================================================================= FLAG TELECOM BANKRUPTCY NEWS Issue Number 1 ----------------------------------------------------------------- Copyright 2002 (ISSN XXXX-XXXX) April 12, 2002 ----------------------------------------------------------------- Bankruptcy Creditors' Service, Inc. 609-392-0900 FAX 609-392-0040 ----------------------------------------------------------------- FLAG TELECOM 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 Beverly Lomosad, R. Vince Brandt and Peter A. Chapman, Editors. Subscription rate is US$45 per issue. Any re-mailing of FLAG TELECOM BANKRUPTCY NEWS is prohibited. ================================================================= IN THIS ISSUE ------------- [00000] HOW TO SUBSCRIBE TO FLAG TELECOM BANKRUPTCY NEWS [00001] BACKGROUND & DESCRIPTION OF FLAG TELECOM HOLDINGS LIMITED [00002] CONSOLIDATED BALANCE SHEET AT DECEMBER 31, 2001 [00003] COMPANY'S PRESS RELEASES ANNOUNCING CHAPTER 11 FILING [00004] FLAG TELECOM CHAPTER 11 DATABASE [00005] LISTS OF THE DEBTORS' LARGEST UNSECURED CREDITORS KEY DATE CALENDAR ----------------- 04/12/02 Voluntary Petition Date 04/27/02 Deadline for filing Schedules of Assets and Liabilities 04/27/02 Deadline for filing Statement of Financial Affairs 04/27/02 Deadline for filing Lists of Leases and Contracts 05/02/02 Deadline to provide Utilities with adequate assurance 06/11/02 Deadline to make decisions about lease dispositions 07/11/02 Deadline to remove actions pursuant to F.R.B.P. 9027 08/10/02 Expiration of Debtor's Exclusive Plan Proposal Period 10/09/02 Expiration of Debtor's Exclusive Solicitation Period 04/11/04 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 FLAG TELECOM BANKRUPTCY NEWS ----------------------------------------------------------------- FLAG TELECOM 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 Debtors' 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 FLAG TELECOM 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. To continue receiving FLAG TELECOM BANKRUPTCY NEWS, please complete the form below and return it by fax or e-mail to: Bankruptcy Creditors' Service, Inc. 24 Perdicaris Place Trenton, NJ 08618 Telephone (609) 392-0900 Fax (609) 392-0040 E-mail: peter@bankrupt.com We have published similar newsletters tracking billion-dollar insolvency proceedings since 1990, starting with Federated Department Stores. 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Name: ---------------------------------------------- Firm: ---------------------------------------------- Address: ---------------------------------------------- ---------------------------------------------- Phone: ---------------------------------------------- Fax: ---------------------------------------------- E-Mail: ---------------------------------------------- (Distribution to multiple professionals at the same firm is provided at no additional cost.) FLAG TELECOM 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 FLAG TELECOM 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 FLAG TELECOM HOLDINGS LIMITED ----------------------------------------------------------------- FLAG Telecom Holdings Limited 41 Cedar Ave. Hamilton HM 12, Bermuda Telephone (441) 296-0909 http://www.flagtelecom.com FLAG Telecom (Nasdaq: FTHL; LSE: FTL) operates a global telecommunications network comprised of advanced fiber-optic global cable systems and interfaces that are owned, leased or otherwise available to FLAG. Over the FLAG Telecom global network, FLAG offers a panoply of telecommunications services, including IP transit, IP point-to-point, leased capacity services, managed bandwidth services, and collocation services. FLAG views itself as "a global carrier's carrier" -- in other words, its target customer base is the international wholesale broadband market consisting of established carriers or major incumbents, rather than individual telecommunications consumers. FLAG Telecom's owned undersea cable is divided into three distinct projects: (A) the FLAG Europe-Asia Network -- placed into commercial service in November, 1997, and stretches from the United Kingdom to Japan with landing sites in 13 countries; (B) the FLAG Atlantic-1 Network -- the world's