/raid1/www/Hosts/bankrupt/TCR_Public/040818.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, August 18, 2004, Vol. 8, No. 174
Headlines
ADELPHIA BUSINESS: Has Until October 6 to Object to Claims
ALL STAR GAS: Emerging from Bankruptcy as Court Approves Plan
AMERICAN TOWER: Raising $300 Million to Refinance 9-3/8% Sr. Debt
AMERICAS MINING: S&P Raises Corporate Credit Rating to B-
AMERICAN UNITED: Inks Letter of Intent with Southern Gas Company
AMERICREDIT CORP: Prices $800 Million Asset-Backed Securitization
AMPHENOL CORP: Moody's Upgrades Credit Facility Rating to Ba1
APPLIED EXTRUSION: Reports FY 2004 3rd Quarter $18.6MM Net Loss
ASTROPOWER: Proposes Plan Solicitation & Voting Procedures
BELL CANADA: Union Ratifies Collective Bargaining Agreement
BRIDGE TECH: U.S. Trustee Appoints 4-Member Creditors Committee
CALPINE: Inks Pact to Sell Canadian Assets to PrimeWest for $625MM
CANDESCENT TECHNOLOGIES: Steve Berson Moves to Kilpatrick Stockton
CATHOLIC CHURCH: Can't Prepare Monthly Operating Reports on Time
CATHOLIC CHURCH: Abuse Claimants Want to Use Fictitious Names
CCC INFORMATION: Insurers Will Pay $4.75 Million Settlement
CHEM PORT LLC: Case Summary & 22 Largest Unsecured Creditors
CITADEL HILL: Fitch Affirms $15MM Class B-2L Notes' BB- Rating
COVANTA ENERGY: Affiliates' Claims Objection Deadline Extended
CROMPTON CORP: Completes $945 Million Refinancing Program
D'LISI FOOD SYSTEMS: Case Summary & Largest Unsecured Creditors
DEAN FOODS: Fitch Upgrades Senior Unsecured Debt Rating to BB
DENNINGHOUSE INC: Files for CCAA Protection & RSM is the Monitor
DENNY'S CORPORATION: Moody's Junks $379 Million Senior Notes
DENNY'S CORP: S&P Junks $100MM Second-Lien Loan & $220MM Notes
ELANTIC TELECOM: Wants Ordinary Course Professionals to Continue
ENRON: Oregon Electric Guarantees PGE Customers $15MM Rate Credit
ENRON CORP: Objects to PBGC's Remaining $320 Million Claims
ENRON CORP: Affiliate Asks Court to Okay Liston Brick Settlement
ENTERPRISE PRODS: GulfTerra Noteholders Agree to Scrap Covenants
EQUISTAR CHEM: Retains S&P's B+ Credit Rating & Stable Outlook
EVERGREEN CARDIOLOGY: Case Summary & Largest Unsecured Creditors
FACTORY 2-U: Selling All Assets to National Stores Affiliate
FALCON HOSPITALITY: Files Plan and Disclosure Statement in Nevada
FEDERAL-MOGUL: Wants Until December 1 to Decide on Leases
FIRST UNION-LEHMAN: S&P Affirms Class J Junk Rating
FLEMING COMPANIES: Wants to Hold 14 Leases Until August 31
FLEMING COMPANIES: Sells Five Real Estate Parcels for $392,000
FORTRESS CBO: Moody's Affirms $17.5MM Preferred Certs. B2 Rating
FOSTER WHEELER: Subsidiary Wins PMB Contract for Petronas Plant
FUJITA CORPORATION: Creditors Must File Claims by September 15
FURNACE & TUBE: Case Summary & 18 Largest Unsecured Creditors
GENERAL MEDIA: Penthouse Intents to Stall Bankruptcy Emergence
GLOBAL CROSSING: Sells Global Marine Systems to Bridgehouse Marine
HAYES LEMMERZ: Trust Settles 25 Avoidance Claims for $894,230
IPCS INC: Reorganized Company's Balance Sheet Insolvent by $200MM
INDUSTRIAL DEV'T: Lawsuit Prompts Moody's Ba1 Bond Rating
INDUSTRIAL WHOLESALE: First Creditors Meeting Slated for Sept. 13
LAIDLAW INT'L: Discusses Post-Confirmation Safety-Kleen Exposure
LEAP WIRELESS: Emerges from Chapter 11 with New Board of Directors
LEAP WIRELESS: Acquires Wireless Spectrum in Fresno for $27.1 Mil.
LIFEPOINT HOSPITALS: S&P Puts BB Credit Rating on Negative Watch
MOONEY AEROSPACE: Arent Fox to Represent Unsecured Creditors
NETWORK INSTALLATION: Gets $40,000 S.F. Bay Area IT Contract
NEXTWAVE TELECOM: Wants Exclusivity Extended through October 12
NORCROSS SAFETY: S&P Affirms B+ Credit Rating With Stable Outlook
LOMA COMPANY: Section 341(a) Meeting Slated for September 21
MID-STATE RACEWAY: Hires Harris Beach as Bankruptcy Counsel
MIRANT CORP: Judge Lynn Gives Examiner More Responsibilities
MERITAGE MORTGAGE: Fitch Assigns BB+ Rating on $12.6MM Class M-10
NORTEL NETWORKS: Canadian Police to Start Criminal Investigation
OMNI FACILITY: Has Until Sept. 10 to File Bankruptcy Schedules
RCN CORP: Discloses $71.6 Million Net Loss for 2004 Second Quarter
RCN: Gets Court Nod to Employ Winston & Strawn as Special Counsel
RELIANCE INSURANCE: Court Approves $450,000 King County Land Sale
RIO ALTO RESOURCES: Shareholders Approve Plan of Arrangement
RIO ALTO: Reports $19.7MM Book Loss in Argentina Assets Write Down
RS GROUP: Reports $11 Million in Revenue from CIL Acquisition
SK GLOBAL: Transfers 13 Claims Totaling $265MM+ to SK Networks
SOLUTIA: Wants Remediation Pact with Inquip & Monsanto Approved
SPIEGEL: Asks Court for Permission to Reject 53 Newport Contracts
STONE MACHINE: Case Summary & 17 Largest Unsecured Creditors
SUNRISE CDO: S&P Places B- Rated Class C Notes on Negative Watch
TRANSWESTERN PUBLISHING: Moody's Puts B1 Rating on First-Lien Loan
UNIFLEX, INC.: Committee Hires Lowenstein Sandler as Counsel
UNITED AIRLINES: Aircraft N379UA Holds Allowed $8,160,355 Claim
US AIRWAYS: Asks IRS to Stretch Pension Contributions Over 5 Years
US AIRWAYS: Negotiates Waiver of Credit Rating Triggers
VIATICAL LIQUIDITY: Hires Sparber Rudolph as Bankruptcy Counsel
VIVENTIA BIOTECH: Equity Deficit Tops $13 Million at June 30
W.R. GRACE: Separation Group Acquires Alltech Int'l Holdings
WASTE SERVICES: Discloses $29.3 Million Half-Year Net Loss
WASTE SERVICES: Fails to Meet Covenants in Senior Credit Agreement
WESTLAKE CHEMICAL: S&P Raises Credit Rating to BB after IPO
WILSONS LEATHER: Pays $8.6 Million 11-1/4% Sr. Notes at Maturity
WILSONS LEATHER: Appoints Executives to New Leadership Roles
WORLDCOM INC: Asks Court for Summary Judgment on Acosta's Claim
XO COMMS: Appoints Heather Burnett Gold Government Relations VP
* Upcoming Meetings, Conferences and Seminars
*********
ADELPHIA BUSINESS: Has Until October 6 to Object to Claims
----------------------------------------------------------
Judge Gerber of the U.S. Bankruptcy Court for the Southern
District of New York gave Adelphia Business Solutions, Inc., and
its debtor-affiliates until October 6, 2004 to object to claims in
their chapter 11 cases.
Headquartered in Coudersport, Pa., Adelphia Business Solutions,
Inc., now known as TelCove -- http://www.adelphia-abs.com/-- is a
leading provider of facilities-based integrated communications
services to businesses, governmental customers, educational end
users and other communications services providers throughout the
United States. The Company filed for Chapter 11 protection on
March 27, 2002 (Bankr. S.D.N.Y. Case No. 02-11389) and emerged
under a chapter 11 plan on April 7, 2004. Judy G.Z. Liu, Esq., at
Weil, Gotshal & Manges LLP represents the Debtors in their
restructuring efforts. When the Company filed for protection from
its creditors, it listed $2,126,334,000 in assets and
$1,654,343,000 in debts. The Company emerged from bankruptcy on
April 7, 2004. (Adelphia Bankruptcy News, Issue No. 65 and 66;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ALL STAR GAS: Emerging from Bankruptcy as Court Approves Plan
-------------------------------------------------------------
All Star Gas and its affiliates are scheduled to emerge from the
protection of Chapter 11 following a federal bankruptcy court's
approval of the company's plan of reorganization. The company's
board retained on a permanent basis John R. Gordon, who had served
as the company's chief executive during the Chapter 11 case.
The bankruptcy court action followed approval of the plan of
reorganization by the company's senior lenders and unsecured
creditors. Under the plan, the senior secured Noteholders will
exchange more than $60 million of debt for 100 percent of the
stock of the company. Most other secured lenders will be paid in
full over five years, and unsecured creditors will, depending on
their class, receive distributions of up to 7.5 percent, for most
unsecured creditors or, in other cases, up to 45 percent.
"All of us are happy to get court approval for the plan of
reorganization and are optimistic about what the future holds for
All Star Gas and its customers," said John Gordon, chief executive
officer of All Star Gas. "We appreciate the support from our
customers and the community while we restructured the company's
obligations," Gordon added. Gordon was appointed chief executive
in April 2003, and led the company's restructuring efforts. He is
a partner of Corporate Revitalization Partners, a Dallas-based
turnaround management firm.
The plan was the product of extensive negotiations among All Star
Gas, the Official Committee of Unsecured Creditors appointed in
its Chapter 11 case, and the company's senior secured Noteholders.
"This has been a textbook chapter 11 case," stated Tom Patterson
of Klee, Tuchin, Bogdanoff & Stern LLP, bankruptcy counsel for All
Star. "The case had its moments of contention, but John Gordon
and his management team built successfully on the company's
traditional strengths to create a solid business, winning the
confidence of key creditor groups and ultimately enabling the
company to reorganize on a largely consensual basis."
All Star Gas filed for Chapter 11 reorganization protection on
July 21, 2003, and filed its Plan of Reorganization with the U.S.
Bankruptcy Court on Dec. 31, 2003.
For more than 30 years, All Star Gas has provided dependable,
affordable propane to residential and business customers. The
company and its subsidiaries currently supply approximately 48,000
customers in Arkansas, Arizona, Colorado, Missouri, Oklahoma and
Wyoming. Further information on All Star Gas is accessible at
http://www.allstargas.com/
AMERICAN TOWER: Raising $300 Million to Refinance 9-3/8% Sr. Debt
-----------------------------------------------------------------
American Tower Corporation (NYSE: AMT) is seeking to raise
approximately $300 million through an institutional private
placement of convertible notes due 2012. In addition, the company
is expected to grant the initial purchasers of the notes an option
to purchase up to an additional $45.0 million principal amount of
the notes. The closing of the offering is expected to occur in
late August, subject to market conditions.
The company intends to use all of the net proceeds of the offering
to refinance a portion of its outstanding 9-3/8% senior notes due
2009 either through redemption or repurchase.
This announcement is neither an offer to sell nor a solicitation
of an offer to buy any of the notes.
The notes and the Class A common stock issuable upon conversion of
the notes have not been registered under the Securities Act of
1933, as amended, or any state securities laws, and are being
offered only to qualified institutional buyers in reliance on Rule
144A under the Securities Act. Unless so registered, the notes
may not be offered or sold in the United States except pursuant to
an exemption from registration requirements of the Securities Act
and applicable state securities laws.
American Tower is the leading independent owner, operator and
developer of broadcast and wireless communications sites in North
America. American Tower operates approximately 15,000 sites in
the United States, Mexico, and Brazil, including approximately 300
broadcast tower sites. For more information about American Tower
Corporation, visit http://www.americantower.com/
* * *
Liquidity Concerns
In its Form 10-Q for the quarterly period ended June 30, 2004,
filed with the Securities and Exchange Commission, American Tower
Corporation reports:
"As of June 30, 2004, our annual consolidated cash debt service
obligations (principal and interest) for the remainder of 2004 and
for each of the next four years and thereafter are approximately:
$96.0 million, $193.0 million, $214.5 million, $507.2 million,
$942.9 million and $2.6 billion, respectively. If we are unable
to refinance our subsidiary debt or renegotiate the terms of such
debt, we may not be able to meet our debt service requirements in
the future. In addition, as a holding company, we depend on
distributions or dividends from our subsidiaries, or funds raised
through debt and equity offerings, to fund our debt obligations.
Although the agreements governing the terms of our credit facility
and senior subordinated notes permit our subsidiaries to make
distributions to us to permit us to meet our debt service
obligations, such terms also significantly limit their ability to
distribute cash to us under certain circumstances. Accordingly,
if we do not receive sufficient funds from our subsidiaries to
meet our debt service obligations, we may be required to refinance
or renegotiate the terms of our debt, and there is no assurance we
will succeed in such efforts."
AMERICAS MINING: S&P Raises Corporate Credit Rating to B-
---------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Americas Mining, Corp., and its three mining
subsidiaries:
(1) Minera Mexico S.A. de C.V.;
(2) ASARCO, Inc.; and
(3) Southern Peru Copper Corp.,
to 'B-' from 'CCC+'.
The ratings were removed from Creditwatch, where they were placed
on June 23, 2004. The outlook is positive.
"The upgrade on [Americas Mining] and its subsidiaries reflects
the company's improved cash flow and ability to significantly
reduce leverage," said Standard & Poor's credit analyst Juan P.
Becerra. "This in turn was due to higher-than-expected metals
prices and the dedication of excess cash flow to repay debt (as
required by Minera Mexico debt covenants)."
The rating on Americas Mining and its subsidiaries reflects the
company's still-aggressive debt profile, volatile metal prices,
average cost position, and lack of product and geographic
diversification. In addition, Americas Mining has very limited
liquidity at the holding company level and a high dependence on
volatile dividends from Southern Peru, given the current effective
cash trap at the Minera Mexico level and negative cash flow at
Asarco. These factors are balanced by Americas Mining's position
as the third-largest copper producer in the world, including
particularly low-cost mines at Southern Peru, its vertical
integration, and its realized and expected debt reduction.
The positive outlook reflects Standard & Poor's expectations that
Americas Mining could continue to reduce debt at the holding
level, but more significantly at Minera Mexico's level as long as
the current high copper prices are sustained. It also
contemplates Southern Peru 's ability to continue funding Americas
Mining's cash shortfalls through its dividends. The outlook could
return to stable if debt reduction is lower than expected.
AMERICAN UNITED: Inks Letter of Intent with Southern Gas Company
----------------------------------------------------------------
American United Global, Inc. (Pink Sheets:AUGB) has entered into a
non-binding Memorandum of Understanding with Southern Gas Company,
a limited liability company incorporated in Russia and based in
Moscow.
Through its subsidiaries and affiliates, Southern Gas owns 100% of
a company that operates a 3.5 mile gas pipeline between Rostov,
Russia and the Ukraine, 100% of a well extraction equipment supply
company, and a minority interest in an extraction company in
Russia. Southern Gas advises that it controls approximately 17.5
billion cubic meters of natural gas reserves and currently
operates thirteen income producing gas wells and that annual
revenues are approximately $35,000,000.
The MOU contemplates a reverse acquisition under the terms of
which American United will issue approximately 33.0 million shares
of its common stock (to represent not less than 70% of the fully-
diluted American United common stock) to the equity owners of
Southern Gas in consideration for 100% of the equity in Southern
Gas and subsidiaries. Assuming the issuance of 33.0 million
American United shares to the Southern Gas equity owners, the
holders of American United securities prior to the transaction
will effectively retain on the closing date not more than
14.0 million common shares on a fully diluted basis.
It is the intention of the parties to enter into a definitive
purchase agreement and consummate the transaction by December 31,
2004. Consummation of the transaction is subject to a number of
conditions, including:
-- Southern Gas acquiring the balance of the ownership of the
extraction company so that it will be the sole shareholder
of that entity at the closing;
-- completion of a satisfactory due diligence investigation by
both parties;
-- delivery of audited consolidated financial statements of
Southern Gas for the two years ended December 31, 2003 and
the nine months ended September 30, 2004;
-- total debt and contingent liabilities of American United,
excluding any liabilities that may be indemnified against in
a manner satisfactory to Southern Gas, shall not exceed
$100,000; and
-- approval by the American United stockholders.
In a related transaction, American United established a special
purpose joint venture acquisition company with Vertex Capital
Corporation to acquire the equity of Southern Gas. American
United owns 78.6% and Vertex owns 21.4% of the equity of the new
joint venture entity, with either party having the right to cause
the Vertex equity to be exchanged for 3.5 million American United
shares upon completion of the Southern Gas acquisition.
Principals of Vertex have made the introductions and are
facilitating the Southern Gas transaction, including payment of
certain transaction expenses.
American United has re-applied to relist its common stock on the
Over the Counter Bulletin Board and anticipates that its common
stock will resume trading there in September.
At March 31, 2004, American United Global's balance sheet showed a
$4,307,000 stockholders' deficit, compared to a $3,658,000 deficit
at December 31, 2003.
AMERICREDIT CORP: Prices $800 Million Asset-Backed Securitization
-----------------------------------------------------------------
AmeriCredit Corp. (NYSE:ACF) priced an $800 million offering of
automobile receivables-backed securities through lead managers
Deutsche Bank Securities and Wachovia Securities. Co-managers are
JPMorgan, Lehman Brothers and UBS Investment Bank. AmeriCredit
uses net proceeds from securitization transactions to provide
long-term financing of its receivables.
The securities will be issued via an owner trust, AmeriCredit
Automobile Receivables Trust 2004-C-A, in four classes of Notes:
Note Class Amount Average Life Price Interest Rate
---------- ------ ------------ ----- -------------
A-1 $161,000,000 0.27 years 100.00000 1.765%
A-2 $228,000,000 0.95 years 99.99524 2.39%
A-3 $205,000,000 2.05 years 99.98977 3.00%
A-4 $206,000,000 3.34 years 99.96976 3.61%
------------
$800,000,000
============
The weighted average coupon is 3.2%.
The Note Classes are rated by Standard & Poor's, Moody's Investors
Service and Fitch Ratings. The ratings by Note Class are:
Note Class Standard & Poor's Moody's Fitch
---------- ----------------- ------- -----
A-1 A-1+ Prime-1 F1+
A-2 AAA Aaa AAA
A-3 AAA Aaa AAA
A-4 AAA Aaa AAA
This transaction represents AmeriCredit's first securitization in
which Ambac Assurance Corporation is providing bond insurance.
Initial credit enhancement will total 10.5% of the original
receivable pool balance building to the total required enhancement
level of 18.5% of the then outstanding receivable pool balance.
The initial 10.5% enhancement will consist of 2.0% cash and 8.5%
overcollateralization.
This transaction represents AmeriCredit's 45th securitization of
automobile receivables in which a total of more than $34 billion
of automobile receivables-backed securities has been issued.
Copies of the prospectus relating to this offering of receivables-
backed securities may be obtained from the managers and co-
managers.
AmeriCredit Corp. is a leading independent auto finance company.
Using its branch network and strategic alliances with auto groups
and banks, the Company purchases retail installment contracts
entered into by auto dealers with consumers who are typically
unable to obtain financing from traditional sources. AmeriCredit
has more than one million customers and nearly $12 billion in
managed auto receivables. The Company was founded in 1992 and is
headquartered in Fort Worth, Texas. For more information, visit
http://www.americredit.com/
* * *
As reported in the Troubled Company Reporter on February 3, 2004,
Standard & Poor's Ratings Services revised its outlook on
AmeriCredit Corp. to stable from negative, and affirmed its
ratings, including its 'B' long-term counterparty credit rating,
on the company.
The outlook revision reflects the improvement in the company's
financial performance and stabilization of its asset quality
measures.
"The ratings also reflect the company's significant capital base
of $1.96 billion, which provides a significant cushion given the
high level of charge-offs that the company has been experiencing.
The company has also successfully been able to access the
securitization market, albeit at higher credit enhancement
levels," said Standard & Poor's credit analyst Lisa J. Archinow,
CFA.
AMPHENOL CORP: Moody's Upgrades Credit Facility Rating to Ba1
--------------------------------------------------------------
Moody's upgraded Amphenol Corporation's ratings to reflect the
company's improved credit statistics and strong free cash flow.
Amphenol's credit quality has improved primarily due to
management's focus on debt reduction and due to its strong
operating performance in recent quarters. This rating action
concludes the review of the company's ratings for possible upgrade
initiated on April 23, 2004. The ratings outlook is stable.
Moody's upgraded these rating:
* $125 million senior secured revolver, due May 6, 2008,
upgraded to Ba1 from Ba2;
* $125 million ($38 million outstanding) senior secured Term
Loan A, due May 6, 2008, upgraded to Ba1 from Ba2;
* $500 million ($400 million outstanding) senior secured Term
Loan B, due May 6, 2010, upgraded to Ba1 from Ba2;
* Senior Implied, upgraded to Ba1 from Ba2;
* Senior Unsecured Issuer, upgraded to Ba2 from Ba3.
Moody's confirmed these rating:
* Speculative Grade Liquidity rating; rated SGL-1.
Moody's notes that Amphenol's financial performance has been very
strong in recent quarters with a 27% increase in sales for the
second quarter of 2004 and for the first half of the year. The
company's operating margins for the first six months of 2004
increased to 17.6% from 16.2% for the same period in 2003.
Amphenol's operating margins have benefited from:
-- increased operating leverage;
-- higher margins on its application specific connector
products; and
-- continuing programs of cost control.
Furthermore, the company's revenues are derived from a broad
customer and geographic base. Cash flows should continue to
benefit from the company's efficiency focus. These factors,
combined with a conservative acquisition strategy, suggest that
the company's balance sheet should continue to improve. The
company's total debt has decreased to $476.7 million at the end of
the second quarter of 2004 from $644 million at the end of 2002.
Amphenol's revenues are expected to be affected by GDP growth, and
in particular in demand for electronics, as this leads to growth
in the connector market. Hence, a slowdown in global economic
growth would likely have an adverse effect on demand for the
company's products.
The confirmation of the SGL-1 rating reflects expectations for a
good projected liquidity profile over the next twelve months. The
rating reflects expectations for significant availability under
its $125 million revolving credit facility ($117 million at June
30, 2004), and improving flexibility under bank financial
covenants despite a small step down in the total leverage covenant
in the first quarter of 2004 to 3.75 times from 3.8 times and then
down to 3.5 times in the first quarter of 2005.
The company's liquidity benefits from a lack of upcoming debt
maturities in 2004 as amortization payments for both the Term Loan
A and Term Loan B have been prepaid through 2007. The company's
acquisition program is expected to focus on smaller, niche
candidates that should require only limited short-term revolver
usage. Moody's believes the company has few, if any, non-core
assets that could be tapped for liquidity without affecting the
company's core business offerings. Furthermore, the company has
an $85 million accounts receivable securitization facility of
which $68 million of receivables were sold as of June 30, 2004.
Amphenol's SGL-1 rating will be sensitive to the company's ability
to sustain its level of free cash flow, to changes in the
company's business climate, and other risk factors.
For the last twelve months ended June 30, 2004 the company's cash
flow from operations totaled $175 million versus total debt of
$476.7 million. Debt to EBITDA was approximately 1.7 times.
Adjusted for the off-balance sheet accounts receivable
securitization and $103 million of pension liabilities, adjusted
debt to EBITDA was in the area of 2.3 times. EBITDA coverage of
interest for the last twelve months ended June 30, 2004, was
strong at 11.1 times and EBITDA less capital expenditures coverage
of interest was 9.6 times. The use of EBITDA and related EBITDA
ratios as a single measure of cash flow without consideration of
other factors can be misleading.
Headquartered in Wallingford, Connecticut, Amphenol Corporation
manufactures and markets electrical, electronic and fiber optic
connectors, interconnect systems and coaxial and flat-ribbon
cable. Revenue for the last twelve months ended June 30, 2004,
was approximately $1.4 billion.
APPLIED EXTRUSION: Reports FY 2004 3rd Quarter $18.6MM Net Loss
---------------------------------------------------------------
Applied Extrusion Technologies, Inc. (NASDAQ NMS:AETC) reported
financial results for its third fiscal quarter ended June 30,
2004.
Third Quarter 2004 Results
Sales for the third quarter of fiscal 2004 of $69.2 million were
$2.2 million, or 3%, higher compared with the third quarter of
fiscal 2003. The 3% increase in sales was driven by a 9% increase
in unit volume, which was offset by a 5% decrease in average
selling price. The decline in average selling price reflects a
significant increase in the volume of lower price films, which was
in part caused by the company's inventory reduction initiatives.
Gross profit for the third quarter of $7.5 million was
$4.8 million, or 39%, lower than the third quarter of fiscal 2003.
Gross margin of 10.8% in the third fiscal quarter of 2004 was 7.5
percentage points lower as compared to gross margin of 18.3%
during the same period in fiscal 2003. The decline in gross
margin resulted principally from the impact of lower average
selling prices, as indicated above, and substantially higher raw
material cost.
Selling, general and administrative expenses were $5.1 million, or
7.4% of sales, for the third quarter of fiscal 2004 compared with
$4.6 million, or 6.9% of sales, for the same period in fiscal
2003.
Research and development expense was $1.7 million, or 2.5 percent
of sales, for the third quarter of fiscal 2004, compared with $1.5
million, or 2.2 percent of sales, for the same period in fiscal
2003.
Restructuring expenses of $0.7 million incurred in the third
quarter of fiscal 2004 were comprised primarily of professional
fees paid in conjunction with the recapitalization of the
Company's senior notes. A goodwill impairment charge of $9.9
million was also recognized in the third quarter of fiscal 2004.
Interest expense of $8.7 million in the third fiscal quarter of
2004 was $1.3 million higher than the third quarter of fiscal
2003. This is due to a higher average debt balance and lower
capitalized interest.
The net loss for the third quarter of fiscal 2004 was
$18.6 million compared with a net loss of $1.3 million for the
third quarter of fiscal 2003.
The effective income tax rate for the third quarter of fiscal 2004
and the third quarter of fiscal 2003 was zero.
For the three months ended June 30, 2004, the Company generated
earnings before interest, taxes, depreciation and amortization
(EBITDA) of $7.5 million compared with EBITDA of $12.0 million for
the third quarter of fiscal 2003.
Nine Months 2004 Results
Sales for the first nine months of fiscal 2004 of $197.1 million
were $7.9 million, or 4%, higher compared with the first nine
months of fiscal 2003. The 4% increase in sales was driven by a
7% increase in unit volume, which was offset by a 3% decrease in
average selling price. The decline in average selling price
principally reflects a significant increase in the volume of lower
price films, which was in part caused by the company's inventory
reduction initiatives.
