stable from negative. Standard & Poor's also affirmed its 'BB-' corporate credit and senior unsecured ratings and 'BB' rating on a $100 million senior secured revolving bank credit facility. The Dallas, Texas-based company has about $650 million in total debt. "The outlook revision reflects improved industry conditions in the company's structural steel operations, which will result in improved credit metrics and operating performance indicative of its current ratings," said Standard & Poor's credit analyst Paul Vastola. The outlook revision also reflects Standard & Poor's expectations that the improvement will be sustainable well into 2005. Improved demand and reduced imports have enabled steel producers, including TXI, to significantly raise structural steel prices, more than offsetting high input costs. Indeed, the improved supply/demand fundamentals have increased TXI's capacity utilization rate at its Virginia-based steel plant to 70% from a dismal 50%, enabling this facility to generate a profit in the May 31, 2004, quarter for the first time since its 1999 start-up. The ratings on TXI reflect its fair business position in the domestic steel and cement, aggregates, and concrete industries, which are highly cyclical and intensely competitive. TXI is the second-largest structural steel producer in the U.S., behind market leader Nucor Corp. The two companies hold the majority market share for wide-flange beams used in nonresidential construction markets. Owing to weakness in the U.S. dollar, high freight costs and increased global demand, structural steel imports have waned and are likely to remain at lower levels for the intermediate term. Despite persistently weak nonresidential construction activity, domestic producers have supplanted imports and increased production and shipment levels. As a result, TXI's steel segment generated $48 million in operating income for its quarter ended May 31, 2004, its highest level to date. Prior to the quarter ended Feb. 28, 2004, in which the company generated $11.5 million in operating income, this segment had six consecutive quarters of losses. TRANSMONTAIGNE: Board Okays UBS Assistance in Evaluating Options ---------------------------------------------------------------- TransMontaigne Inc.'s (AMEX: TMG) Board of Directors has authorized management to engage UBS Investment Bank to assist the Company in evaluating its strategic alternatives. TransMontaigne Inc. is a refined petroleum products distribution and supply company based in Denver, Colorado with operations in the United States, primarily in the Gulf Coast, Midwest and East Coast regions. The Company's principal activities consist of (i) terminal, pipeline, and tug and barge operations, (ii) supply, distribution and marketing and (iii) supply management services. The Company's customers include refiners, wholesalers, distributors, marketers, and industrial and commercial end-users of refined petroleum products. Corporate news and additional information about TransMontaigne Inc. is available 24 hours a day, 7 days a week on the Company's web site: http://www.transmontaigne.com/ * * * As reported in the Troubled Company Reporter's June 1, 2004 edition, Standard & Poor's Ratings Services lowered its ratings on terminaling company TransMontaigne Inc. (TMG) to 'BB-' from 'BB' and removed the ratings from CreditWatch with negative implications where they were placed on March 26, 2004. The outlook is now negative. Colorado-based TMG had $385 million of debt as of March 31, 2004. "The rating actions follow a review of TMG's historic and prospective financial performance and its current business model," noted Standard & Poor's credit analyst Paul B. Harvey. "In Standard & Poor's opinion, a rise in refined product prices has led to aggressive borrowing on the company's working-capital facility, weakening TMG's financial flexibility, increasing the capital intensity of the company's business, and raising debt leverage," he continued. Although TMG strengthened its financial profile modestly during the quarter ended March 31, 2004, liquidity and financial performance measures remain well-below Standard & Poor's expectations and are not expected to reach such expectations in the near term. Further increases in debt leverage or a weakening of the company's profitability or cash flow could provoke an additional ratings downgrade. TRANSMONTAIGNE INC: S&P Affirms BB- Ratings & Revises Outlook ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on TransMontaigne Inc. (BB-/Developing/--) and revised its outlook to developing from negative. The rating actions follow TransMontaigne's announcement that it will "evaluate strategic alternatives". In the absence of TransMontaigne selling itself to a higher-rated entity, Standard & Poor's would caution that the probability of a ratings downgrade exceeds that of a ratings upgrade, because TransMontaigne's operating and financial trends have been weaker than expected for some time. "The change to a developing outlook reflects Standard & Poor's uncertainty about the possible outcome of TransMontaigne's actions," noted Standard & Poor's credit analyst Paul B. Harvey. Standard & Poor's is currently unaware of any pending acquisition or refinancing of TransMontaigne. "If TransMontaigne is acquired by a higher-rated entity, credit quality could improve; however, an acquisition by a lower-rated entity or a refinancing could negatively affect credit quality and be detrimental to the subordinated noteholders," he continued. Standard & Poor's will monitor the progress at TransMontaigne and evaluate its outlook and ratings when a course of action and its implications have been defined. The developing outlook reflects the possibility of negative or positive rating actions depending on Standard & Poor's evaluation of the actions, if any, taken by TransMontaigne as it reviews its alternatives. TROPICAL SPORTSWEAR: Retains Broker to Market Tampa Facility Sale ----------------------------------------------------------------- Tropical Sportswear Int'l Corporation (Nasdaq:TSIC), a designer and marketer of high-quality branded and retailer private branded apparel, has retained NAI Krauss Organization, a commercial real estate services company, to market the sale of its 110,000 sq. ft. cutting facility at 4924 West Waters Street in Tampa, Florida. The planned sale is part of TSI's ongoing strategy, which includes transitioning from a manufacturing to a marketing-driven business model. As previously announced, the Company has transferred all cutting operations to offshore contractors. The net book value of the Tampa facility is approximately $3.7 million and TSI expects to record a gain on the sale. Net proceeds from the sale will be used to repay borrowings under the Company's revolving credit line. "Since launching our restructuring effort earlier this year, TSI has embarked on a series of strategic asset sales that have increased our liquidity and improved our financial position," said Richard Domino, President of TSI. "We also have taken significant steps towards repositioning the company in a way that allows us to leverage our expertise, become more competitive and most importantly, provide greater value to our customers." TSI also announced the resignation of John T. Berg Jr. as Senior Vice President, General Manager of TSI's branded division to pursue personal interests. Richard Domino will serve as interim General Manager of the branded division while the Company seeks a permanent division head with substantial brand management experience. TSI is a designer 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 Savaner, Farahr, FlyersT, The Original Khaki Co.r, Bay to Bayr, Two Pepperr, Royal Palmr, Banana Joer, and Authentic Chino Casualsr. Licensed brands include Bill Blassr and Van Heusenr. Retailer national private brands that we produce include Puritanr, GeorgeT, Member's Markr, Sonomar, Croft & Barrowr, St. John's Bayr, Roundtree & Yorker, Geoffrey Beener, Izodr, and White Stagr. 