================================================================= EXIDE BANKRUPTCY NEWS Issue Number 1 ----------------------------------------------------------------- Copyright 2002 (ISSN XXXX-XXXX) April 15, 2002 ----------------------------------------------------------------- Bankruptcy Creditors' Service, Inc. 609-392-0900 FAX 609-392-0040 ----------------------------------------------------------------- EXIDE BANKRUPTCY NEWS is published by Bankruptcy Creditors' Service, Inc., 24 Perdicaris Place, Trenton, New Jersey 08618, on an ad hoc basis (generally every 10 to 20 days) as significant activity occurs in the Debtors' cases. New issues are prepared by Danilo R. Munzo, R. Vince Brandt and Peter A. Chapman, Editors. Subscription rate is US$45 per issue. Any re-mailing of EXIDE BANKRUPTCY NEWS is prohibited. ================================================================= IN THIS ISSUE ------------- [00000] HOW TO SUBSCRIBE TO EXIDE BANKRUPTCY NEWS [00001] BACKGROUND & DESCRIPTION OF EXIDE TECHNOLOGIES [00002] CONSOLIDATED BALANCE SHEET AT DECEMBER 31, 2001 [00003] COMPANY'S PRESS RELEASES ANNOUNCING CHAPTER 11 FILING [00004] EXIDE DEBTORS' CHAPTER 11 DATABASE [00005] LIST OF THE DEBTORS' 40-LARGEST UNSECURED CREDITORS [00006] DEBTORS' MOTION TO PAY CRITICAL VENDOR CLAIMS [00007] DEBTORS' MOTION TO IMPLEMENT CONTRACT REJECTION PROTOCOL KEY DATE CALENDAR ----------------- 04/14/02 Voluntary Petition Date 04/29/02 Deadline for filing Schedules of Assets and Liabilities 04/29/02 Deadline for filing Statement of Financial Affairs 04/29/02 Deadline for filing Lists of Leases and Contracts 05/05/02 Deadline to provide Utilities with adequate assurance 06/13/02 Deadline to make decisions about lease dispositions 07/13/02 Deadline to remove actions pursuant to F.R.B.P. 9027 08/12/02 Expiration of Debtor's Exclusive Plan Proposal Period 10/11/02 Expiration of Debtor's Exclusive Solicitation Period 04/13/04 Deadline for Debtor's Commencement of Avoidance Actions Organizational Meeting with UST to form Committees Bar Date for filing Proofs of Claim First Meeting of Creditors pursuant to 11 USC Sec. 341 ----------------------------------------------------------------- [00000] HOW TO SUBSCRIBE TO EXIDE BANKRUPTCY NEWS ----------------------------------------------------------------- EXIDE BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. 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Please enter my personal subscription to EXIDE BANKRUPTCY NEWS at US$45 per issue until I tell you to cancel my subscription. Name: ---------------------------------------------- Firm: ---------------------------------------------- Address: ---------------------------------------------- ---------------------------------------------- Phone: ---------------------------------------------- Fax: ---------------------------------------------- E-Mail: ---------------------------------------------- (Distribution to multiple professionals at the same firm is provided at no additional cost.) EXIDE BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtor's cases. The subscription rate is US$45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Re-mailing of EXIDE BANKRUPTCY NEWS is prohibited. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. ----------------------------------------------------------------- [00001] BACKGROUND & DESCRIPTION OF EXIDE TECHNOLOGIES ----------------------------------------------------------------- Exide Technologies 210 Carnegie Center, Suite 500 Princeton, New Jersey 08540 Telephone (609) 627-7200 Fax (609) 627-7217 http://www.exide.com About Exide Technologies Exide Technologies (OTCBB: EXDT) is the world-wide leading manufacturer and distributor of lead acid batteries and other related electrical energy storage products. Exide manufactures and distributes industrial and transportation batteries in 89 countries throughout North America, Europe, Aisa, and the Middle East, including India, Australia, and New Zealand. Exide's industrial battery lines include: * motive-power batteries, like