================================================================= IT GROUP BANKRUPTCY NEWS Issue Number 1 ----------------------------------------------------------------- Copyright 2002 (ISSN XXXX-XXXX) January 17, 2002 ----------------------------------------------------------------- Bankruptcy Creditors' Service, Inc. 609-392-0900 FAX 609-392-0040 ----------------------------------------------------------------- IT GROUP 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 Debtor's case. Each issue is prepared by Peter A. Chapman, Editor. Subscription rate is US$45 per issue. Any re-mailing of IT GROUP BANKRUPTCY NEWS is prohibited. ================================================================= IN THIS ISSUE ------------- [00000] HOW TO SUBSCRIBE TO IT GROUP BANKRUPTCY NEWS [00001] BACKGROUND & DESCRIPTION OF THE IT GROUP [00002] THE IT GROUP'S SEPT. 28, 2001 CONSOLIDATED BALANCE SHEET [00003] COMPANY'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING [00004] IT GROUP DEBTORS' CHAPTER 11 DATABASE [00005] LIST OF THE DEBTORS' 50-LARGEST UNSECURED CLAIM HOLDERS [00006] SHAW GROUP SIGNS LETTER OF INTENT TO BUY DEBTORS' ASSETS [00007] DEBTORS' CASH FLOW FORECAST THROUGH FEBRUARY 8, 2002 KEY DATE CALENDAR ----------------- 01/16/02 Voluntary Petition Date 02/05/02 Deadline to provide Utilities with adequate assurance 02/15/02 Deadline for filing Schedules of Assets and Liabilities 02/15/02 Deadline for filing Statement of Financial Affairs 02/15/02 Deadline for filing Lists of Leases and Contracts 03/17/02 Deadline to make decisions about lease dispositions 04/16/02 Deadline to remove actions pursuant to F.R.B.P. 9027 05/16/02 Expiration of Debtor's Exclusive Plan Proposal Period 07/15/02 Expiration of Debtor's Exclusive Solicitation Period 01/15/04 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 IT GROUP BANKRUPTCY NEWS ----------------------------------------------------------------- IT GROUP 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 case. 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 IT GROUP 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 IT GROUP 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. Currently, we provide similar coverage about the restructuring proceedings involving Safety-Kleen, Laidlaw, Enron Corp., Pacific Gas and Electric Company, Reliance Group Holdings & Reliance Financial, NationsRent, ANC Rental, Burlington Industries, Polaroid Corporation, Hayes Lemmerz, Federal-Mogul, W.R. Grace & Co., Owens Corning, Armstrong World Industries, USG Corporation, Lodgian, The FINOVA Group, Inc., Comdisco, Fruit of the Loom, Pillowtex, Warnaco, Ames Department Stores, Service Merchandise, Bridge Information Services, Imperial Sugar, The Loewen Group International, Inc., Vlasic Foods, AMF Bowling, Bethlehem Steel, LTV, Wheeling-Pittsburgh, Metals USA, Harnischfeger Industries, Inc., Exodus Communications, Winstar, Covad Communications, 360networks, ICG Communications, PSINet, Lernout & Hauspie & Dictaphone, Vencor, Inc., Sun Healthcare Group, Inc., Mariner Post-Acute & Mariner Health, Genesis Health & Multicare, and Integrated Health Services. ================================================================= [ ] YES! Please enter my personal subscription to IT GROUP 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.) IT GROUP 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 case. 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 IT GROUP 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 THE IT GROUP ----------------------------------------------------------------- The IT Group, Inc. 2790 Mosside Boulevard Monroeville, Pennsylvania 15146-2792 Telephone (412) 372-7701 Fax (412) 373-7135 http://www.theitgroup.com The IT Group, Inc. (together with its 92 direct and indirect subsidiaries) is a leading provider of diversified, value-added services in the areas of consulting, engineering and construction, remediation, and facilities management. The Company conducts business in 48 states and 10 countries around the world. IT Group employs more than 6,400 workers. The Company's operations are organized in six divisions or business lines: (a) Government Services. The Government Services business line provides services to U.S. federal government agencies such as the Department of Defense, Department