October 62003

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October 6, 2003

Enron Seeks Millions for Power Never Delivered to Sierra
Pacific

A major Nevada utility stands on the brink of a bankruptcy filing
because Enron is demanding hundreds of millions of dollars of payments
for electricity that it never really delivered, the New York
Times reported. Sierra and Enron battled in bankruptcy court about
whether the amount of money owed by Sierra was nothing - or what is now
more than $330 million. After having lost there, Sierra is expected
today to file an emergency request with the Federal Energy Regulatory
Commission, asking it to take charge of the controversy and invalidate
the payment requirement.

At issue are a series of long-term energy contracts entered into in
2000 and 2001 by the Sierra units, through a broker, with Enron Power
Marketing. Under the contracts, Enron committed to delivering power to
the Sierra utilities, known as the Nevada Power Company and the Sierra
Pacific Power Company, in future months and years, reported the
Times.

US Airways Sees Third Quarter Loss

The chief executive of US Airways Group forecast a net loss for the
company's third quarter on Friday, and said revenue was not improving at
the rate the airline had hoped, Reuters reported. Earlier in the day, US
Airways had estimated that its unit revenue grew 6 percent to 7 percent
in September, which reinforced comments from Continental Airlines this
week showing that revenue trends for the month improved. The
typically-strong third quarter should result in the industry's first
operating profit since the end of 2000, Merrill Lynch analyst Michael
Linenberg said on Friday. But US Airways' results for the third quarter
won't fare as well as its competitors', the airline's chief executive,
David Siegel, said in a Friday telephone recording to employees. 'While
other airlines are hinting that they may break even or show a profit for
the quarter, that is not going to be the case for US Airways, I'm sorry
to say,' Siegel said, reported the newswire.

Oakwood Bankruptcy Court OKs Disclosure Statement

Oakwood Homes Corp. on Friday said a Delaware bankruptcy court has
approved its disclosure statement, paving the way for the maker and
seller of prefabricated homes to seek approval for its reorganization
plan, Reuters reported. Oakwood said it hopes to have creditor approval
for the plan by late November. The court would then have to approve the
plan. Oakwood filed for bankruptcy protection in November 2002 after the
economic downturn hit buyers of manufactured homes.

Under the proposed plan, Oakwood's $303 million of senior unsecured
debt, $275 million guarantees for subordinated securities and other debt
would be converted into new common stock, Oakwood said. The company
would exit chapter 11 essentially free of long-term debt. Oakwood's
existing common shares would be converted into warrants to buy about 10
percent of the new shares, it said, reported the newswire.

Mississippi Chemical Gets $32 Million In DIP Financing

Mississippi Chemical Corp. has received $32.5 million in
debtor-in-possession revolving credit so it can operate during
bankruptcy, the Associated Press reported.

Company President and Chief Executive Charles O. Dunn said on Friday the
financing will help with reorganization and operating costs, such as
payroll and vendor payments.

In addition to the funding from Harris Trust and Savings, Dunn said
Mississippi Chemical has about $11 million in cash to fund ongoing
operations.

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Ex-Federal Prosecutor To Monitor Reforms At Merrill Lynch

A former U.S. federal prosecutor who tried organized crime cases was
appointed Thursday to oversee Merrill Lynch & Co.'s compliance with
reforms it agreed to implement to avoid prosecution for its alleged role
in Enron Corp.'s collapse.

According to an Associated Press article, the agreement also calls for
Merill Lynch to cooperate with the ongoing investigation of Enron by the
Justice Department, which appointed George A. Stamboulidis to monitor
the brokerage. Stamboulidis is a former prosecutor for the Eastern
District of New York.

Merrill Lynch avoided prosecution alongside three of its former
executives last month by agreeing to implement internal reforms to
prevent future dubious deals with clients and cooperate with
investigators. Violations of the agreement could result in an
indictment, prosecutors said.

Onex to Spin off Canadian Movie Theaters as Trust

Onex Corp. said on Friday it will spin off its Canadian movie theater
assets as an income trust, combining the cinemas of its partly owned
Loews Cineplex and Galaxy Entertainment units, Reuters reported.
Operating under the Cineplex Odeon and Galaxy brands, the trust will be
the country's second-largest movie theater chain, owning, operating or
having an interest in 81 theaters with 731 screens.