Gross profit for the first nine months of $27.0 million was $10.2
million, or 27%, lower than the first nine months of fiscal 2003.
Gross margin of 13.7% in the first nine months of 2004 was 5.9
percentage points lower as compared to gross margin of 19.6%
during the same period in fiscal 2003. The decline in gross
margin resulted principally from the impact of lower average
selling prices, and substantially higher raw material cost.
Selling, general and administrative expenses were $16.4 million,
or 8.3% of sales, for the first nine months of fiscal 2004
compared with $16.9, or 8.9% of sales, for the same period in
fiscal 2003.
Research and development expense was $5.1 million, or 2.6% of
sales, for the first nine months of fiscal 2004, compared with
$5.4 million, or 2.9% of sales, for the same period in fiscal
2003.
Restructuring expenses of $0.7 million incurred in the third
quarter of fiscal 2004 were comprised primarily of professional
fees paid in conjunction with the recapitalization of the
Company's senior notes. A goodwill impairment charge of
$9.9 million was also recognized in the third quarter of fiscal
2004.
Interest expense of $27.8 million in the first nine months of
fiscal 2004 was $5.3 million higher than the first nine months of
fiscal 2003. This increase reflects approximately $2.2 million of
nonrecurring expenses, principally the write-off of deferred
financing charges associated with the Company's prior credit
facility, which was refinanced with GE Capital Finance on
October 3, 2003. The remaining increase of $3.1 million is due to
a higher average debt balance and lower capitalized interest.
The net loss for the first nine months of fiscal 2004 was
$32.9 million compared with a net loss of $7.6 million for the
same period of fiscal 2003.
The effective income tax rate for the first nine months of fiscal
2004 and the first nine months of fiscal 2003 was zero.
For the nine months ended June 30, 2004, the Company generated
earnings before interest, taxes, depreciation and amortization
(EBITDA) of $25.9 million compared with EBITDA of $32.2 million
for the same period of fiscal 2003.
Balance Sheet, Cash Flow and Liquidity
The Company used $15.5 million of cash in the first nine months.
This was principally due to a $10.7 million increase in accounts
receivable as a result of the significant increase in sales during
the period, and a $5.0 million increase in inventories. Finished
goods and raw materials inventories increased by $4.1 million and
$0.9 million, respectively, due primarily to increased resin
costs. The unit volume of finished goods inventories were reduced
by approximately 2 million pounds, or 3%, during the first nine
months.
During the third quarter, finished goods were reduced by
approximately 3 million pounds. However, this reduction in unit
volume was largely offset by an increase in the average cost of
finished goods, due primarily to increased raw material costs.
Additionally, raw material inventories decreased by approximately
$2.6 million, due to a reduction in the volume of polymer
inventories offset, in part, by higher resin costs. As a result,
total inventories were reduced by approximately $3.1 million
during the quarter.
The Company amended its credit facility with GE Commercial Finance
on March 23, 2004. This amendment increased the Company's
revolving line of credit by $10 million to $60 million, and
reduced the EBITDA covenant through the third quarter of fiscal
2005.
On June 16, 2004, the Company announced that it had lowered its
earnings expectations for the second half of it its fiscal year
2004. The lower earnings expectations were due primarily to a
lower than expected volume of shipments and an unexpected
significant increase in the cost of polypropylene resin, the
Company's primary raw material. While recent price increases have
offset a portion of these additional costs, market demand has not
been sufficient to enable all of the cost increases to be passed
on to the Company's customers. GE Capital Finance agreed to an
amendment to the credit facility on June 30, 2004, to among other
things, restate the Company's minimum EBITDA covenant for the
third fiscal quarter 2004 from approximately $35.0 million to
$30.0 million. GE Capital Finance subsequently agreed to another
amendment to the credit facility on July 30, 2004 to, among other
things, waive any event of default with respect to the non-payment
of interest on its senior notes through September 1, 2004, which
date may be extended by the lenders.
At June 30, 2004, the Company had borrowings of $41.3 million
pursuant to its revolving line of credit. Unused availability
under this revolving credit facility at the end of the third
fiscal quarter 2004 was approximately $7.0 million. Net debt
(total debt less cash) at June 30, 2004 was $358.8 million,
representing 99% of total capitalization.
Future Operations
The Company has reached an agreement in principle with six
bondholders holding over 70% in aggregate outstanding principal
amount of the Company's 10 3/4% senior notes to recapitalize the
senior notes. Pursuant to the agreement in principle, the Company
will not pay the interest on the senior notes that became due on
July 1, 2004. The recapitalization will be accomplished through a
prepackaged chapter 11 plan of reorganization and is expected to
be completed within the timetable set out in the Company's press
release of July 30th.
Additionally, the Company received notice from the NASDAQ Listing
Qualifications Staff that the Company's common stock has not
maintained a minimum market value of publicly held shares of $5.0
million as required for continued inclusion under Marketplace Rule
4450(e)(1). If the Company cannot demonstrate compliance with the
minimum market value rule or meet certain other requirements on or
before November 11, 2004, the NASDAQ Listing Qualifications Staff
will provide written notice that the Company's common stock will
be delisted. The Company may apply to transfer its securities to
The NASDAQ SmallCap Market. To transfer, the Company must satisfy
the continued inclusion requirements for that market.
Applied Extrusion Technologies, Inc. is a leading North American
developer and manufacturer of specialized oriented polypropylene
(OPP) films used primarily in consumer products labeling and
flexible packaging applications.
* * *
As reported in the Troubled Company Reporter on July 5, 2004,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Applied Extrusion Technologies, Inc., to 'D' from
'CCC'.
Standard & Poor's also lowered its rating on the company's
$275 million 10.75% senior notes due 2011 to 'D' from 'CC'.
The downgrade follows the New Castle, Delaware-based company's
failure to make the $14.8 million interest payment due
July 1, 2004, on its $275 million senior notes.
"In light of very weak operating results, the company obtained an
amendment to financial covenants under its credit agreement for
the third fiscal quarter of 2004. However, the amendment
restricts the company from paying interest due on July 1, 2004, on
its senior notes unless it has excess availability under its
current credit facility of $20 million after giving effect to the
interest payment. Currently, the company would not have the
excess availability required under the amendment to make the
interest payment," said Standard & Poor's credit analyst Liley
Mehta.
ASTROPOWER: Proposes Plan Solicitation & Voting Procedures
----------------------------------------------------------
AstroPower, Inc., asks the U.S. Bankruptcy Court for the District
of Delaware to approve uniform solicitation and voting procedures
for tabulating creditors' votes to accept or reject the Chapter 11
Liquidating Plan. As previously reported in the Troubled Company
Reporter on August 13, 2004, AstroPower and the Official Unsecured
Creditors filed a joint Chapter 11 Liquidating Plan.
Donlin Recano & Company, Inc., the Debtor's Notice and Balloting
Agent, will assist the Debtor in (a) mailing solicitation packages
to creditors, (b) distributing ballots, (c) receiving creditors'
ballots, and (d) tabulating the results.
The Debtor anticipates commencing the Plan solicitation process no
later than 5 days after the Court approves the Disclosure
Statement.
To be counted, ballots must be property executed, completed and
delivered to Donlin Recano either by:
(a) mail in the return envelope provided with each Ballot, or
(b) personal delivery to Donlin Recano by 4:00 p.m. five days
before the Confirmation Hearing.
The Debtor submits that a solicitation period allowing at least 25
days will provide sufficient time for creditors to make informed
decisions about whether to accept or reject the Plan and timely
submit their Ballots.
The Debtor further requests that the Court schedule the
Confirmation Hearing on a date amendable to the Court. All
written objections to the Confirmation of the Plan are due 5 days
before the Confirmation Hearing and must be filed with the Court
with copies served on the Notice Parties.
Headquartered in Wilmington, Delaware, AstroPower Inc., produced
the world's largest solar electric (photovoltaic) cells and a full
line of solar modules. The Company filed for chapter 11
protection on February 1, 2004 (Bankr. Del. Case No. 04-10322).
Derek C. Abbott, Esq. at Morris, Nichols, Arsht & Tunnell,
represents the Debtor. When the Company filed for protection from
its creditors, it estimated debts and assets of more than $100
million. As of Aug. 4, 2004, the Company sold substantially all
of its assets and its non-debtor subsidiaries.
BELL CANADA: Union Ratifies Collective Bargaining Agreement
-----------------------------------------------------------
Bell Canada's more than 7,000 technicians, represented by the
Communications, Energy and Paperworkers' Union of Canada -- CEP,
voted to accept a new four-year agreement. The vote in favour of
ratification was 85.4 per cent, the participation rate 81 per
cent.
"This vote to accept reflects the fact that the last company
offer, which came following our strike deadline, was much
improved," said CEP Ontario administrative vice president Joel
Carr.
"Those improvements included the withdrawal by the company of
concession demands, 12.1 % wage increase over four years, the
potential to negotiate further pension improvements during the
life of the collective agreement, the guarantee of a defined
benefit pension for existing employees, the reclassification of
hundreds of employees and 200 new job openings and new
hires," Mr. Carr said.
"We are pleased to have reached an agreement with our technicians
through the collective bargaining process," said Ellen Malcolmson,
Senior Vice-President - Operations, Bell Canada. "[The] result
recognizes the solid offer we placed on the table. The offer
balances the needs of our employees and the company in a highly
competitive environment."
"We can now all continue to focus on serving customers - working
together, building a stronger company to compete in an industry
that is changing dramatically," added Ms. Malcolmson.
Bell Canada -- http://www.bci.ca/-- provides connectivity to
residential and business customers through wired and wireless
voice and data communications, local and long distance phone
services, high speed and wireless Internet access, IP-broadband
services, e-business solutions and satellite television services.
Bell Canada is wholly owned by BCE Inc.
Bell Canada is operating under a court supervised Plan of
Arrangement, pursuant to which it intends to monetize its assets
in an orderly fashion and resolve outstanding claims against it in
an expeditious manner with the ultimate objective of distributing
the net proceeds to its shareholders and dissolving the company.
Bell Canada is listed on the Toronto Stock Exchange under the
symbol BI.
BRIDGE TECH: U.S. Trustee Appoints 4-Member Creditors Committee
---------------------------------------------------------------
The United States Trustee for Region 16 appointed four creditors
to serve on an Official Committee of Unsecured Creditors in Bridge
Technology, Inc.'s Chapter 11 case:
1. James Djen
111 Hillcrest
Irvine, California 92603
Phone: 949-422-8954, Fax: 949-854-8149
2. Frontier Electronics
Attn: Ron Monitz, Esq.
Zimmerman Walker & Monitz LLP
23975 Park Sorrento, Suite 210
Calabasas, California 91302-4011
Phone: 818-222-9889, Fax: 818-222-9780
3. Karen Chiu
15 Harcourt
Newport Coast, California 92657
Phone: 949-718-0718, Fax: 949-718-0718,
Cell: 949-413-0803
4. Squar, Milner, Reehl & Williamson, LLP
Attn: Deborah S. Slack
4100 Newport Place, 3rd Floor
Newport Beach, California 92660
Phone: 949-222-2999, Fax: 949-222-2989
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.
Headquartered in Garden Grove, California, Bridge Technology Inc.
-- http://www.bridgeus.com/-- develops, markets, and sells
computer peripherals and computer system enhancement products.
The Company filed for chapter 11 protection on June 21, 2004
(Bankr. C.D. Calif. Case No. 04-13988). Herbert N. Niermann,
Esq., in Irvine, Calif., represents the Debtor in its
restructuring efforts. When the Company filed for protection from
its creditors, it listed $19,498,905 in total assets and
$13,067,848 in total debts.
CALPINE: Inks Pact to Sell Canadian Assets to PrimeWest for $625MM
------------------------------------------------------------------
Calpine Corporation (NYSE: CPN) entered into an agreement to sell
all of its Canadian natural gas reserves and petroleum assets to
PrimeWest Energy Trust for a total purchase price of $Cdn825
million, or approximately $US625 million, less adjustments to
reflect a July 1, 2004, effective date. These assets currently
represent approximately 221 billion cubic feet equivalent (bcfe)
of proved reserves, producing approximately 61 million cubic feet
equivalent of net gas per day (mmcfed). Also included in this
sale is Calpine's 25 percent interest in approximately 80 bcfe of
proved reserves (net of royalties) and 32 net mmcfed owned by the
Calpine Natural Gas Trust. Calpine expects to close the sale in
early September 2004, pending regulatory approval and other
conditions of closing.
"This is an excellent opportunity for Calpine to capture
significant value for our natural gas assets during attractive
market conditions," stated Calpine Chief Financial Officer Bob
Kelly. "And it puts us well on our way toward achieving our goal
of having $3 billion of cash and liquidity on hand by year-end."
Net proceeds from this sale will be used to repay the amount
outstanding under the existing $500 million first lien
indebtedness, with remaining proceeds to be used in accordance
with the asset sale provisions of Calpine's existing bond
indentures. Following the repayment of its existing first lien
indebtedness, Calpine expects to issue up to approximately
$700 million of new first lien debt. Calpine retained Waterous &
Co. as its advisor for the sale.
About Calpine
Calpine Corporation (S&P, CCC+ Senior Unsecured Convertible Note
and B Second Priority Senior Secured Note Ratings, Negative
Outlook), celebrating its 20th year in power in 2004, is a leading
North American power company dedicated to providing electric power
to customers from clean, efficient, natural gas-fired and
geothermal power facilities. The company generates power at
plants it owns or leases in 21 states in the United States, three
provinces in Canada and in the United Kingdom. Calpine is also
the world's largest producer of renewable geothermal energy, and
owns or controls approximately one trillion cubic feet equivalent
of proved natural gas reserves in the United States and Canada.
For more information about Calpine, visit http://www.calpine.com/
CANDESCENT TECHNOLOGIES: Steve Berson Moves to Kilpatrick Stockton
------------------------------------------------------------------
Candescent Technologies Corporation and Candescent Technologies
International, Ltd., ask the U.S. Bankruptcy Court for the
Northern District of California, San Jose Division, for approval
to employ Kilpatrick Stockton LLP as their special corporate
counsel.
The Debtors report that Steven L. Berson, Esq., was formerly a
partner in Wilson Sonsini Goodrich & Rosati PC, their primary
corporate counsel. Mr. Berson was one of the attorneys at Wilson
Sonsini who was primarily responsible for providing services to
the Debtors. Mr. Berson's historical knowledge and familiarity
with the Company's business operation prompt the Debtors to hire
Kilpatrick Stockton -- Mr. Berson's new firm.
The firm is presently holding a $42,370 retainer for costs and
services rendered in the Debtors' cases. The Debtors will pay Mr.
Berson his current $450 hourly billing rate.
Headquartered in Los Gatos, California, Candescent Technologies
Corp. -- http://www.candescent.com/-- supplies flat panel
displays for notebook computers, communications and consumer
products. The Company, along with its affiliate, filed for
chapter 11 protection on June 16, 2004 (Bankr. N.D. Calif. Case
No. 04-53803). Ramon Naguiat, Esq., at Pachulski, Stang, Ziehl,
Young, Jones & Weintraub, represents the Debtors in their
restructuring efforts. When the Debtor filed for protection from
its creditors, it estimated debts and assets of more than
$100 million.
CATHOLIC CHURCH: Can't Prepare Monthly Operating Reports on Time
----------------------------------------------------------------
Subsection A of Rule 2015-2 of the Local Rules of the United
States Bankruptcy Court for the District of Oregon requires the
Archdiocese of Portland in Oregon to file its monthly financial
reports "no later than the 15th day" of the month following the
month being reported.
Thomas W. Stilley, Esq., at Sussman Shank, LLP, in Portland,
Oregon, tells Judge Perris that on a consistent basis, the
majority of the Debtor's statements for 140 investment accounts
are not received until mid-month. The Debtor cannot prepare
accurate reports until these statements are received and
reconciled.
For this reason, the Debtor asks the Court to modify Local Rule
2015-2 to allow it to file its monthly financial reports on the
last business day of the month following the month being reported.
Mr. Stilley explains that providing reports on the last business
day of the month following the month reported will allow a more
accurate assessment of the Debtor's receipts and expenses,
especially investment income. The Debtor will also be able to
provide better information than would be provided were the Debtor
attempt to prepare and file reports every 15th of the month.
The Official Committee of Tort Claimants and the U.S. Trustee
support the Debtor's request.
The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas
W. Stilley, Esq. and William N. Stiles, Esq. of Sussman Shank LLP
represent the debtor in its restructuring efforts. In its
Schedules of Assets and Liabilities filed with the Court on
July 30, 2004, the Portland Archdiocese reports $19,251,558 in
assets and $373,015,566 in liabilities. (Catholic Church
Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
CATHOLIC CHURCH: Abuse Claimants Want to Use Fictitious Names
-------------------------------------------------------------
Seventeen victims of severe and frequent sexual molestation by
Catholic priests seek the permission of the U.S. Bankruptcy Court
for the District of Ohio to proceed under fictitious names
throughout the Archdiocese of Portland in Oregon's Chapter 11
case, in adversary proceedings, and in contested matter
proceedings or otherwise, including requests for protection from
the automatic stay and for the presentation and contest of proofs
of claim.
Neil T. Jorgenson, Esq., representing 17 Priest Abuse Claimants,
reminds the Court that the erring priests were under the
jurisdiction and control of the Archdiocese of Portland. The
Debtor is aware of, or will be promptly made aware of, the
identities of all the Priest Abuse Claimants. Therefore, the
Debtor will not be prejudiced by the use of the fictitious names.
Mr. Jorgenson explains that the Priest Abuse Claimants' claims are
sensitive and private in nature. Proceeding under fictitious
names will minimize additional fear, embarrassment, humiliation
and possible retaliation from third parties that public disclosure
of their identities might otherwise generate.
The Priest Abuse Claimants will go by the names SNB, JC, AGY and
REC, JCM, John Doe 1, John Smith, LD, DM, FM, HS, MM, GM, RM, CM,
BG and MJ.
Mr. Jorgenson also notes that the Priest Abuse Claimants who have
filed lawsuits before the Oregon Circuit Court have sought and
obtained the Oregon Circuit Court's approval to use fictitious
names in those cases. The Claimants, hence, propose to use the
same fictitious names in the Bankruptcy Court.
The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas
W. Stilley, Esq. and William N. Stiles, Esq. of Sussman Shank LLP
represent the debtor in its restructuring efforts. In its
Schedules of Assets and Liabilities filed with the Court on
July 30, 2004, the Portland Archdiocese reports $19,251,558 in
assets and $373,015,566 in liabilities. (Catholic Church
Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
CCC INFORMATION: Insurers Will Pay $4.75 Million Settlement
-----------------------------------------------------------
CCC Information Services Group, Inc., (Nasdaq:CCCG) settled a
dispute that had been pending between the company and certain of
its insurers which had issued insurance policies to the company
over the past several years.
Under the terms of the settlement, signed on August 16, 2004, the
insurers will pay the company approximately $4.75 million, and the
parties have agreed to dismiss the legal proceedings relating to
this matter and to provide mutual releases. The settlement
involved a lawsuit filed by the company's insurers involving
coverage in connection with the litigation involving the company's
vehicle valuation product now known as CCC Valuescope(R) Claim
Services.
The company expects to use this settlement, along with previously
accrued charges and other available insurance proceeds, for
defense costs and settlements related to certain litigation
involving CCC Valuescope(R) Claim Services. The company cannot
predict at this time, however, whether total defense costs and/or
settlements for this litigation will be more or less than the
aggregate amount of the current recovery, previously accrued
charges and other insurance proceeds. The company also cannot
predict at this time whether any other insurance proceeds will be
available for the defense and/or settlement of CCC Valuescope(R)
litigation.
About CCC
CCC Information Services Group, Inc., (Nasdaq:CCCG), headquartered
in Chicago, is a leading supplier of advanced software,
communications systems, Internet and wireless-enabled technology
solutions to the automotive claims and collision repair
industries. Its technology-based products and services optimize
efficiency throughout the entire claims management supply chain
and facilitate communication among approximately 21,000 collision
repair facilities, 350 insurance companies, and a range of
industry participants. For more information about CCC Information
Services, visit CCC's Web site at http://www.cccis.com/
* * *
As reported in the Troubled Company Reporter on August 5, 2004,
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Chicago, Illinois-based CCC Information Services
Inc.
At the same time, Standard & Poor's assigned its 'B+' senior
secured debt rating, with a recovery rating of '4', to the
company's proposed $208 million senior secured bank facility,
which will consist of a $30 million revolving credit facility (due
2009) and a $178 million term loan (due 2010). The 'B+' rating on
the senior secured debt is the same as the corporate credit rating
and the '4' recovery rating indicates that the first priority
senior secured debt holders can expect marginal (25%-50%) recovery
of principal in the event of a default.
The proceeds from this facility, along with about $38 million of
cash on hand, will be used to repurchase $210 million in CCC's
common stock. The outlook is positive. Pro forma for the
proposed bank facility, CCC had approximately $205 million in
operating lease-adjusted debt as of June 2004.
"The ratings reflect CCC's narrow product focus within a mature
niche marketplace and leveraged balance sheet," said Standard &
Poor's credit facility Ben Bubeck. "These are only partially
offset by a largely recurring revenue base supported by
intermediate-term customer contracts, high barriers to entry, and
solid operating margins, allowing for modest free operating cash
flow generation."
CHEM PORT LLC: Case Summary & 22 Largest Unsecured Creditors
------------------------------------------------------------
Lead Debtor: Chem Port, LLC
55 West Port Plaza Drive, Suite 575
Saint Louis, Missouri 63146
Bankruptcy Case No.: 04-50368
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
RMC Energy Technology, LLC 04-50370
Chapter 11 Petition Date: August 16, 2004
Court: Eastern District of Missouri (St. Louis)
Debtors' Counsel: Teresa A. Generous, Esq.
Mathis, Marifian, Richter & Grandy, Ltd.
7751 Carondelet, Suite 500
St. Louis, MO 63105
Tel: 314-421-2325
Estimated Assets Estimated Debts
---------------- ---------------
Chem Port, LLC $0 to $50,000 $1 M to $10 M
RMC Energy Technology, LLC $0 to $50,000 $100,000-$500,000
A. Chem Port, LLC's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Ronald O. Parsons $350,000
2820 Sugarloaf Club Drive
Duluth, GA 30097
Robert & Nancy Koopman $175,000
Mark A. Fitzgerald $160,000
Theodore A. Guebert $160,000
Roger A. Guebert $130,000
Robert C. Chan $70,000
Richard & Melinda Trokey $50,000
Robert & Cheryn Sutton $50,000
GTA Technologies, Inc. $40,000
Bryan Cave, LLP $32,000
World Energy, LLC $25,000
Marie Schliemann $10,000
WPP Holdings, LLC $8,000
Don Hackman $6,500
Baker & Hostetler, LLP $4,500
Harrah's Casino $1,500
Southwestern Bell Telephone $1,000
Birch Telecom $500
Cingular $500
Federal Express $500
B. RMC Energy Technology's 2 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
RMC - China $180,000
Chem Port, LLC $130,000
CITADEL HILL: Fitch Affirms $15MM Class B-2L Notes' BB- Rating
--------------------------------------------------------------
Fitch Ratings affirms six classes of notes issued by Citadel Hill
2000, Ltd. These affirmations are the result of Fitch's review
process. These rating actions are effective immediately:
-- $352,733,794 class A-1L notes affirmed at 'AAA';
-- $45,000,000 class A-2L notes affirmed at 'AA-';
-- $35,000,000 class A-3L notes affirmed at 'A-';
-- $17,500,000 class B-1L notes affirmed at 'BBB';
-- $7,500,000 class B-1C notes affirmed at 'BBB';
-- $15,000,000 class B-2L notes affirmed at 'BB-'.
Citadel Hill is a collateralized debt obligation -- CDO -- managed
by Citadel Hill Advisors which closed December 20, 2000. Citadel
Hill is composed of more than 82% High Yield Loans, 5.5% High
Yield Bonds and 2.5% of ABS. Included in this review, Fitch
Ratings discussed the current state of the portfolio with the
asset manager and their portfolio management strategy going
forward.
Since the last rating action, the collateral has continued to
perform. The weighted average rating factor has stayed the same
at 'B+'. The senior class A overcollateralization ratio has
increased from 121.46% as of May 17, 2003 to 122.63% as of the
most recent trustee report dated July 17, 2004, the class A
overcollateralization ratio has increased from 111.57% to 112.66%,
the class B overcollateralization ratio has increased from 102.02%
to 103.01%. As of the most recent trustee report available,
Citadel Hill defaulted assets represented 0% of the $438.0 million
of eligible investments. Assets rated 'CCC+' or lower represented
approximately 1.03%, excluding defaults.
As of the July 17, 2004 distribution date, there is currently
$46.6 million balance in the principal collection account, which
has been received through prepayment, tenders and calls of
eligible investments. The manager has indicated that they are
currently in the process of selecting suitable investments to
reduce the cash balance of the portfolio.
The rating of the class A-1L, class A-2L, and class A-3L notes
addresses the likelihood that investors will receive full and
timely payments of interest, as per the governing documents, as
well as the stated balance of principal by the legal final
maturity date. The rating of the class B-1L, class B-1C and class
B-2L notes address the likelihood that investors will receive
ultimate and compensating interest payments, as per the governing
documents, as well as the stated balance of principal by the legal
final maturity date.
Fitch will continue to monitor and review this transaction for
future rating adjustments.
COVANTA ENERGY: Affiliates' Claims Objection Deadline Extended
--------------------------------------------------------------
U.S. Bankruptcy Court for the Southern District of New York gave
Covanta Tampa Bay, Inc., until Dec. 4, 2004 -- 120 days after the
Effective Date of its chapter 11 plan -- to object to claims.
The deadline for these Covanta affiliates to object to claims is
extended until 120 days following the Effective Date of their to-
be-prepared Chapter 11 Plans:
-- Covanta Lake II, Inc.,
-- Covanta Tampa Construction, Inc.,
-- Covanta Warren Resource Co., LP,
-- Covanta Warren Holdings I, Inc., and
-- Covanta Warren Holdings II, Inc.
Headquartered in Fairfield, New Jersey, Covanta Energy Corporation
-- http://www.covantaenergy.com/-- is a publicly traded holding
company whose subsidiaries develop, own or operate power
generation facilities and water and wastewater facilities in the
United States and abroad. The Company filed for Chapter 11
protection on April 1, 2002 (Bankr. S.D.N.Y. Case No. 02-40826).
Deborah M. Buell, Esq., and James L. Bromley, Esq., at Cleary,
Gottlieb, Steen & Hamilton represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
its creditors, they listed $3,280,378,000 in assets and
$3,031,462,000 in liabilities. (Covanta Bankruptcy News, Issue
Nos. 62 and 63; Bankruptcy Creditors' Service, Inc., 215/945-7000)
CROMPTON CORP: Completes $945 Million Refinancing Program
---------------------------------------------------------
Crompton Corporation (NYSE:CK) completed a multipart refinancing
program totaling $945 million.