of Energy, Environmental Protection Agency and the National Aeronautics and Space Administration. Services are provided in three market areas: (1) Hazardous, Toxic and Radiological Waste, which focuses on the cleanup of environmental "legacy" sites in order to restore them to productive use; (2) Outsourced Services, which manages large, mission- essential military and aerospace facilities and offers design, build and renovation services; and (3) Civil Works, which executes major infrastructure projects focused largely on the restoration of our nation's watersheds, such as the Florida Everglades. (b) Commercial Services. The Commercial Services business line is a combination of the Debtors' Engineering and Construction business line, which provides turnkey engineering and construction services to private-sector clients and state and local government agencies and the Debtors' Consulting and Technology business line, which provides specialized consulting services in environmental health and safety compliance, risk and cost allocation determination, chemical management planning, product registration, due diligence support and strategic environmental planning. (c) Solid Waste. The solid waste business line provides turnkey services, which comprise complete life cycle management of solid waste, employing capabilities that range form site investigation through landfill design and construction to post-closure operations and maintenance or redevelopment. (d) Transportation and Telecommunication. The Company's W&H Pacific subsidiary is a consulting, engineering and design firm serving the infrastructure development needs of the transportation, land development, energy and telecommunications industries. (e) Real Estate Restoration. The Real Estate Restoration business line provides integrated solutions for environmentally impaired property assets using the Company's real estate, environmental, legal, financial and insurance expertise. The Company also acquires and redevelops environmentally impaired properties to achieve their highest values, while mitigating risks through the use of innovative risk management programs. (f) International. The International business line provides comprehensive environmental and infrastructure services to multinational and foreign-based clients, which include development, engineering-procurement-construction and operation capabilities. The Road to Bankruptcy Harry J. Soose, Senior Vice President, Chief Financial Officer and Principal Financial Officer of The IT Group, Inc., explains that starting in 1997, the Company embarked on an aggressive acquisition and diversification strategy pursuant to which the Company acquired eleven firms representing aggregate annual revenues of more than $1 billion. The Company undertook this strategy with the expectation that it would be able to take advantage of economies of scale with these new but related businesses and by integrating them into one shared services firm, reducing overhead, and simultaneously maximizing revenues. The Company expected that this growth strategy would create short-term negative cash flow following each acquisition, but also expected that once the acquired business was assimilated into the Company, the newly assimilated business line would become cash-flow positive. In order to fund the cash needs directly related to the acquisitions, IT Group issued the Subordinated Notes in 1999 and increased availability under the Prepetition Credit Agreement by $100 million in March of 2000. The assimilation of the acquired businesses did not result in significant economies of scale or a significant increase in revenues as expected. This, combined with declines in the construction business, and a recessionary economy, led many commercial clients to slow spending in non-core operating areas and caused the Company to begin experiencing negative revenue growth and liquidity problems in the second quarter of 2001. As a result, in the third quarter of 2001, the Company had fully drawn the cash available under the Prepetition Credit Agreement. The Company's financial situation was further complicated by the events of September 11, 2001, Mr. Soose says, which distracted the Company's largest client, the federal government, slowing project progress. Additionally, in early October, the Company