first multi- terabit transoceanic dual cable system providing service between London, Paris and New York, and placed into commercial service in the third quarter of 2001; and (C) and the FLAG North Asian Loop Network -- designed to support the strong growth in inter-Asia Internet traffic and, when complete, to provide inter-regional, city-to- city connectivity between Hong Kong, Seoul, Tokyo and Taipei. Currently, only the eastern portion of FNAL, from Hong Kong to Japan, is complete and in operation. The remaining portion of the loop is substantially complete, and FLAG Telecom hopes to complete it and begin operations during 2002. In addition to its owned undersea cable projects, FLAG Telecom offers over-land transit services to its customers in the form of metro rings in New York, London and Paris and a terrestrial network in Europe. To complete its global network, FLAG Telecom has acquired rights to terrestrial backbone capacity between New York and San Francisco and trans-Pacific undersea capacity, and provides services to inland locations using backhaul rights acquired from other carriers. In addition to the raw transport of data, FLAG Telecom offers its customers value-added telecommunications services such as collocation, managed bandwidth and point-to-point IP services. FLAG Telecom's services are offered, in varying scope and combinations, in approximately 32 points of presence or virtual points of presence located in approximately 17 countries and spanning four continents. FLAG Telecom employs more than 400 people in more than 23 offices world-wide. FLAG's Troubles & Woes Kees van Ophem, FLAG's Secretary and General Counsel since October 2001, relates how the Company finds itself at the steps of the Bankruptcy Court: FLAG's troubles stem from a dramatic change in the economic climate generally, and an even more dramatic shift in the environment for telecommunications companies. This shift has imposed severe financial challenges on the telecommunications industry in general and, in particular, FLAG's competitors, customers and potential customers, and, due to dramatically lower capital expenditure budgets, FLAG itself. Overcapacity for bandwidth in some regions and lower than anticipated demand have led to dramatic declines in bandwidth prices, the unavailability of new capital, and chapter 11 filings by companies in virtually every sector of the telecommunications industry. The Turnaround Plan In light of the current economic climate, FLAG Telecom has focused its business strategy on preserving capital and reducing costs by: * serving the core backbone needs of large telecom and Internet companies, * focusing on regions where FLAG has a competitive advantage, and * increasing the revenue generating capacity of the FLAG Telecom global network by expanding the number and scope of bundled services available to its customers. With this business plan in hand, the Debtors began negotiations with their principal creditors to restructure their bank, bond and trade debt. The Chapter 11 Scenario In connection with these negotiations, Mr. van Ophem relates, the Debtors concluded that the commencement of these chapter 11 cases was in the best interests of all stakeholders because it would be difficult, outside of reorganization proceedings for the Debtors, to effect the contemplated restructuring. The Debtors continue to believe that FLAG Telecom's core businesses, taken as a whole, are viable, and believe that continued operation of activated networks, completion and lighting of additional near term revenue producing segments, and continued development of FLAG Telecom's servicing abilities are each capable of producing significant future revenue streams. Meanwhile, the Debtors believe that the current unsettled telecommunications market is not a favorable environment for liquidation. Consequently, the Debtors believe that reorganization of their core businesses will generate substantially more value than other business options. Why FLAG Filed Now On April 11, 2002, the Company was informed that the Bank Group was accelerating the debt owed under the Credit Agreement dated as of October 8, 1999 (as amended by the First Amendment to Credit Agreement and Equity Contribution