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Enron Mail |
see bankruptcy bill update.
Lisa J. Mellencamp Enron North America Corp. 1400 Smith St. Houston, TX 77002 Tel: (713) 853-7986 Fax: (713) 646-3393 E-mail: Lisa.Mellencamp@enron.com ----- Forwarded by Lisa Mellencamp/HOU/ECT on 11/01/2000 11:00 AM ----- =09"William Rochelle" <wrochelle@fulbright.com< =0911/01/2000 10:28 AM =09=09=20 =09=09 To: undisclosed-recipients:; =09=09 cc:=20 =09=09 Subject: Fulbright Daily Bankruptcy News FULBRIGHT & JAWORSKI L.L.P. DAILY BANKRUPTCY NEWS From: Wm. J. Rochelle, III Fulbright - New York Wednesday, November 1, 2000 Filings: American Aircarriers Support, Incorporated (Nasdaq: AIRS), a South Carolin= a=20 aircraft maintenance and overhaul provider, filed chapter 11 yesterday in t= he=20 usual venue (Delaware) together with four subs and says it is in *negations= *=20 [sic] on DIP financing and already has a deal to sell its landing gear=20 division. AASI listed assets of $131.4 million versus debts totaling $102.= 5=20 million. A good example of the crisis which suddenly overtook the telecom equipment= =20 sector is Universal Broadband Networks Inc. (Nasdaq:UBNT), whose stock trad= ed=20 above $20 in March but filed chapter 11 yesterday in Santa Ana, Calif. alon= g=20 with four subs. The company blamed its filing on vendors who would no long= er=20 extend financing. The company provides microwave and dial up internet acce= ss. Although Medical Arts Laboratory performs nearly half of the lab work in= =20 Oklahoma, the company and its parent, Southern Medical Arts Cos., filed=20 chapter 11 with debts around $20 million. The company or affiliates also= =20 serve Alabama, Mississippi and Louisiana. Involuntary: Ohio insurance regulators barred Credit General Insurance Co. from writing= =20 new policies, and a bank filed an involuntary petition yesterday in the usu= al=20 venue (Delaware) against Credit General=02=07s parent, PRS Insurance Group = Inc. =20 PRS=02=07s companies write multiperil, automobile, surety, and workers' com= p=20 policies. Default: Spray bottle manufacturer Indesco International, Inc. missed an interest= =20 payment due in October on $145 million in sub debt. The default is not=20 surprising given the Caa1 and CCC+ ratings from Moody=02=07s and S&P on the= sub=20 debt. In plain English, ratings in the Caa or CCC range mean that a compan= y=20 is not generating sufficient cash flow to pay interest and that debt holder= s=20 are likely to incur a loss in chapter 11. See F&J Daily Bankr. News of Jul= y=20 26 of =02=0899 and May 24 of =02=0800. Troubles: The stock of Rent-Way Inc. (NYSE: RWY) crashed 78% after the company=20 announced it had found *accounting irregularities* on the expense side of t= he=20 P&L ledger. Rent-Way=02=07s 6000 employees make up the country=02=07s seco= nd largest=20 *rent to own* retailer, which means that the company rents household goods = to=20 people who cannot afford outright purchases. We make no predictions but=20 merely note that in the last year revelations about *accounting=20 irregularities* have preceded chapter 11 filings by Safety-Kleen Corp.,=20 Styling Technology Corp. and PSI Industries Inc. Looking further back,=20 accounting problems contributed to bankruptcy filings by Leslie Fay, Mercur= y=20 Finance Corp., Sirena Apparel Group, Inc., and First Merchants Acceptance= =20 Corp. Bankr. reform update: The Senate is now on track to vote on the bankruptcy reform bill this=20 Friday. Curiously, this year=02=07s gridlock in Congress is keeping alive = some=20 hope in lenders=02=07 hearts that the bill could become law despite a Presi= dential=20 veto. Ordinarily in an election year, the session would have ended a month= =20 ago so our elected representatives could return home to campaign. This yea= r,=20 the budget is one month late already, and Congress remains hard at work. I= n=20 an ordinary year, Senate passage of the bill (the House has already passed= =20 the legislation) would allow the President to carry out his threatened veto= ,=20 thus affording Congress no opportunity to override since Congress would not= =20 meet again. In this exceptional year, Congress may return after the=20 election, thus presenting at least the possibility of overriding a veto. = =20 Nevertheless, a bank lobbyist sounded pessimistic about a successful overri= de=20 vote in a lame duck Congress. Steel again?: The domestic steel industry was one of the most troubled sectors of the U.= S.=20 economy in the wake of the 1997 Asian financial crisis, as imports flooded= =20 the market. For the past year, we have been writing little about the steel= =20 industry, but that perhaps is about to change as imports this year are on= =20 track to surpass the 1998 record. Also, the price for hot rolled coil, for= =20 example, has fallen 25% (no typo) in the last few months. Downgrade: The continuing slump in gold prices has forced Kinross Gold Corp. and its= =20 sub Kinross Gold Inc. to tap out their bank revolver, with the result that= =20 S&P has knocked the companies=02=07 corporate and sub ratings to BB- and B.= The=20 company is also unhedged next year. Kinross is the fifth largest gold=20 producer in North America. Fulbright & Jaworski L.L.P. makes NO WARRANTIES OR REPRESENTATIONS OF ANY= =20 SORT with respect to this report, including any warranties or representatio= ns=20 as to the accuracy or completeness of any of the information, facts, or=20 opinions contained herein. By having requested receipt of these reports, t= he=20 recipient acknowledges that the receipt of these reports does not constitut= e=20 the receipt of legal advice and does not, by itself, establish an=20 attorney-client relationship. These reports are provided as a courtesy=20 solely for the recipient=02=07s information and may not be reproduced or=20 distributed to any third parties without Fulbright=02=07s express written= =20 authorization. - bknews.wpd
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