announced sharply reduced earnings, which in turn raised concerns regarding the Company's financial health and slowed the Company's ability to book new work, further exacerbating the Company's cash flow problems. Thus, by the end of November and early December 2001, the Company was unable to timely pay all of its trade payables when due. As a consequence, many of the Company's vendors and subcontractors delayed and even stopped working on certain of the Company's projects. To address these problems, in the fourth quarter of 2001, the Company expanded efforts to reduce debt and raise working capital by selling parts of the Company. Despite these restructuring efforts, the Company continued to experience severe liquidity problems and in late December the Company embarked on an aggressive strategy under which it sought alternative financing, strategic mergers and a sale of substantially all of the Company. In that regard, the Company solicited traditional and nontraditional lenders regarding possible interim and long-term financing. Additionally, the Company entered into substantive discussions with possible strategic partners regarding potential transactions involving the sale of all or part of the Company's assets. The Shaw Transaction These efforts resulted in the Company negotiating a letter of intent with The Shaw Group, Inc. regarding a transaction pursuant to which Shaw would acquire substantially all of Debtors' assets in exchange for Shaw: (a) paying the Debtors $105 million in cash and stock (subject to certain adjustments); (b) assuming certain liabilities of the Debtors; and (c) providing, through its subsidiary Sugar Acquisition (NVDIP) Inc., a DIP loan to the Debtors of up to $75 million, the outstanding balance of which will be forgiven by Shaw if the sale to Shaw is consummated. IT Group and Shaw are presently negotiating the final terms of a definitive asset purchase agreement, which they hope to finalize by January 21, 2002. The Exit Strategy Accordingly, Mr. Soose relates, IT Group commenced its chapter 11 cases to expeditiously reorganize their operations through a Bankruptcy Code section 363 sale of substantially all of their assets to Shaw or an alternative bidder. Pursuant to the letter of intent and given, the Company's liquidity position, IT Group will seek Court approval of the sale with Shaw or an alternative bidder within the first 45 to 60 days of these cases. "The Debtors' ultimate goal is to reorganize through a sale of substantially all of their assets to Shaw or an alternative bidder. The transaction with Shaw minimizes the loss of value of their businesses [and] is necessary for the Debtors to successfully achieve their restructuring objections, maintain customer and trade creditor support and preserve their going value concern," Mr. Soose says. ----------------------------------------------------------------- [00002] THE IT GROUP'S SEPT. 28, 2001 CONSOLIDATED BALANCE SHEET ----------------------------------------------------------------- THE IT GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS at September 28, 2001 ASSETS Current assets: Cash and cash equivalents $12,588,000 Receivables, net 463,203,000 Prepaid expenses and other current assets 50,411,000 Deferred income taxes 38,071,000 -------------- Total current assets 564,273,000 Property, plant and equipment, at cost: Land, buildings and improvements 11,289,000 Machinery and equipment 114,085,000 -------------- 125,374,000 Less accumulated depreciation 61,074,000 -------------- Net property, plant and equipment 64,300,000 Cost in excess of net assets of acquired businesses 534,592,000 Other assets 82,143,000 Deferred income taxes 99,522,000 -------------- Total assets $1,344,830,000 ============== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $240,373,000 Accrued liabilities 95,890,000 Billings in excess of revenues 39,435,000 Short-term debt, including current portion of long-term debt 12,243,000 -------------- Total current liabilities 387,941,000 Long-term debt 686,558,000 Other long-term accrued liabilities 12,049,000 Stockholders' equity: Preferred stock, $100 par value; 180,000 shared authorized: 7% cumulative convertible exchangeable, 20,556 shares issued and outstanding, 24,000 shares authorized 2,056,000 6% cumulative convertible participating, 46,095 