Agreements dated as of December 14, 1999; the Second Amendment to Credit Agreement dated as of November 16, 2000; and the Third Amendment to the Credit Agreement and Forbearance Agreement, dated as of March 25, 2002) among Flag Atlantic Limited, the banks and other financial institutions party thereto -- the Lending Consortium is comprised of: * Barclays Bank plc * Dresdner Bank AG, New York and Grand Cayman Branches * Westdeutsche Landesbank * Girozentrale, New York Branch * Australia and New Zealand Banking Group Ltd. * Bank of Scotland * City National Bank * Credit Lyonnais * DG Bank * Erste Bank Der Oesterriechischen Sparkassen AG * Gulf International Bank B.S.C. * Bayerische Hypo-Und Vereinsbank, AG, New York Branch * IKB Deutsche Industriebank AG, Luxembourg Branch * Kbc Finance Ireland * Landesbank Hessan-Thuringen Girozentrale * Landesbank Sachen Girozentrale * Mitsubishi Trust & Banking Corp. * NIB Capital Bank * Rabobank International * Raiffeisen Zentralbank Osterreich Aktiengesellschaft * Societe Generale * Sumitomo Bank Limited * The Royal Bank of Scotland plc as of March 25, 2002 -- Barclays Bank Plc, as the administrative agent for the Lenders, Dresdner Bank AG, New York Branch, as the documentation agent, Westdeutsche Landesbank Girozentrale, New York Branch, as the syndication agent, and Barclays Capital, as the lead arranger was accelerated. Mr. van Ophem explains that the acceleration arguably caused cross-defaults of the Debtors' institutional bond debt. Although FTHL is not a borrower or a guarantor under the FLAG Atlantic Limited facility, Barclays Bank plc froze FTHL's funds on deposit at Barclays. Further, FTHL held significant funds at a financial institution that was a lender under the FLAG Atlantic Limited facility. In response to the acceleration and fear that other financial institutions party to the FLAG Atlantic Limited bank facility would similarly freeze funds, FTHL moved approximately $210,000,000 out of such accounts. The funds were ultimately moved to FLAG Pacific Holdings Limited -- a non-Debtor and non- filing entity. ----------------------------------------------------------------- [00002] CONSOLIDATED BALANCE SHEET AT DECEMBER 31, 2001 ----------------------------------------------------------------- FLAG TELECOM HOLDINGS LIMITED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2001 ASSETS: Current assets: Cash and cash equivalents.................. $ 424,174,000 Accounts receivable, net of allowance for doubtful accounts of $4,099,000...... 154,000,000 Prepaid expenses and other assets.......... 66,205,000 Interest rate collars...................... 57,000 -------------- 644,436,000 Restricted cash.............................. 321,195,000 Capitalized financing costs, net of accumulated amortization of $8,543,000..... 27,872,000 Deferred tax asset........................... 2,940,000 Construction in progress..................... 315,718,000 Other long term assets, net.................. 157,427,000 Property and equipment, net.................. 2,007,078,000 -------------- $3,476,666,000 ============== LIABILITIES: Current liabilities: Accrued construction costs................. $ 67,084,000 Accounts payable........................... 112,183,000 Accrued liabilities........................ 109,684,000 Deferred revenue and other................. 173,000,000 Cross currency swaps....................... 7,226,000 Income taxes payable....................... 13,686,000 Short-term debt............................ 556,078,000 -------------- 1,038,941,000 Long-term debt............................... 767,953,000 Deferred revenue and other................... 1,236,951,000 Deferred taxes............................... 2,901,000 -------------- 3,046,746,000 SHAREHOLDERS' EQUITY: Common stock, $.0006 par value, 300,000,000 shares authorized and 134,139,046 issued and outstanding.... 80,000 Additional paid-in capital................... 1,112,668,000 Deferred stock compensation.................. (51,000) Accumulated other comprehensive income....... 