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." VLASIC: 8 More Witnesses Take the Stand in $250M Suit vs. Campbell ------------------------------------------------------------------ Eight more witnesses took the witness stand in the lawsuit commenced by VFB, LLC, against Campbell Soup Company before the United States District Court for the District of Delaware: A. Ralph Harris Before serving as Vice President in Corporate Development at Campbell Soup Company, Ralph Harris had worked primarily on mergers, acquisitions and divestiture activities for a number of companies. At Campbell, Mr. Harris became involved in acquisition projects. In most cases, Mr. Harris says, he makes the ultimate recommendation to Campbell Chairman David Johnson on prices to be paid on an acquisition. Mr. Harris tells the District Court that after Campbell had been into "several disastrous acquisitions," Campbell's Controller Department became interested in increasing the quality of the due diligence and acquisition process. Thus, at Campbell, one of Mr. Harris' tasks was keeping "ad hoc computer models to look at specific acquisition analysis and analyze the effects of synergies" on potential acquisitions. Mr. Harris attests that the Freshbake Foods, one of the businesses spun to Vlasic Foods International, Inc., was one of Campbell's disastrous acquisitions. In a Campbell spreadsheet titled "Impact Restructuring on Consolidated Results" dated January 11, 1993, U.K. Frozen is listed under Losers/Leakers. Mr. Harris explains that Losers/Leakers is a term used to describe small businesses that they wanted to get out of because it had no future at Campbell. U.K. Frozen was also among the businesses spun into VFI. Mr. Harris believes that U.K. Frozen was listed under the Losers/Leakers because it did not have a strong branded position and the Controller Department couldn't see that as being consistent with what Campbell wanted in terms of its strategy. John A. Lee, Esq., at Andrews & Kurth, in Houston, Texas, representing VFB LLC, brought out a collection of documents printed off a CD produced by Campbell. In the documents were "RAH" estimated sales prices for Campbell businesses. RAH are the initials of Mr. Harris' name. Mr. Harris admits that in making the estimates and valuations, he did not really know some of the businesses, what the businesses would have been involved in and other considerations. Mr. Harris recalls being asked by Campbell's Tax Department to come up with valuations on certain businesses as it related to the spin-off but he was not sure what the Tax Department wanted at that time and what the numbers were ultimately used for. "I had no knowledge how these numbers were to be used other than it related to a tax question," Mr. Harris says. Since worksheets memorializing his calculations have been disposed of, Mr. Harris points out, there wouldn't be any document in existence now that could be looked up to figure out how he came up with his valuations. B. Kathleen McCarthy Kathleen McCarthy came to work as Vice President of Taxes at VFI after she was contacted by Robert Bernstock, the former Chief Executive Officer and President of VFI. Ms. McCarthy was informed that VFI needed help on tax issues. "[T]hey had some business that they wanted to settle and they were restricted under a tax agreement," Ms. McCarthy recalls. Ms. McCarthy has a law degree from Villanova University and a Master of Laws in tax from New York University. Ms. McCarthy relates that when she came to VFI, the big issue was VFI's wanting to sell several troubled businesses. However, VFI was restricted by a tax indemnity agreement from selling sell certain assets within a two-year period. "[W]hen you have a spin-off and you sell the asset within two years, you are presumed to have a bad intention of selling it from the very beginning," Ms. McCarthy explains. "[I]f you eventually sell the asset, [the Tax Code] will tax you from the beginning as if it is not tax-free." Ms. McCarthy also notes that if VFI did anything to cause a tax liability to the spin-off either currently or in the past, VFI had to indemnify Campbell and its shareholders. Ms. McCarthy learned from Campbell's counsel, Dechert Price & Rhoads, that VFI's potential tax liability would be a billion dollars, if VFI jeopardizes the spin-off. VFI had to obtain Campbell's consent if it is going to sell any of its businesses. To obtain Campbell's consent, VFI must get a legal opinion from Campbell's counsel or a supplemental ruling from the IRS, Ms. McCarthy says. Despite the restrictions, VFI discussed with Campbell its plans to sell the Swift business. Dan Hays of Campbell Tax did not want to take the risk. However, after finding out that Swift could be sold at a loss, VFI's management decided to sell the entire Swift business and went for a supplemental ruling. Upon learning of VFI's decision, Dechert Price informed VFI that they would now be able to give a favorable opinion. Getting the consent was not easy, Ms. McCarthy recalls. The process took about seven months, with VFI receiving the opinion in April 1999. In the process, VFI paid $150,000 to Dechert Price and $50,000 to Ernst & Young. Ms. McCarthy further relates that VFI paid a $58 million intercompany loan to Campbell 45 days after the spin-off. The payment was in addition to the $500 million in cash and distribution Campbell took as part of the spin-off transaction. Ms. McCarthy, however, never got a full open discussion on how the intercompany payment came about. "This was an issue that Dan [Hays] was not comfortable speaking about," Ms. McCarthy observes when she asked Mr. Hays to explain why the intercompany payment was required. "[Mr. Hays] basically cut my question off before I could even get it out of my mouth. He told me it shouldn't be considered in the calculation and that was really the end of the discussion." Judge Jordan recalled that in a prior testimony, a witness represented that there was no additional debt other than the $500 million. Judge Jordan asked Ms. McCarthy if she could recall such representation being made to the IRS. Ms. McCarthy confirms that all the previous filings up to the seventh supplement indicated that there were no more intercompany debt between VFI and Campbell. The representations stood that it would be $500 million and no intercompany loan would be outstanding. But this changed in January 1998. "[T]he way the ruling worked, they did make a representation in the initial supplement there was $500 million of debt that was going to be transferred with . . . the company," Ms. McCarthy explains. "Then, in addition to that, in a latter supplement, what they disclosed is that one of the companies would continue to have an intercompany [loan] that was going to be outstanding, a $58 million, and in the transfer because the initial representation is there is going to be no debt and we're going to wipe out all the [intercompany loans]. . . . Then in a later supplement, they said we're going to leave one company, but within 45 days that intercompany [loan] has to be paid off from the date that we spin." Part of Ms. McCarthy's work was to identify the tax impact on VFI and any risks that it would face as the valuation numbers that went into the final tax basis did not hold up. Judge Jordan asked Ms. McCarthy of the consequence if Vlasic were accused of being responsible for the $58 million intercompany loan. Ms. McCarthy relates that the way the $58 million was disclosed in the SEC Form 10, Vlasic needed the intercompany loan. Hence, there was a possibility that Vlasic could be accused of having asked for the money, which would cause the debt number to go over the basis. Consequently, there would be a tax, there would be a gain and there would be a tax computed, Ms. McCarthy says. Vlasic would have to pay the tax. Ms. McCarthy further states that the Tax Indemnity Agreement bear other constraints, including the restriction on equity and VFI's obligation to continue to get cost savings for a five-year period with regard to the different divisions and Swift and the mushroom businesses. Ms. McCarthy left VFI in May 2001 and joined Pinnacle Foods Corporation for a period of time until July 2001. In September 2001, Ms. McCarthy rejoined VFB as successor to VFI. Ms. McCarthy clarifies that she wasn't hired to sue Campbell. "I was actually hired to finish the work I had started when I was still at Pinnacle. When I was working for Pinnacle, the deal was I was supposed to work for both [Pinnacle and VFI], liquidate the business, file the final tax returns and also help Pinnacle. But that wasn't working out. So