The components of the refinancing are:
-- $600 million aggregate principal amount of privately
offered senior notes. The new senior notes are a
combination of $375 million of 9 7/8% Senior Notes due
2012 (with a yield to maturity of 10.0%), and $225
million of Libor plus 5.75% Senior Floating Rate Notes
due 2010 (interest rate reset quarterly);
-- $220 million in new credit facilities consisting of a $120
million revolving credit facility and a $100 million pre-
funded letter of credit facility; and
-- A three-year extension of the company's domestic accounts
receivable program, giving Crompton the ability to sell up
to $125 million in domestic accounts receivable (an increase
of $10 million to the current facility).
"This is a major step in securing Crompton's financial future,"
said Robert L. Wood, chairman, president and chief executive
officer. "We accomplished our key objective, which was to push
out maturities in order to give management the opportunity to
reinvigorate some very good businesses. We are continuing to
focus intensely on pricing discipline and are attacking the cost
side of the equation in numerous ways, including our previously
announced $50 million restructuring initiative, which is designed
to streamline the organization and its work processes."
Crompton received proceeds of approximately $8.7 million from its
senior note offering, net of the underwriter's discount and
expenses. Approximately $462.0 million of proceeds were used to
repay outstanding borrowings under its prior domestic revolving
credit facility, and fund its concurrent tender offer and consent
solicitation for its 8.50% Senior Notes due 2005 and 6.125% Senior
Notes due 2006, which expired as scheduled. Crompton has received
and accepted tenders for $261.3 million, or 74.7%, of the 8.50%
Senior Notes due 2005 and $140.0 million, or 93.3%, of the 6.125%
Senior Notes due 2006. Accordingly, the executed supplemental
indentures amending the indentures relating to these notes have
become operative. Approximately $100.0 million of proceeds are
being used to redeem the balance of the outstanding 8.50% Senior
Notes.
Crompton Corporation, with annual sales of $2.2 billion, is a
producer and marketer of specialty chemicals and polymer products
and equipment. Additional information concerning Crompton
Corporation is available at http://www.cromptoncorp.com/
* * *
As reported in the Troubled Company Reporter's July 23, 2004,
edition, Standard & Poor's Ratings Services lowered the ratings on
the existing senior notes and debentures of Middlebury,
Connecticut-based Crompton Corp. to 'B+' from 'BB-'.
The 'BB-' corporate credit rating of this specialty chemicals and
polymer products producer is affirmed and the outlook remains
negative.
The existing notes, which are assigned a recovery rating of '3'
and will become secured upon the close of the new revolving
credit facility, are now rated one notch lower than the corporate
credit rating. The lower rating reflects the notes'
disadvantaged position since lenders under the new credit
facility retain a first-priority distribution on the collateral in
an amount equal to 10% of the company's consolidated net tangible
assets. Standard & Poor's also assigned a 'B' rating to proposed
tranches of senior unsecured debt totaling $600 million with
maturity dates of 2010, 2011, and 2014. The new unsecured notes
are rated two notches lower than the corporate credit rating,
reflecting the priority of secured debt as well as substantial
subsidiary obligations relative to total assets.
Standard & Poor's assigned a 'BB-' bank loan rating and its '2'
recovery rating to a new secured $250 million revolving credit
facility maturing in 2009. The 'BB-' rating is the same as the
corporate credit rating; this and the '2' recovery rating
indicate that bank lenders can expect a substantial recovery of
principal in the event of default.
"The ratings on Crompton reflect the vulnerability of its
operating margins and earnings to competitive pricing pressures,
raw materials costs, and the cyclicality of its markets; and weak
cash flow protection measures," said Standard & Poor's credit
analyst Wesley E. Chinn.
D'LISI FOOD SYSTEMS: Case Summary & Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: D'Lisi Food Systems, Inc.
10 White Street
Rochester, New York 13608
Bankruptcy Case No.: 04-23515
Chapter 11 Petition Date: August 13, 2004
Court: Western District of New York (Rochester)
Judge: John C. Ninfo II
Debtor's Counsel: Lee E. Woodard, Esq.
Harris, Beach LLP
One Park Place
300 South State Street, Suite 400
Syracuse, NY 13202
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Unisource $320,908
7472 Collections Center Drive
Chicago, IL 60693
Teeny Food Corporation $234,413
Ablest Staffing Services $155,105
Ablest Staffing Services $155,105
Winona Foods, Inc. $123,190
Da Vinci Food Products $115,085
Goglanian Bakeries $76,122
C & F Packing Co. $70,486
Leonard's Express $70,228
Private Label Foods $65,024
John W. Danforth Company $46,848
GCA Inc. $44,377
R.C. Daniel, Inc. $42,682
Jacobstein Food Service $41,662
URS Logistics Inc. $41,204
Richmond Group $35,991
UBF Food Solutions $34,204
Flower City Logistics $33,125
Durham Industries $31,530
Interstate Logistics, Inc. $31,353
DEAN FOODS: Fitch Upgrades Senior Unsecured Debt Rating to BB
-------------------------------------------------------------
Fitch Ratings assigns a 'BBB-' rating to Dean Foods Company's new
senior secured credit facility and upgrades its senior unsecured
notes rating to 'BB' from 'BB-'. Simultaneously, Fitch withdraws
its 'BB+' rating from Dean's previous senior secured facility
which included a revolver and a Term A, B, and C loan maturing in
2007. The Rating Outlook is Positive. This rating action affects
approximately $3.1 billion of Dean's outstanding debt.
Fitch's 'BBB-' rating covers its new $1.5 billion senior secured
revolver which expires August 2009 and its new $1.5 billion senior
secured term loan A which matures August 2009. The security for
these loans consists of all assets, excluding the capital stock of
the legacy Dean's subsidiaries and the real property owned by the
legacy Dean and its subsidiaries. Fitch's 'BB' rating covers
approximately $661 million senior unsecured notes with maturities
staggered between 2005 and 2017.
The ratings upgrade and outlook consider the improvement in Dean's
credit profile over the past several years, the company's leading
and growing market share in the fluid and soy milk industry, and
its proven management team. Dean's management has established a
track record of effectively integrating acquisitions, extracting
cost savings from its businesses, and successfully managing
through difficult operating environments. Management's successful
navigation through the current unprecedented class one raw milk
price environment provides reassurance that a degree of operating
income stability is obtainable even in the most difficult and
volatile environments.
For the latest 12 months ended June, 30 2004, Dean's total debt-
to-EBITDA was 3.5 times (x) and Dean's EBITDA-to-interest incurred
was 4.6x. Net cash flow from operations has increased
approximately 40% since the 2001 merger of the legacy Dean Foods
and Suiza Foods to over $400 million annually despite recent
demands on working capital. Fitch expects the overall operating
environment to improve going forward and Dean's working capital
requirements to decline. As such, Fitch believes Dean is capable
of sustaining a leverage ratio in the low 3.0x range for the
foreseeable future.
Dean Foods Company is the largest processor of milk and the third
largest producer of ice cream in the United States. In addition,
Dean is the leading producer, distributor and marketer of value-
added dairy and non-dairy products and the largest processor of
private label pickles in the United States. Dean also has several
joint ventures and sells products under partnerships and licensed
brands such as Land O' Lakes, Hershey's, and Folgers Jakada. Dean
has operations in 39 states, Spain, and the U.K.
DENNINGHOUSE INC: Files for CCAA Protection & RSM is the Monitor
----------------------------------------------------------------
Denninghouse Inc. (TSX: DEH), operator of 313 Buck or Two and
Quebec-based Dollar Ou Deux stores, and certain of its
subsidiaries has voluntarily sought and obtained protection
pursuant to the Companies' Creditors Arrangement Act -- CCAA.
RSM Richter, Inc., was appointed the CCAA Monitor.
Denninghouse sought CCAA protection because it has been unable to
secure sufficient new resources to meet its ongoing obligations.
These obligations were caused, in large part, by the continuing
and accelerating losses in the Company's corporate stores,
including related overhead expenses and increasing franchise
financial assistance.
"[The] filing follows a strategic review of the Company's options
by our Board of Directors, with the assistance of financial
advisors from Richter," says Denninghouse Inc. President & C.O.O.,
Gregg Treadway. "We determined that seeking CCAA protection was
in the best interest of all stakeholders, and in particular
believed that it was the best alternative towards preserving the
value of our franchise network."
The restructuring contemplated will include a search for
purchasers, led by Richter, and the Company remains optimistic
that the franchise network will be an attractive business
opportunity to a number of potential buyers or investors, and will
provide a solid foundation of financial stability and
opportunities for future profitability.
As part of the ongoing restructuring process and in recognition of
the expected significant reduction in corporate stores,
Denninghouse has implemented a staff rationalization plan at the
Company's corporate home office and has substantially reduced
other operational expenses.
"The present decision to close locations will affect company-owned
stores," says Gregg Treadway. "During the coming days and weeks we
will continue to focus on developing a plan that will protect and
ensure the interests of our successful franchise locations."
Market Regulation Services halted the trading of Denninghouse's
shares at 9:20 Eastern Time on August 16, 2004.
Denninghouse, Inc., operates franchised or company-owned stores in
10 provinces under the Buck or Two, Dollar Ou Deux banners. The
stores sell thousands of items, generally at fixed price points of
$2.00 or less with selective value items above $2.00, and offer
wide categories of products and everyday items at value prices.
Denninghouse, Inc., is listed on the Toronto Stock Exchange
(TSX: DEH).
DENNY'S CORPORATION: Moody's Junks $379 Million Senior Notes
------------------------------------------------------------
Moody's Investors Service rated:
* the proposed first-lien bank loan of Denny's Corporation at
(P)B2;
* the proposed second-lien facility at (P)B3; and
* the proposed senior notes at (P)Caa1, subject to review of
final documentation.
The review for upgrade reflects that senior implied and issuer
ratings would be raised to B2 and Caa1, respectively, following
successful implementation of the new capital structure, primarily
the first and second-lien facilities. Together with $92 million
from a previous equity placement, virtually all proceeds from the
new debt will be used to completely repay the existing senior
notes. Replacement of the company's current debt with a less
burdensome capital structure and Moody's expectation for continued
improvement in operating performance will support the higher
ratings. However, limiting the ratings are the company's high
financial leverage even after the proposed transaction and Moody's
opinion that cash outflows for debt service and capital investment
will remain substantial relative to operating cash flow.
These ratings were assigned:
* $275 million first-lien bank loan at (P)B2;
* $100 million second-lien loan facility at (P)B3; and the
* $220 million unsecured senior note issue at (P)Caa1.
These ratings were placed under review for upgrade:
* $120 million of 12.75% senior note (2007) rating of Caa1;
* $379 million of 11.25% senior note (2008) rating of Caa3;
* Senior Implied Rating of Caa1; and the
* Issuer Rating of Caa3.
Moody's will withdraw its ratings on the 2007 and 2008 notes
following consummation of this contemplated transaction.
The ratings recognize Moody's expectation that operating profit
over the medium-term will remain modest relative to cash outflows
for interest expense and capital investment, the high degree of
financial leverage (especially when adjusted for operating lease
obligations) even after the proposed transaction improves the
balance sheet, and the history of underinvestment in Denny's store
base (given that depreciation has substantially exceeded capital
expenditures since the January 1998 reorganization).
The intense competition within the family dining segment of the
restaurant industry and our belief that many franchisees were
adversely impacted during the recent period of declining sales
also adversely impacts this credit opinion.
However, benefiting the ratings are substantial reductions in
leverage and debt service following replacement of the 2007 and
2008 notes with incremental equity and debt that is lower cost and
longer dated, consistent sales and profitability improvements over
the past several quarters, and the potential liquidity from a
meaningful real estate portfolio. Control of the well-known
"Denny's" trade name and concentration of domestic restaurant
count in economically expanding regions also potentially benefit
the company.
The review for upgrade reflects that ratings will improve
following successful implementation of the proposed new capital
structure, primarily the first and second-lien facilities. Over
the longer term, Moody's expects that the company's financial
profile will improve as it:
(1) continues the recent pattern of growing average unit volume
from both increased customer count and higher average
check;
(2) adjusts the pace of capital investment to avoid free cash
flow deficits; and
(3) improves leverage by using a portion of discretionary cash
flow to amortize debt ahead of schedule.
Ratings would be negatively impacted if the company and its
franchisees prove unable to further improve average unit volume,
constrained operating cash flow limits the company's ability to
update its store base, or debt protection measures fail to improve
from current levels (such as pro-forma lease adjusted leverage of
5.8 times and fixed charge coverage of 1.2 times). Ratings could
eventually go up as higher average unit volume and store
profitability leads to greater financial flexibility (such as
lease adjusted leverage falling below 5 times and fixed charge
coverage approaches 2 times) and the company achieves worthwhile
returns on investment with the planned remodel and development
program.
The (P)B2 rating on the proposed five-year Bank Loan borrowed by
Denny's, Inc., (to be comprised of a $75 million Revolving Credit
Facility and a $200 million Term Loan B) considers that this debt
enjoys the guarantees of the company's operating subsidiaries and
is secured by a first-lien on substantially all assets. The
collateral includes the real estate for about 240 stores. While
Moody's believes that this first-lien bank loan is fully covered
by sellable assets, the security on the collateral does not result
in notching above the senior implied rating because of the
significant proportion of this bank loan in the company's total
debt structure. Over the life of the bank loan, Moody's expects
that the company will utilize the Revolving Credit Facility only
for temporary cash flow timing differences except Letters of
Credit (currently about $35 million) that cover self-insurance
commitments.
The (P)B3 rating on the proposed $100 million six-year Loan
Facility borrowed by Denny's, Inc., considers, in addition to the
guarantees of the operating subsidiaries, that this debt is
collateralized by a 2nd-Lien on virtually all of the company's
tangible and intangible assets. This bank loan has a subordinate
lien relative to the proposed 1st-Lien bank loan. In a
hypothetical distressed scenario, Moody's expects that collateral
value may fall short of the secured debt balance because of likely
liquidation valuation for significant assets such as restaurant
equipment, leasehold improvements, goodwill, and the Denny's trade
name.
The (P)Caa1 rating on the senior unsecured notes issued by the
intermediate holding company Denny's Holdings, Inc., considers
that this debt class is not guaranteed by the operating
subsidiaries and is structurally subordinated to significant
amounts of more senior obligations. These obligations include the
$275 million first-lien secured bank facility, the $100 million
second-lien loan facility, $34 million of capital leases and other
secured debt, and $32 million of operating company trade accounts
payable.
Lease adjusted leverage improved to 5.8 times for the twelve
months ending June 30, 2004 (pro-forma for the proposed debt
issuances and the July 2004 equity infusion of $92 million) from
5.9 times and fixed charge coverage improved to 1.2 times from 0.8
times prior to the two balance sheet events. The meaningful
improvement in fixed charge coverage comes from the expectation
that the new debt will be materially cheaper than the retired debt
so cash interest will decline by $25 million. Restaurant margin
improved to 13.2% in the first half of 2004 compared to 10.8% in
the same period of 2003 as effective promotions have allowed the
company to leverage fixed operating costs over increased average
unit volume.
Following the proposed transaction, the company's immediate
liquidity will consist of about $40 million of bank facility
borrowing capacity and $19 million in cash. Pro-forma cash flow
(as measured by EBITDA) for the twelve months ending June 2004
just covered cash interest expense, capital investment, and
working capital changes. Moody's believes that free cash flow
will remain small as the company uses most operating cash to
remodel the existing store base and eventually to develop new
stores.
Denny's Corporation, headquartered in Spartanburg, South Carolina,
operates and franchises 1,619 family dining restaurants. Revenue
for the twelve months ending June 2004 was $959 million.
DENNY'S CORP: S&P Junks $100MM Second-Lien Loan & $220MM Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its B rating to family
dining restaurant operator Denny's Corp.'s proposed $275 million
senior secured bank loan, comprising a $200 million term loan and
a $75 million revolving credit facility.
In addition, a '3' recovery rating was assigned to the loan,
indicating an expectation for meaningful (50%-80%) recovery of
principal in the event of a default.
At the same time, a 'CCC+' rating was assigned to the company's
proposed $100 million second-lien term loan. A recovery rating of
'5' also was assigned to this loan, indicating an expectation for
negligible (0%-25%) recovery of principal in the event of a
default.
In addition, a 'CCC+' rating was assigned to Denny's proposed
$220 million senior unsecured note offering.
Existing ratings on Denny's, including the 'CCC+' corporate credit
rating, were affirmed. The outlook is developing.
Proceeds from the proposed offerings will be used to redeem the
company's 12.75% and 11.25% senior unsecured notes. The company
already used proceeds from its recent equity investment to pay
down its current bank loan. Upon completion of the $275 million
bank loan, Standard & Poor's will raise the corporate credit
rating to 'B' from 'CCC+'. The outlook will be stable.
The upgrade will be based on the refinancing of the company's
credit facility, which matures in December 2004, improved cash
flow protection measures attributed to the lower interest rate on
the bank loan compared with that on the existing senior notes, and
lower leverage following the recent $92 million equity investment.
Moreover, Denny's better financial profile is supported by its
recently improving operating performance.
"The ratings reflect the challenges of improving operating
performance in the highly competitive restaurant industry, weak
cash flow protection measures, and a significant debt burden,"
said Standard & Poor's credit analyst Robert Lichtenstein.
Spartanburg, South Carolina-based Denny's operates 554 restaurants
and franchises 1,062 others throughout the U.S., with
concentrations in California (24%), Florida (11%), and Texas
(10%). The company's historical performance is inconsistent due
to poor execution and service, as well as a lack of investment in
its restaurants. During the past two years, management has
attempted to implement programs to revitalize the Denny's brand
and improve the concept's profitability, although with limited
success.
ELANTIC TELECOM: Wants Ordinary Course Professionals to Continue
----------------------------------------------------------------
Elantic Telecom, Inc., asks the U.S. Bankruptcy Court for the
Eastern District of Virginia, Richmond Division, for permission to
retain professionals it turns to in the ordinary course of its
business without bringing formal employment applications to the
Court every time.
In the day-to-day performance of its duties, the Debtor regularly
calls upon various professionals, including attorneys, consultants
and other professionals, to assist in:
(a) carrying out its assigned responsibilities; and
(b) the operation of its business.
Because of the nature of the Debtor's business, it would be
costly, time-consuming and administratively cumbersome to require
each Ordinary Course Professional to file and prosecute separate
employment and compensation applications. The Debtor submits that
the uninterrupted service of the Ordinary Course Professionals is
vital to its ability to reorganize.
The Debtor assures the Court that no payment to an ordinary course
professional will exceed $25,000 per month during the next four
months.
Headquartered in Richmond, Virginia, Elantic Telecom, Inc. --
http://www.elantictelecom.com/-- provides wholesale fiber
bandwidth and carrier services to long-distance, international
wireless carriers and competitive local exchange carriers across
its fiber optic network. The Company filed for chapter 11
protection (Bankr. E.D. Va. Case No. 04-36897) on July 19, 2004.
Lynn L. Tavenner, Esq., and Paula S. Beran, Esq., at Tavenner &
Beran, PLC, represent the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, it listed
$19,844,000 in assets and $24,372,000 in liabilities.
ENRON: Oregon Electric Guarantees PGE Customers $15MM Rate Credit
-----------------------------------------------------------------
Oregon Electric Utility Company states that Portland General
Electric customers will receive an unconditional rate credit in
the amount of $15 million if it receives Oregon Public Utility
Commission approval to acquire PGE.
"We have listened to the concerns of OPUC staff and various
customer groups regarding the uncertain benefit of our previous
offer to share PGE's profits over a 10.5 percent return with
customers," said Kelvin Davis, a partner in an investor group
backing Oregon Electric and a future PGE board member. "We are
now responding by replacing this benefit with a firm dollar
amount. Oregon Electric will now guarantee customers a $15
million total rate credit to be paid from 2007 through 2011 in a
manner consistent with what customers may have received under our
prior proposal."
In Rebuttal Testimony filed Monday, Aug. 16, in response to the
testimony of OPUC staff and intervenors in the approval
proceeding, Oregon Electric also said that it will make PGE the
sole beneficiary of the contractual protection against potentially
material Enron-related liabilities that it had negotiated as part
of the purchase agreement. "Not only will the approval of this
acquisition put an end to the Enron era," Mr. Davis said, "It will
also ensure that PGE gets the benefit of substantial protection
against potentially material liabilities arising from Enron's
bankruptcy. PGE currently faces these liabilities, and does not
have the benefit of this protection today."
In furtherance of its commitment to provide full transparency, and
in response to requests by Citizens Utility Board, Industrial
Customers of Northwest Utilities and others for assurances of
disclosure of Oregon Electric's activities, Oregon Electric, a
privately owned company, also agreed to file with OPUC and make
available to all stakeholders annual and quarterly reports
equivalent to SEC Forms 10Q and 10K which publicly owned companies
are required to file. This complements Oregon Electric's prior
agreement to make its books and records relating to PGE available
to the OPUC.
"Oregon Electric fully expects to provide disclosure," said Mr.
Davis. "This commitment underscores that. Furthermore, we have
been working hard to fully respond to staff and other intervenors'
questions. To date, we have responded to almost 470 data requests
and have provided almost 17,000 pages of information. We expect
to continue to provide a frank and transparent exchange of
information to ensure that we answer questions that have been
raised."
In the filing, Oregon Electric clearly sets out the reasons why
its acquisition of PGE would result in a net benefit to PGE's
customers and addressed questions and concerns expressed by some
stakeholders. Oregon Electric explains why its acquisition
financing plans will not affect PGE rates or customers, and agreed
to a series of conditions similar to those required by the
Commission in prior acquisitions of Oregon utilities that are
designed to protect customers. Oregon Electric also provided an
additional condition that assures dividends from PGE will be used
to pay down debt of Oregon Electric for three years rather than
being distributed to Oregon Electric's investors.
"The OPUC Staff and intervenor testimony and subsequent settlement
conferences have resulted in substantial progress, and I am
pleased that we have been able to respond so constructively," said
Peter O. Kohler, M.D., prospective chairman of Oregon Electric and
PGE. "Monday's filing demonstrates that Oregon Electric is
listening to the concerns of all constituents, and allowed us to
further round out the benefits that Oregon Electric's proposal
provides. I remain all the more confident that this transaction
is in the best interests of customers and is a positive succession
to Enron's ownership."
Dr. Kohler noted that settlement conferences will continue for the
next several weeks. "This is a collaborative process and I
believe we have made great strides toward a settlement," he said.
"The benefits we have articulated are a substantial improvement
from PGE's current status. We will operate with transparency and
have taken substantial steps to assure that Oregon Electric
provides disclosure similar to that of other holding companies."
Oregon Electric reiterated the other benefits that this
transaction provides and the other commitments it has made,
conditioned on approval of the transaction from the OPUC:
-- An end to Enron: An immediate end to Enron's ownership of
PGE, ensuring renewed stability and certainty backed by
responsible shareholder support
-- The creation of a new board with substantial local
representation: Oregon Electric has announced seven leading
Oregonians to the PGE board, including an Oregon chairman
-- A $15 million rate credit: Customers will receive a total
rate credit of $15 million, to be paid $3 million annually
from 2007 to 2011
-- Protection against Enron-related liabilities: Oregon
Electric will ensure that PGE is the sole beneficiary of
contractual protections provided under the purchase contract
against potentially material Enron-related liabilities
-- Service quality: A commitment to reinforcing high quality
service standards, including a 10-year extension of service
quality measures that are currently in place
-- Addressing customer concerns: Periodic access by customer
organizations and other PGE stakeholder groups to the PGE
Board of Directors, providing these constituencies with the
opportunity to voice concerns directly to the board
-- Capital reinvestment: Substantial future capital
reinvestment in PGE, ensuring reliability and efficiency
from existing assets and the acquisition and development of
new resources
-- Long-term efficiency and cost-effectiveness: A commitment to
undertaking a comprehensive review of the company post-
closing, with the goal of identifying efficiency and
productivity gains that ensure customers receive safe and
reliable electricity as cost-effectively as possible
-- Local headquarters remain: PGE's headquarters will stay in
Portland, jobs will stay in Oregon, and PGE will continue
its charitable leadership in the community
-- A significant Oregon taxpayer: Oregon Electric will be a
substantial Oregon taxpayer and will not consolidate its
returns with any out-of-state company, as happened in the
Enron era
-- More renewables: A commitment to vigorously pursue a target
of using cost-effective renewable resources to fulfill 10
percent of PGE's peak capacity by 2012
-- Organizational accountability for environmental initiatives:
The appointment of a manager within PGE with the appropriate
responsibility and authority to work with the advocacy
groups for renewable energy sources, sustainability, energy
efficiency, and environmental matters
-- Greater assistance to low-income customers: A doubling of
cash contributions for the next 10 years that PGE currently
makes to Oregon HEAT, a non-profit organization that assists
low-income families in paying utility bills, which will be
paid for with Oregon Electric shareholder (rather than
customer) funds
About Oregon Electric Utility Company
Oregon Electric Utility Company is a new Oregon company formed for
the sole purpose of investing in Portland General Electric.
Oregon Electric's goal is to maintain PGE as an independent
utility based in Oregon, serving local customers, and contributing
to the health of the community and the growth of the regional
economy.
The company is backed by Texas Pacific Group, one of the leading
private equity firms in the country. In addition, respected
Northwest leaders and industry experts have committed to join the
new PGE board upon approval of the transaction. They include:
-- Peter Kohler, M.D., President of Oregon Health & Science
University
-- Kirby Dyess, former Corporate Vice President and Director of
Operations at Intel Capital, and currently a Principal with
Austin Capital Management, LLC
-- Maria Eitel, Vice President and Senior Advisor for Corporate
Responsibility, Nike, Inc., and President, Nike Foundation
-- Gerald Grinstein, Principal, Madrona Investment Group LLC,
and CEO, Delta Air Lines, Inc.
-- Jerry Jackson, former Executive Vice President and Group
President, Utility Operations, Entergy Corporation
-- Duane McDougall, former President and CEO, Willamette
Industries, Inc.
-- Robert Miller, Chairman, Rite Aid Corp. and former CEO, Fred
Meyer, Inc.
-- M. Lee Pelton, Ph.D., President, Willamette University
-- Tom Walsh, President, Tom Walsh & Co.
-- In addition, Peggy Fowler, CEO of PGE, and David Bonderman
and Kelvin Davis, partners of Texas Pacific Group, will also
join the Board.
On November 18, 2003, Oregon Electric Utility Company signed a
binding agreement with Enron to acquire all of Portland General
Electric for approximately $2.35 billion. The Oregon Electric
proposal is now pending review and approval before the Oregon
Public Utility Commission.
As reported in the Troubled Company Reporter on August 5, 2004,
the Staff of the Oregon Public Utility Commission made its initial
recommendation to the Commission that the sale of Portland General
Electric, a subsidiary of Enron, to Oregon Electric Utility
Company, not be approved.