those used in forklift trucks and other electrical vehicles, and * network power batteries used for back-up power applications, primarily in telecommunication and computer data centers. Exide distributes and markets its transportation batteries to a broad range of: * auto parts retailers, * replacement auto parts distributors; * after-market battery distributors; and * automotive original equipment manufacturers. Exide has 19 manufacturing facilities located in the United States, employing 6,500 workers. For the fiscal year ending March 31, 2002, Exide projects it will report $2.5 billion in net sales. Craig H. Muhlhauser, Exide's President and Chief Executive Officer explains that lead acid batteries are manufactured, distributed and marketed in a highly competitive environment. Beginning in mid-2001, Exide experienced increasing competitive pressures and a downturn in general economic consitions. Sales shrank and raw material prices increased; with excess overhead costs, earnings plummeted. Exide's financial strain has not been a secret and its bankruptcy filing is no surprise given the Company's balance sheet insolvency. In 2001, Exide couldn't meet the financial covenants under its bank loan agreements. This year, Exide couldn't make the interest payments due on its bond debt. Exide's bank lenders worked with the Company and extended waivers that expired today. "After consideration of all reasonably available alternatives, and in light of the Debtors' liquidity crisis, the Debtors determined that the voluntary commencement of these Chapter 11 Cases would provide them with sufficient breathing spaceto enable them to restructure their financial affairs and reorganize their businesses for the benefit of all their creditors," Lisa J. Donohue, Exide's Chief Financial Officer and Chief Restructuring Officer, says. ----------------------------------------------------------------- [00002] CONSOLIDATED BALANCE SHEET AT DECEMBER 31, 2001 ----------------------------------------------------------------- EXIDE TECHNOLOGIES AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS At December 31, 2001 (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 38,761,000 Receivables, net of allowance for doubtful accounts of $49,431,000 346,859,000 Inventories 481,814,000 Prepaid expenses and other 25,481,000 Deferred income taxes 29,637,000 ---------------- Total current assets 922,552,000 ---------------- PROPERTY, PLANT AND EQUIPMENT 936,304,000 Less-accumulated depreciation (383,059,000) ---------------- Property, plant and equipment, net 553,245,000 ---------------- OTHER ASSETS: Goodwill, net 434,772,000 Other intangibles, net 48,885,000 Investments in affiliates 6,363,000 Deferred financing costs, net 13,352,000 Deferred income taxes 42,509,000 Other 51,560,000 ---------------- 597,441,000 ---------------- Total assets $ 2,073,238,000 ================ LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES: Short-term borrowings $ 15,784,000 Current maturities of long-term debt 672,982,000 Accounts payable 316,386,000 Accrued expenses 397,389,000 ---------------- Total current liabilities 1,402,541,000 LONG-TERM DEBT 717,004,000 NONCURRENT RETIREMENT OBLIGATIONS 168,401,000 OTHER NONCURRENT LIABILITIES 236,502,000 ---------------- Total liabilities 2,524,448,000 ---------------- COMMITMENTS AND CONTINGENCIES MINORITY INTEREST 18,703,000 ---------------- STOCKHOLDERS' DEFICIT Common stock, $.01 par value, 100,000,000 shares authorized; 27,370,000 shares issued and outstanding 274,000 Additional paid-in capital 570,096,000 Accumulated deficit (727,248,000) Notes receivable - stock award plan (665,000) Accumulated other comprehensive loss (312,370,000) ---------------- Total stockholders' deficit (469,913,000) ---------------- Total liabilities and deficit $ 2,073,238,000 ================ *** Exide indicates in its First-Day Pleadings filed with the *** Bankruptcy Court that the Company's balance sheet at *** March 31, 2002, reflects substantially similar total assets *** and liabilities as those reported