I came back to VFI to finish all the tax liquidations and get the cash out of Europe and to clean up the estate from a tax perspective." C. Joseph Adler Joseph Adler worked at Campbell's Controller's Office and was assigned to prepare the historical carve out financial statements for use in the IRS filing and SEC Form 10 filing in connection with the spin-off. In preparing the SEC Form 10, which was filed in March 1998, Mr. Adler relied entirely on what was on Campbell's books. Mr. Adler admits that he did not have the time to independently audit or verify the information that Campbell's book provided. Mr. Adler was not aware that the terms of certain of Campbell's intercompany supply agreements were revised. Mr. Adler believes that his lack of knowledge of the modifications at the time of the preparation of the financial statements affected the figures that went into Form 10, particularly the pro forma section of Form 10. "[I]t probably would have had to be pro forma adjustments to the Profit & Loss Statement for the changes in the terms of the supply contracts," Mr. Adler says. "[T]hen depending upon those supply terms, it may have also indicated an impairment that would have been run through the historical financial statements as well." Until late 2002, Mr. Adler was also unaware of Goldman Sachs' Project Sweetpea Report and the valuation figures in the Sweetpea Report. "If I had seen that information at that time, it would have raised serious questions about the need for impairment charges and I would have had to do a lot more analysis in that impairment area and I would have sought the counsel of our auditors, PricewaterhouseCoopers, immediately," Mr. Adler tells the District Court. Mr. Adler attests that there were no adjustments made with regards to the effect of trade loading to the fiscal year 1997 numbers in the Form 10. Mr. Lee reminded the Court of Campbell's assertion that Mr. Adler was involved in preparing projections sent to the banks in connection with the credit arrangements. Mr. Adler denies the allegation. "I wasn't involved in preparing the projections. [I was] preparing the historical carve out [full-time]," Mr. Adler maintains. Mr. Adler recalls that Campbell originally declared the "fit and focus" theory as the purpose for the spin-off. However, when the IRS wouldn't consider "fit and focus", Campbell pursued the "cost savings" justification. Mr. Adler admits that he never heard about the cost savings reason before. "[F]rom my early involvement in June 1997, to prepare the carve out financials, it was explained to me that the spin was based upon 'fit and focus.' That each of the two result, and the companies would be better able to focus on their respective customers." After the spin-off Mr. Adler became VFI's Controller. As the spin-off was structured and VFI became a separate company, Mr. Adler notes that contrary to the spin-off purpose, there were no cost savings. Instead, there was duplication of costs and there were aspects where VFI lost economies of scale in its cost structure. Mr. Adler recalls the way VFI had to administer its employee benefits plans. Before the spin process, VFI was part of an organization that provided employee benefit administration. VFI was charged a pro rata share of the total fee that was charged to Campbell's. About a year after the spin off, the organization came in with their quote for the upcoming year, where it more than doubled its charge to VFI. VFI was paying between 500,000 and $1 million and the quote was about $2 million. The quote was to high for VFI so it had to scramble to set up a new system. Mr. Adler also tells Judge Jordan that VFI had to pay a tax bill which related to a tax liability for a period before the spin-off. During the spin-planning period, Mr. Adler remembers being told by Campbell's tax lawyers that any tax liabilities prior to the spin-off were Campbell's. Campbell did not clearly communicate the fine print provision stating that any tax liability of any subsidiary spun out to VFI was was VFI's liability. Mr. Adler also explains how the Swanson Division hit its earning targets at the end of fiscal 1997: "Based upon my review of the results [in] the years '97 and '98, [there's] a surge in performance in the months of June and July. Sales jumped dramatically in that period of time, versus the trend that had been occurring in the previous ten months." "And I subsequently have learned that there [were] two kinds of loads that occurred in that time. There was one manufacturing load, where there is the incentive for the trade to buy more cases, [and] for the first time in a long time, if not ever, Swanson ran what they call a fifth deal. And that promoted what we call pantry loading, where consumers bought more than they would normally consume, [loading] up their freezer." Mr. Adler states that Campbell's launch of the Pepperidge Farm pot pie in October 1998 was like a stab in the back from the group that spun VFI. "[I]t happened within weeks of the spin-off and it was like bad faith. [I]t was more of a morale issue. It was a serious strike to the morale because at this time, most of the people in the company had come directly from Campbell's." Mr. Adler also describes Campbell's provision of transition services to VFI after the spin-off as " disappointing". VFI was clearly low on the list of priorities. Campbell did the minimum they had to do to get by. As time wore on, Campbell got increasingly bored with having to do it and the service faltered. However, VFI always had to pay top dollar for the service. D. Tom Walker Tom Walker is the Managing Partner at Goldman Sachs. Among others, Goldman Sachs worked on Campbell's Project Sweetpea, which morphed into what became the spin-off project. The Sweetpea Report is Goldman Sachs' investment banking report with respect to the spin-off. In March 1996, Goldman Sachs got involved in Campbell's envisioned "best in show" project, which means achieving respect or recognition in the marketplace -- comparable, Mr. Walker says, to "something like Coca-cola, [trading] at significantly higher multiples than any of the other food companies." Goldman Sachs believed at that time that, Campbell's shift from "best in class" to "best in show" would be the major driver in creating shareholder value with earnings growth rate playing an important part. To achieve earnings growth rate, according to Mr. Adler, Campbell divisions would have to report steadily increasing earnings. A higher level of growth would be better and be regarded in the marketplace more than a lower level of growth. The end result of this would be Campbell's stock price going up. In May 1996, Goldman Sachs gave Campbell a strong endorsement of the best in show strategy. One of the aspects of the best in show strategy involved portfolio reconfiguration or acquisitions. Goldman Sachs advised Campbell to consider some acquisitions including international acquisitions and look into divestitures for underperforming businesses. Mr. Lee asked Mr. Walker why Goldman Sachs found it a good idea to divest underperforming businesses. Mr. Walker explains that the underperforming businesses were small and weren't making very much money. "[The underperforming businesses] were a distraction and we were just a big believer that management [focusing] on the core most important businesses was a very important thing to do and Campbell historically had not been a company that had kind of pruned off the underperforming stuff." "And we were just big believers that you should constantly be pruning the portfolio and that Campbell needed to do a more aggressive job of getting things out of this portfolio that weren't attractive and that were never going to be attractive. Goldman Sachs also advised Campbell that it must accelerate its share repurchase program. "[We] felt their stock was cheap," Mr. Walker explains. "We felt that the stock would trade higher in the future. We felt that [Campbell] was underleveraged and [borrowing] money to buy back shares was something [that] would both raise the earnings per share level of the company as well as accelerate the growth rates, both of which would be very well received in the marketplace." If the management were able to achieve best in show status, Goldman Sachs advised Campbell to expect the stock to