The news comes a day after the Globe and Mail newspaper reported that
Onex, a Toronto based conglomerate, was considering taking all of Loews
Cineplex Entertainment Corp. public as an income trust. A subsequent
story said that only the Canadian theaters would be sold, reported the
newswire.

Ceteco's Receivers File Claim Against Hagemeyer

The receivers of bankrupt consumer goods firm Ceteco said on Friday they
filed a claim in court for up to 200 million euros ($234.2 million) in
financial compensation from Ceteco's former board members and from Dutch
trading firm Hagemeyer, Reuters reported. Hagemeyer was the major
shareholder of Ceteco, a producer, wholesaler and retailer of consumer
durables in Latin America that went bankrupt in 2000. In October last
year, the court-appointed receivers announced they had decided to take
legal action against Hagemeyer, saying the company was liable for the
bankruptcy of Ceteco and had acted negligently with respect to Ceteco
and its creditors.

Hagemeyer, which last year denied it was liable for the bankruptcy of
Ceteco and said it was confident about the outcome of any civil
proceedings, was not immediately available for comment on Friday's
statement by the receivers, reported the newswire.

Mesa Air Says to Provide More Jets to United

Regional air carrier Mesa Air Group Inc. on Friday said United Airlines
Inc. has exercised an option under which Mesa will deliver 10 additional
50-seat regional jets, bringing the total to 25, Reuters reported. Terms
and conditions for the expansion of the carriers' regional jet agreement
have not been determined. Phoenix-based Mesa said the new aircraft will
be delivered in the middle of next year, and boost the total number of
Mesa aircraft under contract with United to 55. It said that under the
companies' previously signed 10-year agreement, Mesa had agreed to
provide 20 CRJ-700s, 15 CRJ-200s and 10 Dash 8s. United, a unit of UAL
Corp. has an option for 15 additional regional jets, Mesa said, reported
the newswire.

AK Steel CEO Letters Signal Shift to Tariff Support

AK Steel Holding Corp.'s new chief executive sent letters to two U.S.
government officials this week supporting America's controversial steel
tariff program, signaling a shift in his company's position on the
program, Reuters reported. 'We now believe that the 201 steel tariffs
must remain in place in order for the domestic steel industry to finish
the job of remaking itself,' James Wainscott, AK Steel's acting CEO,
wrote in letters to Trade Ambassador Robert B. Zoellick and Secretary of
Commerce Donald Evans. In the letters, Wainscott said the company
maintained its position that quotas on semi-finished slabs of steel are
a detriment to the domestic steel industry.

The tariffs were instituted in March 2002 under section 201 of U.S.
trade law to help the ailing industry recover after a string of more
than 30 steel bankruptcies. The move was made in response to claims made
by U.S. steel companies the country had become a dumping ground for
cheap foreign steel, reported the newswire.

Union, AK Steel Hope to Resolve Labor Issues

The United Steelworkers of America union and new management at AK Steel
Holding Corp. on Friday said they are hopeful of resolving conflicts
that arose during the three-year lockout at an Ohio plant, Reuters
reported. The union said its president, Leo Gerard, has already engaged
in 'detailed and productive discussions' with James Wainscott, AK
Steel's acting chief executive. Under discussion are outstanding legal
issues, including employees the union contends were discharged unfairly.
'We are hopeful that together we can forge a new relationship that
recognizes the realities of our business,' Wainscott said in a
statement, reported the newswire.

GGST Wins Pillowtex Auction with $128 Million Bid

Bankrupt towel and bedding manufacturer Pillowtex Corp. said on Thursday
GGST LLC had won an auction for its assets with a $128 million bid,
Reuters reported. Pillowtex, which filed for chapter 11 protection in
July, said the next-highest offer was a $127.5 million bid from a joint
venture of PT Partners LLC and The Petters Company Inc. GGST's offer to
buy substantially all of Pillowtex's remaining assets exceeded its
earlier offer of $56 million that was submitted in July, the company
said. Pillowtex said the sale was contingent on approval from the
Bankruptcy Court in Delaware at a sale hearing scheduled for Oct. 7.

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