The OPUC Staff "has concluded that the proposal, as it stands on
July 21, 2004, falls short of demonstrating net benefits for
customers," Bryan Conway, PUC staff case manager said. "The
Commission is requiring a two-step assessment," focused on whether
the proposed sale will:
(1) provide a net benefit to the utility's customers, and
(2) impose 'no harm' to the public at large?"
The OPUC Staff says due to many unanswered questions about
relevant issues, and risks these entail for customers, it has not
been able to fully assess the downside risk to customers of the
transaction.
"We look forward to hearing from OEUC how it intends to
mitigate a number of our concerns as well as those raised by
other parties in this case," Mr. Conway added.
About PGE
Portland General Electric is an electric utility involved in the
generation, puchase, transmission, distribution and sale of
electricity in Oregon. The Company also sells energy to wholesale
customers throughout the western United States. Portland General
Electric is operated by Portland General Corporation, a
diversified holding company.
Headquartered in Houston, Texas, Enron Corporation is in the midst
of restructuring various businesses for distribution as ongoing
companies to its creditors and liquidating its remaining
operations. Before the company agreed to be acquired, controversy
over accounting procedures had caused Enron's stock price and
credit rating to drop sharply. The Company filed for chapter 11
protection on December 2, 2001 (Bankr. S.D.N.Y. Case No.
01-16033). Judge Gonzalez confirmed the Company's Modified Fifth
Amended Plan on July 15, 2004, and numerous appeals followed.
Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts.
ENRON CORP: Objects to PBGC's Remaining $320 Million Claims
-----------------------------------------------------------
Pension Benefit Guaranty Corporation originally filed 31 proofs of
claim in the chapter 11 cases of Enron Corporation and its debtor-
affiliates. The Claims are in respect to:
-- the Enron Corp. Cash Balance Plan;
-- the Pension Plan of Portland General Corporation;
-- the EFS Pension Plan;
-- the Garden State Paper Pension Plan; and
-- the San Juan Gas Company Pension Plan.
Brian S. Rosen, Esq., at Weil, Gotshal & Manges, LLP, in New
York, relates that PBGC's Claims fall into three categories:
(1) contingent, unliquidated, priority claims for PBGC
insurance premiums associated with the Pension Plans;
(2) contingent, unliquidated, priority claims for due, but
unpaid, minimum funding contributions under the Internal
Revenue Code of 1986, as amended, and ERISA; and
(3) contingent, liquidated, priority claims for unfunded
benefit liabilities under the Pension Plans pursuant to
Section 1362(b) of the Labor Code.
Mr. Rosen notes that PBGC has withdrawn 16 of its Claims. The
remaining 15 Claims include five Premium Claims, five Contribution
Claims and five UBL Claims. The Premium Claims and the
Contribution Claims remain contingent and unliquidated. PBGC has
amended the UBL Claims several times. Originally for
$305,500,000, the amended UBL Claims now aggregate $321,800,000:
-- $240,200,000 in respect of the Enron Plan;
-- $64,600,000 in respect of the PGE Plan;
-- $15,400,000 in respect of the EFS Plan;
-- $1,200,000 in respect of the Garden State Plan; and
-- $400,000 in respect of the San Juan Plan.
The PBGC Action
On June 3, 2004, PBGC filed a complaint in the United States
District Court for the Southern District of Texas, Houston
Division. PBGC wants the District Court to:
(a) rule that each of the Enron Plan, the EFS Plan, the
Garden State Plan and the San Juan Plan is terminated as
of June 2, 2004 based on PBGC's authority to commence
involuntary termination actions pursuant to Section 1342
of the Labor Code;
(b) appoint a PBGC trustee for each of the Terminating Plans;
and
(c) order the transfer of records, relating to the
administration of the Terminating Plans.
PBGC alleges that the Terminating Plans will be unable to pay
benefits when due and the possible long-run loss to PBGC is
reasonably expected to increase unreasonably if the Terminating
Plans are not terminated.
The Debtors wonder how PBGC believes it can support these
allegations and claim they are anything other than an attempt to
forum shop litigation associated with the Terminating Plans out of
the Bankruptcy Court, where PBGC has not faired very well in its
objection to the Plan and its failed attempt to gain overly broad
voting rights.
In fact, Mr. Rosen points out that the Court's Findings and
Conclusions of Law with respect to the Plan support the fact that
PBGC is essentially not at risk. The U.S. Bankruptcy Court for
the Southern District of New York determines that the Debtors have
the wherewithal to ensure the full funding of the Terminating
Plans, and the Debtors will have established a reserve for the
Claims in accordance with Article XXI of the Plan that, in the
aggregate, will be a dollar-for-dollar reserve. Thus, PBGC should
have little about which to complain, let alone support the
continuation of the Plan termination action commenced by filing
the Complaint.
Accordingly, the Debtors object to each of the UBL Claims,
Contribution Claims and Premium Claims. The Debtors ask the
Court to reduce the UBL Claims to an amount to be established at a
hearing on the Objection, and disallow and expunge the
Contribution Claims and Premium Claims in their entirety.
The Contribution Claims
Mr. Rosen informs Judge Gonzalez that the attachment to the
Contribution Claims provides a recitation of a defined benefit
plan sponsor's minimum funding obligations under the ERISA and the
Tax Code. However, the attachments are devoid of any evidence
that the Debtors and their affiliates have actually failed to make
any minimum funding contributions to the Pension Plans. In fact,
the Debtors have committed no failure and, in the nearly two years
since PBGC filed the Contribution Claims, PBGC has produced no
supporting evidence. Moreover, the Findings and Conclusions state
that the Debtors have satisfied these obligations. PBGC states in
its Contribution Claims that, "[t]he investigation of this matter
is ongoing," and "[t]he PBGC reserves the right to amend, modify
or supplement this proof of claim . . ." Nevertheless, Mr. Rosen
argues that since there is no evidence of any failure to make
minimum funding contributions to the Pension Plans, the
Contribution Claims should be expunged in their entirety.
In addition, the Contribution Claims alleged that they are subject
to priority treatment, or dollar-for-dollar payment, either as
administrative expense pursuant to Sections 507(a)(1) and 503(b)
of the Bankruptcy Code, or as contributions to an employee benefit
plan pursuant to Section 507(a)(4) of the Bankruptcy Code. PBGC
is well aware that the contributions due and owing under a pension
plan as of the filing of a Chapter 11 petition are not susceptible
to this treatment and do not constitute expenses of administering
the estate, where the contributions relate to benefits earned in
respect of a participant's prepetition services.
The Premium Claims
The PBGC asserts that the Premium Claims are based on Sections
1307(a) and (e) of the Labor Code. In general, Section 1307 sets
forth the obligations of a pension plan sponsor to make payments
of insurance premiums to the PBGC when due.
In the attachment to the Premium Claims, Mr. Rosen notes that
PBGC baldly states that any premium payment obligation arising
postpetition is an administrative expense under Section 503(b)(1)
and 507(a)(1). PBGC explicitly admits that any obligation to pay
premiums that arose prepetition would constitute general unsecured
claims.
The Debtors neither admit nor deny PBGC's proposed treatment of
the obligations to pay PBGC insurance premiums. However, the
Debtors need not address PBGC's proposed application of the law in
this regard because, in fact, there has been no failure by the
Debtors to pay their premium obligations pursuant Section 1307(a).
Mr. Rosen relates that shortly after the Petition Date, the
Debtors sought a Court order authorizing them to, among other
things, continue to maintain their certain of their employee
benefit plans -- which includes the Terminating Plans -- in the
same manner as they were maintained during the prepetition period.
Pursuant to those orders, the Debtors have continued to make
contributions to the Pension Plans and pay PBGC insurance premiums
in accordance with the terms of the plans and applicable law.
After more than two years of involvement in the Debtors' Chapter
11 cases, including review and auditing of plan documents, benefit
calculations and financial information, document production
pursuant to PBGC subpoenas and other informal requests, and
several in person meetings among the PBGC, the Debtors and the
Debtors' benefit plan professionals, PBGC failed to unearth any
basis to maintain the Contribution Claims or the Premium Claims.
While the Debtors realize that PBGC generated a boilerplate proof
of claim including the standard types of issues, PBGC has
presented the Bankruptcy Court with no basis on which to maintain
the allegation that, even if there were due and unpaid
contributions to the Pension Plans, the Contribution Claims would
thereby be entitled to priority or administrative expense
treatment. Likewise, Mr. Rosen asserts that PBGC also presented
no evidence that any prepetition PBGC insurance premium
obligations have gone unpaid.
In the supporting documentation to the Premium Claims and the
Contribution Claims, PBGC asserts that the Debtors have documents
in their possession that would provide support for the claims.
Considering PBGC's extensive involvement in these cases over these
last two and one-half years and the fact that PBGC actually
receives the payment of PBGC insurance premiums, the Debtors
submit that PBGC is fully apprised of these matters and can
produce no evidence of any failure on the Debtors' part.
Accordingly, the Court should expunge the Contribution Claims and
the Premium Claims in their entirety.
The UBL Claims
The value of unfunded benefit liabilities underpinning PBGC's UBL
Claims are determined under ERISA. Unfunded benefit liabilities
are determined by subtracting the value of accrued and vested plan
benefits from the value of plan assets as of the date of
termination of the plan at issue. Mr. Rosen points out that the
Pension Plans have not been terminated. Moreover, even if they
were terminated, the methodology PBGC used to determine unfunded
benefit liabilities grossly overstates their value and thereby
improperly inflates the value of PBGC's UBL Claims.
Calculating the unfunded benefit liabilities under a pension plan
is generally accomplished in accordance with the terms of the plan
and applicable law. However, this calculation requires the use of
certain actuarial assumptions to account for variables associated
with the participants' benefits and their accrual over time.
These assumptions include, among other things, the future rate of
return on plan investments, the percentage of plan beneficiaries
who will elect certain forms of benefit payment and the expected
retirement age at which benefit payments will commence. It is
through the employment of excessively conservative assumptions on
these points that PBGC is able to artificially inflate the amount
it sets in the UBL Claims. This claim inflation significantly
benefits PBGC, at the expense of all other similarly situated
creditors.
With regard to the UBL Claims in respect of the Terminating Plans,
the Court is already well familiar with the Debtors' planned
funding, annuitization and "standard termination" of those plans.
The Debtors estimated that the unfunded benefit liabilities were
approximately $185 to $200 million. No party-in-interest,
including PBGC, objected to the Debtors' estimation.
In the intervening months since the Debtors were authorized to
commence the "standard termination" of the Terminating Plans, Mr.
Rosen explains that the unfunded benefit liabilities changed due
to minor increases in liabilities, the market fluctuation of asset
values and interest rates, and ongoing contributions to the
Terminating Plans. Even assuming the worst with respect to the
foregoing variables, Mr. Rosen asserts that PBGC's estimates of
the liabilities far exceed those of the Debtors and exceed the
amount that may ever be allowed in a bankruptcy case.
Accordingly, the amount of the UBL Claims in respect of the
Terminating Plans should be reduced using reasonable assumptions
for the calculation of those liabilities, as required in
bankruptcy cases.
The Debtors believe that the UBL Claims are calculated using an
interest rate that creates too low of a discount when determining
the present value of pension liabilities. Furthermore, the
Debtors believe that PBGC's benefit liability assumptions presume
that participants in the Terminating Plans will begin receiving
benefits at a time that is earlier than the normal retirement age
under the Terminating Plans. In addition, the Debtors believe
that PBGC's claim in respect of the Enron Plan, which has a "cash
balance feature" that would result in a significant amount of plan
benefits being payable in a lump sum, assumes that participants
who have the opportunity to elect to receive lump sum benefit
payments will, instead, opt to receive payments in the form of an
annuity, which is clearly unsupported by the experience under the
Enron Plan.
Headquartered in Houston, Texas, Enron Corporation is in the midst
of restructuring various businesses for distribution as ongoing
companies to its creditors and liquidating its remaining
operations. Before the company agreed to be acquired, controversy
over accounting procedures had caused Enron's stock price and
credit rating to drop sharply. The Company filed for chapter 11
protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-
16033). Judge Gonzalez confirmed the Company's Modified Fifth
Amended Plan on July 15, 2004, and numerous appeals followed.
Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts. (Enron Bankruptcy News, Issue No. 121;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ENRON CORP: Affiliate Asks Court to Okay Liston Brick Settlement
----------------------------------------------------------------
On October 26, 2001, Liston Brick Company of Corona filed for
Chapter 11 protection in the United States Bankruptcy Court for
the Central District of California. On February 8, 2002, Enron
Energy Services, Inc., an Enron Corporation debtor-affiliate,
filed a proof of claim in the Liston Bankruptcy Case with respect
to accounts receivable for goods and services provided under the
Contracts. Liston objected to the EESI Claim.
Edward A. Smith, Esq., at Cadwalader, Wickersham & Taft, in New
York, reports that EESI and Liston have reached an agreement as to
the payments due under the Contracts. The Settlement Agreement
requires the parties to exchange mutual releases of all
obligations with respect to the Contracts. In addition, EESI will
be granted an allowed general unsecured claim for $367,000 in the
Liston Bankruptcy Case.
Thus, pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure and the Retail Contracts Settlement Protocol, EESI asks
the U.S. Bankruptcy Court for the Southern District of New York to
approve its Settlement Agreement with Liston.
Mr. Smith argues that the Settlement Agreement should be approved
because it allows EESI to capture value of the Contracts for its
estates and creditors. Moreover, the Settlement Agreement enables
the parties to avoid potential future disputes and litigation
regarding the payments due under the Contracts.
Headquartered in Houston, Texas, Enron Corporation is in the midst
of restructuring various businesses for distribution as ongoing
companies to its creditors and liquidating its remaining
operations. Before the company agreed to be acquired, controversy
over accounting procedures had caused Enron's stock price and
credit rating to drop sharply. The Company filed for chapter 11
protection on December 2, 2001 (Bankr. S.D.N.Y. Case No.
01-16033). Judge Gonzalez confirmed the Company's Modified Fifth
Amended Plan on July 15, 2004, and numerous appeals followed.
Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts. (Enron Bankruptcy News, Issue No. 121;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ENTERPRISE PRODS: GulfTerra Noteholders Agree to Scrap Covenants
----------------------------------------------------------------
Enterprise Products Operating L.P., a principal operating
subsidiary of Enterprise Products Partners L.P. (NYSE:EPD), has
obtained the requisite consents to eliminate most of the covenants
and several events of default from the indentures governing the
outstanding senior subordinated and senior notes of GulfTerra
Energy Partners, L.P. and GulfTerra Energy Finance Corporation.
Enterprise commenced four cash tender offers on August 4, 2004 to
purchase any and all of the outstanding senior subordinated and
senior notes of GulfTerra. The tender offers will expire at 5:00
p.m., New York City time, on September 2, 2004, unless extended.
In connection with the tender offers, Enterprise is soliciting
consents to proposed amendments to the GulfTerra indentures that
will eliminate certain restrictive covenants and default
provisions. Holders who tender their GulfTerra notes are deemed
to consent to these amendments, and those who did so by the
consent time, 5:00 p.m. on August 13, qualified for a consent
payment of $30 per $1,000 of notes in addition to the tender offer
purchase price offered by Enterprise for each series of notes.
Holders of over 98% of each of the four series of GulfTerra notes,
representing approximately 99.3% of the aggregate outstanding
amount of all four series, tendered their notes by the consent
time and thereby consented to the proposed amendments and
qualified for the consent payment.
GulfTerra will now execute supplements to the indentures for its
notes that effect the proposed amendments. However, the
supplements will become operative only upon Enterprise's purchase,
pursuant to the tender offers, of more than a majority in
principal amount of the outstanding GulfTerra notes. Enterprise
will purchase these notes promptly after the expiration time for
the tender offers, provided that the conditions to the tender
offers, including the completion of the merger between Enterprise
Products Partners, L.P., and GulfTerra Energy Partners, L.P., have
been satisfied or waived.
Enterprise Products Partners, L.P., is the second largest publicly
traded midstream energy partnership with an enterprise value of
over $7 billion. Enterprise is a leading North American provider
of midstream energy services to producers and consumers of natural
gas and natural gas liquids. The Company's services include
natural gas transportation, processing and storage and NGL
fractionation (or separation), transportation, storage and
import/export terminaling.
* * *
As reported in the Troubled Company Reporter's May 20, 2004
edition, Standard & Poor's Rating Services lowered its corporate
credit ratings on Enterprise Products Partners, L.P., and
Enterprise Products Operating, L.P., to 'BB+' from 'BBB-' and
removed the ratings from CreditWatch with negative implications.
The outlook is stable.
The ratings were originally placed on CreditWatch on Dec. 15, 2003
as a result of the announcement of the merger between Enterprise
Products and GulfTerra Energy Partners L.P. (BB+/Watch Neg/--).
The rating action is based upon an assessment that the credit
rating on Enterprise Products will be 'BB+' whether or not the
proposed merger with GulfTerra takes place.
"On a stand-alone basis, Enterprise Products' creditworthiness has
deteriorated over the past year," said Standard & Poor's credit
analyst Peter Otersen.
EQUISTAR CHEM: Retains S&P's B+ Credit Rating & Stable Outlook
--------------------------------------------------------------
Equistar Chemicals, L.P.'s (B+/Stable/--) announcement that it
resumed making cash distributions to its owners, distributing a
total of $100 million to Lyondell Chemical Co. and Millennium
Chemicals Inc., does not affect Standard & Poor's Ratings
Services' ratings or outlook on the company.
Standard & Poor's notes that the resumption of cash distributions
from Equistar to its parents is reflective of emerging but clear
signs of recovery in the petrochemical cycle and fully consistent
with expectations at the current ratings. The cash distribution
is the first since August 2000. Lyondell currently owns a 70.5%
of Equistar Chemicals, and Millennium owns the remaining 29.5%. A
previously announced acquisition by Lyondell of Millennium, that
will effectively provide Lyondell with 100% ownership and full
control of Equistar Chemicals, is pending shareholder approval and
expected to close during the fourth quarter of 2004.
EVERGREEN CARDIOLOGY: Case Summary & Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Evergreen Cardiology Care Center PS
8301 161st Avenue, North East Suite 302
Redmond, Washington 98052
Bankruptcy Case No.: 04-20652
Chapter 11 Petition Date: August 12, 2004
Court: Western District of Washington (Seattle)
Judge: Karen A. Overstreet
Debtor's Counsel: Lawrence K Engel, Esq.
106 West Roy Street
PO Box 9598
Seattle, Washington 98109
Tel:(206) 352-6000
Estimated Assets: $0 to $50,000
Estimated Debts: $2,192,738
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Banner Bank $529,015
PO Box 645
Woodinville, Washington 98072
Summit Leasing $303,153
117 N. 3rd Street, Suite 201
Yakima, Washington 98907
L&C Capital $269,488
c/o Kennedy Schuck Harris & Miller, PLLC
11100 NE 8th Street, Suite 710
Bellevue, Washington 98004
Finney, Falk & Lawrence-Berrey & Naught $31,587
Sound Management Billing Services Inc. $30,000
Pia Schalin $30,000
MED Staff Inc. $25,586
Accounttemps $24,793
MED Staff Inc. $23,532
Toyer & Associates CPA's Inc. P.S. $17,569
Imperial Business Credit Inc. $16,139
Woods & Associates $11,970
Siemans Medical Solutions USA, Inc. $11,820
BDO Seidman $10,946
Gordon Murray & Tilden $6,360
Office Team $5,316
First Bankcard $5,077
Michael Eulberg $4,160
McKesson General Medical Corporation $3,521
Radford & Company $3,393
FACTORY 2-U: Selling All Assets to National Stores Affiliate
------------------------------------------------------------
Factory 2-U Stores, Inc. (Pink Sheets:FTUSQ) has entered into a
definitive agreement to sell substantially all of the Company's
assets to Factory 2-U Acquisition, LLC, a company formed by an
affiliate of National Stores, Inc., The Alamo Group, Garcel, Inc.,
doing business as The Great American Group and The Ozer Group LLC.
Under terms of the agreement, the Purchaser will acquire, among
other assets, inventory and lease obligations for the Company's
stores and distribution center for approximately $28 million,
subject to adjustment based on the Company's actual inventory.
This agreement is the result of efforts to maximize the value of
the Company through a comprehensive process to identify qualified
buyers, which the Company initiated after consulting with its
secured lenders and the Official Committee of Unsecured Creditors
in its Chapter 11 proceedings.
Completion of the transaction is subject to Bankruptcy Court
approval and customary closing conditions. The transaction will
also be subject to higher or better bids for Factory 2-U's assets
at an auction the Company has proposed to hold in Wilmington,
Delaware on August 31, 2004 pursuant to Bankruptcy Court
procedures. A hearing on the transaction, or any higher or better
offer, has been scheduled for September 2, 2004, also in
Wilmington, Delaware.
Norman G. Plotkin, Chief Executive Officer of Factory 2-U, said,
"We believe this process, which allows for higher or better bids
for our company to be submitted by other interested parties at an
auction, will generate the best available outcome for the Company
and its constituents."
Based on the proposed terms of the transaction and indications of
interest received to date from other parties, Factory 2-U does not
believe that any distribution will be made to its shareholders
following completion of the sale. In addition, the Company
announced that it intends to file a Form 15 with the Securities
Exchange Commission suspending its duty to file reports under
Sections 13 and 15(d) of the Securities Exchange Act.
About National Stores
National Stores operates 72 Fallas Paredes off-price retail stores
in Arizona, California, Texas, Nevada and New Mexico. It is
contemplated that a substantial number of the Company's current
stores will continue to be operated by the Purchaser.
About Factory 2-U Stores
Headquartered in San Diego, California, Factory 2-U Stores, Inc.
-- http://www.factory2-u.com-- operates a chain of off-price
retail apparel and housewares stores in 10 states, mostly in the
western and southwestern US, sells branded casual apparel for the
family, as well as selected domestics, footwear, and toys and
household merchandise. The Company filed for chapter 11
protection on January 13, 2004 (Bankr. Del. Case No. 04-10111).
M. Blake Cleary, Esq., and Robert S. Brady, Esq., at Young Conaway
Stargatt & Taylor, LLP, represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed $136,485,000 in total assets and
$73,536,000 in total debts.
FALCON HOSPITALITY: Files Plan and Disclosure Statement in Nevada
-----------------------------------------------------------------
Falcon Hospitality Development LLC filed its Chapter 11 Plan of
Reorganization and an accompanying Disclosure Statement with the
U.S. Bankruptcy Court for the District of Nevada. A full-text
copy of the Debtor's Disclosure Statement explaining the Plan is
available for a fee at:
http://www.researcharchives.com/bin/download?id=040718204822
The Plan groups creditors and interest holders into nine classes
and describes their proposed treatment:
Class Treatment
----- ---------
1 - Unimpaired and not entitled to vote on the
Administrative Plan. Holders are paid in full on the
Claims Effective Date.
2 - Priority Unimpaired and not entitled to vote on the
Claims Plan. Will be paid in full in cash on the
Effective Date or as otherwise agreed.
3 - Tax Claims Impaired, entitled to vote. Will be paid
deferred cash payments over a period not
exceeding six years after the date of
assessment of such claim, of a value, as of
the Effective Date.
4 - Secured Impaired, entitled to vote.
Lenders Claim
4A - Vestin Treated in accordance to the terms and
Mortgage Claim conditions of the Stipulation Order on the Use
of Cash Collateral unless otherwise agreed.
4B - ABCO Will be treated in accordance with the terms
Leasing, Inc. and conditions of the Stipulated Order between
Claim the Debtor, ABCO Leasing, Inc., unless
otherwise agreed.
5 - Other Impaired, entitled to vote.
Secured Claims
5A - Kim Soo- Treated in accordance with the terms of its
Hyun Claim second deed of trust and promissory note in
the original principal amount of the value of
its collateral bearing interest at the rate of
8% per annum.
5B - Carma Will have an option, on the Effective Date, to
Capital LLC receive the return of its collateral in full
Claim satisfaction of its claims, or to receive a
restructured promissory note in the original
principal amount of the value of its
collateral bearing interest at the rate of 8%
per annum.
5C - BJ Leasing Will have an option, on the Effective Date, to
Company Claim receive the return of its collateral in full
satisfaction of its claims, or to receive a
restructured promissory note in the original
principal amount of the value of its
collateral bearing interest at the rate of 8%
per annum.
5D - First Will have an option, on the Effective Date, to
Corp. Claim receive the return of its collateral in full
satisfaction of its claims, or to receive a
restructured promissory note in the original
principal amount of the value of its
collateral bearing interest at the rate of 8%
per annum.
5E - Cendant Claimant will have an option to utilize the
Claim terms in the pending stipulation or to
receives a restructured promissory note in the
original principal amount of the value of its
collateral bearing at the rate of 8% per
annum.
6 - Allowed Impaired, not entitled to vote.
Secured Claims
7 - DIP Lender Administrative Creditor, not entitled to vote.
Claims Have agreed to accept a Class 7 Subordinated
Note secured by the collateral granted by the
Court and will be subordinate to Class 4 and
Class 9 Claims.
8 - Unsecured Impaired, entitled to vote. Will receive an
Claims of less initial dividend of 30% of their claims on the
than $1,000 first day of the month following 30 days from
the Closing and an additional dividend of 30%
of their claims 120 days after.
9 - General Impaired, entitled to vote. Each holder has
Unsecured the following options:
Option 1: to receive one night standard King
size or double queen room in
exchange for no less than 30% of the
allowed amount of their claim, to
participate in a pool of $50,000 for
their pro rate portion;
Option 2: to receive a restructured promissory
note without interest.
Headquartered in Henderson, Nevada, Falcon Hospitality
Development, LLC, filed for chapter 11 protection on
April 28, 2004 (Bankr. Nev. Case No. 04-14601). Zachariah Larson,
Esq., at Larson Law Firm LLC represent the Debtor in its
restructuring efforts. When the Company filed for protection from
its creditors, it listed $11,108,000 in total assets and
$8,340,000 in total debts.
FEDERAL-MOGUL: Wants Until December 1 to Decide on Leases
---------------------------------------------------------
Pursuant to Section 365(d)(4) of the Bankruptcy Code, Federal-
Mogul Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to extend the time
within which they may elect to assume, assume and assign, or
reject their non-residential real property leases. The Debtors
ask the Court to extend the deadline through and including
December 1, 2004.
Michael P. Migliore, Esq., at Pachulski, Stang, Ziehl, Young,
Jones & Weintraub, PC, in Wilmington, Delaware, explains that
several real property leases that relate to the Debtors' numerous
facilities are still being evaluated. The process of evaluating
and rejecting the Leases has taken place as the Debtors seek to:
(a) consolidate their facilities to eliminate redundancies and
inefficiencies; and
(b) shift certain manufacturing efforts to portions of the
country and the world more suitable to the Debtors'
businesses, consistent with their overall business plan.
Mr. Migliore asserts that the extension will allow time for the
evaluation process to continue and for the Debtors to preserve the
maximum flexibility in restructuring their business. Without an
extension, the Debtors could be forced prematurely to assume
Leases that would later be burdensome, giving rise to large
potential administrative claims against the Debtors' estates and
hampering their ability to reorganize successfully. In the
alternative, the Debtors could be forced prematurely to reject
that would have been of benefit to the Debtors' estates, to the
collective detriment of all stakeholders.