5,165,000 Accumulated deficit.......................... (687,942,000) -------------- 429,920,000 ============== $3,476,666,000 ============== At March 31, 2002, the Company reports $3,335,017,000 in total assets and $2,598,040,000 in total debts. The Company says that these figures are "based on the unaudited internal records of the Company as of April 12, 2002 and may include consolidated assets and liabilities by project company." ----------------------------------------------------------------- [00003] COMPANY'S PRESS RELEASES ANNOUNCING CHAPTER 11 FILING ----------------------------------------------------------------- FLAG Telecom Files for Voluntary Petition for Bankruptcy Under Chapter 11 HAMILTON, Bermuda -- April 12, 2002 -- FLAG Telecom (Nasdaq: FTHL; LSE: FTL) announced today that it has filed a voluntary petition (the "Petition") under Chapter 11 of the United States Bankruptcy Code with the United States Bankruptcy Court for the Southern District of New York. Certain subsidiaries of the company have also filed voluntary petitions under Chapter 11. This action was taken after the Board of Directors authorized the filing of the Petition by unanimous vote. The Board's action was taken following the acceleration of the bank debt of FLAG Atlantic Ltd by the syndicate of banks which are its lenders, which constituted a cross-default under the company's indenture for its outstanding senior notes. As announced yesterday, the Board of Directors has authorized FLAG Telecom's management and advisors to negotiate with certain creditors, including representatives of the FLAG Telecom Atlantic Bank Group, holders of its various Senior Notes, and significant trade creditors, regarding a comprehensive financial restructuring. FLAG Telecom will attempt to reach agreement with these representatives regarding the material terms of a financial restructuring in the coming weeks. If and when such an agreement is reached, a plan of reorganization will be filed with the court, and, when approved, will allow the company to emerge from Chapter 11 with a deleveraged balance sheet and a strong operational base. FLAG intends to manage its business in a focused manner, conserving capital and reducing costs where appropriate. It will continue to provide core backbone capacity to traditional carriers, Internet Service Providers and other content providers. * * * FLAG Telecom Board Authorizes Restructuring Proposal HAMILTON, Bermuda -- April 10, 2002 -- The Board of Directors of FLAG Telecom Holdings Limited ("FLAG") (Nasdaq: FTHL; LSE: FTL) approved a proposal (the "Proposal") to restructure the obligations of FLAG and its subsidiaries. The Board of Directors has authorized FLAG's management and advisors to negotiate with certain creditors, including representatives of the FLAG Atlantic Bank Group, holders of its various Senior Notes, and significant trade creditors, regarding a comprehensive financial restructuring. FLAG will attempt to reach agreement with these representatives regarding the material terms of a financial restructuring in the coming weeks. Under the Proposal, FLAG would exchange: (a) The FLAG Atlantic Bank debt of approximately US$257 million for approximately US$70 million in cash and new common equity of FLAG; (b) US$430 million of FLAG Limited 8-1/4% Senior Notes due in 2008 for approximately US$170 million of New Senior Notes of FLAG; and (c) $US300 million and Euro 300 million of FLAG 11-5/8% Senior Notes due in 2010 for approximately US$150 million in cash, approximately US$40 million of New Senior Notes of FLAG and new common equity of FLAG. Under the Proposal, all trade creditors and equipment suppliers would be paid in full in the ordinary course of business or through vendor financing. The Proposal anticipates that, as is common in restructurings of this type, existing common equity holders will be substantially diluted. FLAG intends to manage its business in a focused manner, conserving capital and reducing costs where appropriate. It will continue to provide core backbone capacity to traditional carriers, Internet Service Providers and other content providers. There can be no assurance that FLAG will be able successfully to restructure its obligations, or that any successful restructuring would be accomplished under terms set forth in the Proposal. In particular, at this point none of FLAG's creditors mentioned above have agreed to the