shares issued and outstanding 4,609,000 Common stock, $.01 par value; 50,000,000 shares authorized; 22,913,154 shares issued 229,000 Treasury stock at cost, 941,325 Shares (4,672,000) Additional paid-in capital 351,040,000 Unearned compensation, restricted stock (1,057,000) Deficit (86,136,000) Accumulated other comprehensive loss (7,787,000) -------------- Total stockholders' equity 258,282,000 -------------- Total liabilities and stockholders' equity $1,344,830,000 ============== ----------------------------------------------------------------- [00003] COMPANY'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING ----------------------------------------------------------------- PITTSBURGH, Pennsylvania -- January 16, 2002 -- The IT Group, Inc. ("the Company") announced today that it has signed a letter of intent with The Shaw Group Inc. (NYSE: SGR) ("Shaw") regarding a proposed transaction in which Shaw would acquire substantially all of The IT Group's assets in exchange for approximately $105 million and the assumption of certain liabilities. The Company estimates the transaction to have a value of approximately $160 million to $200 million. In addition, The IT Group announced that the Company and certain of its subsidiaries have filed voluntary petitions for relief under chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court in Wilmington, Delaware. In connection with these filings and the proposed transaction with Shaw, Shaw has agreed in principle to provide The IT Group with a debtor-in- possession (DIP) credit facility of up to $75 million, $25 million of which will be available to The IT Group upon initial bankruptcy court approval. The remaining $50 million will be available to the Company at Shaw's discretion upon final bankruptcy court approval. The chapter 11 filings and the agreement in principle to provide DIP financing from Shaw will allow The IT Group to provide for an orderly sale of the Company, which will be subject to higher or otherwise better bids in the bankruptcy court process, while enabling the Company to take steps to address its liquidity issues and stabilize operations. The Company's joint ventures and its Canadian subsidiary, Roche Limited Consulting Group, are not included in the chapter 11 reorganization cases, but are included in the proposed asset sale to Shaw and are continuing normal business operations. Dr. Francis J. Harvey, acting president and chief executive officer of The IT Group, said, "We are very pleased to have reached this agreement with The Shaw Group, particularly since it will provide an excellent opportunity for many of our employees to be part of a stronger, world-class company with a large engineering, consulting and construction group. Likewise, we expect that this transaction will ensure a continuation of outstanding service and support to our customers." "As a result of our comprehensive business review, which we commenced upon my appointment as acting president and CEO two months ago, we concluded that the sale of the Company was in the best interest of The IT Group and our stakeholders," Dr. Harvey continued. "We believe The Shaw Group meets the criteria we established for selecting the most appropriate buyer: expertise and experience in the environmental, infrastructure and engineering industries; a reputation for outstanding customer service; a culture that values people and the development of their employees; and the resources to profitably grow The IT Group's businesses." Dr. Harvey said, "We appreciate the continuing support of our customers, subcontractors and vendors, as well as the dedication of our employees. Today's court filings present new challenges for the Company and its stakeholders. However, we firmly believe that a court-supervised reorganization process represents the best means of resolving the Company's severe liquidity issues and stabilizing operations while we move aggressively to finalize the sale of the Company." The proposed transactions with Shaw are subject to, among other things, execution of definitive documentation, higher or otherwise better offers, court approval and receipt of other regulatory required approvals. It is currently contemplated that the transaction with Shaw will be completed before the end of the first quarter. The Shaw Group Inc. is the