Mr. Migliore assures the Court that the affected lessors will not
be prejudiced as a result of the extension. The Debtors will
continue to perform all of their lease obligations arising as of
the Petition Date in a timely fashion, including payment of
postpetition rent due as required by Section 365(d)(3).
Judge Lyons will convene a hearing on August 25, 2004 at 10:00
a.m. to consider the Debtors' request. By application of
Del.Bankr.LR 9006-2, the Debtors' lease decision deadline is
automatically extended until the conclusion of that hearing.
Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is one of the world's largest
automotive parts companies with worldwide revenue of some
$6 billion. The Company filed for chapter 11 protection on Oct.
1, 2001, (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan,
Esq., James F. Conlan, Esq., and Kevin T. Lantry, Esq., at Sidley
Austin Brown & Wood and Laura Davis Jones, Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, represent the Debtors in
their restructuring efforts. When the Debtors filed for
protection from its creditors, they listed $10.15 billion in
assets and $8.86 billion in liabilities. (Federal-Mogul Bankruptcy
News, Issue No. 62; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
FIRST UNION-LEHMAN: S&P Affirms Class J Junk Rating
---------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on two
classes of commercial mortgage pass-through certificates from
First Union-Lehman Brothers Commercial Mortgage Trust's series
1997-C1. Concurrently, the ratings on two other classes from the
same series are affirmed.
The raised ratings reflect increased credit enhancement levels
since the last review as well as the resolution of several loans
that were previously specially serviced. The affirmed rating
reflects subordination levels that adequately support the existing
ratings.
As of July 19, 2004, the trust collateral consisted of 186 loans
with an aggregate outstanding principal balance of $757.1 million,
down from 283 loans amounting to $1.3 billion at issuance. The
master servicer, Wachovia Bank, N.A., provided full-year 2003 net
cash flow debt service coverage -- DSC -- figures for 91.1% of the
pool. Based on this information, Standard & Poor's calculated a
weighted average DSC of 1.44x, up from 1.35x at issuance. The
current DSC figure excludes two defeased loans (1.8%) and 8.7% of
the pool for which recent financial information is not available.
The specially serviced assets account for the majority of loans
that lack 2003 financial performance data. The pool has
experienced seven losses to date amounting to $4.7 million (0.4%).
The top 10 loans have an aggregate outstanding balance of
$188.8 million (24.9%) and reported a 2003 weighted average DSC of
1.38x, up from 1.30x at issuance. The 2003 DSC figure excludes
the 10th-largest loan for which 2003 financial data has been
collected by the special servicer but the analysis has not yet
been approved. As part of its surveillance review, Standard &
Poor's reviewed recent property inspections provided by Wachovia
for assets underlying the top 10 loans, and all such assets were
characterized as "good" or "excellent." There are no top 10 loans
currently in special servicing, but the fifth -largest loan is on
Wachovia's watchlist.
There are 11 loans with an aggregate outstanding balance of
$38.7 million (5.1%) that are reported to be with the special
servicer, CRIIMI MAE Services, L.P., including the 10th-largest
loan in the portfolio. This loan is secured by a 300,000-sq.-ft.
retail property in Pembroke Pines, Florida, with an outstanding
balance of $12.4 million (1.6%) that was returned to the master
servicer subsequent to the latest remittance report. All 10
delinquent loans account for the remaining specially serviced
assets.
These loans all have balances of less than $4.0 million and
include five lodging properties with an aggregate balance of $14.8
million (2.0%). Standard & Poor's anticipates substantial losses
on all five of these assets, and a near total loss on a healthcare
asset in Georgia. Moderate losses are expected on the remaining
specially serviced assets.
Wachovia's watchlist consists of 40 loans with an aggregate
outstanding balance of $153.2 million (20.2%), and includes one of
the top 10 loans. The fifth-largest loan in the trust has an
outstanding balance of $18.6 million (2.5%) and is secured by a
526,000-sq.-ft. retail asset in Mobile, Alabama that reported a
2003 DSC of 1.06x. Several new tenants that collectively occupy
more than 10.0% of the space signed leases and began to pay rent
in the latter part of 2003 or early 2004. Recent financial data
indicates this property generated a 1.41x DSC as of the first half
of 2004. The balance of assets appears on the watchlist due
primarily to occupancy, lease expirations, or DSC issues.
The trust collateral is situated in 33 states, with concentration
in Florida (11.6%), Texas (10.0%), and California (9.5%).
Property concentrations are found in retail (39.9%), multifamily
(39.2%), and lodging (12.2%) assets.
Standard & Poor's stressed the specially serviced, watchlist, and
other loans with credit issues in its analysis. The resultant
credit enhancement levels support the raised and affirmed ratings.
Ratings Raised
First Union-Lehman Brothers Commercial Mortgage Trust
Commercial mortgage pass-thru certs series 1997-C1
Rating
Class To From Credit Enhancement
----- -- ---- ------------------
F BBB- BB+ 9.73%
G BB+ BB 8.01%
Ratings Affirmed
First Union-Lehman Brothers Commercial Mortgage Trust
Commercial mortgage pass-thru certs series 1997-C1
Class Rating Credit Enhancement
----- ------ ------------------
H B 4.56%
J CCC+ 2.83%
FLEMING COMPANIES: Wants to Hold 14 Leases Until August 31
----------------------------------------------------------
Christopher J. Lhulier, Esq., at Pachulski, Stang, Ziehl, Young,
Jones & Weintraub, PC, in Wilmington, Delaware, notes that the
Plan of Fleming Companies, Inc., and its debtor-affiliates
provides, among other things, that, as of the Effective
Date, all executory contracts and unexpired leases are deemed
rejected unless:
(i) previously rejected or assumed by a Court order;
(ii) subject to a pending motion to reject or assume, or any
appeals;
(iii) specifically listed on the Assumption Schedule; or
(iv) specifically identified in the Plan as being assumed.
However, unless the lease decision period provided under Section
365(d)(4) of the Bankruptcy Code is extended, the Debtors believe
that the leases will be deemed rejected on the expiration of the
Section 365(d)(4) period -- August 31, 2004.
Mr. Lhulier relates that the Debtors are in the difficult position
of trying to accommodate the third party purchasers of their
wholesale distribution business who want additional time to assume
and assign certain leases. At the same time, the Debtors want to
ensure that the failure of a third party purchaser to assume and
assign a lease prior to the expiration of the Lease Decision
Period does not trigger claims against the estate. The Debtors
and the third party purchasers have worked together to limit the
number of leases for which the Debtors seek an extension of the
Lease Decision Period.
Accordingly, the Debtors ask Judge Walrath of the U.S. Bankruptcy
Court for the District of Delaware to extend the Lease Decision
deadline for 14 Leases until the Court enters a final order,
including final adjudication of any appeals, on the assumption and
assignment of the Unexpired Leases:
Lease No. Lessor
--------- ------
6708 Hope Plaza, Inc.
6359 Balipark Food Corp. and Al Slipakoff and Eileen
Slipakoff
6609 Foxmoor Associates
6838 Marazzo's Quality Market, Inc.
6409 Branford Plaza Investment Group, LLC
6646 Giunta's Market, Inc.
7217 Valley West Shopping Center, LLC
6996 Prusan Limited Partnership
7017 Raymond Choy
6757 Joe Berry Corporation
7202 Twain Harte Custom Builders, Inc.
7203 Twain Harte Grocery, Inc.
6847 Mary Jean Loftus
7001 R.B. Moore & Company, Inc.
Mr. Lhulier says that all other unexpired leases will be deemed
rejected as of August 31, 2004, unless an agreement with the
lessors is reached and filed with the Court before then.
The Debtors believe that they are current on all of their
postpetition rent payments and other contractual obligations with
respect to the Unexpired Leases. As part of the Debtors'
agreement to seek an extension of the Lease Decision Deadline, the
third party purchasers agreed to prepay each subsequent month's
rent. Thus, the Debtors' continued occupation of the leased
premises will not prejudice the lessors.
Headquartered in Lewisville, Texas, Fleming Companies, Inc. --
http://www.fleming.com/-- is the largest multi-tier distributor
of consumer package goods in the United States. The Company filed
for chapter 11 protection on April 1, 2003 (Bankr. Del. Case No.
03-10945). Judge Walrath confirmed Fleming's Third Amended Plan
on July 26, 2004, under which Core-Mark Holding Company, Inc.,
will emerge as a rehabilitated company and be owned by Fleming's
unsecured creditors. Richard L. Wynne, Esq., Bennett L. Spiegel,
Esq., Shirley Cho, Esq., and Marjon Ghasemi, Esq., at Kirkland &
Ellis, represent the Debtors in their restructuring efforts. When
the Debtors filed for protection from their creditors, they listed
$4,220,500,000 in assets and $3,547,900,000 in liabilities.
(Fleming Bankruptcy News, Issue No. 42; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
FLEMING COMPANIES: Sells Five Real Estate Parcels for $392,000
--------------------------------------------------------------
Pursuant to the De Minimis Asset Sale Protocol approved by the
U.S. Bankruptcy Court for the District of Delaware, Fleming
Companies, Inc., and its debtor-affiliates inform the Court that
they are selling:
A. Vacant lot at E. Shelby Drive and Germantown Road, in Memphis,
Tennessee
Purchaser : Birdsong, Inc.
Purchase Price : $250,000
Marketing Efforts: Keen marketed the Lot locally and
nationally for 12 weeks
B. Vacant lot at Bowen Street, in Oshkosh, Wisconsin
Purchaser : James H. Lang
Purchase Price : $25,000
Marketing Efforts: The Oshkosh Property was originally
marketed locally and nationally for eight
weeks by Keen, which resulted in Earth
Sense, Inc.'s offer. After Earth Sense
and the Debtors agreed not to consummate
the sale, Keen remarketed the property by
contacting local brokerage community and
real estate professionals.
C. Real property at 2930 E. Ovid Avenue, in Des Moines, Iowa
Purchaser : Eastwood Church of the Open Bible
Purchase Price : $20,000
Marketing Efforts: Keen marketed the Ovid Property for
eight weeks
D. Real property at 2620 NE Sardou Avenue, in Topeka, Kansas
Purchaser : The Food Store, LLC
Purchase Price : $32,000
Marketing Efforts: Keen marketed the Sardou Property for
four weeks
E. Real property at 2921 E. Euclid Avenue, in Des Moines, Iowa
Purchaser : William C. Knapp, LC
Purchase Price : $65,000
Marketing Efforts: Keen marketed the Euclid Property for
eight weeks
Judge Walrath authorizes the Sales free and clear of all liens,
claims, and encumbrances under Section 363(f) of the Bankruptcy
Code.
Headquartered in Lewisville, Texas, Fleming Companies, Inc. --
http://www.fleming.com/-- is the largest multi-tier distributor
of consumer package goods in the United States. The Company filed
for chapter 11 protection on April 1, 2003 (Bankr. Del. Case No.
03-10945). Judge Walrath confirmed Fleming's Third Amended Plan
on July 26, 2004, under which Core-Mark Holding Company, Inc.,
will emerge as a rehabilitated company and be owned by Fleming's
unsecured creditors. Richard L. Wynne, Esq., Bennett L. Spiegel,
Esq., Shirley Cho, Esq., and Marjon Ghasemi, Esq., at Kirkland &
Ellis, represent the Debtors in their restructuring efforts. When
the Debtors filed for protection from its creditors, they listed
$4,220,500,000 in assets and $3,547,900,000 in liabilities.
(Fleming Bankruptcy News, Issue No. 41; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
FORTRESS CBO: Moody's Affirms $17.5MM Preferred Certs. B2 Rating
----------------------------------------------------------------
Moody's Investors Service assigned ratings on July 26, 2004 to the
U.S. $322,500,000 Class A Additional Notes due 2038 and the U.S.
$20,000,000 Class B Additional Notes due 2038 issued by Fortress
CBO Investments I, Limited and Fortress CBO Investments I Corp.
The Additional Notes were issued in conjunction with the
simultaneous redemption of the U.S. $322,500,000 Class A Floating
Rate Notes due 2038 and the U.S. $20,000,000 Class B Floating Rate
Notes due 2038 issued on July 22, 1999, both of whose ratings have
been withdrawn.
Moody's also noted that the issuance of the Additional Notes would
not result in a withdrawal or reduction of the ratings on the
three other outstanding classes of notes and the preferred
certificates issued by Fortress CBO Investments I, Limited and
Fortress CBO Investments I Corp., currently rated as follows:
* $62,500,000 Class C Fixed Rate Notes due 2038, affirmed at
A2;
* $32,500,000 Class D, Fixed Rate Notes due 2038, affirmed at
Baa2;
* $17,500,000 Class E Fixed Rate Notes due 2038, affirmed at
Baa2;
* $17,500,000 Preferred Certificates, affirmed at B2.
FOSTER WHEELER: Subsidiary Wins PMB Contract for Petronas Plant
---------------------------------------------------------------
Foster Wheeler International Corporation, a subsidiary of Foster
Wheeler, Ltd., (OTCBB: FWLRF), Foster Wheeler Malaysia Sdn Bhd,
and the subsidiary's partner, OGP Technical Services Sdn Bhd, have
been awarded a project management consultancy contract by Petronas
Penapisan (Melaka) Sdn Bhd (PP(M)SB) for the addition of a lube
base oil plant at the PP(M)SB refinery at Melaka, Malaysia. The
project will be included in third-quarter bookings.
This project will include a new plant and supporting facilities to
produce various grades of lubricant oil. It will be integrated
within the existing facilities and also includes modifications to
the offsites and utility systems.
"This is a significant win for Foster Wheeler and reflects our
long-standing relationship with PP(M)SB, having been the PMC for
the major PSR-2 expansion over a decade ago," said Steve Davies,
executive vice president of Foster Wheeler International
Corporation. "Foster Wheeler, with its partner, OGP, is also the
PMC for the current cogeneration project for PP(M)SB. The award
also recognizes the competitive market position and the quality of
services that Foster Wheeler is able to offer."
Under the scope of the contract, the PMC partners will undertake
the basic engineering design (BED), develop cost estimates and
prepare engineering, procurement and construction (EPC) bid
packages. Following selection of the EPC contractor, the PMC
partners will be responsible for the management of the activities
of the EPC contractor through start-up of the new facilities.
Foster Wheeler, Ltd., is a global company offering, through its
subsidiaries, a broad range of design, engineering, construction,
manufacturing, project development and management, research, plant
operation and environmental services.
At March 26, 2004, Foster Wheeler Ltd.'s balance sheet showed an
$880,742,000 stockholders' deficit, compared to an $872,440,000
deficit at December 26, 2003.
FUJITA CORPORATION: Creditors Must File Claims by September 15
--------------------------------------------------------------
The United States Bankruptcy Court for the Central District of
California, set 4:00 p.m., on September 15, 2004, as the deadline
for all creditors owed money by Fujita Corporation USA on account
of claims arising prior to August 5, 2004, to file formal written
proofs of claim.
Creditors must deliver their claim forms to:
Clerk of the Bankruptcy Court
U.S. Federal Building
300 North Los Angeles Street, First Floor
Los Angeles, California 90012
and a copy must be sent to:
Skadden, Arps, Slate, Meagher & Flom LLP
Attn: Van C. Durrer, II, Esq.
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
Three categories of claims are exempted from the Bar Date:
(a) claims arising from rejection or executory contracts or
unexpired leases;
(b) claims of governmental units; and
(c) claims arising as the result of transfer avoidance
pursuant to Chapter 5 of the Bankruptcy Code.
For governmental units, the last day to file a proof of claim is
February 8, 2005.
Headquartered in Culver City, Califonia, Fujita Corporation, owns
various real estate investment properties. The Company filed for
chapter 11 protection on August 5, 2004 (Bankr. C.D. Calif. Case
No. 04-27072). Glenn Walter, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, represents the Debtor in its restructuring
efforts. When the Company filed for protection, it listed
$4,469,212 in estimated assets and $111,484,468 in estimated
debts.
FURNACE & TUBE: Case Summary & 18 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Furnace and Tube Service, Inc.
PO Box 343
Prairieville, Louisiana 70769
Bankruptcy Case No.: 04-12669
Chapter 11 Petition Date: August 13, 2004
Court: Middle District of Louisiana (Baton Rouge)
Judge: Douglas D. Dodd
Debtor's Counsel: Patrick S. Garrity, Esq.
Steffes, Vingiello, & McKenzie, LLC
3029 South Sherwood Forest Boulevard
Suite 100
Baton Rouge, Louisiana 70816
Tel: (225) 368-1006
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 18 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Brand Scaffold Builders, Inc. $188,386
Ameritek Heat Treating & Field Machining Services Inc $171,696
Hi-Tech Refractory Services, Inc. $127,401
A and I Sandblasting & Painting $124,144
Southeast Texas Industrial Services $120,342
Arthur J. Gallaghrer BB & H Division $116,350
Templet & Templet Welding Service $99,513
American Express Company $89,679
Gulf Coast Bank & Trust Company $83,959
Volks Contractors Division
Braud Company, Inc. $83,197
Industrial Consulting & Supply $72,457
Drago Supply Company $66,721
Kelson Industrial Service, Inc. $49,203
X-Ray Inspection, Inc. $45,002
Maxim Crane Works $37,198
Universal Plant Services $33,632
Breazeale, Sache & Wilson LLP $32,739
Southern Services, Inc. $30,511
GENERAL MEDIA: Penthouse Intents to Stall Bankruptcy Emergence
--------------------------------------------------------------
On August 12, 2004, the U.S. Bankruptcy Court for the Southern
District of New York confirmed General Media's plan of
reorganization sponsored by PET Capital Partners, LLC, an
affiliate of Marc Bell Capital Partners LLC and the holder, with
its related entities, of approximately 89% of the Senior Notes of
General Media, Inc., the publisher of Penthouse Magazine. The
order is expected to become effective on or about August 27, 2004,
until which time Penthouse International (Pink Sheets:PHSL), the
parent company of General Media, remains in control of General
Media as debtor-in-possession.
Penthouse International had sponsored an alternative plan of
reorganization that was to be heard on September 14, 2004, which
offered better recoveries for all classes of creditors and equity
holders. The earlier hearing of August 12, 2004 was requested by
Bell and other creditors. As a result, the September 14 hearing
will not occur.
"We will comply with the court's ruling if it goes effective.
However, there are several options available to the Penthouse that
we will pursue for our shareholders, including a motion for
reconsideration, an appeal and other courses of action available
for up to 180 days after the date of the confirmation order," said
Claude Bertin, Executive Vice President of Penthouse.
Prior to the bankruptcy hearing, Penthouse commenced an action in
New York State Supreme Court against Daniel C. Staton, Marc Bell
and several other defendants alleging fraud and other charges.
The complaint sets forth allegations that Staton and Bell
defrauded Penthouse International and the General Media estate in
order to obtain control of General Media.
In the lawsuit, Penthouse contends the defendants exploited their
new position as debt holders to manipulate the management of
General Media to support their debt-for-equity plan and their
misconduct was fraudulent. The lawsuit also contends that Bell
breached an agreement with Penthouse to support their plan of
reorganization and tortiously interfered with certain contractual
and business relationships.
On July 9, 2004, six days prior to the confirmation hearing for
the plan of reorganization which Dr. Molina was sponsoring, PET
Capital Partners sued Dr. Molina and Penthouse without prior
demand or notice for $9.4 million alleging that an interest
payment was not made on a promissory note due PET Capital
Partners. Thereafter, Dr. Molina withdrew his sponsorship of the
Penthouse plan.
Mr. Staton and Mr. Bell, through their affiliates, purchased the
junk bonds of General Media at approximately sixty cents on the
dollar in October 2003.
In the coming weeks Penthouse is considering amending its
complaint to include other individual defendants which it believes
were complicit in defrauding the estate and Penthouse.
A copy of the lawsuit filed in State Court is available at no
charge at:
http://bankrupt.com/misc/Penthouse.pdf
Internet Billing Company is unaffected by the General Media
litigation above and iBill continues to grow its operations
monthly, including the roll out of new services. Additionally,
Penthouse real estate investments, including the New York City
Penthouse mansion and the beachfront resort development, are
unaffected.
There can be no assurance that the appeal planned by Penthouse
will be successful and no assurance that the litigation will be
successful, or if it is, that it will be beneficial to the
company.
About Penthouse International, Inc.
Penthouse International, Inc., through its subsidiaries General
Media, Inc., Del Sol Investments, LLC, and PH Realty Associates
LLC and iBill, is a brand-driven global entertainment business
founded in 1965 by Robert C. Guccione. General Media's flagship
PENTHOUSE brand is one of the most recognized consumer brands in
the world and is widely identified with premium entertainment for
adult audiences. General Media caters to men's interests through
various trademarked publications, movies, the Internet, location-
based live entertainment clubs and consumer product licenses.
Internet Billing Company -- iBill -- sells access to online
services and other downloadable products (music, games, videos,
personals, etc.) to consumers through proprietary Web-based
payment applications. The iBill online payments systems manage
transaction authorization on the global financial networks such as
Visar and MasterCard(R) and simultaneously provide password
management controls for the life of the subscribing consumer. On-
demand CRM -- Customer Relationship Management -- applications are
provided to registered independent merchants, typically small and
medium-sized businesses seeking a cost-effective technology
platform to outsource non-core banking and finance functions.
Since 1996, iBill as established a trusted brand with consumers
and online businesses with 27 million customers in 38 countries.
About General Media
General Media, a subsidiary of Penthouse International, Inc.,
publishes Penthouse magazine and other publications and is engaged
in other diversified media and entertainment businesses. The
Company filed for reorganization under Chapter 11 with the U.S.
Bankruptcy Court for the Southern District of New York on August
12, 2003. Robert Joel Feinstein, Esq. Pachulski, Stang, Ziehl,
Young, Jones & Weintraub P.C. represent the Debtors in their
restructuring efforts. When the Company filed for protection from
their creditors, they listed $50 million to $100 million in total
assets and more than $50 million in total debts.
GLOBAL CROSSING: Sells Global Marine Systems to Bridgehouse Marine
------------------------------------------------------------------
Global Crossing (Nasdaq: GLBCE) consummated a series of
agreements, which the company values at up to $132 million, with
Bridgehouse Marine, Ltd., for the sale of wholly owned subsidiary
Global Marine Systems and the transfer of its 49 percent
shareholding in S. B. Submarine Systems Company, Ltd., to Global
Marine.
As a result of these transactions Global Crossing will receive
consideration of up to $14.8 million, and Bridgehouse will assume
$117 million of Global Marine capital lease debt, which had been
carried on Global Crossing's consolidated balance sheet. In
addition, all operating lease commitments for the Global Marine
fleet will remain with Global Marine.
"Global Crossing is keenly focused on becoming the market leader
in global IP connectivity solutions for enterprise customers,
building upon our unique network and technology advantages,"
commented John Legere, Global Crossing's CEO. "New ownership will
enable Global Marine to pursue diverse markets beyond telecom for
its services, while we concentrate our energies on acquiring
enterprise customers and building our competitive advantage with
IP solutions. Monday's agreement with Bridgehouse Marine is a
win-win for both companies."
In February 2004, Global Crossing retained Citigroup Global
Markets as its financial advisor to assist in exploring strategic
alternatives for Global Marine, including its potential sale.
After a six-month review and discussions with several potential
investors and purchasers, Global Crossing determined that a sale
to Bridgehouse Marine would best serve the strategic goals of both
Global Crossing and its marine technology subsidiary.
"Bridgehouse Marine and its investors from Bridgehouse Capital
have tremendous experience in revitalizing companies in difficult
market sectors," stated Phil Metcalf, managing director, Europe
for Global Crossing and outgoing CEO of Global Marine. "As Global
Marine weathers the turbulent telecom storm and pursues diverse
markets such as oil and gas, the Bridgehouse team will undoubtedly
provide valuable strategic counsel and new resources to the
company."
Global Crossing acquired its 49 percent interest in S. B.
Submarine in 1999, as part of its purchase of Global Marine, and
owns the venture in partnership with China Telecom. As part of
today's agreement, Global Crossing plans to transfer its
shareholding in S. B. Submarine to Global Marine, subject only to
the approval of China Telecom and Chinese regulatory review.
According to Andy Ruhan, Bridgehouse Capital's managing director
and a principal investor in Bridgehouse Marine, Global Marine is
the recognized market leader in the submarine telecommunications
industry and has unparalleled expertise in marine technology.
"Taking the business to a new level by expanding into diverse
markets while maintaining its leadership position in submarine
installation and maintenance is a challenge we are well- prepared
to undertake," commented Mr. Ruhan.
Mr. Ruhan will be serving as chairman of Global Marine and brings
significant experience in leading telecom-related businesses,
including having previously founded and served as CEO of Global
Switch, the world's largest carrier-neutral collocation company.
Global Crossing has also agreed to extend its commercial agreement
with Global Marine for the maintenance of Global Crossing's
network for an additional five years.
Bridgehouse Marine's CEO, Larry Schwartz, commented: "We are
particularly pleased that Global Crossing has agreed to extend its
commercial agreement with Global Marine through 2012. We look
forward to a long-term, mutually successful commercial
relationship with Global Crossing."
About Bridgehouse Marine and Bridgehouse Capital
Bridgehouse Marine Limited was formed for the purpose of acquiring
and managing companies providing marine services to the
telecommunications and energy industries. Bridgehouse Marine is
backed by Andrew Ruhan and Alan Campbell of Bridgehouse Capital,
together with Larry Schwartz of The Wenham Group, a Bridgehouse
affiliate. Bridgehouse Marine plans to grow through a proactive
acquisition strategy that will compliment the organic growth
initiatives of its operating subsidiaries. Bridgehouse Capital is
a leading London-based, private equity investment advisory firm
with a successful track record of investing in and managing a
wide-range of asset-intensive and capital-intensive businesses.
Recent European and US investments of Bridgehouse Capital and its
principals have covered a wide range of industries, including IP
infrastructure and managed services, commercial real estate,
hotels, logistics and insurance.
About Global Marine Systems
Global Marine Systems Limited is the world's largest and most
experienced submarine cable maintenance and installation company.
Global Marine operates the world's most advanced fleet of cable
ships and subsea vehicles, which consist of 14 cable ships, 1
installation barge and 34 submersible vehicles, not including
joint venture facilities.
Visit http://www.globalmarinesystems.com/for more information
about Global Marine Systems.
About S. B. Submarine
S. B. Submarine Systems was formed in 1995, and is a key provider
of submarine cable installation and maintenance services
throughout Asia from its headquarters in Shanghai. The company
owns and operates three vessels and four submersible vehicles, and
has been successfully pursuing opportunities in the oil and gas
industry to complement its strong track record in
telecommunications.
Visit http://www.sbsubmarinesystems.com/for more information
about S. B. Submarine.
About Global Crossing
Headquartered in Florham Park, New Jersey, Global Crossing Ltd.