Proposal. * * * FLAG Telecom Retains CSFB and the Blackstone Group to Advise On Strategic and Financial Initiatives HAMILTON, Bermuda -- March 7, 2002 -- FLAG Telecom (Nasdaq: FTHL; LSE: FTL), a leading global network services provider and independent carriers' carrier, announced today that it has retained both Credit Suisse First Boston (CSFB), a leading global investment bank, and The Blackstone Group, a leading global investment and advisory firm, as strategic and financial advisors. Both firms will advise FLAG Telecom on financial and strategic alternatives for the long-term development of the company. Andres Bande, FLAG Telecom's Chairman and CEO said, "FLAG Telecom is bringing in these advisors to assist us in the review of our business and the evaluation of the most beneficial path for FLAG Telecom's future, including possible restructuring of our indebtedness, identifying funding opportunities and working with potential strategic partners. We believe the time is right for CSFB and Blackstone to work with us to facilitate the consideration of all alternatives for the future that best suit FLAG Telecom and it's stakeholders." About FLAG Telecom FLAG Telecom is a leading global network services provider and independent carriers' carrier providing an innovative range of products and services to the international carrier community, ASPs and ISPs across an international network platform designed to support the next generation of IP over optical data networks. FLAG Telecom has the following cable systems in operation or under development: FLAG Europe-Asia, FLAG Atlantic-1 and FLAG North Asian Loop. Leveraging this unique network, FLAG Telecom's Network Services business markets a range of managed bandwidth and value added services targeted at carriers, ISPs, and ASPs worldwide. Principal shareholders are: Verizon Communications Inc., Dallah Albaraka Group (Saudi Arabia) and Tyco International Ltd. Recent news releases and information are on FLAG Telecom's website at http://www.flagtelecom.com ----------------------------------------------------------------- [00004] FLAG TELECOM CHAPTER 11 DATABASE ----------------------------------------------------------------- Debtor entities filing separate chapter 11 petitions: Case No. Debtor Entity -------- ------------- 02-11732 FLAG Telecom Holdings Limited 02-11733 FLAG Atlantic Limited 02-11734 FLAG Atlantic Holdings Limited 02-11735 FLAG Limited 02-11736 FLAG Pacific USA Limited Petition Date: April 12, 2002 U.S. Bankruptcy Court: United States Bankruptcy Court Southern District of New York Alexander Hamilton Custom House One Bowling Green, 5th Floor New York, New York 10004-1408 Telephone (212) 668-2870 Bankruptcy Judge: The Honorable Allan L. Gropper Debtors' U.S. Bankruptcy Counsel: Conor D. Reilly, Esq. Janet M. Weiss, Esq. M. Natasha Labovitz, Esq. Craig A. Bruens, Esq. Paul H. Guillotte, Esq. Sarah K. Larcombe, Esq. Joseph Furst, Esq. GIBSON, DUNN & CRUTCHER LLP 200 Park Avenue New York, NY 10166 Telephone (212) 351-4000 Fax (212) 351-4035 Debtors' Bermudian Insolvency Counsel: APPLEBY, SPURLING & KEMPE Cedar House 41 Cedar Avenue P.O. Box HM 1179 Hamilton HM EX, Bermuda Telephone (441) 295-2244 Members of the Prepetition FTHL 11-5/8% Noteholders' Committee: Varde Partners, Inc. Elliot Associates Cerberus Capital Partners Salomon Smith Barney York Capital Redwood Capital Management, LLC Counsel to the Prepetition FTHL 11-5/8% Noteholders' Committee: Kasowitz, Benson, Torres & Friedman Members of the Prepetition FLAG Limited 8-1/4% Noteholders' Committee: Goldman Sachs Pacific Life Eaton Vance Greenwich Capital Hartford Financial Services Group, Inc. Offitbank Pimco PPM America, Inc. Putnam Investments Saloman Brothers Trust Company of the West Wellington Management Counsel to the Prepetition FLAG Limited 8-1/4% Noteholders' Committee: Akin, Gump & Strauss, Hauer & Feld L.L.P. Financial Advisor to the Prepetition FLAG Limited 8-1/4% Noteholders' Committee: Chanin Capital Partners U.S. Trustee: Carolyn S. Schwartz United States Trustee for Region 2 33 Whitehall Street, Suite 2100 New York, NY 10004 Telephone (212) 510-0500 ----------------------------------------------------------------- [00005] LISTS OF THE