at year-end 2001. ----------------------------------------------------------------- [00003] COMPANY'S PRESS RELEASES ANNOUNCING CHAPTER 11 FILING ----------------------------------------------------------------- Exide Technologies Files for Reorganization PRINCETON, New Jersey -- April 15, 2002 -- Exide Technologies, Inc. (OTCBB:EXDT) today announced that it and certain of its U.S. subsidiaries filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The Company said that it elected to file for reorganization because it offered the most efficient way to restructure its balance sheet and access new working capital while continuing to operate in the ordinary course of business. The Company's operations outside of the U.S. are not included in the filing and will not be adversely affected. "Over the past several months, we have made a number of difficult yet necessary operational changes that have exhibited positive results. We are now taking the next step to resolve our financial challenges and focus on addressing our balance sheet issues," said Craig Muhlhauser, president and chief executive officer. Exide said that its heavy debt burden, caused largely by a debt-financed global acquisition strategy and the costs of integrating these acquisitions, combined with the current economic conditions has made it necessary for the Company to file for reorganization to address its financial leverage and debt burden. The Company said that it has arranged for $415 million in new financing, including $250 million in debtor-in-possession (DIP) financing provided by Citicorp USA, Inc., a subsidiary of Citibank N.A., and other financial institutions, and $165 million in financing provided by Citibank N.A. and other financial institutions for the entities outside of the U.S. that are not filing. The new financing, subject to Court approval, provides assurance that Exide will be able to continue to run its operations in the ordinary course and continue to serve its customers in a seamless manner. Suppliers who provide goods and services post-petition will be paid in the normal course. Muhlhauser continued, "Our operations continue to be solid. With our lean manufacturing initiative, Excell, we have strengthened our ability to operate on a more efficient basis. Our fill rates are currently the highest they have ever been and we continue to offer our customers top quality products. Additionally, the realignment of our business units and our strategic sourcing initiatives have achieved significant productivity gains and cost savings that have enabled the Company to remain competitive in a challenging market. Combined with the financial restructuring, Exide will be in a better position to invest in our business and ensure our long-term success." Exide said it has requested, and expects to receive Court approval to pay employee salaries, wages and benefits in the normal course of business, as well as continue to meet customer demands and supply products as usual. Exide has established a supplier assistance center to answer questions from its suppliers. The toll free number for suppliers only is 866-758-8070. Exide's legal counsel is Kirkland & Ellis. Jay Alix and Associates and The Blackstone Group are engaged to provide restructuring and financial advisory services. ----------------------------------------------------------------- [00004] EXIDE DEBTORS' CHAPTER 11 DATABASE ----------------------------------------------------------------- Debtor entities filing separate chapter 11 petitions: Case No. Debtor Entity -------- ------------- 02-11125 Exide Technologies 02-11126 RBD Liquidation, LLC 02-11127 Exide Delaware, L.L.C. 02-11128 Exide Illinois, Inc. Petition Date: April 14, 2002 U.S. Bankruptcy Court: United States Bankruptcy Court District of Delaware 824 Market Street, Fifth Floor Wilmington, Delaware 19801 Telephone (302) 252-2900 Bankruptcy Judge: The Honorable John C. Akard Debtors' Lead Counsel: Matthew N. Kleiman, Esq. Kirk A. Kennedy, Esq. KIRKLAND & ELLIS 200 East Randolph Street Chicago, IL 60601 Telephone (312) 861-2031 Fax (312) 861-2200 Debtors' Local Counsel: Laura Davis Jones, Esq. James E. O'Neill, Esq. Christopher J. Lhulier, Esq. Kathleen M. DePhillips, Esq. PACHULSKI, STANG, ZIEHL YOUNG & JONES 919 N. Market Street 16th Floor Wilmington, DE 19899-8705 Telephone (302) 652-4100 Fax (302) 652-4400 Debtors' Restructuring Consultants: Lisa J. Donohue Robert N. Dangramond Greg F. Presley John P. Crisco William J. Seng Carter Pennington Jon A. Slatkin JA&A SERVICES, L.L.C. (a Jay Alix & Associates affiliate) 9 West 57th Street, 34th Floor New York, NY 10019 Telephone (212) 490-2500 Fax (212) 490-1344 Debtors' Financial Advisors: The Blackstone Group 345 Park Avenue New York, NY 10154 Telephone (212) 583-5000 Fax (212) 583-5712 Debtors' Claims Agent: Bankruptcy Management Corporation 1330 E. Franklin Ave. El Segundo, CA 90245 Telephone (310) 364-3170 Fax (310) 640-8071 Debtors' PR Consultants: Gavin Anderson & Company 220 East 42nd Street, Suite 408 New York, NY 10017 Telephone (212) 515-1900 Fax (212) 515-1909 U.S. Trustee: United States Trustee for Region III 844 King Street, Suite 2313 Lockbox 35 Wilmington, Delaware 19801-3519 Telephone (302) 573-6491 Fax (302) 573-6497 ----------------------------------------------------------------- [00005] LIST OF THE DEBTORS' 40-LARGEST UNSECURED CREDITORS ----------------------------------------------------------------- Entity Nature Of Claim Claim Amount ------ --------------- ------------ Bank of New York Trustee - 2.9% $367,900,000 5 Penn Plaza, 13th Floor Convertible Senior New York, New York Subordinated Bonds 10001-1810 Corporate Trust/Trustee Administration 101 Barclay Street Floor 21 West New York, New York 10286 Bank of New York Trustee - 10% $300,000,000 5 Penn Plaza, 13th Floor Senior Notes New York, New York 10001 Corporate Trust/Trustee Administration 101 Barclay Street Floor 21 West New York, New York 10286 United States of America Guarantee $27,500,400 Chris Origliosso 650 Missouri Avenue Suite 103 East St. Louis, IL 62201 c/o Mirriam F. Miquelon Assistant US Attorney 750 Missouri Avenue, Third Floor East St. Louis, IL 62201 Daramic Incorporated Trade $8,679,687 PO Box 751905 Charlotte, NC 28275 270-683-1561 Fax: 270-686-9226 McKinsey & Co., Inc. Trade $4,834,850 PO Box 72477255 Philadelphia, PA 19170 312-551-3500 Fax: 314-453-7189 Doe Run Company Trade $4,018,631 PO Box 956159 St. Louis, Missouri 63195-6159 314-453-7100 Fax: 314-453-7189 Mann Shayang Batt Trade $2,194,436 Entp Co Ltd 156-1 Fub An Village Ah Lieh Hsiang Kadhsung Hsien Taiwan R.O.C. 011-88676331161 Fax: 011-88676331746 Yacht Battery Trade $2,041,951 Rm. No. 5F-1 No. 212 Taipei 011-856225782128 Fax: 011-886225778439 Water Gremlin Company Trade $1,648,472 1610 Whitaker Avenue White Bear Lake, MN 55110 651-429-7761 Fax: 651-429-9611 National Automotive Trade $1,474,372 Parts Association 2999 Circle 75 Parkway Atlanta, Georgia 30339 770-956-2200 Fax: 770-956-2210 Sovema GT, LLC Trade $1,131,168 118 Panmenas Lane Chattanooga, Tennessee 37405 423-698-0948 Fax: 423-622-4944 Transervice Logistics Inc. Trade $1,095,040 Attn: Dallas Hullage 5 Dakota Drive Lake Success, NY 11042 516-488-3400 Fax: 516-488-3574 Entact Trade $856,919 4040 West Royal Lane, Suite 136 Irving, Texas 75063 972-580-1323 Fax: 972-550-7464 EDS Corporation Trade $844,282 PO Bo 281935 Atlanta, Georgia 30384 972-605-2515 Fax: 972-605-2515 Accuma Corporation Trade $799,301 133 Fanjoy Road Statesville, NC 28625 Grafika Commercial Trade $780,467 Printing 710 Johnston Street Sinking Spring, PA 19608 GE Capital Trade $758,287 PO Box 747016 Pittsburgh, PA 15274 Marsh USA Inc. Trade $748,310 1166 Avenue of the Americas New York, NY 10036 212-345-2582 Fax: 212-345-4752 Schopf & Weiss Trade $737,115 312 West Randolph Street, Suite 300 Chicago, Illinois 60606 312-701-9300 Fax: 312-701-9335 Tulip Corp. Trade $710,211 PO Box 51789 Los Angeles, CA 90051 414-936-3180 Fax: 414-962-1825 Sparton Technologies Trade $686,678 4901 Rockaway Boulevard SE Rio Rancho, NM 87124 505-892-5300 Fax: 505-892-5515 KW Plastics/Troy Trade $646,678 