be 20 to 25 points higher by the Summer of 1998 than where it might otherwise stand. Mr. Walker also recalls that Campbell CFO Basil Anderson contacted him with regards to the Project Sweetpea. Mr. Anderson wanted Mr. Walker to look at various Campbell assets and find out if they should sell, spin, split or keep those assets. Mr. Walker admits that the valuation figures on Goldman Sachs' Sweetpea Report were based on Campbell management's estimates or figures that Campbell provided to them. Goldman Sachs, assuming the accuracy of the Campbell's information, did not do any business level bottoms-up due diligence on Campbell's businesses to verify any of the sales or earnings figures. Mr. Walker tells the Court that he absolutely trusted Mr. Anderson and Campbell Corporate Development staff, John Forbis, to give him sound data. Among others, Goldman Sachs stated in the Sweetpea Report these spin-off advantages: -- consumes the least senior management time, thus could be completed relatively quickly; -- depending on the leverage on the spun entity, Campbell could receive in dividends as much cash as it would have received in a sale; and -- high degree of certainty of execution. Mr. Walker does not recall including in the Sweetpea Report an assumption as to the cost in moving the spun out entity to independent stand alone basis. Nor did Goldman Sachs make any assumptions as to synergies that would be lost from separating the spun entity. Mr. Walker is also unsure whom the concept of taking the leverage on the spun entity and using it to repurchase Campbell shares originally came from. "I don't know whether it was [the idea of] Mr. Anderson or [mine]," Mr. Walker says, "but you have got a consistent pattern over a period of time of a belief that the stock was undervalued at Campbell, people should be buying back the shares, and that particularly in a situation where [the] price earnings multiple of the spun-off division is so low relative to the price earnings multiple of Campbell. . . ." "[S]ince the shareholders own both Vlasic and Campbell, to the extent that you could put leverage on the spun-off company, and shift the assets, cash, to earn more money at the higher multiple, you would be creating shareholder value for the Campbell shareholder that would end up owning both businesses. Mr. Walker attests that Goldman Sachs did not provide the $500 million number to Campbell. "[Campbell] decided the amount of debt to be put on [VFI], not Goldman Sachs forcing them to put some number on." E. Debbie Dobzanski In her 15 years as Campbell employee, Debbie Dobzanski had worked in Internal Audit, Corporate Accounting, IT Group and various Campbell business units as a financial analyst. Ms. Dobzanski joined VFI in 1997 as Assistant Controller for its Financial Business Service Center. Ms. Dobzanski describes the Financial Business Service Center as all accounting services for VFI, including general ledger, accounts payable, payroll and fixed assets. According to Ms. Dobzanski, the Business Center did not exist at the time of the spin-off. "[VFI] didn't have a system. [VFI] didn't have personnel. All of the services were to be provided by Campbell in the business or transaction services agreement." Ms. Dobzanski discloses that VFI paid Campbell "a lot of money each month" for the financial accounting services that Campbell provided. At the time VFI's Business Center was set up, Ms. Dobzanski recounts the difficulties VFI encountered due mainly to the manner in which Campbell had structured VFI in the spin-off. "It was complicated to the extent that, under the Campbell organization, we had many legal entities, and that required Vlasic to set up more ledgers than they probably would have ordinarily had to set up to meet the federal and fiduciary reporting requirements." When VFI had to complete its software installation in February 1999, Ms. Dobzanski recalls how VFI's billing module crashed. As a result of the crash, VFI had to reconcile its accounts receivable. After working on it for a long time and even with the help of VFI's internal audit staff and a number of people in the organization, Ms. Dobzanski relates that the VFI staff was unable to locate the differences. When they have to close the books at the end of the fiscal year, VFI has forced to write-off $3.5 million. The collectible receivables ended up being $3.5 million less than what was on the ledger. There was also a million dollars difference on VFI's bank statements and ledgers with regards to its cash balance. VFI again failed to uncover the missing million. To match the bank balance, VFI wrote down its ledger balance by $1 million. When VFI ran its payroll system, it again had to incur $1.2 million, representing the amount exceeding its payroll withholding taxes reserve. Ms. Dobzanski could not explain how the withholding tax reserve got this far out of line. The state of the accounting systems with regards to the mushroom farms as "a mess." There were discrepancies on the financial outputs from the plants' new accounting systems and that of Campbell's systems. The gaps "were material to VFI in the magnitude of one to two million dollars," Ms. Dobzanski reveals. After the transition from Campbell, Ms. Dobzanski estimates the total required write-off to be about $7 million in VFI's books. As a result, VFI's assets and its earnings were overstated. Mr. Lee asked if there was anything Ms. Dobzanski or the VFI management could have done to prevent VFI's failure. "I think a lot of people worked very hard, but it didn't change the end result," Ms. Dobzanski says. F. Jack Reitnauer Mr. Lee again called on Jack Reitnauer to testify for VFI regarding Campbell's argument that the contract price it agreed to pay to VFI's mushroom under the supply agreement was above market. Mr. Reitnauer worked as farm manager in the mushroom farms. According to Mr. Reitnauer, "market" was a nebulous term because when Campbell's wanted mushrooms or Campbell's did not want mushrooms, they could, in effect, create the market. "When [Campbell's] wanted a tremendous amount of mushrooms, it created a high market. When they didn't want a lot of mushrooms, it created a low market, plus the fact that [VFI's] costs were higher than market, if you will, being competitive growers based on how we were set up to grow, trying to serve as both retail and Campbell Soup company, which was the reason the farms were built." Mr. Reitnauer did not see any real serious effort from Campbell to comply with the mushroom supply agreement. When Chuck Miller at Campbell Purchasing met with Mr. Reitnauer to discuss the issue of Campbell's compliance with the supply agreement, Mr. Miller indicated that "Campbell will take what they want when they want it." With all the problems VFI experienced dealing with Campbell after the spin-off, Mr. Reitnauer relates that they just couldn't transition the mushroom business away from Campbell and to just focus on retail. The basis of the farms was to supply Campbell so VFI always had to have a relatively significant percentage of its production available for Campbell's, Mr. Reitnauer explains. Since the farms were dependent on Campbell, the end of the mushroom contract would mean the farms would not have much of a chance, Mr. Reitnauer notes. VFI had to close up to half the farms. Mr. Reitnauer also relates why the mushroom business go from pre-spin earnings on the books to a disastrous result after the spin-off. VFI didn't have the capital moneys to put into the farm to make the farms competitive, where it could increase yields and reduce costs. VFI was also unable to sell surplus product to Campbell's Soup Company like it had done in the past where whatever it didn't sell, VFI had to sell the surplus at a tremendous loss or just throw them away. Mr. Reitnauer believes that the mushroom farms could never be transformed into a successful retail operation without major capital and some major revamping of the entire system. Mr. Reitnauer left VFI in September 1999 to work for a different mushroom operator. VFI, however, sued Mr. Reitnauer after he left to enforce a non-compete agreement. Despite the VFI's lawsuit against him, Mr. Reitnauer decided to step up and testified for VFI because "a lot of people were hurt during this whole transition." G. Norma Carter Norma