world's only vertically integrated provider of complete piping systems and comprehensive engineering, procurement and construction services to the power generation industry. Shaw is the largest supplier of fabricated piping systems in the United States and a leading supplier worldwide, having installed piping systems in power plants with an aggregate generation capacity in excess of 200,000 megawatts. While the majority of Shaw's backlog is attributable to the power generation industry, the company also does work in the process industries, including petrochemical, chemical and refining, and the environmental and infrastructure sector. The company currently has offices and operations in North America, South America, Europe, the Middle East and Asia-Pacific; and has more than 13,000 employees. For additional information on The Shaw Group, please visit the company's web site at http://www.shawgrp.com The IT Group addresses the infrastructure and environmental needs of both private and public sector clients as a leading provider of diversified services, including environmental, engineering, facilities management, water, construction, emergency response, remediation, liability transfer and information management. Additional information about The IT Group can be found on the Internet at http://www.theitgroup.com The IT Group's common stock and depositary shares have been suspended from trading by the New York Stock Exchange. Information about the status of the common stock will be posted on the Company's web site as events warrant. ----------------------------------------------------------------- [00004] IT GROUP DEBTORS' CHAPTER 11 DATABASE ----------------------------------------------------------------- Lead Debtor: The IT Group, Inc. 2790 Mosside Blvd. Monroeville, PA 15146-2792 Bankruptcy Case No.: 02-10118-MFW Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- 37-02 College Point Boulevard, LLC 02-10119-MFW Advanced Analytical Solutions, Inc. 02-10120-MFW E-Com Solutions, Inc. 02-10121-MFW Empire State I, LLC 02-10122-MFW Empire State II, LLC 02-10123-MFW EVAP Technologies, LLC 02-10124-MFW Evergreen Acquisition Sub I, Inc. 02-10125-MFW Groundwater Technology, Inc. 02-10126-MFW IT Administrative Services, LLC 02-10127-MFW IT C&V Operations, Inc. 02-10128-MFW IT E&C Operations, Inc 02-10129-MFW IT Environmental and Facilities, Inc 02-10130-MFW IT International Holdings, Inc 02-10131-MFW IT International Investments, Inc. 02-10132-MFW IT International Operations,Inc 02-10133-MFW IT Investment Holdings, Inc 02-10134-MFW IT Iron Mountain Operations, LLC 02-10135-MFW Jernee Mill Road LLC 02-10136-MFW KIP I, LLC 02-10137-MFW LandBank Acquisition I, LLC 02-10138-MFW LandBank Acquisition II, LLC 02-10139-MFW LandBank Acquisition III, LLC 02-10140-MFW LandBank Environmental Properties, LLC 02-10141-MFW LandBank Remediation Corp. 02-10142-MFW LandBank, Inc. 02-10143-MFW LandBank Wetlands, LLC 02-10144-MFW Marconi Wartburg, LLC 02-10145-MFW Millstone River Wetland Services, Inc. 02-10146-MFW Northeast Restoration Company LLC 02-10147-MFW Organic Waste Technologies, Inc. 02-10148-MFW Otay Mesa Ventures I, LLC 02-10149-MFW PHR Environmental Consultants, Inc 02-10150-MFW Raritan Venture I, LLC 02-10151-MFW The Dorchester Group, LLC 02-10152-MFW U.S. Wetlands Services, LLC 02-10153-MFW Whippany Ventures I, LLC 02-10154-MFW Wycoff's Mills, LLC 02-10155-MFW American Landfill Supply Co., Inc. 02-10156-MFW Benecia North Gateway LLC 02-10157-MFW EMCON 02-10158-MFW EMCON Industrial Services, Inc 02-10159-MFW Enterprise, Environmental & Earthworks, Inc. 02-10160-MFW Fluor Daniel Environmental Services, Inc. (FDESI) 02-10161-MFW Gradient Corporation 02-10162-MFW IT Alaska, Inc 02-10163-MFW IT Baker, LLC 02-10164-MFW IT Corporation 02-10165-MFW IT Corporation of North Carolina, Inc 02-10166-MFW IT Lake Herman Road LLC 02-10167-MFW IT Vine Hill, LLC 02-10168-MFW IT-Tulsa Holdings, Inc. 02-10169-MFW ITGtech 02-10170-MFW Jellinek, Schwartz & Connolly, Inc 02-10171-MFW JSC International Inc 02-10172-MFW Kato Road, LLC 02-10173-MFW Keystone Recovery, Inc 02-10174-MFW LFG Specialties, Inc 02-10175-MFW Monterey Landfill Gas Company 02-10176-MFW National Earth Products, Inc 02-10177-MFW Northern California Development Limited 02-10178-MFW OHM Corporation 02-10179-MFW OHM Remediation Services