-- http://www.globalcrossing.com/-- provides telecommunications
solutions over the world's first integrated global IP-based
network, which reaches 27 countries and more than 200 major cities
around the globe. Global Crossing serves many of the world's
largest corporations, providing a full range of managed data and
voice products and services. The Company filed for chapter 11
protection on January 28, 2002 (Bankr. S.D.N.Y. Case No. 02-
40188). When the Debtors filed for protection from their
creditors, they listed $25,511,000,000 in total assets and
$15,467,000,000 in total debts. Global Crossing emerged from
chapter 11 on Dec. 9, 2003.
HAYES LEMMERZ: Trust Settles 25 Avoidance Claims for $894,230
-------------------------------------------------------------
The HLI Creditor Trust formed under the chapter 11 confirmed in
Hayes Lemmerz International, Inc., and its debtor-affiliates cases
asks the U.S. Bankruptcy Court for the District of Delaware to
approve the settlement of 25 avoidance claims aggregating
$894,230:
Settlement
Vendor Amount
------ ----------
Advanced Industrial Products Inc. $28,000
ARM Tooling and Supply, a/k/a Arm Tooling Systems 5,000
Bomen, Inc., a/k/a ABB 15,000
Brenntag Mid-South, Inc. 10,000
Brillion Iron Works, Inc. 22,500
Ceratizit-Michigan Corp., d/b/a Duramet Corp. 6,000
Clemex Technologies 17,500
Deco Tool Supply 14,000
Enline Energy Solutions, LLC 5,000
Forge Die & Tool Corp., a/k/a Forge Precision Tool 6,500
Foseco, Inc., a/k/a Foseco Metallurgical 16,750
Giddings & Lewis, Inc., d/b/a Advantek Global Srvs. 5,000
IBT, Inc. 52,500
Insight Enterprises, Inc., f/k/a Insight Direct, USA 27,000
Machinery Maintenance, Inc. 13,500
Michigan Arc Products Corp. 17,000
Mindis Treatment Services 5,300
N.E.A.T. Tool and Die, Inc. 15,000
Recess Inc., f/k/a FNG Industries 7,000
Rental Service Corporation 2,480
Rooney Equipment Company 2,300
Roush Industries 7,900
Southern California Edison 541,000
Walt Ltd./Specialty Precision Tool 11,000
TXU Energy Services 41,000
(Hayes Lemmerz Bankruptcy News, Issue No. 51; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
IPCS INC: Reorganized Company's Balance Sheet Insolvent by $200MM
-----------------------------------------------------------------
IPCS, Inc., (Pink Sheets:IPCX), the PCS Affiliate of Sprint that
owns and operates the Sprint Nationwide PCS Network in 40 markets
in four Midwestern states, reported financial results for the
third fiscal quarter ended June 30, 2004.
Highlights for the quarter:
-- Gross activations of approximately 26,000 with net additions
of approximately 5,600
-- Monthly churn, net of 30-day deactivations, of 2.4%
-- Ending subscribers of approximately 233,000
-- Total revenues of approximately $52.0 million with a net
loss of approximately $8.8 million
-- Adjusted EBITDA of approximately $8.9 million
-- Capital expenditures of approximately $3.2 million
"We are pleased with the progress made during the third fiscal
quarter. With the completion of our reorganization in July that
provides us with a new capital structure and additional liquidity,
we are excited to begin a new chapter for our company and
stakeholders," said Timothy M. Yager, who previously served as the
Company's Chief Restructuring Officer and was appointed President
and Chief Executive Officer on July 20, 2004, the effective date
of the Company's confirmed plan of reorganization.
At June 30, 2004, iPCS, Inc.'s balance sheet showed a $200,646,000
stockholders' deficit, compared to a $179,577,000 deficit at
September 30, 2003.
About Sprint
Sprint is a global integrated communications provider serving more
than 26 million customers in over 100 countries. With more than
61,000 employees worldwide and over $26 billion in annual revenues
in 2003, Sprint is widely recognized for developing, engineering
and deploying state-of-the-art network technologies, including the
United States' first nationwide all-digital, fiber-optic network
and an award-winning Tier 1 Internet backbone. Sprint provides
local communications services in 39 states and the District of
Columbia and operates the largest 100-percent digital, nationwide
PCS wireless network in the United States. For more information,
visit http://www.sprint.com/
About iPCS, Inc.
iPCS is the PCS Affiliate of Sprint with the exclusive right to
sell wireless mobility communications, network products and
services under the Sprint brand in 40 markets in Illinois,
Michigan, Iowa and eastern Nebraska with approximately 7.8 million
residents. The territory includes key markets such as Grand
Rapids, Michigan, Champaign-Urbana and Springfield, Illinois, and
the Quad Cities of Illinois and Iowa. iPCS is headquartered in
Schaumburg, Illinois. For more information, please visit our
website at http://www.ipcswirelessinc.com/
On February 23, 2003, iPCS and its wholly owned subsidiaries filed
voluntary petitions seeking relief from creditors pursuant to
Chapter 11 of the Bankruptcy Code in the United States Bankruptcy
Court for the Northern District of Georgia. iPCS filed its plan of
reorganization with the Bankruptcy Court on March 31, 2004. On
April 30, 2004, iPCS Escrow Company, a newly formed, wholly owned
indirect subsidiary of iPCS, completed an offering of $165.0
million aggregate principal amount of 11.50% senior notes due
2012. The Company's plan of reorganization was confirmed on July
9, 2004 and declared effective on July 20, 2004.
With the effectiveness of the plan of reorganization, iPCS Escrow
Company was merged with and into iPCS and the senior notes became
senior unsecured obligations of iPCS. Other significant items of
the reorganization that occurred on July 20, 2004 included the
repayment and cancellation of iPCS' senior credit facility from
the proceeds of the $165.0 million senior notes offering, the
cancellation of its common stock held by a liquidating trust, the
cancellation of its $300.0 million 14% senior notes along with
other unsecured claims in exchange for the Company's new common
stock, the assumption of its amended Sprint affiliation agreements
and the settlement of its previously stayed litigation against
Sprint.
INDUSTRIAL DEV'T: Lawsuit Prompts Moody's Ba1 Bond Rating
---------------------------------------------------------
Moody's Investors Service downgraded the rating on the Industrial
Development Authority of the County of Maricopa Education Revenue
Bonds (Arizona Charter School Project I) to Ba1 from Baa3 and
placed the Ba1 rating on Watchlist for possible downgrade.
The downgrade, which affects approximately $26.7 million in
outstanding obligations, reflects heightened risks associated with
a number of the charter schools within the pool, most
significantly Omega Academy, which faces a lawsuit filed for
nonpayment of over $2.5 million in construction fees, weak
finances and significant shortfalls in enrollment. While all
schools within the pool remain current on debt service payments,
the downgrade to Ba1 incorporates the elevated risk associated
with the future of Omega's operations given uncertainty on the
outcome of the lawsuit and questions surrounding the timing and
likelihood of the school's payment of construction costs. The
Watchlist designation reflects the possibility of further credit
deterioration given uncertainty regarding the future operating
viability of Omega Academy in addition to ongoing shortfalls in
enrollment growth and marginal financial results at a number of
other schools within the pool.
In fiscal 2003, Omega Academy received claims exceeding
$2.5 million for construction completed at its Peoria Campus.
This liability resulted from the bankruptcy filing of Omega's
design/build contractor, Better School Facilities, and its
resulting failure to pay several subcontractors for completed
work. Subsequently, the construction company, Caviness
Construction Company filed a Suit for Foreclosure against Omega
for unpaid construction fees in excess of $2.5 million. In the
lawsuit, Caviness asked the Court to determine, among other items,
Caviness' lien to be a first and prior lien on the school's Peoria
Campus. While Caviness and Omega reportedly remain in
negotiations over repayment of these charges, the rating downgrade
to Ba1 largely reflects uncertainty surrounding the timing and
likelihood of full repayment and the ultimate outcome of this
litigation. Because of the magnitude of the repayment amount, the
lawsuit also raises concerns on the future, long-term operating
viability of the school.
Fall 2003 enrollment, as certified in its 100-day student count,
of around 600 students fell below both the prior year's enrollment
of over 700 students and initial projections of enrollment in
excess of 2,000 students. Significant enrollment shortfalls
reportedly resulted from construction delays, the schools
inability to complete planned expansions at its McDowell Campus in
part due to cost overruns at the Peoria campus, and delays in
recruiting new students. While enrollment levels are projected to
increase in the fall of 2004, Moody's expects that the school will
remain far below its initial enrollment projections in the
foreseeable future. The school's finances are also weak, with a
year-end deficit in fiscal 2003 of $2.2 million in net
unrestricted assets, reflecting in large part the school's
outstanding construction fee obligation, which was recognized as a
current liability in the school's 2003 audit. In addition, even
exclusive of $2.5 million in legal settlement costs, which were
recorded as an expense in fiscal 2003, the school demonstrated an
operating deficit approaching $83,000, raising concerns over the
school's ability to maintain even balanced operations at its
current enrollment levels.
Debt Service Reserve Funds Enhance Security
in the Event of Nonpayment
Two reserve funds, a Credit Reserve Fund equal to maximum annual
debt service -- MADs -- and a Liquid Reserve Fund equal to one
year's interest payments, were funded at closing and currently
equal a combined $5.3 million. These reserves are cross
collateralized among the pool participants, providing additional
security for debt service in the event of nonpayment by any
individual school. In addition, financed property for each school
is also pledged to the repayment of that school's proportionate
share of the bonds. While available reserve funds equal less than
Omega's outstanding obligations of approximately $7.8 million (30%
of the pool's outstanding obligations), they do provide some
bondholder protection in combination with bondholders' mortgaged
interest in the financed campus. The Ba1 rating, however,
reflects uncertainty regarding the capacity for liquidated assets,
in the event of foreclosure, to fully cover outstanding
obligations and the timeliness with which bondholders would
receive repayment in the event of foreclosure. School officials
have indicated that an updated appraisal is in the process of
being completed, and future credit evaluations will incorporate
this information.
In the event that the foreclosure proceedings have begun and the
trustee is no longer receiving school revenues, money in the
Liquid Reserve Fund will be utilized first to make payments on the
school's obligations. Once foreclosure proceedings have been
concluded, proceeds will be used to repay that portion of the
bonds, as well as replenish any reserves that have utilized.
Should proceeds from the foreclosure sale prove insufficient to
redeem the bonds, any shortfalls would be made up from available
deposits in the Credit Reserve Fund. Draws on the Liquid Reserve
Fund would be replenished from ongoing monthly deposits from pool
participants equal to five percent of debt service. If the Liquid
Reserve Fund is funded at its requirement, these monthly deposits
would then be used to cure any deficiency in the Credit Reserve
Fund. If this fund is funded at its requirement, then these
monthly deposits will continue to be utilized for the early
redemption of bonds.
Enrollment Shortfalls And Marginal Finances
at a Number of other Schools also Weaken Credit Quality
Continuing enrollment shortfalls and marginal financial results at
a number of other pool participants also contribute to weakened
credit quality. Westwind Academy, American Heritage Academy and
Arizona Montessori all demonstrated fall 2003 enrollment levels
that fell below initial projections. In the case of Arizona
Montessori, fall 2003 enrollment of 225 fell significantly below a
projected enrollment of 325.
In addition to enrollment shortfalls, Arizona Montessori
experienced an operating deficit of close to $141,000 in fiscal
2003, reflecting in part the school's opening of a new branch
location that was not successful and management problems. The
school ended fiscal 2003 with negative unrestricted net assets of
$44,803 (3.3% of operating revenues), and Moody's does not expect
significant improvement in this figure over the near term. Tempe
Preparatory Academy also experienced an operating deficit in
fiscal 2003 of over $18,000, which resulted in negative
unrestricted net assets of $90,560 (4.7% of revenues). While
school officials report that the operating deficit reflects one-
time construction costs of approximately $40,000, the school's
weakened financial results raise uncertainty regarding the
school's ability to maintain balanced operations and build
reserves in light of expectations for only moderate enrollment
growth. Westwind Academy and Challenge Charter School financial
results also continue to reflect year-end deficits in unrestricted
net assets. Five of the seven pool participants fiscal 2003
results reflect deficit unrestricted net assets, demonstrating the
extensive leveraging and the almost universal difficulty faced by
charter schools in increasing reserves, especially cash balances,
to adequate levels.
Future Credit Evalutations will Incorporate
100-Day Enrollment Counts and Operating Information
The Watchlist designation for a possible downgrade reflects risks
associated with outstanding litigation filed against Omega Academy
in addition to shortfalls in enrollment growth and weak financial
results at a number of the schools within the pool. Future credit
evaluations will incorporate fall 2004 enrollment levels at each
school, as designated in the schools' 100-day enrollment count
completed at the end of October as well has budgeted operations
for the coming fiscal year and anticipated audited results for
fiscal 2004. Failure of Omega Academy to increase enrollment
sufficient to ensure balanced operations with additions to
depleted reserves, or other participants' failure to essentially
meet enrollment projections with budgeted operations sufficient to
ensure adequate debt service coverage levels is likely to result
in further weakening in credit quality.
INDUSTRIAL WHOLESALE: First Creditors Meeting Slated for Sept. 13
-----------------------------------------------------------------
The United States Trustee for Region 16 will convene a meeting of
Industrial Wholesale Electric Co.'s creditors at 12:00 p.m., on
September 13, 2004, in Room 2610 at 725 South Figueroa St. in Los
Angeles, California. This is the first meeting of creditors
required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Los Angeles, California, Industrial Wholesale,
filed for chapter 11 protection on August 5, 2004 (Bankr. C.D.
Calif. Case No. 04-27072). David A. Tilem, Esq., in Glendale,
Calif., represents the Debtor in its restructuring efforts. When
the Debtor filed for protection from its creditors, it listed
$2,797,100 in estimated assets and $6,646,928 in estimated debts.
LAIDLAW INT'L: Discusses Post-Confirmation Safety-Kleen Exposure
----------------------------------------------------------------
Laidlaw International, Inc., Senior Vice-President and Chief
Financial Officer Douglas A. Carty advises the Securities and
Exchange Commission in a recent regulatory filing that Laidlaw,
Inc., and Laidlaw International are no longer parties to the
proceedings captioned In re Laidlaw Stockholders Litigation and In
re Safety-Kleen Corp. Securities Litigation. Laidlaw's cash
obligation in these cases is limited to the unfunded portion of
the Director and Officer Claim Treatment Letter, among itself, the
informal steering committees of its lenders and bondholders, and
certain of its present or former directors or its subsidiaries or
affiliates, including Safety-Kleen Systems, Inc.
The D&O Claim Treatment Letter sets forth an agreement among the
parties with respect to the treatment of indemnification,
reimbursement and other D&O claims, with respect to acts or
omissions prior to Laidlaw's emergence from bankruptcy. Among
other things, pursuant to the D&O Claim Treatment Letter,
Laidlaw's Directors and Officers will have access to the D&O
insurance policy, purchased by Laidlaw to cover claims, including
those arising from certain lawsuits. In addition, the Directors
and Officers will have access to a $10,000,000 trust established
by Laidlaw to cover claims against the Directors and Officers not
covered by the D&O Insurance.
Laidlaw is obligated to contribute additional funds to maintain a
$10,000,000 balance in the Defense Trust by contributing
additional funds in $1,000,000 increments, subject to a cap of
$10,000,000 in additional funding. The cap decreases over time.
The unexpended balance in the Trust, if any, will revert to
Laidlaw on June 23, 2013.
The Laidlaw and Safety-Kleen litigations had been settled shortly
before trial was originally scheduled to commence in March 2004,
but the settlements have not yet been finalized.
With regards to (i) the proceedings with the U.S. Department of
Justice regarding the billing processes of Regional Emergency
Services, a subsidiary of American Medical Response, and of
Florida Hospital Waterman, as well as (ii) a subpoena duces tecum
received from the Office of the Inspector General regarding
Huguley and Metroplex Hospitals and Regional Emergency Services
contracts in Texas, Georgia and Colorado, Mr. Carty reports that
the claims in the Waterman matter and the claims in Texas have
been resolved pursuant to a potential settlement for an aggregate
of $20 million, to which AMR will contribute a total of
$5 million. The settlement has been negotiated, but all the
parties have not yet signed the documentation.
Mr. Carty further relates that American Medical Response West, a
subsidiary of AMR, has reached a tentative settlement to pay
$3.5 million and enter into a Corporate Integrity Agreement in
connection with the subpoenas AMR West received from August 1998
until August 2000 regarding the billing matters for emergency
transports and specialized services. The settlement documents,
however, have not been finalized. (Laidlaw Bankruptcy News, Issue
No. 49; Bankruptcy Creditors' Service, Inc., 215/945-7000)
LEAP WIRELESS: Emerges from Chapter 11 with New Board of Directors
------------------------------------------------------------------
Leap Wireless International, Inc., emerged from Chapter 11
bankruptcy protection as a stronger company, well positioned for
the future. The Company now has an improved capital structure
that reflects a significant and growing cash balance with leverage
ratios among the best in the wireless industry.
"This is a bright day for our company," said Bill Freeman, Leap's
chief executive officer. "Our emergence from Chapter 11 is a
testament to the outstanding support we received from our
customers, suppliers and especially our employees across the
nation, who have continued to display their extraordinary
dedication to growing the business and providing customers across
the country with best-in-class services. Our emergence from
bankruptcy is not the finish line -- it is the start of a new era
for our company. Our focus going forward will be on continuing to
strengthen our business through the development and implementation
of new, customer-driven services that, over time, are expected to
drive the growth of our business. We have an enormous opportunity
before us and I am thrilled to work with our highly talented group
of employees as we continue to progress as a value leader in the
telecommunications industry."
The Company's Fifth Amended Joint Plan of Reorganization is now
effective and the Company has begun to distribute new equity and
debt securities as per the Plan. Leap expects that its new common
stock will be quoted for trading on the OTC Bulletin Board under
the ticker symbol "LEAP." The Company anticipates that it will
apply for listing on the NASDAQ National Market System upon
satisfaction of the listing criteria established by NASDAQ,
including a minimum number of round lot shareholders.
"We are extremely proud of the Company's achievements during the
restructuring process, which are reflected in the financial
results we recently reported for the second quarter," said Doug
Hutcheson, executive vice president and chief financial officer of
Leap. "We have successfully utilized the tools available to us
during our restructuring to reduce our long-term debt, optimize
our cost structure and improve the operational efficiency of our
business. As a result, we have emerged as a business that is
generating substantial positive cash flow and is supported by a
strong balance sheet that reflects a reduction of more than $2
billion in long-term debt. We believe this has put us in a solid
position to achieve our goal of ensuring that Leap remains a
financially strong company that is ready to seize the growth
opportunities we see before us."
"With the financial restructuring of its business behind it, Leap
is now well positioned for market success by taking a different
approach to providing service to customers that remain under-
served by traditional wireless carriers," said Scott Ellison,
Program Director for Wireless & Mobile Communications for IDC, a
global market intelligence and advisory firm. "With its reduced
cost structure, market experience, and a business model designed
to serve under-penetrated subscriber segments, Leap is well
positioned in the marketplace as a differentiated provider
targeting new wireless growth opportunities," he added.
Leap's operating subsidiary, Cricket Communications, Inc., is
emerging from its restructuring with a strong customer base and
value-driven services designed to meet the needs of a wide range
of consumers and businesses. Cricket has expanded its portfolio
to include four new service plans, including its popular Cricket
Unlimited(TM). The plan includes: unlimited anytime calls within
a Cricket calling area, unlimited domestic long distance (except
Alaska), unlimited text messaging, voicemail, caller ID, call
waiting, and up to three directory assistance calls per month with
no long-term service agreement required. Cricket has also
introduced several latest-generation handsets, including the
Audiovox 8900 camera phone, Kyocera SE47 Slider, Kyocera KE433c
Rave, and the Motorola E310. Additionally, the Company has made
significant improvements to its operations and customer service,
including:
(1) implementing a new indirect dealer compensation program
that aligns dealer incentives with the Company's customer
retention strategies;
(2) introducing a new store design focused on improving
Cricket's customer retail experience;
(3) accelerating the Company's rebate payments;
(4) improving staffing levels at retail locations, which allows
the Company to assist customers more efficiently;
(5) increasing call center service levels for customers who
call its 1-800 service line; and
(6) launching new payment options, which provide customers with
additional flexibility in how they pay for their Cricket(R)
service.
"Throughout the restructuring process we have remained committed
to offering our customers the highest quality, all-digital CDMA
networks available, which third-party drive tests have confirmed
are among the best in the nation," said Glenn Umetsu, executive
vice president and chief operating officer of Leap. "In addition,
we have made great strides in improving our customers' experience
with Cricket(R) from the moment they first enter our stores. The
steps we have taken to prepare the Company for the future would
have been difficult without the continued cooperation we received
from our suppliers and dealers and we appreciate their support
during this process. As we close this chapter in our company's
history, we look forward to further strengthening our
relationships with them and implementing the Company's plans to
support our future growth."
Cricket continues to lead the industry in the landline
displacement trend. According to a recent Company survey, 43
percent of Cricket's customers do not have a traditional landline
phone, compared to four percent industrywide, according to the
Yankee Group, a firm that analyzes telecommunications trends.
Approximately 88 percent of Cricket customers surveyed report they
use Cricket as their primary phone. Both statistics have climbed
steadily over the past few years.
Leap also announced the creation of a new board of directors
consisting of the following members:
* Wayne Barr, Jr.
Senior Managing Director
Capital & Technology Advisors, LLC
* Dr. Rajendra Singh
Co-founder
LCC International
* Michael B. Targoff
Founder and CEO
Michael B. Targoff & Co.
* Gerald Stevens-Kittner
Former Senior Vice President
Legislative and Regulatory Affairs
CAI Wireless Systems, Inc.
Additionally, the following parties are expected to be appointed
as directors for Leap in the near future:
* James D. Dondero
Founder and President
Highland Capital Management, L.P.
* Dr. Mark H. Rachesky
Founder and President
MHR Fund Management LLC
* William M. Freeman
Chief Executive Officer
Leap
Including Mr. Freeman, the Company's executive management team
consists of:
* Stewart D. (Doug) Hutcheson
Executive Vice President
Chief Financial Officer
* Glenn Umetsu
Executive Vice President
Chief Operating Officer
* David B. Davis
Senior Vice President
Operations
* Robert J. Irving, Jr.,
Senior Vice President
Legal Counsel
* Leonard C. Stephens
Senior Vice President
Human Resources
"The management team looks forward to working with our new board
of directors," said Freeman. "The high level of expertise and
insight they bring with them is expected to serve the Company well
as it progresses into the future. In addition, I would like to
take this opportunity thank the outgoing board for their guidance
and direction as we navigated through a challenging period in the
Company's history."
Headquartered in San Diego, California, Leap Wireless
International Inc. -- whose March 31, 2004 balance sheet shows a
stockholders' deficit of $921,775,000 -- is a customer-focused
company providing innovative communications services for the mass
market. Leap pioneered the Cricket Comfortable Wireless(R)
service that lets customers make all of their local calls from
within their local calling area and receive calls from anywhere
for one low, flat rate.
The Company filed for chapter 11 protection on April 13, 2003
(Bankr. S.D. Calif. Case No. 03-03470). The Honorable Louise
DeCarl Adler entered an order confirming the Company's Fifth
Amended Plan on October 22, 2003. The Company announced yesterday
morning that its plan is effective. Robert A. Klyman, Esq.,
Michael S. Lurey, Esq., and Eric D. Brown, Esq., at Latham and
Watkins LLP represent the Debtors in their restructuring efforts.
LEAP WIRELESS: Acquires Wireless Spectrum in Fresno for $27.1 Mil.
------------------------------------------------------------------
Leap Wireless International, Inc., a leading provider of
innovative and value-driven wireless communications services, has
signed a definitive agreement to acquire a wireless operating
license in Fresno, California.
On Friday, August 13, 2004, the U.S. Bankruptcy Court of
California, Northern Division, approved the sale of spectrum by
Alpine-Fresno C, LLC to Leap. The purchase price for the license
is approximately $27.1 million (plus the reimbursement of certain
construction costs in an amount not to exceed $500,000). The
license, for 30 MHz of spectrum, covers approximately 950,000
potential customers.
"The acquisition of Fresno provides us with a key link between our
Modesto, Merced and Visalia, California service areas," said Bill
Freeman, chief executive officer of Leap. "As we progress into
the future, our primary goal is to continue strengthening our
business through the development and introduction of new,
customer-driven products and services that are designed to enhance
the value of our core Cricket service. This acquisition reflects
our goal to further support the future growth of our Company
through the measured and strategic expansion into new areas that
are synergistic with our current markets. We are excited about
this transaction and the opportunity to better serve our customers
in the Central San Joaquin Valley of California."
Leap expects the value of its Cricket service in Modesto, Merced
and Visalia to greatly increase with the addition of Fresno. Leap
has not set a timeline for building out the Fresno license. The
transaction is subject to certain conditions, including approval
from the Federal Communications Commission -- FCC.
In a separate transaction, Leap also announced that it has closed
a previously announced sale of 15 MHz of its wireless operating
license in Columbus, Georgia to Cingular for $2 million. The sale
covers 371,000 potential customers. Leap has retained 15 MHz of
spectrum in Columbus, which it will use to continue providing
wireless services to subscribers in the Columbus area.
Leap currently offers its Cricket service in 39 markets in 20
states across the country stretching from New York to California.
About Leap
Headquartered in San Diego, California, Leap Wireless
International Inc. -- whose March 31, 2004 balance sheet shows a
stockholders' deficit of $921,775,000 -- is a customer-focused
company providing innovative communications services for the mass
market. Leap pioneered the Cricket Comfortable Wireless(R)
service that lets customers make all of their local calls from
within their local calling area and receive calls from anywhere
for one low, flat rate.
The Company filed for chapter 11 protection on April 13, 2003
(Bankr. S.D. Calif. Case No. 03-03470). The Honorable Louise
DeCarl Adler entered an order confirming the Company's Fifth
Amended Plan on October 22, 2003. The Company announced yesterday
morning that its plan is effective. Robert A. Klyman, Esq.,
Michael S. Lurey, Esq., and Eric D. Brown, Esq., at Latham and
Watkins LLP represent the Debtors in their restructuring efforts.
LIFEPOINT HOSPITALS: S&P Puts BB Credit Rating on Negative Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on non-urban
hospital chain operator LifePoint Hospitals, Inc., including the
'BB' corporate credit rating and LifePoint Hospitals Holdings,
Inc., on CreditWatch with negative implications.
LifePoint announced an agreement to acquire Province Healthcare
Co. in a $1.7 billion cash and stock transaction. The combination
of the two Brentwood, Tennessee Hospital chains, expected to be
completed by mid-2005, would nearly double LifePoint's revenue
base, broaden its geographic presence, and diversify the combined
entity's portfolio of facilities. However, Standard & Poor's
expects that the acquisition would significantly increase debt
leverage and likely lead to a two-notch downgrade for LifePoint's
corporate credit rating. The transaction will be financed with
approximately $565 million in cash, through the issuance of about
17 million shares of LifePoint common stock, and by the assumption
or refinancing of Province's debt.