Carter joined Campbell Legal Department in 1981. On September 1997, Ms. Carter signed on to become the General Counsel for the to-be-formed VFI. However, after signing with VFI, Ms. Carter was not released from the other responsibilities at Campbell. Ms. Carter continued to handle Campbell's acquisition in France, divestiture in the Netherlands. She also had her day-to-day regular assignments and continued to handle another acquisition almost right up to the closing of the VFI spin-off. Ms. Carter recounts that Campbell wanted to takeover the drafting of the spin-off contracts, including the supply agreements. According to Ms. Carter, it was only by mid-February 1998 when she found out in a work calendar that the SpinCo team was not going to get drafts of the supply agreements, which they were waiting for until after the SEC Form 10 had been filed. Ms. Carter recalls being "a little upset" when she saw a calendar outlining the work that had to be done between closing. After asking for the agreements and not getting them, Ms. Carter expected that at least they would see the agreements before the Form 10 was filed. The work calendar was the first indication that the Form 10 was going to get filed without the exhibits. When Ms. Carter inquired why the agreements weren't being attached, Campbell Controller Jerry Lord explained that it was just like a continuation of past practice. "[T]he reason why they weren't being attached is [that] they were going to be the same as historical, so that [there wasn't] going to be a change, because they still represented the same cost-plus arrangement as before, they were going to be just seamless and they didn't have to be attached," Ms. Carter says. Upon finally getting hold of the drafts of the mushroom and beef agreements, Ms. Carter realized how things changed "substantially." At this time Mr. Lord admitted that "he had misunderstood." The Agreements were not going to be the same. Ms. Carter learned who determined the $500 million debt when Campbell CFO Basil Anderson came to her office one afternoon and told her outright that it was his idea. Mr. Anderson explained that the value of Swanson was a little low and the value of Vlasic was a little high but that, in his opinion, it was fine. The net worth equaled the net liabilities. In October 1997, Ms. Carter was shocked to learn of the three- year non-compete arrangement between VFI and Campbell as provided in certain spin-off agreements. Ms. Carter relates that VFI could not compete against Campbell in any products that had been made in the U.S. Grocery Division, which included thermal products, like group, gravy, pasta, canned pasta and Franco American gravy. However there was no restriction on Campbell competing against VFI. In the main spin-off agreement, there was no obligation against Campbell not to compete against VFI. VFI is also restricted from soliciting Campbell employees after the spin-off for two years. VFI either had to hire them before it was ready for them on day one or not at all. Before the closing of the spin-off, Ms. Carter's access to Campbell's counsel, Dechert Price & Rhoads, was restricted. "I was not allowed to go to the lawyers directly," Ms. Carter recalls. In November 2000, in an effort to sell certain of its businesses, VFI, through a letter, asked help from Campbell to finally set in place all the contracts so that a purchaser could operate a true stand-alone business. But Campbell Legal Linda Limpscomb told Ms. Carter that in return for their help, VFI must release Campbell against all claims relating to the spin-off, including claims from bankruptcy creditors. H. Anthony Disilvestro Anthony Disilvestro was appointed a VFI Director upon its formation. Since VFI was a subsidiary of Campbell, Mr. Disilvestro considered that his duty was to Campbell. Concurrent with the closing of the spin-off on March 30, 1998, Mr. Disilvestro resigned. Mr. Disilvestro believes that managing the VFI business was not a Director's responsibility but that of CEO Robert Bernstock and his management team. Mr. Disilvestro tells the Court that he can't tell why VFI Controller Joseph Adler's responsibility was limited to accounting issues and why Mr. Adler was instructed not to perform any financial planning or analysis for the spin-off. Mr. Lee referred Mr. Disilvestro to Goldman Sachs' Sweetpea report, which stated: "[S]o a spin-off with debt, the proceeds of which are paid to Campbell, accomplishes two things that were good for Campbell in 1997. One, it resulted in a divesting of underperforming businesses; and second, it gave cash or some measure of cash comparable to what you would have received on a sale." According to Mr. Disilvestro, the cash proceeds was not something Campbell necessarily sought, so it would not be an advantage. Getting cash was a result, not a purpose of the leverage. Mr. Disilvestro also points out that the $500 million proceeds was not intended for repurchasing shares. Campbell was trying to maintain a certain capitalization for the company. "[T]he receipt of $500 million would have changed the capitalization, in our view, [going] in the wrong direction," Mr. Disilvestro says. Mr. Disilvestro finds it a coincidence that the amount of debt equals the tax basis number and the amount of share repurchases. As scheduled in an "Implementation Plan Recommendations" document that Mr. Disilvestro, the terms of the beef and mushrooms supply agreements and the transition service agreement were to be put in place by October 31, 1997. Initial debt level and credit agreements were scheduled to be determined by November 30. On why these agreements were not in final form by those dates, Mr. Disilvestro cannot tell. "I don't remember it being a substantive issue," Mr. Disilvestro explains. "I might have been over-optimistic with my timetable." Mr. Disilvestro also denies knowledge on why there was no independent legal advisor hired for the VFI side of the spin-off transaction. As to the non-existent, independent financial advisor for VFI, Mr. Disilvestro says that he determined at that time that there was no need to hire one. (Vlasic Foods Bankruptcy News, Issue No. 45; Bankruptcy Creditors' Service, Inc., 215/945-7000) VHJ ENERGY LLC: Case Summary & 15 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: VHJ Energy, LLC 504 B Fort Street Buffalo, Wyoming 82834 Bankruptcy Case No.: 04-21360 Type of Business: The Debtor is engaged in methane gas production. Chapter 11 Petition Date: July 13, 2004 Court: District of Wyoming (Cheyenne) Judge: Peter J. McNiff Debtor's Counsel: Paul Hunter, Esq. 2616 Central Avenue Cheyenne, WY 82001 Tel: 307-637-0212 Total Assets: $239,745 Total Debts: $7,402,469 Debtor's 15 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Shirley Brown $5,000,000 c/o Randall T. Cox 400 S Kendrick Ave., Ste. 304 Gillette WY 82716 Bear Paw Energy $343,467 1400 16th St., Ste. 310 Denver, CO 80202 Federated Oil and Gas Prop. $245,562 Clifford L. Smith $31,392 RK Neils Family Partnership $20,000 Richard E. Neils MD $20,000 John R. Ederer $17,557 John Copeland $8,000 Paramount Contracting LLC $7,897 Dave's Flow Measurement $5,068 R2R Energy LLC $4,754 Meagher Oil and Gas Prop. $3,832 CBM Pumps and Svc. $3,717 Patrick Davidson $1,411 Dorsey and Whitney LLP $1,002 W. INC.: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------ Debtor: W., Inc. P.O. Box 460 Stockdale, Texas 78160 Bankruptcy Case No.: 04-54028 Type of Business: The Debtor provides Residential concrete Construction services. Chapter 11 Petition Date: July 13, 2004 Court: Western District of Texas (San Antonio) Judge: Leif M. Clark Debtor's Counsel: William R. Davis, Jr., Esq. Langley & Banack, Inc. 745 East Mulberry #900 San Antonio, TX 78212 Tel: 210-736-6600 Total Assets: $295,875 Total Debts: $1,332,473 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Beck Readymix Concrete, Inc. Goods and services $381,629 P.O. Box 790641 San Antonio, TX 78279 Schneider Steel, Ltd. Goods $78,145 Marion State Bank Purchase money $52,000 security interest Value: $44,000 Cemex Goods and services $39,812 MGPT, Inc. Services $23,394 CIT Equipment Purchase money $48,598 security interest Value: $26,000 S&P Communications Services $18,308 Suncoast Post-Tension, Inc. Goods and services $17,666 Texana Machinery Goods $14,244 Apache Disposal