Corp 02-10180-MFW Pacific Environmental Group, Inc 02-10181-MFW Sielken, Inc 02-10182-MFW Submerged Lands, LLC 02-10183-MFW W&H Pacific, Inc 02-10184-MFW Wehran Engineering PC 02-10185-MFW Wehran New York, Inc 02-10186-MFW Woodbury Creek, Inc 02-10187-MFW Chapter 11 Petition Date: January 16, 2002 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 Mary F. Walrath Debtors' Counsel: David S. Kurtz, Esq. Skadden Arps Slate Meagher & Flom (Illinois) 333 W. Wacker Drive Chicago, IL 60606 Tel: 312-407-0700 - and - Gregg M. Galardi, Esq. Marion M. Quirk, Esq. Skadden Arps Slate Meagher & Flom LLP One Rodney Square Wilmington, DE 19899 Tel: 302 651-3000 Fax: 302-651-3001 - and - Daniel J. DeFranceschi, Esq. Mark D. Collins, Esq. Richards, Layton & Finger One Rodney Square, P.O. Box 551 Wilmington, DE 19899 Tel: 302 658-6541 Fax: 302-651-7701 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' 50-LARGEST UNSECURED CLAIM HOLDERS ----------------------------------------------------------------- Entity Nature Of Claim Claim Amount ------ --------------- ------------ The Bank of New York Debentures $225,000,000 (as indenture Trustee for 11-1/4% Senior Subordinated Notes issued by the IT Group, Inc., due 2009) Corporate Trustee Administration 101 Barclay Street, 21 W New York, NY 10286 Fax: 212 815 5915 United States Trust Debentures $31,622,000 Company of New York (as indenture Trustee for 8% Convertible Subordinated Debentures, issued by OHM Corporation, due 2006) Corporate Trust and Agency Services 47 Wall Street New york, NY 1005 Tel: 212 852 1235 Fax: 212 852 1625 Citibank (SD, N.A.) Trade Debt $6,753,128 Ken Stork 701 E. 60th Street Sioux Falls, SD 57117 Tel: 605 331 2626 Fax: 605 331 1966 Shareholders of Roche Ltd. Share Purchase $2,770,800 Consulting Group Agreement 3075 chemin des Quatre-Bourgeois Sainte-Foy, Quebec Canada G1W4Y4 Stone & Webster Trade Debt $1,531,773 Engineering A Unit of the Shaw Group John Clemmons 100 Technology Center Drive Stoughton, Ma 2072 Tel: 617 589 2702 Fax: 617 589 2156 Samsung Corporation Trade Debt $1,526,746 Hyung Soo Kim 677-25 Yeoksam-Dong Kangnam-Ku Seoul, Korea 135-080 Tel: 82 2 527 8592 Fax: 82 2 527 0199 Containment Control Inc. Trade Debt $1,462,036 Buckey Thompson 48-C Robeson Street Fayetteville, NC 28301 Tel: 910 484 7000 Fax: 910 484 4978 AWS Remediation, Inc. Trade Debt $1,460,829 Gary Thurheimer One Triangle Lane Export, PA 15632 Tel: 724 733 1009 Fax: 724 327 5946 IUC White Mesa LLC Trade debt $1,345,176 Ron Hochstein Independence Plaza Suite 9 1050 Seventeenth Street Denver, CO 80265 Tel: 303 628 7798 Fax: 303 389 4125 Pinetree Environmental Co. Trade Debt $1,306,085 Matt Schofield Suite 905, Marine Center 118, 2-GA, Namdaemun-RO Seoul, Korea 100-770 Tel: 82 2 752 7141 Fax: 82 2 752 7144 Mid Atlantic Tank Inspect Trade Debt $1,226,488 President 464 S. Independence Blvd. Suite C-108 Virginia Beach, VA 23452 Tel: 757 497 7853 Fax: 757 497 7823 Innovative tech Solutions Trade Debt $1,223,122 Dev Shukla 2730 Shadelands Drive Suite 100 Walnut Creek, CA 94598 Tel: 925 256 8898 Fax: 925 256 8998 Eurest Support Services Trade Debt $1,215,473 George cuzzort 9210 Vanguard Drive Suite 1 Anchorage, AK 99507 Tel: 907 344 1207 Fax: 907 344 0353 MHF Logistical Solutions Trade Debt $1,202,453 Clifford J. Bright 800 Cranberry Woods Drive Suite 450 Cranberry, PA 16066 Tel: 724 452 9300 Fax: 724 452 3753 W&HP ESOP Trust Stock Purchase $1,160,000 J.Kim Cacace, CTFA Agreement 1201 Third Avenue Suite 5010 Seattle, WA 98101 Fax: 206 664 8844 SAIC Trade Debt $1,081,693 PO Box 64115 Baltimore, MD 21264 Tel: 858 826 6000 Fax: 858 826 6808 Duratek Field Services, Trade Debt $990,233 Inc. Bob Hornbeck 628 Gallaher Road Kinston, TN 37763 Tel: 856 376 8286 Fax: 865 376 6247 ETI Services, Inc. Trade Debt $914,862 Sherman Wright 12790 Highway 51 Malvern, AR 72104 Tel: 501 844 4702 Fax: 501 844 4416 Emax Laboratories, Inc. Trade Debt $879,896 Jim Carter 630 Maple Ave. Torrance, CA 90503 Tel: 310 618 8889 Fax: 310 618 0818 Miller Drilling Company Trade Debt $861,122 Mark Herndon 200 Dan Tibbs Road Hunsville, AL 35806 Tel: 423 622 3161 Fax: 423 622 3182 United Rentals Trade Debt $852,735 Michael Nolan PO Box 100711 Atlanta, GA 30384-0711 Tel: 800 704 1767 Fax: 203 622 6080 Harding Lawson Assoc. Trade Debt $834,878 Contracts Dept. PO Box 2786 