LifePoint currently owns and operates 30 hospitals in non-urban
communities. The majority of the facilities are in the Southeast,
with Tennessee and Kentucky accounting for about 50% of the
company's total bed capacity. Province Healthcare owns or leases
20 acute-care hospitals, also in small markets. "While the
combined entity could benefit from operating scale and cost
savings, the financial risk associated with the transaction is
likely to be the overriding consideration in a potential two-notch
downgrade when the transaction is completed," said Standard &
Poor's credit analyst Jesse Juliano.
MOONEY AEROSPACE: Arent Fox to Represent Unsecured Creditors
------------------------------------------------------------
The Official Unsecured Creditors Committee appointed in Mooney
Aerospace Group, Ltd., seeks approval from the U.S. Bankruptcy
Court for the District of Delaware to employ Arent Fox PLLC as its
attorneys.
The Committee expects Arent Fox to:
a) assist, advise and represent the Committee in its
consultation with the Debtor relative to the
administration of this case;
b) assist, advise and represent the Committee in analyzing
the Debtor's assets and liabilities and investigate the
validity of liens;
c) attend meetings and negotiate with the representatives of
the Debtor and secured creditors;
d) assist and advise the Committee in its examination and
analysis of the conduct of the Debtor's affairs;
e) assist the Committee in the review, analysis and
negotiation of any plans or reorganization that may be
filed, and assist the Committee in the review, analysis
and negotiation of the disclosure statement accompanying
any plan of reorganization;
f) assist the Committee in the review, analysis and
negotiation of any financing or funding agreements;
g) take all necessary action to protect and preserve the
interests of the Committee, including, without
limitation, the prosecution of actions on its behalf,
negotiations concerning all litigation in which the
Debtor is involved, and review analysis of all claims
against the Debtor's estate;
h) prepare on behalf of the Committee all necessary motions,
applications, answers, orders, reports and papers in
support of positions taken by the Committee;
i) appear as appropriate, before this Court, the Appellate
Courts, and other Courts in which matters may be heard
and to protect the interests of the Committee before said
Courts and the United States Trustee; and
j) perform all other necessary legal services in this case.
Mark D. Taylor, Esq., a member of Arent Fox's Financial
Restructuring and Bankruptcy Practice Group, will lead the team in
this engagement. The estate will pay Mr. Taylor in his hourly
rate of $385. Other Arent Fox professionals and paraprofessionals
will render services to the Committee and their current rates are:
Position Hourly Rate
-------- -----------
Members $340 - 590
Counsel 340 - 580
Associates 175 - 395
Legal Assistans 165 - 190
The Committee tells the Court that it selected Arent Fox because
of the Firm's expertise in the fields of bankruptcy, insolvency,
reorganizations, liquidations, debtors' and creditors' rights,
debt restructuring and corporate reorganization.
Headquartered in Kerrville, Texas, Mooney Aerospace Group, Ltd. --
http://www.mooney.com/-- is a general aviation holding company
that owns Mooney Airplane Co., located in Kerrville, Texas. The
Company filed for chapter 11 protection on June 10, 2004 (Bankr.
Del. Case No. 04-11733). Mark A. Frankel, Esq., at Backenroth
Frankel & Krinsky LLP, represents the Debtor in its restructuring
efforts. When the Company filed for protection from its
creditors, it listed $16,757,000 in total assets and $69,802,000
in total debts.
NETWORK INSTALLATION: Gets $40,000 S.F. Bay Area IT Contract
------------------------------------------------------------
Network Installation Corp. (OTC Bulletin Board: NWIS) was awarded
an IT project from Feickert, Ellen Elementary School in Elk Grove,
CA. The project involves the deployment of a Leviton data
communications platform as well as a Nortel telecom solution.
Total value of the project is approximately $40,000.
About Network Installation Corp.
Network Installation Corp. provides communications solutions to
the Fortune 1000, Government Agencies, Municipalities, K-12 and
Universities and Multiple Property Owners. These solutions
include the design, installation and deployment of data, voice and
video networks as well as wireless networks and Wi-Fi. Through
its wholly-owned subsidiary Del Mar Systems International, Inc.,
the Company also provides integrated telecom solutions including
Voice over Internet Protocol (VoIP) applications. Network
Installation maintains branch offices in Irvine, Los Angeles, Gold
River and San Marcos, California; Las Vegas, Nevada, Phoenix,
Arizona and Seattle, Washington. To find out more about Network
Installation Corp. (OTC Bulletin Board: NWIS), visit
http://www.networkinstallationcorp.net/The Company's public
financial information and filings can be viewed at
http://www.sec.gov/
NEXTWAVE TELECOM: Wants Exclusivity Extended through October 12
---------------------------------------------------------------
NextWave Telecom, Inc., Nextwave Personal Communications and their
debtor-affiliates ask the U.S. Bankruptcy Court for the Southern
District of New York to extend the time period within which only
the Debtors have the right to file a plan of reorganization and to
solicit acceptances of that plan. The Debtors want their
exclusive plan filing period extended through October 12, 2004,
and the Debtors want until December 11, 2004, to solicit
acceptances of that plan from their creditors.
The Debtors relate that they intend to propose treatment that
would leave all creditors unimpaired. The Debtors want to pay
unsecured creditors in full, in cash, with postpetition interest.
The Debtors tell the Court that their estates are in a strong and
attractive position. The Debtors are confident that they are in a
position to propose a Plan that not only pays creditors in full,
but also provides value to equity holders. The remaining
challenge, the Debtors point out, is to maximize value for equity
holders. The Debtors are currently determining transactions that
may provide equity holders with the best value in a most
advantageous fashion.
Deborah L. Schrier-Rape, Esq., reminds the Court that the estates
were insolvent by billions of dollars when Nextwave filed for
bankruptcy protection. While the road to reorganization has been
challenging and uncertain, the Debtors are confident that the
estates are now poised to have almost $1 billion in cash and
unencumbered assets. "The recent sale of the New York, Tampa and
Sarasota licenses are evidence of the substantial value inherent
in the Retained Licenses," Ms. Schrier-Rape said.
The Debtors believe that it is prudent to take some additional
time to ensure that the best approach to reorganization is
followed. The Debtors said that it is in the best interest of the
estates to allow additional time for the conclusion of current
negotiations and receipt of regulatory approval for the New York
and Florida Sales. "This will help to ensure that the Plan is the
optimal plan for the Debtors and their interest holders," Ms.
Schrier-Rape adds.
Headquartered in Greenwich, Connecticut, NextWave Telecom, Inc.
-- http://www.nextwavetel.com/-- was formed in 1995 to provide
broadband wireless and other mobile communications services to
consumer and business markets. The Company filed for chapter 11
protection on December 23, 1998 (Bankr. S.D.N.Y. Case No.
98-23303). The Debtors did battle with the Federal Communications
Commission all the way to the U.S. Supreme Court to maintain
control of the spectrum licenses it bought at an FCC auction but
couldn't afford to pay for at the time. Deborah Lynn Schrier-
Rape, Esq., in Dallas, Texas, and lawyers at Andrews & Kurth, LLP,
represent the Debtors in their restructuring efforts.
NORCROSS SAFETY: S&P Affirms B+ Credit Rating With Stable Outlook
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Norcross
Safety Products LLC to stable from negative. All ratings,
including Standard & Poor's 'B+' corporate credit rating, are
affirmed on the Oak Brook, Illinois-based supplier of personal-
protection equipment.
"The outlook was revised because of the company's decision to
terminate the exploration of strategic alternatives that could
have included the sale of the company," said Standard & Poor's
credit analyst John Sico. "In addition, Norcross has been
improving operating performance that should raise credit metrics
to within our expectations."
"While there are no plans under way to sell the company or go to
the market with a leveraged recapitalization, Standard & Poor's
would review the impact of any future discussions."
Norcross had about $260 million of debt outstanding at
June 30, 2004. Norcross offers a high level of protection with
branded and patented products that are critical, especially to the
life-threatening occupations in the high-voltage electricity and
firefighting jobs in which they are used. It has niche positions
in respiratory, hand, and footwear devices, and a diverse
portfolio. The safety business is driven by Occupational
Safety & Health Administration requirements and the aversion to
litigation. Currently, there is a good opportunity for Norcross'
products because of the heightened emphasis on domestic safety
preparedness.
LOMA COMPANY: Section 341(a) Meeting Slated for September 21
------------------------------------------------------------
The United States Trustee for Region 5 will convene a meeting of
The Loma Company, LLC's creditors at 10:30 a.m., on September 21,
2004, in Room 252 at 231 S. Union Street in Opelousas, Louisiana.
This is the first meeting of creditors required under 11 U.S.C.
Sec. 341(a) in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Carencro, Louisiana, The Loma Company --
http://www.lomacompany.com/-- is a custom moulder specializing in
large structural components. The Company filed for a chapter 11
protection on August 11, 2004 (Bankr. W.D. La. Case No. 04-51957).
H. Kent Aguillard, Esq., at Young, Hoychick & Aguillard,
represents the Debtor in its restructuring efforts. When the
Company filed for protection from its creditors, it listed
$8,946,703 in total assets and $19,842,342 in total debts.
MID-STATE RACEWAY: Hires Harris Beach as Bankruptcy Counsel
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Mid-State Raceway, Inc., sought and obtained permission from the
U.S. Bankruptcy Court for the Northern District of New York to
hire Harris Beach LLP as its bankruptcy counsel.
Harris Beach will:
a) negotiate and workout cash collateral with secured
creditors;
b) counsel the Debtor on the duties of a Debtor-in-
possession;
c) negotiate with secured creditors for adequate protection,
assumption or rejection of leases;
d) review Debtor's operations and operating reports;
e) confer with the Debtor regarding formulation of a Plan;
f) prepare Debtor's Disclosure Statement and Plan of
Reorganization; and
g) meet with creditors, appear in Court and perform all
other services necessary in this case.
The professionals who will have primary responsibility in this
retention and their current hourly rates are:
Professionals Hourly Billing Rate
------------- -------------------
Lee E. Woodward $295
Harold P. Goldberg 275
Wendy A. Kinsella 225
Eugene Klindienst 225
Associates 225
Paralegals 85
Mr. Woodward assures the Court that Harris Beach is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.
Headquartered in Vernon, New York, Mid-State Raceway --
http://www.vernondowns.com/-- operates a racetrack, restaurant
and gaming resort. The Company filed for chapter 11 protection on
August 11, 2004 (Bankr. N.D. N.Y. Case No. 04-65746). Lee E.
Woodard, Esq., at Harris Beach LLP, represents the Debtor in its
restructuring efforts. When the Debtor filed for protection from
its creditors, it estimated debts of $10 to $50 million, but did
not disclose any estimate of its assets.
MIRANT CORP: Judge Lynn Gives Examiner More Responsibilities
------------------------------------------------------------
Recent developments have led Judge Lynn of the U.S. Bankruptcy
Court for the Northern District of Texas to conclude that it is
necessary and appropriate to expand the role of the Examiner in
Mirant Corp.'s on-going chapter 11 restructuring proceeding.
Some of the factors Judge Lynn considered are:
(a) There is a need of a new means of oversight to ensure
that parties and professionals do not abuse the freedom
they have gained through the Protection Order and the
Compensation Order;
(b) The Examiner Order addresses potential conflicts -- but
only if a party brings a possible conflict to the
Examiner's attention will he investigate it. Due to the
possible conflicts the Debtors and the two creditors'
committees face and the limitations on Court oversight,
closer supervision by the Examiner is necessary;
(c) Many entities and individuals active in these cases face
exposure at different levels of potential conflicts,
which require the presence of an empowered neutral;
(d) There has been turnover of key personnel in both the
Debtors and the Mirant Committee. Yet now is the time
when the parties should be exchanging ideas for
reorganization plans -- not breaking in new personnel
anxious to prove themselves. With encouragement and
guidance, the parties may yet achieve efficiently a
feasible reorganization that provides substantially fair
treatment, consistent with the requirements of the
Bankruptcy Code, for all interested parties. Since the
Court cannot facilitate the process, it now must look to
the Examiner to ensure that these cases do not fall into
chaos -- a state sometimes perceived as advantageous for
a party that wishes to use its strategic position to
bully competing classes of creditors; and
(e) The Court has perceived a number of troubling instances
of mistakes concerning information and even of an absence
of professionalism. The Court wishes to ensure that less
of its time is given to rhetoric designed for mind-
poisoning and that further confusion not distract from
the proper business of the Court and the parties. Thus,
the Court must look to the Examiner for assurance that
all parties are negotiating in good faith and that any
wrongful conduct is brought to the attention of the Court
and other authorities.
The Court notes that it does not presently harbor mistrust for any
entity or professional participating in Mirant's cases. However,
the dynamics of the cases, the Debtors' corporate structure, the
nature of the Debtors' business, the variables of these Cases and
in the market place, the orphan creditor constituencies, and the
variety of agendas that professionals, the Debtors' management and
committee members may have, as well as other factors, make for a
volatile situation. The Court cannot but be concerned that one or
more parties might try -- or appear -- to exploit this situation
to the detriment of the reorganization process and the public
good.
Accordingly, Judge Lynn adds nine additional duties for Mirant
Examiner William K. Snyder to perform:
(a) The Examiner will hold a monthly status conference
regarding Mirant's Chapter 11 cases to monitor the
progress and conduct of these cases. The status
conference will be on notice to entitled entities pursuant
to Rule 2002(i) of the Federal Rules of Bankruptcy
Procedure, and any party-in-interest may attend the
conference through counsel. The Examiner will make a
recording of each status conference, which will not be
provided to any entity absent a Court order;
(b) The Examiner will identify any issue of law or fact in
these cases, resolution of which may be necessary or
useful to advancement of the Debtors' reorganization.
The Examiner may take the necessary steps that are
consistent with his duty to remain neutral as among the
Debtors' estate to resolve any issue. In the event an
issue cannot be resolved through negotiation or
mediation, the Examiner will consult the Debtors, the
Official Committees and any other party having an
interest in the issue over how and when the issue should
be resolved through litigation. In the event no party
commences litigation to resolve the issue, the Examiner
may seek Court authority to commence the litigation
unless to do so would compromise his neutrality as to
each of the Debtors' estates. In the latter event, the
Examiner will report to the Court concerning the nature
of the issue in the next Examiner's report;
(c) The Examiner may take a position on any motion. The
Examiner will advise the Court, in connection with a
Court hearing of any contested matter, whether or not any
Fiduciary that is party to the contested matter has made
a good faith effort to resolve the contested matter
without the need for litigation;
(d) The Examiner may, and at the Court's direction will,
maintain notional accounting records for the Debtors as
may be useful in connection with ongoing efforts to
resolve issues of risk-bearing;
(e) The Examiner may investigate any aspect of the Debtors'
operations to ensure fair dealing among the Debtors and
may investigate any basis that may exist for pursuing
litigation in or in connection with these cases. The
Examiner may ask the Court to limit or delay investigation
of any issue by a Fiduciary to permit the Examiner to
conduct the investigation of the issue as he deems
appropriate;
(f) The Examiner will monitor negotiations among the parties
regarding a plan or plans of reorganization for one or
more of the Debtors. Upon the request of one or more
Fiduciaries, the Examiner may participate in the
negotiations, but only as a mediator. The Examiner, in
his reports, will advise the Court concerning (i)
progress in negotiations, (ii) whether or not each
Fiduciary is negotiating in good faith, and (iii) what
procedures the Court might implement to advance and
facilitate the negotiating process;
(g) The Examiner will investigate any conduct by a Protected
Person or Fiduciary which may, in the Examiner's
judgment, constitute a breach of any duty to a
Fiduciary's constituency, the estate of any Debtor or
the Court. The Examiner must keep in mind the specific
duties owed by each of the Fiduciaries. The Examiner may
employ investigators with the approval of the United
States Trustee upon Application to the Court under seal
and after hearing, if required. Regarding any Protected
Person the Examiner may invoke or act under Rule 9011
of the Federal Rules of Bankruptcy Procedure or Section
3059 of the Criminal Procedure Code. The Examiner will
report to the Court and the U.S. Trustee if he determines
that any Protected Person has violated Bankruptcy Rule
9011 or should be prosecuted for a criminal act;
(h) The Examiner will nominate a representative to the Fee
Committee. The Examiner may object to or comment on any
request for compensation and the retention or continued
retention of a professional by a Fiduciary; and
(i) The Examiner is directed to review and monitor the
operation and observance of the Continued Trading Order.
The Examiner will report to the Court if, through
misapplication or otherwise, the Continued Trading Order
is not consistent with the public interest and efficient
reorganization of the Debtors.
Furthermore, the Court instructs the Examiner to file reports by
the 10th day of every other month, beginning October 10, 2004, and
at other times he deems necessary. The quarterly rolling average
Examiner's budget will be deemed to read $900,000.
Judge Lynn makes it clear that the Examiner may not assume or
exercise any authority over the Debtors' operations.
Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- together with its direct and indirect
subsidiaries, generate, sell and deliver electricity in North
America, the Philippines and the Caribbean. The Company filed
for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex.
03-46590). Thomas E. Lauria, Esq., at White & Case LLP represent
the Debtors in their restructuring efforts. When the Company
filed for protection from their creditors, they listed
$20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant
Bankruptcy News, Issue No. 41; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
MERITAGE MORTGAGE: Fitch Assigns BB+ Rating on $12.6MM Class M-10
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Fitch Ratings assigns these ratings to Meritage Mortgage Loan
Trust, series 2004-2, asset-backed certificates, which closed on
Aug. 12, 2004:
-- $790.9 million classes I-A1, II-A1, II-A2 and II-A3 'AAA',
-- $32.8 million class M-1 'AA+';
-- $30.3 million class M-2 'AA+';
-- $20.2 million class M-3 'AA';
-- $17.6 million class M-4 'AA-';
-- $17.6 million class M-5 'A+';
-- $15.1 million class M-6 'A';
-- $15.1 million class M-7 'A-';
-- $15.1 million class M-8 'BBB+';
-- $15.1 million class M-9 'BBB'; and
-- $12.6 million class M-10 'BB+'.
The 'AAA' rating on the senior certificates reflects 21.75% in
total credit enhancement provided by these classes as well as the
1.00% initial and targeted overcollateralization -- OC:
* the 3.25% class M-1;
* the 3.00% class M-2;
* the 2.00% class M-3;
* the 1.75% class M-4;
* the 1.75% class M-5;
* the 1.50% class M-6;
* the 1.50% class M-7;
* the 1.50% class M-8;
* the 1.50% class M-9;
* the 1.25% class M-10;
* the 1.00% class B-1; and
* the 0.75% class B-2.
All certificates have the benefit of monthly excess cash flow to
absorb losses. In addition, the ratings on the certificates
reflect the quality of the loans, the soundness of the legal and
financial structures, and the capabilities of Saxon Mortgage
Services, Inc., as servicer. Deutsche Bank National Trust Company
will act as trustee.
The Group 1 mortgage loans consist of 3,163 fixed rate (2.19%) and
adjustable rate (97.81%), first and second lien loans with an
aggregate balance of $503,649,647 as of the cut-off date. The
principal balances of the Group 1 mortgage loans conform to the
limitations of Fannie Mae and Freddie Mac. As of origination,
approximately 43.30% of the mortgage loans had loan-to-value
ratios in excess of 80.00%. The weighted average combined loan-
to-value ratio -- CLTV -- for the mortgage loans is approximately
85.48%, and the weighted average remaining term to maturity is
approximately 358 months. The weighted average FICO score is
approximately 647. The weighted average coupon -- WAC -- is
6.973%, and the average balance is $159,232.
The three states that represent the largest portion of the
mortgage loans are California (29.51%), Arizona (9.17%), and
Washington (6.35%).
The Group 2 mortgage loans consist of 1,005 fixed rate (25.63%)
and adjustable rate (74.37%), first and second lien loans with an
aggregate balance of $103,321,420 as of the cut-off date. The
principal balances of the Group 2 mortgage loans may or may not
conform to the limitations of Fannie Mae and Freddie Mac. As of
origination, approximately 65.91% of the mortgage loans had loan-
to-value ratios in excess of 80.00%. The weighted average CLTV
for the mortgage loans is approximately 88.72%, and the weighted
average remaining term to maturity is approximately 313 months.
The weighted average FICO score is approximately 644. The WAC is
8.259%, and the average balance is $102,807.
The three states that represent the largest portion of the
mortgage loans are California (36.47%), Arizona (7.49%), and
Massachusetts (5.21%).
Interest and principal payments will be distributed on the 25th
day of each month commencing in September 2004. Distributions of
principal and interest on the class I-A1 certificates will be
based primarily on collections from the pool 1 mortgage loans.
Distributions of principal and interest on the class II-A1, II-A2,
and II-A3 certificates will be based primarily on collections from
the pool 2 mortgage loans. To the extent available, principal may
be distributed from amounts on the unrelated mortgage pools among
the class I-A1, II-A1, II-A2, and II-A3 certificates, resulting in
limited cross-collateralization. Interest will be paid
concurrently to the senior classes and then sequentially to all
subordinate classes. Prior to the step-down date or if a trigger
event is in effect, principal will be distributed pro rata to the
class I-A1, II-A1, II-A2, and II-A3 certificates until their
principal balances have been reduced to zero and then sequentially
to the class M-1, M-2, M-3, M-4, M-5, M-6, M-7, M-8, M-9, M-10, B-
1, and B-2 certificates. After the step-down date and if no
trigger is in effect, then principal will be distributed pro rata
to all classes.
NORTEL NETWORKS: Canadian Police to Start Criminal Investigation
----------------------------------------------------------------
Nortel Networks Corporation (NYSE:NT)(TSX:NT) received a letter
from the Integrated Market Enforcement Team of the Royal Canadian
Mounted Police advising the Company that it will commence a
criminal investigation into the Company's financial accounting
situation.
These matters have been the subject of an ongoing review by the
RCMP. Nortel Networks will continue to cooperate fully with the
RCMP in connection with the investigation.
Nortel Networks is an industry leader and innovator focused on
transforming how the world communicates and exchanges information.
The Company is supplying its service provider and enterprise
customers with communications technology and infrastructure to
enable value-added IP data, voice and multimedia services spanning
Wireless Networks, Wireline Networks, Enterprise Networks, and
Optical Networks. As a global company, Nortel Networks does
business in more than 150 countries. More information about
Nortel Networks can be found on the Web at
http://www.nortelnetworks.com/or
http://www.nortelnetworks.com/media_center/
OMNI FACILITY: Has Until Sept. 10 to File Bankruptcy Schedules
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave Omni Facility Services, Inc., and its debtor-affiliates more
time to file their schedules of assets and liabilities, statements
of financial affairs and lists of executory contracts and
unexpired leases required under 11 U.S.C. Sec. 521(1). The
Debtors have until September 10, 2004, to file these financial
disclosure documents.
Headquartered in South Plainfield, New Jersey, Omni Facility
Services, Inc. -- http://www.omnifacility.com/-- provides
architectural, janitorial, landscaping, and electrical services.
The Company filed for chapter 11 protection on June 9, 2004
(Bankr. S.D.N.Y. Case No. 04-13972). Frank A. Oswald, Esq., at
Togut, Segal & Segal LLP, represents the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed $80,334,886 in total assets and
$100,285,820 in total debts.
RCN CORP: Discloses $71.6 Million Net Loss for 2004 Second Quarter
------------------------------------------------------------------
RCN Corporation's (Pink Sheets: RCNCQ) revenues for the quarter
ended June 30, 2004 were $121.3 million, compared to
$114.5 million for the quarter ended June 30, 2003. Net loss from
continuing operations was ($71.6) million for the three months
ended June 30, 2004, compared to ($85.6) million, for the three
months ended June 30, 2003.
The Company anticipates filing a plan of reorganization and
related disclosure statement consistent with the financial
restructuring, prior to the end of August 2004, and expects to
consummate its restructuring process during the fourth quarter of
2004.
RCN filed its 2004 Form 10-Q on, Monday, August 16, 2004. The
Company also filed Amendment No. 1 on Form 10-Q/A, to correct
depreciation expense for the quarter ended March 31, 2004.
Investors can access the Form 10-Q at RCN's Web site at
http://www.rcn.com/investor/secfilings.php
Headquartered in Princeton, New Jersey, RCN Corporation --
http://www.rcn.com/-- provides bundled Telecommunications
services. The Company, along with its affiliates, filed for
chapter 11 protection (Bankr. S.D.N.Y. Case No. 04-13638) on
May 27, 2004. Frederick D. Morris, Esq., and Jay M. Goffman,
Esq., at Skadden Arps Slate Meagher & Flom LLP, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $1,486,782,000 in
assets and $1,820,323,000 in liabilities.
RCN: Gets Court Nod to Employ Winston & Strawn as Special Counsel
-----------------------------------------------------------------
RCN Corporation and its debtor-affiliates got the permission of
The U.S. Bankruptcy Court for the Southern District of New York to
employ Winston & Strawn, as of June 7, 2004, as special counsel to
represent the members of RCN's Board of Directors.
As reported in the Troubled Company Reporter on July 20, 2004,
Winston & Strawn will provide the Board of Directors with legal
services and advice in connection with the Debtors' Chapter 11
cases, including:
-- corporate governance matters;
-- the Board of Directors' fiduciary duties;
-- matters concerning the Securities and Exchange Commission,
the Federal Communications Commission or any other federal,
state or local regulatory agency; and
-- any investigations and securities class actions or
shareholder derivative actions.
Winston & Strawn will also advise the Board of Directors with
respect to other matters including, but not limited to:
(a) conducting legal research, collection and review of
documents, interviews of relevant current and former
officers, directors and employees of the Debtors and other
tasks in connection with the Proceedings;
(b) reviewing developments in the Debtors' cases and advising
the Board of Directors in connection the developments;
(c) providing legal advice to the Board of Directors in
support of its ongoing responsibilities with respect to
the Debtors' operations, including attendance at meetings
of the Board of Directors and its committees;
(d) representing and providing services requested by the Board
of Directors in connection with any litigation that may be
brought against it;
(e) if necessary, appearing before the Bankruptcy Court, any
district or appellate courts, and the United States
Trustee on the Board of Directors' behalf with respect
to certain matters; and
(f) providing the full range of legal services and advice
normally associated with related contested matters or
litigation.
RCN Corporation Senior Vice President and Chief Restructuring
Officer Anthony M. Horvat clarifies that Winston & Strawn will not
be involved in interfacing with the Court and will not be
primarily responsible for the Debtors' general restructuring
efforts. However, the firm may, on occasion, interface with the
Court to the extent necessary to assist the Debtors and their
bankruptcy counsel. Winston & Strawn will coordinate with, and
assist Skadden, Arps, Slate, Meagher & Flom, LLP, in connection
with the Debtors' Chapter 11 cases.