Services $13,502 McCoy's Building Supply Goods and services $12,010 Center Humana Insurance Insurance $10,735 Michael R. Barry, CPA Accounting services $8,900 Vulcan Materials, LP Goods and services $6,584 Home Depot Goods $6,309 Johnson Oil Company Goods and services $5,682 International Strand & Steel Goods $5,280 Morrison Supply Goods and services $4,978 ICM Surveys Services $4,601 Comal Supply Goods and services $4,564 WCI STEEL: USWA Ratifies Post-Bankruptcy Emergence Labor Contract ----------------------------------------------------------------- The United Steelworkers of America Local 1375 members have ratified a new labor agreement with WCI Steel, Inc. The contract, which was approved Thursday, will become effective once WCI emerges from bankruptcy as a reorganized company and will expire Nov. 1, 2008. A confirmation hearing on competing reorganization plans is scheduled to begin July 21 in U.S. Bankruptcy Court in Akron. The USWA is strongly supporting the WCI debtor's plan, which is sponsored by the Company's ultimate parent, The Renco Group, Inc. Patrick G. Tatom, WCI's president and chief executive officer, said the labor contract is key to WCI's reorganization plan because it provides the framework for implementing new work systems that will enable WCI to vigorously compete in the global steel market. "We are pleased that our USWA members approved this innovative agreement, which provides hourly employees with job security and greater participation in all areas of our business," Mr. Tatom said. "We have distinguished ourselves in the marketplace by producing custom products, serving niche markets and providing superior customer service," he added. "This new contract will give us further opportunity to improve our costs, quality and customer satisfaction." On Sept. 16, 2003, WCI filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code. WCI is an integrated steelmaker producing more than 185 grades of custom and commodity flat-rolled steel at its Warren, Ohio facility. WCI products are used by steel service centers, convertors and the automotive and construction markets. The company has approximately 1,700 employees. WEIRTON STEEL: Court Approves Amended Disclosure Statement ---------------------------------------------------------- Judge Calhoun of the U.S. Bankruptcy Court for the District of West Virginia finds that the Disclosure Statement explaining Weirton Steel Corporation's First Amended Plan of Liquidation contains adequate information within the meaning of Section 1125 of the Bankruptcy Code. Accordingly, the Court approves Weirton's Disclosure Statement. All objections to the Disclosure Statement, to the extent not withdraw or resolved, are overruled. (Weirton Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., 215/945-7000) WEIRTON STEEL: Court Approves Modified Solicitation Procedures -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of West Virginia found that the Solicitation Procedures proposed by Weirton Steel Corporation and its debtor affiliates and subsidiaries provide a fair and equitable voting process and are consistent with Section 1126 of the Bankruptcy Code. Hence, Judge Friend approves the Solicitation Procedures, as modified, including, but not limited to the forms of the Ballots and Notices of Non-voting Status, the Voting Deadline, the Solicitation Packages, the July 6, 2004 Voting Record Date for Plan Voting and the Tabulation Rules. The modifications to the Solicitation Procedures are: (a) Only original ballots will be counted, and no ballot may be submitted by facsimile, electronic mail or any other electronic means; (b) Any ballot received by the Balloting Agent that casts a vote for a Claim that cannot be identified as a Claim entitled to vote on the Plan will not be counted; (c) If a ballot indicates both an acceptance and a rejection of the Plan, it will be counted as an acceptance of the Plan; and (d) Each holder of a Claim entitled to vote on the Plan is entitled to vote all of the Claims that it holds, but may only cast a single ballot with respect to all Claims that it holds in a single Class. The Confirmation Hearing will be held before Judge Friend, on August 24, 2004, beginning at 10:00 a.m., Eastern Time. The Confirmation Hearing may be continued from time to time by the Court without further notice other than the announcement of the adjourned date at the Confirmation Hearing or any continued hearing. Objections to the confirmation of the Plan must be filed with the Court and served on the parties on the Official Service List established in the Debtors' case so that they are received no later than 4:00 p.m., Eastern Time, on August 18, 2004, or on another date established by the Debtors that is at least 25 days after the service of the Solicitation Packages. Judge Friend also approves the Confirmation Hearing Notice and the form and manner of service and publication of the Confirmation Hearing Notice. On or before July 19, 2004, Weirton will serve or cause to be served the Confirmation Hearing Notice on all creditors and interest holders, and all parties who have requested notice pursuant to Rule 2002 of the Federal Rules of Bankruptcy Procedure. On or before August 2, 2004, Weirton will file and serve the form of Trust Agreement on all parties included on the Official Service List established by the Court in these cases. (Weirton Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., 215/945-7000) WESTPOINT STEVENS: Wants to Extend Key Employee Retention Plan -------------------------------------------------------------- The WestPoint Stevens Inc. Debtors ask the U.S. Bankruptcy Court for the Southern District of New York to approve an extension of their Key Employee Retention Plan, as modified. John J. Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, in New York, relates that the performance-based incentive program under the KERP only provided calculations through the end of the first quarter of 2004. In light of the continued pendency of their Chapter 11 cases, the Debtors have calculated incentive payments through December 2004 in accordance with their 2004 budget. New target metrics are also being implemented to correspond with the Debtors' 2004 Budget: EBITDA Target Levels/Goals Period Ending Minimum Target Maximum ------------- ------- ------ ------- 06/30/2004 $25,112 $29,543 $35,452 09/30/2004 32,513 38,251 45,901 12/31/2004 30,465 35,841 43,009 Cash Availability Target Levels/Goals Period Ending Minimum Target Maximum ------------- ------- ------ ------- 06/30/2004 $100,467 $118,197 $141,836 09/30/2004 68,917 81,079 97,295 12/31/2004 104,701 123,178 147,814 ______________________________________________________________ | | | Payouts as Percentage of Base Salary | |______________________________________________________________| | | | | | | Category of | Minimum | Target | Maximum | | Eligible |_______________|_______________|_______________| | Employee | | | | | | KERP | KERP | KERP | |______________|_______________|_______________|_______________| | | | | | | Group 1A | 50% | 100% | 200% | | Group 1 | 37.5 | 75 | 150 | | Group 2 | 25 | 50 | 100 | | Group 3 | 10 | 20 | 40 | | Group 4 | 7.5 | 15 | 30 | |______________|_______________|_______________|_______________| The proposed EBIDTA and Cash Availability metrics are principally based on the corresponding targets contained in the 2004 Budget but have been adjusted to reflect the estimated costs of the continuation of the Chapter 11 cases through the end of 2004. The Debtors estimate that costs associated with the continuation of the KERP, as modified, will remain consistent and not exceed $4,503,000 per quarter. The costs remain necessary considering the associated benefits of enhanced employee morale. The modified KERP will continue to provide incentives for employees to stay the course and continue to assist the Debtors in their reorganization efforts. In addition, incentive bonuses are performance based. Mr. Rapisardi asserts that the extension of the KERP, as modified, through the duration of the Chapter 11 cases will provide the Debtors with the long-term goals necessary to instill employee confidence in the stability and direction of the Debtors' business. The extension will provide the Debtors an invaluable tool towards maintaining employee morale and will enable