Englewood, CO 801503 Tel: 303 292 5365 Fax: 303 273 5062 Midwest Soil Remediation Trade Debt $777,565 Bruce Penn 1480 Sheldon Drive Elgin, IL 60120 Tel: 847 742 4331 Fax: 847 742 4294 Severn Trent Laboratories Trade Debt $768,670 Rhonda Breeching 10 Hazelwood Drive Suite 106 Amherst, NY 14228-2298 Tel: 330 996 9338 Fax: 330 966 0247 Xerox Corporation Trade Debt $726,030 Tom Colella Eight Penn Center West Pittsburgh,PA 15276 Tel: 412 521 1567 Fax: 412 521 1801 Jeffrey M. Daggett Stock Purchase $680,000 3350 Monte Villa Parkway Agreement Bothell, WA 98021-8972 Tel: 425 951 4800 Fax: 425 951 4808 William M. Jabs Stock Purchase $680,000 8405 SW Nimbus Avenue Agreement Beaverton, OR 97008-7141 Tel: 503 626 0455 Fax: 503 526 0775 On-Site Environmental Trade Debt $679,006 Rich Yanoski 4710 East Elwood Suite 10 Phoenix, AZ 85040 Tel: 410 694 5146 Fax: 410 865 7972 Environmental Rail Trade Debt $655,425 Solutions Dave Ardito 115 Cloverdale Circle Tinton Falls, NJ 7724 Tel: 732 389 6554 Fax: 732 389 6370 Angelini Blasting, Inc. Trade Debt $636,081 John Angelini 1621 NE 17th Way Ft. Laudale, FL 33305 Tel: 954 565 4171 Fax: 954 565 4171 Boart Longyear Company Trade Debt $635,582 Tom Othoudth 14950 Iris Road PO Box 355 Little Falls, MN 56345 Tel: 800 422 6552 Fax: 320 632 2915 Arrowhead Services, Inc. Trade Debt $621,310 John Koutelas 12920 Metcalf Avenue Suite 150 Overland Park, KS 66213 Tel: 913 814 9994 Fax: 913 814 9997 The Watertown Construction Trade Debt $613,943 Company Inc. Robert Santamaria 680 Main Street Watertown, CT 06795-0059 Tel: 860 945 5300 Fax: 860 945 0530 Mid State Mechanical Inc. Trade Debt $596,041 703 Clydesdale Avenue Anniston, AL 36201 Tel: 256 237 2126 Fax: 264 238 9512 Karleskint-Crum Trade Debt $582,389 Incorporated Ted Maino PO Box 5358 San Luis Obispo, CA 93403 Tel: 805 543 3304 Fax: 805 843 3827 Wholesale Building Trade Debt $565,318 Production PO Box 1659 Vidalia, GA 30475 Tel: 912 537 4100 Fax: 912 537 6490 Geotrans, Inc. Trade Debt $559,829 Pete Anderson 46050 Manekin Plaza Suite 100 Sterling, VA 20166 Tel: 703 444 7000 Fax: 703 444 1658 Garcia Paving Company, Inc. Trade Debt $555,526 Attn: Michael Garcia 2951 S. Elm Street Fresno, CA 93706 Phone: (559) 266-3258 Fax: (559) 266-6337 Ironhorse Ltd. Trade Debt $553,821 Attn: Gaines Smith P.O. Box 399 Waynesville, GA 31566 Phone: (912) 778-3275 Fax: (605) 778-3247 Hertz Equipment Rental Trade Debt $550,158 Attn: Richard Heward 5128 Fishwick Drive Cincinnati, OH 45216 Phone: (201) 307-2774 Fax: (201) 505-5477 URS/Dames & Moore Trade Debt $528,237 Philip Hatfield 911 Wilshire Blvd. Suite 800 Los Angeles, CA 90017 Phone: (213) 996-2410 Fax: (213) 996-2374 Brice, Inc. Trade Debt $523,881 Sam Brice P.O. Box 70668 3200 Shell Street (99701) Fairbanks, AK 99707 Phone: (907) 452-2512 Safety & Ecology Corp. Trade Debt $523,552 Martin Gray 2800 Solway Road Knoxville, TN 37931 Phone: (865) 690-0501 Fax: (865) 539-9868 D.L. Braughler Co., Inc. Trade Debt $520,704 Dave Braughler 1018 W. Main Street Morehead, KY 40351 Phone: (606) 784-7544 Fax: (606) 784-7545 NFT, Inc. Trade Debt $518,352 Joe Perdue 600 Corporate Circle Suite A Golden, CO 80401 Phone: (865) 576-2724 Fax: (865) 574-9443 Pond Company Trade Debt $506,207 2635 Century Parkway Suite 125 Atlanta, GA 30345 Phone: (404) 633-8998 Fax: (404) 325-5458 Field Lining Systems, Inc. Trade Debt $496,032 Janet Eeds 439 S. Third Avenue Avondale, AZ 85323 Phone: (888) 382-9301 Fax: (888) 382-9302 Ellington & Son, Inc. Trade Debt $467,660 Mark Ellington 5188 Old Route 75 Oxford, NC 27565 Phone: (919) 693-1230 Fax: (919) 693-0402 Simbeck & Associates, Inc. Trade Debt $458,606 John Simbeck 38256 Highway 160 Mancos, CO 81328 Phone: (970) 533-7178 Fax: (970) 533-3026 Residence Inn/Torrance Trade Debt $476,594 3701 Torrance Blvd. Torrance, CA 90503 Phone: (310) 543-4566 Fax: (310) 542-3026 ----------------------------------------------------------------- [00006] SHAW GROUP SIGNS LETTER OF INTENT TO BUY DEBTORS' ASSETS ----------------------------------------------------------------- BATON ROUGE, Louisiana -- January 16, 2002 -- The Shaw Group Inc. (NYSE:SGR) ("Shaw" or "the Company") announced today that it has signed a letter of intent with The IT Group, Inc. to acquire substantially all of the assets and businesses of The IT Group for approximately $105 million