Attn: James Long Troy, AL 36081 334-566-1563 Fax: 334-566-0107 Saft Power Systems Inc. Trade $638,975 125 Nantucket Boulevard Scarborough, Ontario M1P 2N8 416-757-5151 Fax: 416-752-4514 Hardigg Industries Trade $638,403 2405 Norcross Drive Columbus, Indiana 47201 413-665-2163 Fax: 413-665-4801 Ogletree Deakins Nash Trade $614,156 Smoak & Stewart PO Box 101860 Atlanta, Georgia 30392 803-252-1300 Fax: 803-254-6517 Grand Rapids Label Trade $599,235 Company 2351 Oak Industrial Drive Grand Rapids, MI 49505 616-459-8134 Fax: 616-459-4543 Finova Capital Corp. Trade $592,702 33523 Treasury Center Chicago, IL 60694-3500 800-945-6445 Fax: 201-634-3480 Nova PB Inc. Trade $572,289 1200 Rue Gamier Catherine, Quebec Canada, J0L 1E0 450-632-9910 Fax: 450-632-9090 Gopher Resources Trade $572,300 3385 South Highway 140 Hagan, MN 55121-2395 651-454-3310 Fax: 651-654-7926 Seibel Modern Mfg. Trade $553,109 & Welding Corp. 38 Palmer Place Lancaster, NY 14086 716-683-1536 Fax: 716-683-2552 Commonwealth Relocation Trade $545,400 Services Inc. Two Down Square Wayne, PA 10087 610-263-3200 Fax: 610-263-2550 Morrison & Forrester LLP Trade $542,894 Client Trust Account San Francisco, CA 94105 415-268-7000 Fax: 415-268-6306 Woodlake/Parview Trade $504,609 Investors LLC Alter Asset Management, as Agent Lombard, IL 60148 630-620-3600 Fax: 630-620-6306 Hollingsworth & Vose Trade $443,770 Company County RT 113 Greenwich, NY 12834 508-668-0295 Fax: 508-668-3557 Federal Mogul Ignition Co. Trade $443,570 21497 Network Place Chicago, IL 60673 800-521-8605 Fax: 248-354-7700 Richardson Molding Trade $442,716 Incorporated 931 Herman Alford Memorial Highway Philadelhia, PA 39350 601-656-7921 Fax: 601-656-8044 Maysteel Corporation Trade $473,266 800 Harrison Street Mayville, WT 53050 920-387-5006 Fax: 920-387-3600 Powerlab Inc. Trade $433,913 PO Box 913 Terell, Texas 75160 927-563-1477 Fax: 972-563-8473 Worldwide Dedicated Trade $420,675 Services Attn: Katie Williamson Louisville, KY 40258 856-224-7208 Fax: 856-423-8951 AFCO Trade $400,778 PO Box 360572 Pittsburgh, PA 15250 800-228-6901 Fax: 913-491-6638 ----------------------------------------------------------------- [00006] DEBTORS' MOTION TO PAY CRITICAL VENDOR CLAIMS ----------------------------------------------------------------- Exide purchases goods and services from a variety of unaffiliated Essential Trade Creditors, including: * lead suppliers -- lead is an integral part of battery manufacturing and the number of U.S. suppliers is small; * parts suppliers -- including chemicals, separators, copper, plastic, expanders and resin; * suppliers of parts used on products purchased by the United States Government where a change in part or supplier required government certification; * suppliers of manufacturing tools -- especially pasting belt and bushings; * uniform suppliers and handlers -- special protective uniforms are required for compliance with Occupational Safety and Health Administration regulations and uniform cleaning services must be qualified to handle lead and waste water disposal; * wholesale vendors from which Exide buys finished batteries and chargers to round-out its product line; * packaging companies who supply special materials necessary for shipping batteries; and * third-party sales agents, many of which also provide warranty and repair services. The Debtors describe three hallmarks of Essential Trade Creditors: * sole source suppliers without whom the Debtors could not operate; * irreplaceable within a reasonable time on terms as beneficial as those already in place; * if the relationship terminated, Exide's revenues or profits would suffer. "If the Debtors lose their business relationships with these Essential Trade Creditors," Matthew N. Kleiman, Esq., at Kirkland & Ellis tells Judge Akard, "their ability to generate future revenue will suffer. The Debtors argue that if they can benefit from maintaining lower costs of goods purchased postpetition, it is prudent to pay an Essential Trade Creditor some or all of its prepetition claim. The Debtors ask Judge