the Debtors to concentrate on the rehabilitation of their businesses and emergence from Chapter 11. Mr. Rapisardi relates that the Creditors Committee and the Second Lien Holders support the approval of the KERP's extension. (WestPoint Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service, Inc., 215/945-7000) WORLDCOM: Agrees to Resolve Illinois Revenue Department Tax Claims ------------------------------------------------------------------ In 2002, the Illinois Department of Revenue performed sales tax audits of three WorldCom affiliates: Shared Technologies Fairchild Telecom, Inc., Business Internet, Inc., and Intermedia Communications, Inc. The Revenue Department determined the liabilities for each of the three entities and issued Notices of Tax Liability. Subsequently, the three Debtors filed statutory protests with the Illinois Revenue Department, requesting administrative hearings to contest the liabilities contained in the Notices. The Debtors' requests were later granted. The Illinois Revenue Department filed prepetition claims against various Debtors for: -- Illinois sales taxes, including asserted liabilities that relate to the audits of the three entities; -- Telecommunications Excise Taxes; -- Telecommunications Infrastructure Excise Taxes; -- Withholding Taxes; and -- Message Taxes. The Excise Taxes were assigned Claim Nos. 340, 548, 833, 834, 835, 841, 842, 848, 849, 884, 988, 8767, 33487, 33604, 33625, 942, 1074, 2990, 3164, and 5193. Certain of the claims were previously disallowed, withdrawn or amended. The Debtors objected to certain of the Excise Tax Claims, including the claims against Shared Technologies, Business Internet and Intermedia Communications, which include the asserted sales tax liabilities relating to the Illinois Revenue Department's audits. On April 27, 2004, the Illinois Revenue Department asked the Bankruptcy Court to abstain from hearing the Debtors' objections to the merits of the sales tax portion of these claims and allow the liabilities to be determined in the administrative proceedings: (1) Claim No. 33487 filed against Shared Technologies for $2,637,297; (2) Claim No. 33604 filed against Business Internet for $1,343,784; and (3) Claim No. 33625 filed against Intermedia Communications for $2,330,824. The Illinois Revenue Department believes that its request for abstention is warranted because: (a) The litigation of the merits of the three claims in the administrative proceedings will not detract from but will enhance the efficient administration of the bankruptcy case; (b) The determination of the validity of the Revenue Department's tax claims turns on the application of Illinois law and this will be true even if the claims are litigated in the Bankruptcy Court. The Revenue Department points out that in Raleigh v. Illinois Department of Revenue, 530 U.S. 15, 120 S. Ct. 1952 (2000), the court held that state tax law presumptions apply in bankruptcy; (c) It is not yet clear whether any unsettled issues of Illinois law will have to be decided. Each of the three objections merely states that they dispute the amounts of claims without defining the issues further. The Revenue Department relates that the three Debtors failed to produce the categories of books and records sought by the auditor and the auditor was, therefore, required to principally use information derived from federal and state income tax returns. As a result, the resolution of the Debtors' objections will likely turn on an application of: -- the regulations governing a taxpayer's record keeping requirements; -- the statutory provisions governing audits, including the exercise of "best judgment and information" as set forth at 35 ILCS 120/4; and -- the presumptions of validity that attach to the Notices of Tax Liability where a taxpayer cannot produce the books and records to rebut the presumptions; (d) The administrative proceedings are currently pending. Although the administrative proceedings were stayed because of the pendency of the Debtors' bankruptcy cases, the administrative proceedings can immediately be resumed and the matters promptly set for hearing; (e) The Plan has been confirmed and the treatment of creditors' claims is determined. The Revenue Department maintains that "what is now left to do is to determine the amounts of those claims are but there is no particular reason why the claims have to be litigated in the bankruptcy forum as opposed to any other forum of competent jurisdiction"; (f) While the allowance of claims is generally considered to be a core matter, the issues concerning the validity of the Revenue Department's sales tax claims turn on state law; and (g) There is no good reason why the merits of its sales tax claims need to be determined by the Bankruptcy Court while other tax claims are litigated in Illinois. The Reorganized Debtors have significant operations in Illinois and will not be prejudiced if they are required to litigate the sales and use tax issues as part of the administrative proceedings. The Bankruptcy Court has yet to rule on the Revenue Department's abstention request. The Illinois Revenue Department and the Debtors, subsequently, engaged in negotiations over an extended period of time to settle their disputes over the Excise Tax Claims. In a Court-approved Stipulation, the Debtors and the Revenue Department agree that: (a) The Debtors will pay the Revenue Department $2,500,000, in satisfaction of the Excise Tax Claims and any other claims released; (b) The Revenue Department will waive any right to collect any of the Settled Claims from any former or present director, officer or employee of the Debtors pursuant to 35 ILCS 735/3-7, or in any other manner; (c) Any Excise Tax Claim, including Claim Nos. 340, 548, 833, 834, 835, 841, 842, 848 849, 884, 988, 8767, 33487, 33604, 33625, 942, 1074, 2990, 3164, and 5193 and any other prepetition sales, excise or use tax claim filed by the Revenue Department not previously disallowed or withdrawn is released, waived, disallowed and expunged by agreement. The Debtors will have no obligation to distribute money or property to the Revenue Department on account of the Excise Tax Claims; (d) With the exception of the Income Tax Claims, the Revenue Department will waive other claims against any of the Debtors for prepetition taxes; (e) The pending objection filed by the Debtors to any Excise Tax Claim is denied as moot; (f) The Revenue Department's request for abstention is denied as moot; (g) The Revenue Department will cause these pending administrative proceedings to be closed without any findings of liability: * Shared Technologies Fairchild Telecom, Inc., Case No. 03-ST-0026, * Business Internet, Inc., Case No. 03-ST-0025, and * Intermedia Communications, Inc., Case No. 03-ST-0027; (h) The Debtors will waive any right to assert any refund or similar claims against the Revenue Department related to or arising from prepetition taxes and prepetition tax periods, with the exception of any prepetition income tax refund claims; and (i) The Stipulation and Order will have no effect on the allowance or disallowance of any claims that the Revenue Department has against the Debtors for income taxes. 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, 2004, 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. 