and the assumption of certain liabilities. Up to 50% of the purchase price is payable in Shaw stock at either party's option. The letter of intent also contemplates Shaw providing a secured revolving debtor-in- possession ("DIP") credit facility of up to $75 million, with an initial commitment of $25 million. The credit facility will provide The IT Group with liquidity for operation of its businesses until the asset sale is finalized. In conjunction with and as a condition to the proposed transaction and loan, The IT Group announced that it and certain of its subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code, seeking bankruptcy court approval of the asset sale and credit agreement. The IT Group is a leading provider of diversified, value- added consulting, engineering and construction, remediation and facilities management services. Through its diverse group of specialized companies, with domestic and international offices, its clients take advantage of extensive expertise to meet their global environmental needs. The IT Group's broad range of services includes the identification of contaminants in soil, air, and water and the subsequent design and execution of remedial solutions. These services are provided through several principal business lines including, Government Services, Commercial Engineering and Construction, Solid Waste, Real Estate Restoration and Consulting. "With The IT Group, one of the top environmental firms in the country, Shaw is obtaining a leading provider of environmental remediation and facilities management, particularly in the governmental services sector," stated J.M. Bernhard, Jr. Shaw's Chairman, President and Chief Executive Officer. "This acquisition, if approved by the Bankruptcy Court, will continue the Company's strategy of growth and diversification." Shaw's agreement to purchase The IT Group and provide DIP financing is subject to execution of definitive documentation and bankruptcy court approval. The purchase is also subject to approval under the Hart-Scott-Rodino Act. The Shaw Group Inc. is the world's only vertically- integrated provider of complete piping systems and comprehensive engineering, procurement and construction services to the power generation industry. Shaw is the largest supplier of fabricated piping systems in the United States and a leading supplier worldwide, having installed piping systems in power plants with an aggregate generation capacity in excess of 200,000 megawatts. While the majority of Shaw's backlog is attributable to the power generation industry, the Company also does work in the process industries, including petrochemical, chemical and refining, and the environmental and infrastructure sector. The Company currently has offices and operations in North America, South America, Europe, the Middle East and Asia-Pacific; and has more than 13,000 employees. For additional information on The Shaw Group, please visit the Company's web site at http://www.shawgrp.com ----------------------------------------------------------------- [00007] DEBTORS' CASH FLOW FORECAST THROUGH FEBRUARY 8, 2002 ----------------------------------------------------------------- The IT Group, Inc. Forecast of Cash Flows For the Period 01/14/02 through 02/08/02 Beginning Cash (DIP Loan) Balance $17,000,000 CASH RECEIPTS A/R Receipts 53,026,400 Proceeds from Asset Sales 0 ---------------- Total Cash Receipts 53,026,400 CASH DISBURSEMENTS Payroll 27,420,000 Professionals 600,000 Maintenance 30,000 Interest Expense 0 Insurance 2,699,000 Utilities 1,000,000 Taxes 0 Travel & Expense Reimbursements 3,000,000 Office Expenses 784,000 Field Expenses 920,000 Postage 380,000 Miscellaneous Expenses 460,000 ---------------- Subtotal Fixed Disbursements 37,293,000 ---------------- Variable Disbursements 27,813,000 ---------------- Total Operating Disbursements 65,106,000 ---------------- Net Operating Cash Flow (12,079,600) DEBT AND OTHER PAYMENTS DIP Fees 625,000 Professional Fees 540,000 Deposits 1,500,000 Final Payroll Checks 0 Pre-Petition Payments 1,500,000 Critical Vendor Payments 24,988,000 Miscellaneous 680,600 ---------------- Total Debt & Other Payments 29,833,600 ---------------- NET CASH FLOW (41,913,200) ---------------- Ending Cash (DIP Loan) Balance ($24,913,200) ================ *** End of Issue No. 1 ***