DEBTORS' LARGEST UNSECURED CREDITORS ----------------------------------------------------------------- FLAG Telecom Holdings Limited Bankruptcy Case No. 02-11732 ------------------------------ A. Bondholders Creditor Nature of Claim Claim Amount -------- --------------- ------------ The Bank of New York Indenture Trustee $564,000,000 101 Barclay Street for 11.625% Floor 21 West Senior Dollar and New York, NY 10286 Senior Euro Notes Attn: Corporate Trust due 2010 Administration - Global Finance Unit York Capital Management 11-5/8% Senior $48,132,000 350 Park Avenue, 4th Floor Notes due New York, NY 10022 March 2010 Cybill Yee Tel: 212-651-0500 Fax: 212-651-0501 Colonial Management 11-5/8% Senior $40,000,000 Associates, Inc. Notes due Equity Department March 2010 1 Financial Center, 13th Floor Boston, MA Carl Ericson Tel: 617-426-3750 Fax: 617-772-3995 Varde Investment Partners LP 11-5/8% Senior $18,600,000 3600 West 80th Street, Suite 425 Notes due Minneapolis, MN 55419 March 2010 Tel: 952-893-1554 Fax: 952-893-9613 Smith Barney 11-5/8% Senior $7,540,000 Smith Barney Mutual Funds Notes due 333 West 34th Street, 3rd Floor March 2010 John Bianchi Tel: 800-451-2010 Brinson Advisors, Inc. 11-5/8% Senior $5,500,000 Mitchell Hutchins Funds Notes due 1285 Avenue of the Americas March 2010 New York, NY 10019 Marianne Rossi Tel: 212-713-2000 Aragon Investments, Ltd 11-5/8% Senior $4,005,000 Chicago, IL 60606-3405 Sutter Real Estate 11-5/8% Senior $4,000,000 San Francisco, CA 94111 Notes due March 2010 Bank of Montreal 11-5/8% Senior $3,250,000 100 Kings Street West, 3rd Floor Notes due First Canadian Place March 2010 Toronto Ontario M5X 1H3 Lemuel Seabrook Redwood Capital Mgmt 11-5/8% Senior $3,000,000 Englewood Cliffs, NJ 07632 Notes due March 2010 Wells Fargo Capital Markets 11-5/8% Senior $3,000,000 550 California St, FL 14 Notes due San Francisco, CA 94104 March 2010 Louise Chen Atlantic Asset Management 11-5/8% Senior $2,500,000 New York, NY 10006 Notes due 1111-5/8% Senior March 2010 HSBC Bank Plc Global 11-5/8% Senior $2,250,000 Investment Services Notes due England March 2010 Satellite Credit 11-5/8% Senior $2,000,000 Opportunities Fund, Ltd Notes due Boston, MA 02110-1727 March 2010 Trust Company of the West (TCW) 11-5/8% Senior $2,000,000 865 S Figueroa Notes due Los Angeles, CA 90071 March 2010 Enterprise Capital Management 11-5/8% Senior $1,450,000 Atlanta, GA 30326 Notes due March 2010 First Allmerica Financial 11-5/8% Senior $1,250,000 Life Insurance Notes due New York, NY 10066 March 2010 American Express Financial Corp. 11-5/8% Senior $1,000,000 55440-0534 Notes due March 2010 Deutsche Banc Securities 11-5/8% Senior $745,000 Notes due March 2010 USB Warburg LLC 11-5/8% Senior $300,000 677 Washington Blvd 9N Notes due Stanford, CT 06901 March 2010 Carlos Lede Tel: 203-719-7644 Fax: 203-719-0795 Afliac Market Value Fund 11-5/8% Senior $250,000 New York, NY 10006 Notes due 1111-5/8% Senior March 2010 B. Trade Creditors Latham & Watkins Professional $48,642 99 Bishopsgate, LONDON Services professional services Arthur Andersen-UK Trade Debt $22,171 P O Box 125, Nottingham NG1 2AH, UK American Stock Transfer & Trust Trade Debt $4,000 40 Wall Street New York, NY 10005 Tel: 212 936 5100 Appleby, Spurling & Kempe Professional $3,001 Cedar House Services 41 Cedar Avenue Hamilton, HM12 Bermuda Tel: 00 1 441 295 2244 Financial Times Trade Debt $2,774 1 Southwark Bridge London SE1 9HL Tel: 020 7873 3000 FLAG Atlantic Limited Bankruptcy Case No. 02-11733 ---------------------------- Creditor Nature of Claim Claim Amount -------- --------------- ------------ Tycom Trade Debt $1,737,288 Building A 60 Columbia Turnpike Morristown, NJ 07960 Dresdner Bank Bank Debt $247,402 75 Wall Street New York NY 10005-2889 Skadden, Arps, Slate, Professional $6,473 Meagher & Flom Services 919 Third Avenue New York, NY 10022-3897 Hobbs Group L.L.C. Trade Debt $6,000 P.O. Box 13535 Accounts Receivable Dept Newark, NJ 07188-0535 Tel: 203-351-5600 Appleby, Spurling & Kempe Professional $5,710 Cedar House Services 41 Cedar Avenue Hamilton, HM12 Bermuda Tel: 00 1 441 295 2244 Simmons & Simmons Professional $283 21 Wilson Street Services London EC2M 2TX UK Barclays Bank plc Bank Debt Unliquidated 222 