57; Bankruptcy Creditors' Service, Inc., 215/945-7000) W.R. GRACE: Equity Committee Wants Litigation Protocol Established ------------------------------------------------------------------ The Official Committee of Equity Security Holders of W.R. Grace & Co. tells Judge Fitzgerald that the central problem in the Debtors' cases is how to fashion appropriate procedures to resolve asbestos personal injury claims. The Debtors have proposed two alternative approaches -- resolution of these claims prior to confirmation and resolution after confirmation. According to Rhonda L. Thomas, Esq., at Klett Rooney Lieber & Schorling in Wilmington, Delaware, common to these approaches is the establishment of a process for identifying and resolving threshold issues common to large numbers of asbestos personal injury claims. The Equity Committee endorses the Debtors' approach as common sense "necessitated by the inability of our tort system to deal effectively with the asbestos litigation crisis." Because Congress has taken no action to reform asbestos litigation, the Bankruptcy Code provides the only effective tool available because the District Court for the District of Delaware can centralize resolution of all claims against a particular defendant in a single court. The common-sense resolution would require the establishment of appropriate diagnostic and evidentiary standards for proof of: (1) actual injury; (2) sufficient occupational exposure; and (3) in connection with some of Grace's products, causation. The avalanche of claims against Grace before the Petition Date, coupled with the absence of any way to consolidate those claims in a single forum, left Grace with no choice but to settle large numbers of claims on an "inventory" basis; this, in turn, required payment to settle many meritless claims. Ms. Thomas contrasts this with the single-forum efficient approach possible through the Bankruptcy Code. The Equity Committee believes that an appropriate litigation protocol, which identifies and resolves large numbers of asbestos personal injury claims, is all that's necessary to conclude the Debtors' cases. (W.R. Grace Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service, Inc., 215/945-7000) WRENN ASSOCIATES: Corwin Serves as Special Litigation Counsel ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Hampshire gave its stamp of approval to Wrenn Associates, Inc.'s application to retain Corwin & Corwin as special litigation counsel. Charles F. Ahern, III, Esq., at Corwin & Corwin will provide continuing representation to the Debtor in connection with the defense of litigation pending before the Commonwealth of Massachusetts. The firm has a good, long-term business relationship with the Debtor and its management. It has represented the Debtor and its sureties on a regular basis in connection with the Massachusetts litigation matters for many years. Additionally, Corwin & Corwin is intimately familiar with the pending Massachusetts litigation including the Extended Stay Litigation in which the Debtor has asserted claims totaling $1,000,000 plus interest. The firm will bill the Debtor its current hourly rates ranging from $170 per hour for associates to $270 per hour for partners. Mr. Ahern's current hourly rate is $240 per hour. Paralegals who will principally work in this case bill at $100 per hour. Headquartered in Merrimack, New Hampshire, Wrenn Associates, Inc. -- http://www.wrenn.com/-- is a construction management firm. The Company filed for chapter 11 protection on May 25, 2004 (Bankr. S.D.N.Y. Case No. 04-13589). Jeffrey M. Sponder, Esq. at Riker, Danzig, Scherer, Hyland & Perretti, LLP, represents the Debtors. When the Company filed for protection from its creditors, it listed $39,052,000 in total assets and $132,072,000 in total debts. * Jefferies Expands Restructuring Practice Into Europe ------------------------------------------------------ Jefferies International Limited, a subsidiary of Jefferies Group, Inc. (NYSE: JEF), expands its recapitalization and restructuring advisory business into the European market. As an extension of Jefferies' leading practice in the United States, the newly established team will offer senior-level restructuring advisory services to Jefferies' growing client base in the European market. Richard Nevins, co-head of the restructuring team at Jefferies & Company, Inc. since 1998 with over 20 years experience, has relocated to Jefferies International's London office to lead the European practice. He will be responsible for expanding Jefferies' presence in the European restructuring market. Mr. Nevins commented, "In today's multi-national marketplace, companies in distressed situations increasingly benefit from a global perspective. By extending our highly successful US recapitalization and restructuring practice, the establishment of a European business will further enhance our offering to clients, providing them with a team of restructuring experts who are able to mobilize and react quickly to their individual local needs. With the rapid development of Europe's restructuring market, the decline of relationship lending, and the substantial, if belated, growth in Europe's high yield market, the opportunity is immense." Bill Derrough, co-head of the Jefferies US restructuring practice, added: "Jefferies takes pride in its ideas-based approach to resolving the notoriously complex issues surrounding distressed situations. Jefferies' offering is distinctive because, in addition to providing the customary advisory services, we are also able to offer clients a full suite of investment banking solutions, including high yield and equity underwriting, trading and research. Richard's wealth of experience in this diverse arena will be invaluable as we continue to develop our business both in the US and Europe." Jefferies' global Recapitalization and Restructuring Group has over 40 bankers working across industry sectors to meet the unique challenges facing financially distressed companies. Representing issuers, bondholders, creditors, as well as buyers and sellers of assets, the firm has restructured nearly $100 billion in liabilities since 1998, including successfully completing exchange offers with an average exchange offer acceptance ratio of 99.3%. Jefferies is currently representing bondholders in Parmalat's Canadian operating company, and represented the unsecured creditors in the Federal-Mogul restructuring, which created a precedent for a coordinated US / European restructuring, utilizing the EU's "center of main interest" legislation. About Jefferies Jefferies, a global investment bank and institutional securities firm, has served middle-market and growth companies and their investors for over 40 years. Headquartered in New York with more than 20 offices around the world, Jefferies provides clients with capital markets and financial advisory services, institutional brokerage, research and asset management. The firm is a leading provider of trade execution in equity, high yield, convertible and international securities, serving institutional investors and high net worth individuals. Jefferies & Company, Inc. is the principal operating subsidiary of Jefferies Group, Inc. (NYSE: JEF; www.jefco.com), a publicly traded holding company. Jefferies International Limited, a UK-incorporated, wholly owned subsidiary, was established in London in 1985 and is regulated by the Financial Services Authority. * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------- -------- Airgate PCS PCSA (377) 291 13 Alliance Imaging AIQ (68) 628 20 Akamai Technologies AKAM (175) 279 140 Amazon.com AMZN (1,036) 2,162 568 Bally Total Fitness BFT (158) 1,453 (284) Blount International BLT (397) 400 83 Blue Nile Inc. NILE (27) 62 16 Cell Therapeutic CTIC (83) 146 72 Centennial Comm CYCL (579) 1,447 (99) Choice Hotels CHH (118) 267 (42) Cincinnati Bell CBB (640) 2,074 (47) Compass Minerals CMP (144) 687 106 Cubist Pharmaceuticals CBST (18) 223 91 Delta Air Lines DAL (384) 26,356 (1,657) Deluxe Corp DLX (298) 563 (309) Echostar Comm DISH (1,033) 7,585 1,601 WR Grace & Co GRA (184) 2,874 658 Graftech International GTI (97) 967 94 Hawaian Holdings HA (143) 256 (114) Imax Corporation IMAX (52) 250 47 Imclone Systems IMCL (271) 382 (3) Kinetic Concepts KCI (246) 665 228 Lodgenet Entertainment LNET (129) 283 (6) Lucent Technologies LU (3,371) 15,765 2,818 Maxxam INC MXM (601) 1,061 127 Memberworks Inc. MBRS (20) 248 (89) Millennium Chem. MCH (46) 2,398 637 McDermott International MDR (363) 1,249 (24) McMoRan Exploration MMR (54) 169 83 Milacron Inc MZ (34) 712 17 Northwest Airlines NWAC (1,775) 14,154 (297) Nextel Partner NXTP (13) 1,889 277 ON Semiconductor ONNN (499) 1,161 213 Paxson Communications PAX (406) 1,284 67 Pinnacle Airline PNCL (48) 128 13 Primus Telecomm PRTL (96) 751 (26) Per-Se Tech Inc. PSTI (18) 172 41 Qwest Communications Q (1,016) 26,216 (1,132) Quality Distributors QLTY (19) 371 7 Sepracor Inc SEPR (619) 1,020 256 St. John Knits Int'l SJKI (65) 234 69 I-Stat Corporation STAT (1) 64 33 Stratagene Corp. STGN (6) 39 9 Syntroleum Corp. SYNM (12) 67 11 UST Inc. UST (115) 1,726 727 Valence Tech VLNC (52) 21 (5) Vector Group Ltd. VGR (3) 628 142 Western Wireless WWCA (225) 2,522 15 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. 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 ***