Akard for broad discretion to decide which creditors are Essential and which ones aren't, when to make these payments, and how much to pay, subject to two conditions: * a $30,000,000 cap on all Essential Creditor Payments; and * The Debtors will not pay any Essential Trade Creditor's prepetition claim unless the recipient agrees to "continue to sell their goods at the same reduced prices and on at least as favorable terms on a going forward basis as were in effect" prior to the Petition Date -- and agrees to that in writing. The Debtors indicate that the $30,000,000 amount represents approximately 20% of $150,000,000 owed to holders of prepetition trade claims. The Debtors have no intention of divulging the identities of the Essential Trade Creditors at this time (or perhaps ever), because, Mr. Kleiman says, that "would likely cause such vendors to demand payment in full." ----------------------------------------------------------------- [00007] DEBTORS' MOTION TO IMPLEMENT CONTRACT REJECTION PROTOCOL ----------------------------------------------------------------- The Debtors tell Judge Akard that they are in the process of consolidating their operations and this will require them to exit non-core and unprofitable locations in order to minimize costs and strengthen their business. The Debtors anticipate that, in a very short time, they will bring motions before the Bankruptcy Court asking for permission to walk-away from hundreds of real property leases, personal property leases, and executory contracts. To streamline and manage the rejection process, and avoid costly delays, the Debtors ask the Court to pre-approve uniform lease and contract abandonment and rejection procedures. As soon as the Debtors make a decision to repudiate an agreement, they propose: (1) they will file a notice of their intention to reject a particular executory contract, lease, sublease, or lease-related interest, pursuant to 11 U.S.C. Sec. 365, with the Court and simultaneously FedEx a copy of that notice to the affected counterparties, counsel to any official committees, the Lenders, and the U.S. Trustee; (2) the notice will include information relevant to the agreement about the address of any affected property, the Debtors' monetary obligations, the remaining term, names and addresses of affected counterparties, a general description of the agreement, and objection procedures; (3) objections, if any, must be served on the Debtors and other core parties-in-interest within 10 days; (4) counterparties may not use deposits as setoff without prior Court approval; (5) if no objections are filed within 10 days, the Agreement is deemed rejected without further court action, as of the date the Rejection Notice was filed and served; (6) if an objection is timely filed, the Court will convene a hearing, and if the objection is overruled or withdrawn, the rejection is effective as of the date the Rejection Notice was filed and served; and (7) the Debtors will remove any of their property from any rejected leased facility . . . and if they don't remove it by the Objection Deadline, it is deemed abandoned under 11 U.S.C. Sec 544. Kirk A. Kennedy, Esq., at Kirkland & Ellis, explains that these procedures are designed to provide a fair and efficient way for the Debtors to minimize unnecessary administrative obligations and legal expenses while simultaneously providing affected parties with adequate notice and an opportunity to object within a definitive time period. *** End of Issue No. 1 *** ------------------------------------------------------------------------- Peter A. Chapman peter@bankrupt.com http://bankrupt.com ------------------------------------------------------------------------- Recommended Reading: Professor Stuart Gilson's newest title, "Creating Value Through Corporate Restructuring: Case Studies in Bankruptcies, Buyouts, and Breakups." List Price: $79.95 -- Discounted to $55.96 at http://amazon.com/exec/obidos/ASIN/0471405590/internetbankrupt -------------------------------------------------------------------------