Broadway New York NY FLAG Atlantic Holdings Limited Bankruptcy Case No. 02-11734 ------------------------------ Creditor Nature of Claim Claim Amount -------- --------------- ------------ Slaughter & May Professional $789 35 Basinghall Street London EC2V 5DB UK Tel: 020 7600 1200 FLAG Limited Bankruptcy Case No. 02-11735 ---------------------------- A. Bondholders Creditor Nature of Claim Claim Amount -------- --------------- ------------ IBJ Schroder Bank & Trust Company Indenture Trustee $430,000,000 One State Street for 8-1/4% New York, NY 10004 Senior Notes Attn: Corporate Trust due 2008 Administration Vanguard Group 8-1/4% Senior $56,630,000 Fixed Income Notes due 100 Vanguard Blvd January 2008 Karen Hogan Tel: 610-669-1000 Fax: 610-407-2807 Jackson National Life 8-1/4% Senior $41,200,000 Jackson Natl Life Ins Co of NY Notes due 1 Corporate Way January 2008 Robert Fritts Tel: 517-381-5500 PPM America, Inc. 8-1/4% Senior $32,800,000 Equity Investments Notes due 225 West Wacker Drive-1200 January 2008 Marvin Lutz Tel: 312-634-2553 Fax: 312-634-0055 JoAnne Bianco Tel: 312-634-2500 Fax:312-634-0906 Pimco Advisors 8-1/4% Senior $17,991,000 PIMCO Funds Notes due P.O. Box 6430 January 2008 840 Newport Center Drive Benjamin Trotsly Tel: 800-426-0107 New York Life Insurance Equity 8-1/4% Senior $16,400,000 51 Madison Avenue-203 Notes due Karen Beyer January 2008 Tel: 212-576-6194 Fax: 212-448-1711 Putnam Advisory Global 8-1/4% Senior $15,695,000 Fundamental Research Notes due 1 Post Office Square January 2008 John Boselli Tel: 617-760-8461 Fax: 617-760-1375 UBS Warburg LLC 8-1/4% Senior $15,000,000 100 Liverpool Street Notes due John Campbell January 2008 Tel: 0207 567 2939 Fax: 0207 567 2064 Appaloosa Investment L.P. 8-1/4% Senior $12,405,000 Notes due January 2008 Lincoln National Life 8-1/4% Senior $12,000,000 915 South Clinton Street Notes due Mail Stop 8A-02 January 2008 Jon Boscia Tel: 219-455-2000 Fax: 219-455-1729 Palomino Fund Ltd 8-1/4% Senior $10,870,000 Notes due January 2008 Eaton Vance Management Inc 8-1/4% Senior $10,650,000 Equity Research & Investments 255 State Street Michael Weilheimer Tel: 617-482-8260 Fax: 617-542-7410 American Home Assurance 8-1/4% Senior $10,000,000 AIG Tower 1-2-4 Notes due Kinshi-Cho January 2008 Yasuo Goto Tel: 3-5619-3084 Fax: 3-5619-3153 Unumprovident Corporation 8-1/4% Senior $10,000,000 Notes due January 2008 Perry Capital 8-1/4% Senior $9,949,000 599 Lexington Avenue, 36th Floor Notes due New York, NY January 2008 Nat Klipper Tel: 212-583-4000 Fax: 212-583-4099 Trust Company of the West (TCW) 8-1/4% Senior $9,000,000 400 South Hope Street, 3rd Floor Notes due Richard Pool January 2008 Tel: 212-553-9865 Fax: 212-553-9880 Offit 8-1/4% Senior $8,000,000 520 Madison Avenue, 27th Floor Notes due New York, NY January 2008 William Charlton Tel: 212-350-3776 Fax: 212-371-7687 Provident Life 8-1/4% Senior $8,000,000 1 Fountain Square Notes due Vicki Corbett January 2008 Tel: 423-755-1373 Deutsche Banc Securities 8-1/4% Senior $6,705,000 Notes due January 2008 Marathon Asset Management LLC 8-1/4% Senior $6,200,000 230 Park Avenue, 7th Floor Notes due Andrew Rabinowitz January 2008 Tel: 212-499-1350 Fax: 212-499-1385 AIG Life 8-1/4% Senior $6,000,000 AIG Life Insurance Co. Notes due Post Office Box 667 January 2008 John Oehmke Tel: 302-594-2000 A. Trade Creditors Freshfields Bruckhaus Deringer Professional $82,070 65 Fleet Street Services London EC4Y 1HS UK Tel: 0207 936 4000 Arthur Andersen & Co. (Bda) Professional $61,130 Victoria Hall Services Accounts Receivable Dept 11 Victoria Street Hamilton HM 11 Bermuda Arthur Andersen (Malaysia) Professional $57,996 P.O. Box 11040 Services Accounts Receivable Dept Kuala Lumpur 50734 MALAYSIA Tel: 03-255-7000 Agilent Technologies UK Ltd Trade Debt $43,547 Eskdale Road Winnersh Triangle Wokingham Berkshire RG41 5DZ UK Tel: 020 7868 9208 Hobbs Group Trade Debt $12,587 P.O. Box 13535 Accounts Receivable Dept Newark, NJ 07188-0535 Tel: 203-351-5600 FLAG Pacific USA Limited Bankruptcy Case No. 02-11736 ---------------------------- No known non-affiliated creditors. *** 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 -------------------------------------------------------------------------