Winston & Strawn will be compensated based on its hourly rates
for services performed in its representation of the Board of
Directors. The firm's hourly rates range from:
Partners $325 - 695
Counsel and Associates 160 - 440
Paraprofessionals 105 - 175
Headquartered in Princeton, New Jersey, RCN Corporation --
http://www.rcn.com/-- provides bundled Telecommunications
services. The Company, along with its affiliates, filed for
chapter 11 protection (Bankr. S.D.N.Y. Case No. 04-13638) on
May 27, 2004. Frederick D. Morris, Esq., and Jay M. Goffman,
Esq., at Skadden Arps Slate Meagher & Flom LLP, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $1,486,782,000 in
assets and $1,820,323,000 in liabilities. (RCN Corp. Bankruptcy
News, Issue No. 7 and 8; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
RELIANCE INSURANCE: Court Approves $450,000 King County Land Sale
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The Commonwealth Court of Pennsylvania authorized M. Diane Koken,
Insurance Commissioner of Pennsylvania, as Liquidator of Reliance
Insurance Company, to sell a parcel of property located in King
County, Washington, to TSS, LLC for $450,000, or $6.54 per square
foot.
The Property is known as King County Tax Parcel 926500-0020-07 and
consists of 1.58 acres. Local real estate agents refer to the
Property as Lot 2, West Campus Office Park.
Headquartered in New York, New York, Reliance Group Holdings, Inc.
-- http://www.rgh.com/-- is a holding company that owns 100% of
Reliance Financial Services Corporation. Reliance Financial, in
turn, owns 100% of Reliance Insurance Company. The holding and
intermediate finance companies filed for chapter 11 protection on
June 12, 2001 (Bankr. S.D.N.Y. Case No. 01-13403) listing
$12,598,054,000 in assets and $12,877,472,000 in debts. The
insurance unit is being liquidated by the Insurance Commissioner
of the Commonwealth of Pennsylvania. (Reliance Bankruptcy News,
Issue No. 57 and 58; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
RIO ALTO RESOURCES: Shareholders Approve Plan of Arrangement
------------------------------------------------------------
Rio Alto Resources International, Inc.'s (TSX-RXI) shareholders
approved its Plan of Arrangement in its Annual and Special Meeting
on August 11, 2004. The highlights of the meeting included the
shareholder approval of:
(1) the previously announced dispositions of Rio Alto's
Canadian and Argentine assets; and
(2) approximately 99.4% of each shareholder's Rio Alto shares
being acquired by the Company for cash consideration. The
Rio Alto shares not acquired in the Rio Alto Plan of
Arrangement will participate in the ongoing operations of
the Company, as reorganized by way of the corporate
transaction with West Energy Ltd.
The cash consideration payable by the Company under the Rio Alto
Plan of Arrangement will be approximately $1.32 per share based on
the anticipated sales proceeds from the previously announced
Ecuador, Argentine and Canadian transactions and the Company's
expected net working capital position at the effective time of the
Rio Alto Plan of Arrangement.
Pursuant to the Rio Alto Plan of Arrangement, those Rio Alto
shareholders who will hold less than 118 shares (20,000 shares
prior to giving effect to the Rio Alto Plan of Arrangement) will
not receive certificates for their remaining shares, but instead
will receive a further cash payment of approximately $1.32 for
each of their remaining shares. It is anticipated that the Rio
Alto Plan of Arrangement will be effective and funds will be
transferred to the Company's transfer agent on August 30, 2004 for
the purpose of payment to shareholders in accordance with the
terms of the Rio Alto Plan of Arrangement.
Also approved by the shareholders was the plan to proceed with the
West Plan of Arrangement whereby West Energy, pursuant to a plan
of arrangement will complete a "reverse takeover" of the Rio Alto
corporate shell subsequent to Rio Alto completing the Rio Alto
Plan of Arrangement. West is presently a joint venture partner of
the Company, and the merger will result in a continuation and
expansion of the Company's Canadian oil and gas exploration and
production activities.
West has current production of approximately 1,600 barrels of oil
equivalent per day and 55,000 net acres of undeveloped land,
primarily located in the Nisku and Pembina areas of Alberta.
Following the merger, the management team of West will assume
control of the Company's operations.
Pursuant to the West Plan of Arrangement each holder of West
common shares and West special warrants will receive one Rio Alto
share for each one West share or special warrant. It is expected
that West shareholders and special warrantholders will receive an
aggregate 43,297,300 Rio Alto shares pursuant to the West Plan of
Arrangement. Through this transaction, the existing West security
holders shall own approximately 99% of the merged company, with
Rio Alto's shareholders retaining approximately 500,000 shares, or
approximately 1%, of the merged company, before giving effect to
the Small Shareholder Repurchase. The transaction with West is
still subject to West shareholder, Court and regulatory approval.
Final closing of the Argentine Corporate transaction is pending
regulatory approval in Argentina.
Rio Alto Resources International, Inc., is a Calgary, Alberta-
based junior oil and natural gas exploration and production
company formed in July 2002 as a result of a merger between Rio
Alto Exploration Ltd. and Canadian Natural Resources Limited.
The Company's 100 percent working interest and operated properties
in Ecuador and Argentina provide a solid cash flow base to fund
Rio Alto Resources' short to medium term strategy of growth
through exploration and development in Western Canada.
RIO ALTO: Reports $19.7MM Book Loss in Argentina Assets Write Down
------------------------------------------------------------------
Rio Alto Resources International, Inc., (TSX-RXI) discloses its
financial operating results for three months ending June 30, 2004.
Cash flow from operations totalled $6.5 million ($0.08 per share)
on production of 2,955 boepd, compared to $5.0 million ($0.06 per
share) on production of 5,264 boepd in the same period a year ago.
This thirty percent increase in cash flow was largely attributed
to commodity price strength in the period. A book loss of
$19.7 million ($0.23 per share), resulting from the write down
from the Argentina assets in anticipation of the sale transaction,
compared to earnings of $0.3 million ($0.01 per share) in the
period one year ago.
Operations in northwest Alberta in the second quarter were steady.
Production in the second quarter averaged 819 boepd, an 810
percent increase over the same period in 2003 as Company natural
gas production had just been commenced at the end of the period in
2003. Year to date the average daily production reached 662 boepd
compared to 51 boepd for the same period in 2003.
In Argentina, the production from the Bella Vista Oeste field has
continued to remain consistent due to the South Pool waterflood
project. In the second quarter the average daily production rate
of 2,136 bpd of crude oil represented an increase of 4 percent
over the same period a year ago (2003 - 2,055 bpd). Year to date
production for Argentina averaged 2,178 bpd compared to 1,944 bpd
in 2003.
Rio Alto Resources International, Inc., is a Calgary, Alberta-
based junior oil and natural gas exploration and production
company formed in July 2002 as a result of a merger between Rio
Alto Exploration Ltd. and Canadian Natural Resources Limited.
The Company's 100 percent working interest and operated properties
in Ecuador and Argentina provide a solid cash flow base to fund
Rio Alto Resources' short to medium term strategy of growth
through exploration and development in Western Canada.
The Company's shareholders approved its Plan of Arrangement on
August 11, 2004.
RS GROUP: Reports $11 Million in Revenue from CIL Acquisition
-------------------------------------------------------------
RS Group of Companies, Inc. (formerly Rent Shield Corp.) (OTCBB:
RSGC), a provider of pass-through risk specialty insurance and
reinsurance products, completed its acquisition of Canadian
Intermediaries Limited.
Under the terms of the agreement, RS Group of Companies obtained
the common stock of CIL for $5 million. The consideration for the
stock of CIL was as follows: $2.5 million in cash and $2.5 million
in the common stock of RS Group of Companies. The transaction
closed April 30, 2004. Now a wholly owned subsidiary of RS Group
of Companies, revenues from CIL will now be included in RSGC's
financial statements. This purchase is expected to add a minimum
of $25 million in revenues and $1.75 million in EBITDA for RS
Group of Companies over the next 12 months.
CIL has generated gross written premiums in excess of $11 million
Canadian for the year to June 30, 2004.
As underwriting manager, CIL represents underwriters specializing
in "hard to place" liability, bloodstock mortality and credit
insurance in the North American market. "CIL has consistently
produced a profitable portfolio and holds an excellent reputation
in the North American and London markets," said John Hamilton, CEO
of RS Group of Companies, Inc., "This acquisition provides RS
Group of Companies with another value-added vertical fit for its
pass-through risk specialty insurance and reinsurance products."
RS Group of Companies' core product, the RentShield(TM)
Residential Rental Guarantee Program:
-- Guarantees, without question, to automatically pay the
landlord up to six months of rental income in the event of
tenant default within 30 days of the due date.
-- Pays the landlord up to $10,000 for willful damage by a
tenant.
-- Eliminates the landlord's legal, eviction, and
administrative collection expenses.
-- Pre-qualifies a prospective tenant through background and
credit verification within 48 hours of their application.
-- Eliminates the need for landlords requiring up-front payment
of a security deposit and last month's rent.
-- Provides property owners the online tools that help
administer residential rental properties and access other
RSGC products and services.
-- Provides landlords and tenants online access to listings of
vacant properties.
About RS Group of Companies, Inc.
RS Group of Companies, Inc. -- http://www.rsgc.com/-- has
developed and is implementing a strategy to design, structure and
sell a broad series of pass-through risk specialty insurance and
reinsurance platforms throughout North America. In November 2003,
through its wholly owned subsidiaries, the Company introduced its
core pass-through risk solution, RentShield(TM) --
http://www.rentshieldexpress.com/-- a Residential Rental
Guarantee Program being offered to North America's $300 billion
residential real estate rental market. It is estimated that there
are over 38 million rental units in the United States and Canada.
Rental Guarantee was first developed in Finland to provide surety
to residential property developers and is being used as an
extremely effective marketing tool in the United Kingdom for the
buy-to-let market. It protects investments in the rental units by
receiving a guaranteed income on a certain timeline.
At December 31, 2003, RS Group's balance sheet showed a $966,088
stockholders' deficit.
SK GLOBAL: Transfers 13 Claims Totaling $265MM+ to SK Networks
--------------------------------------------------------------
Pursuant to an Assignment Agreement dated June 15, 2004, 13
creditors transferred claims filed against SK Global America,
Inc., to the Debtor's Parent, SK Networks Co., Ltd.
The transferred claims total $265,285,401:
Claim
Creditor Number Claim Amount
-------- ------ ------------
Cho Hung Bank, London Branch 63 $3,030,739
Hana Bank, New York Agency 57 11,048,114
Industrial and Commercial Bank of China 43 8,024,056
KDB Ireland Limited 58 3,009,555
Kookmin Bank 53 35,487,770
Koram Bank, London Branch 51 51,034,772
Koram Bank, London Branch 72 15,191,904
Oriental Fire & Marine Insurance Co., Ltd. 120 5,109,185
Sinhan Bank, New York Branch 70 51,927,782
The Export-Import Bank of Korea 42 15,036,278
The Korea Development Bank 62 20,238,322
Woori Bank 61 41,107,299
Woori Bank, L.A. Agency 108 5,039,625
Headquartered in Fort Lee, New Jersey, SK Global America,
Inc., is a subsidiary of SK Global Co., Ltd., one of the world's
leading trading companies. The Debtors file for chapter 11
protection on July 21, 2003 (Bankr. S.D.N.Y. Case No. 03-14625).
Albert Togut, Esq., and Scott E. Ratner, Esq., at Togut, Segal &
Segal, LLP, represent the Debtors in their restructuring efforts.
When they filed for bankruptcy, the Debtors reported
$3,268,611,000 in assets and $3,167,800,000 of liabilities.
(SK Global Bankruptcy News, Issue No. 21; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
SOLUTIA: Wants Remediation Pact with Inquip & Monsanto Approved
---------------------------------------------------------------
Solutia, Inc., asks the U.S. Bankruptcy Court for the Southern
District of New York to approve a 2004 Remediation Services
Construction Contract to settle a disputed fee claim with Inquip
Associates, Inc., and Monsanto Company.
2003 Remediation Agreement
Before the bankruptcy petition date, Solutia was issued certain
administrative orders related to environmental investigation,
removal and remediation work. One of Solutia's administrative
orders is the Unilateral Administrative Order for Remedial Design
and Interim Remedial Action, V-W-02-C-716, dated September 30,
2002. The Administrative Order was issued against Solutia,
Pharmacia Corporation and 70 other parties relating to
contamination at a site in the Village of Sauget, St. Clair
County, in Illinois, a closed industrial waste landfill used by
Pharmacia until the 1970's and currently owned by Solutia. The
Administrative Order required the design and installation of an
interim groundwater remedy to prevent contaminated groundwater
that flows under the Sauget Site from entering into the
Mississippi River.
The selected Interim Groundwater Remedy required the installation
of a Vertical Groundwater Control Barrier -- the Slurry Wall --
and groundwater recovery wells, as well as the discharge and
treatment of extracted groundwater, monitoring of groundwater
quality and levels, and monitoring of sediment and surface water.
To satisfy its obligations under the Administrative Order, Solutia
entered into a Remediation Services Construction Contract with
Inquip, effective July 28, 2003. Pursuant to the 2003 Agreement,
Inquip agreed to construct the Slurry Wall. Inquip began work in
October 2003.
Dispute Regarding Inquip's Fees
The 2003 Agreement requires Solutia to reimburse Inquip for all
actual costs necessarily incurred in the construction of the
Slurry Wall and pay a fee for all overhead expenses and a
$1,050,000 profit. The 2003 Agreement provides that the
Stipulated Fee can be increased in certain circumstances if
unforeseen conditions are encountered at the Sauget Site, like:
(a) subsurface or latent physical conditions differing
materially from those in the 2003 Agreement; or
(b) unknown physical conditions of an unusual nature differing
materially from those ordinarily encountered and generally
recognized as inherent in the work of the character
provided for in the 2003 Agreement.
To request an increase, the 2003 Agreement requires Inquip to
notify Solutia before continuing work at the Sauget Site. After
investigation, if Solutia agrees that the conditions materially
differ from those contemplated and cause an increase in Inquip's
cost or time required for constructing the Slurry Wall and
performing the other work required, the 2003 Agreement provides
for an equitable adjustment to the Stipulated Fee. However,
Inquip may not make a claim for adjustment unless it has given the
required notice before continuing work.
On February 9, 2004, Inquip sent a letter to the project
coordinator in charge of the Interim Groundwater Remedy, arguing
that it is entitled to an increased Stipulated Fee. Inquip
alleged that the total cost of the Slurry Wall construction would
greatly exceed the original cost estimate it provided, primarily
due to unknown physical conditions at the Sauget Site that it had
not anticipated. The unexpected conditions include the presence
of "ledge" rock above the bedrock surface and the presence of
significant deposits of fly ash, both of which have already led to
significant delays in the work, with consequent increases in
costs. Inquip also asserted that delays associated with a stop
work order issued by Solutia on December 17, 2003 form the basis
for additional fees.
The current estimate of Inquip's total cost to complete the Slurry
Wall, excluding any fee, is approximately $14,100,000 --
$9,650,000 in excess of Inquip's original cost estimate. Inquip
asserts that it is entitled to an additional fee equal to 23% of
these increased costs -- $2,200,000. The 23% fee is based on the
ratio of the $1,050,000 Stipulated Fee to the $4,451,000 original
cost estimate, and supposedly represents the sum of Inquip's
general and administrative expenses (18%) and its profit (5%).
Therefore, if the current cost estimate reflects the actual costs
at the completion of the construction, Inquip's claim for fees
would total $3,500,000.
M. Natasha Labovitz, Esq., at Gibson, Dunn & Crutcher, LLP, in New
York, tells the Court that Inquip has not followed the procedures
set forth in the 2003 Agreement for asserting a fee adjustment
because it did not send notice to a Solutia representative about
the unknown physical conditions before disturbing the conditions
of the Sauget Site. Thus, Solutia believes that Inquip has no
contractual basis for demanding an equitable adjustment to the
Stipulated Fee under the terms of the 2003 Agreement.
Ms. Labovitz also relates that a significant cause of Inquip's
cost overruns was not the physical conditions at the Sauget Site,
but other causes of significant delays, like an unusually high
percentage of equipment breakdowns. An analysis of the total
equipment hours on the job between September 9 and December 17,
2003 shows that almost 25% of the project time was lost due to
equipment repairs that were not related to the physical condition
at the Sauget Site.
New Monsanto Contract
Before the Petition Date, Solutia had been performing both
Pharmacia's and its own obligations under the various orders and
orders on consent related to the Sauget Site. In March 2004,
Monsanto, as a party responsible for certain Pharmacia
obligations, agreed on an interim basis to make certain payments
or to undertake certain work to continue the environmental
remediation performed on the Sauget Site, thereby satisfying
Pharmacia's obligations under the various orders.
Monsanto agreed to share the actual out-of-pocket costs and
expenses relating to completing the Interim Groundwater Remedy
project. As a result of negotiations with Monsanto, Solutia
agreed to pay all out-of-pocket costs and expenses incurred on or
after February 11, 2004 in connection with the Interim Groundwater
Remedy project until the aggregate amount incurred by Solutia was
$4,000,000. Solutia also agreed to operate and maintain the
Interim Groundwater Remedy upon completion of the Interim
Groundwater Remedy project. In turn, Monsanto agreed that, to the
extent that out-of-pocket costs and expenses incurred in
connection with the Interim Groundwater Remedy project exceeded
$4,000,000, it would pay the additional costs and expenses as they
became due, for a minimum of six months from March 25, 2004, and
would provide 60 days notice before it would stop making those
payments.
Inquip Settlement
Monsanto, acting as Pharmacia's representative, Inquip and Solutia
agreed to enter into the 2004 Remediation Services Construction
Contract to finish the construction of the Slurry Wall while
simultaneously fixing Inquip's prepetition claim against Solutia
and settling Inquip's Disputed Fee Claim. While not rejecting or
assuming the 2003 Agreement, and without admitting that Inquip is
due any additional fee beyond the Stipulated Fee, Solutia agrees
to pay all Reimbursable Costs performed by Inquip after the
Petition Date and up to and including June 12, 2004.
Through the 2004 Agreement, Monsanto will pay Inquip:
(i) All Reimbursable Costs incurred on or after June 13,
2004, currently estimated to be $5,833,0003;
(ii) A $692,323 Additional Fee;
(iii) A 15% fee on all Monsanto Reimbursable Costs that are
not in excess of $5,033,000, beginning with Inquip's
Invoice Number 7603-42;
(iv) A 5% fee of all Monsanto Reimbursable Costs in excess of
$5,033,000, beginning with Inquip's Invoice Number
7603-42;
(v) If all work under the 2004 Agreement has been fully
completed and all Monsanto Reimbursable Costs do not
exceed $5,033,000 beginning with Inquip's Invoice Number
7603-42, a fee representing 45% of the amount by which
the Monsanto Reimbursable Costs are less than
$5,033,000; and
(vi) A fee representing 15% of all Monsanto Reimbursable
Costs associated with changes in the work earned in
accordance with the 2004 Agreement and approved by
Monsanto.
As full satisfaction of the Disputed Fee Claim and any future
claims for additional fees for all work done before June 13, 2004,
Inquip agrees that, in exchange for receipt of the Monsanto
Stipulated Fee, Inquip will not assert, and none of Solutia,
Monsanto or Pharmacia will be liable to Inquip for, any claim for
payment under the 2003 Agreement arising between the Petition Date
and the Effective Date. Furthermore, Solutia and Monsanto will
not to assert claims against Inquip for payment under the 2003
Agreement between the Petition Date and the Effective Date, except
for claims that may arise for work performed under Section 28 of
the General Conditions. Under the Settlement, Monsanto is wholly
liable for the Monsanto Stipulated Fee. The Settlement will
involve no disbursements of funds from Solutia's estate.
As part of the Settlement, Inquip also agreed to fix the amount of
its prepetition claim against Solutia. On the Petition Date,
Inquip's outstanding invoices amounted to $2,500,000. Monsanto
requested Inquip to stay on the site and paid $1,100,000 of
Inquip's prepetition invoices to encourage Inquip to continue
work. Inquip agreed, as part of the Settlement, to fix its
prepetition claim against Solutia for both Reimbursable Costs and
the Stipulated Fee at an amount of no more than $1,477,626.
Ms. Labovitz notes that aside from avoiding litigation-related
costs and the risk of an adverse judgment, the 2004 Agreement
facilitates Solutia's compliance with the Interim Groundwater
Unilateral Administrative Order.
Headquartered in St. Louis, Missouri, Solutia, Inc. --
http://www.solutia.com/-- with its subsidiaries, make and sell a
variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications. The Company
filed for chapter 11 protection on December 17, 2003 (Bankr.
S.D.N.Y. Case No. 03-17949). When the Debtors filed for
protection from their creditors, they listed $2,854,000,000 in
assets and $3,223,000,000 in debts. (Solutia Bankruptcy News,
Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000)
SPIEGEL: Asks Court for Permission to Reject 53 Newport Contracts
-----------------------------------------------------------------
On June 16, 2004, the United States Bankruptcy Court for the
Southern District of New York authorized the Spiegel Group and its
debtor-affiliates to sell substantially all of the assets of
Newport News, Inc., Newport News Services, LLC, and New Hampton
Realty Corp. pursuant to an amended stock and asset purchase
agreement with Newport News Acquisition Limited, formerly known as
Pangea Acquisition 8 Limited. Under the Purchase Agreement:
(i) substantially all of the assets and liabilities of the
Newport Entities would be sold, assigned and transferred
to Newport News Holdings Corporation, a newly formed,
wholly owned non-Debtor subsidiary of one of the
Debtors, in exchange for all of the issued and
outstanding stock Newport News Holdings;
(ii) this Debtor would transfer the stock of Newport News
Holdings to Spiegel, Inc.; and
(iii) Spiegel would sell the stock of Newport News Holdings to
Newport News Acquisition.
Andrew V. Tenzer, Esq., at Shearman & Sterling, LLP, in New York,
relates that the transactions under the Purchase Agreement have
been consummated and, therefore, Newport News Acquisition owns
100% of the common stock of Newport News Holdings to which 100% of
both the assets and liabilities of the Newport Entities have been
contributed.
As a result of the sale of the Newport Assets, the Debtors no
longer require any of the services provided under 53 contracts
previously entered into by the Newport Entities. Accordingly, the
Debtors seek the Court's authority to reject the 53 Newport
Contracts:
Counterparty Newport Entity Type of Contract
------------ -------------- ----------------
Abdick/Multigraphics Newport News, Inc. Maintenance on
Offset Duplicator/
Master Imager
Acurid (Orkin) Newport News, Inc. Service/Pest
Control
Aramark Newport News, Inc. Vending Service
Aramark (NY) Newport News, Inc. Water Cooler
Canon Hygiene Newport News, Inc. Service/Facilities/
Trash
Claritas Newport News, Inc. Data Analysis
Eddie Bauer Int'l, Inc. Newport News, Inc. Buying Agent
Elite - Amsterdam Newport News, Inc. Model-Wendy Dubfeld
Elite - Amsterdam Newport News, Inc. Model-Danielle Z.
Wainkken
Elite - Amsterdam Newport News, Inc. Vivianna Grecco
Experian (Direct Newport News, Inc. Data Hygiene/
Marketing Technology, Acquisition
Inc.)
Experian (Z24) Newport News, Inc. Data Overlays
First Quality Newport News, Inc. Cleaning/Building
Services
Ford Models, Inc. Newport News, Ins. Model-Korina Longin
Givens Trucking Newport News, Inc. Carrier Agreement -
Trucking Services
Konica Newport News, Inc. Maintenance -
Copier - 35F304269
Konica Newport News, Inc. Maintenance -
Copier - 576227150
Konica Newport News, Inc. Maintenance -
Copier - 35Be03592
Konica Newport News, Inc. Maintenance -
Copier - 35Fe04052
Konica Newport News, Inc. Maintenance -
Copier - 35Fe04256
Konica Newport News, Inc. Lease - Copier -
35F34052
Konica Newport News, Inc. Lease - Copier -
35F304269
Konica Newport News, Inc. Lease - Copier -
35Fe04256
Konica Newport News, Inc. Maintenance -
Copier - 576206517
Momentum Logistics/ Newport News, Inc. Test Arrangement -
RR Donnelly Consolidator
Otto International (HK) Newport News, Inc. Buying Agent
Ltd. (Shanghai China)
Otto International (HK) Newport News, Inc. Buying Agent
Ltd., Korea Branch
Otto International (HK) Newport News, Inc. Buying Agent
Ltd., Taipei Branch
Otto International Newport News, Inc. Buying Agent
(Singapore) Pte. Ltd
(Sri Lanka)
Otto International Newport News, Inc. Buying Agent
(Singapore) Pte. Ltd.
(Thailand)
Otto International Newport News, Inc. Buying Agent
(Singapore) Pte. Ltd.
(Indonesia)
Otto International Newport News, Inc. Buying Agent
(Singapore) Pte. Ltd.
(Malaysia and Singapore)
Otto International Do Newport News, Inc. Buying Agent
Brazil Ltda.
Otto International Newport News, Inc. Buying Agent
Hong Kong Ltd.
Otto International Newport News, Inc. Vendor Payment
Hong Kong Ltd. Service Agreement
Otto International Newport News, Inc. Buying Agent
Hong Kong Ltd. (Bombay)
Otto International Newport News, Inc. Buying Agent
Poland Ltd. Sp. z.o.o.
Otto Versand Newport News, Inc. Buying Agent
International Gmbh,
Filiale Italiana Della
Otto Versand Newport News, Inc. Buying Agent
International Gmbh,
Istanbul Branch
Otto-AGN International Newport News, Inc. Buying Agent
Ltd. (India)
Parcel Direct Newport News, Inc. Consolidator - Help
Get Parcels Into
Usps System
Performics Newport News, Inc. Affiliate
Management
Pitney Bowes Newport News, Inc. Rental - Meter &
Software
Quality Data Systems Newport News, Inc.
Rene Derhy Newport News, Inc. Design License
Scan Thor Denmark - Newport News, Inc. Buying Agent
Branch Office Baltics,
Estonia, Latvia,
Lithuania
Scan Thor Denmark - Newport News, Inc. Buying Agent
Branch Office Portugal
T Management Newport News, Inc. Model - Ingrid
Seynhaeve
Time Warner Cable Newport News, Inc. Cable Service
UPS Distribution
Fulfillment Carrier Agreement -
Services UPS Services
UPS Custom House Newport News, Inc. Brokerage House -
Brokerage, Inc. International
Shipments of
Samples, Etc.
VeriSign Newport News, Inc. Software License
Warrior Express Newport News, Inc. Truckload Carrier -
Moves Freight to
Consolidators
Rejecting the Newport Contracts is consistent with the Debtors'
goals of cutting costs, streamlining and improving their business
operations, restructuring their indebtedness, and maximizing the
return to their creditors. Moreover, the Debtors will be able to
avoid incurring administrative expenses arising from the
continuation of the Newport Contracts.
Headquartered in Downers Grove, Illinois, Spiegel, Inc. --
http://www.spiegel.com/-- is a leading international general
merchandise and specialty retailer that offers apparel, home
furnishings and other merchandise through catalogs, e-commerce
sites and approximately 560 retail stores. The Company filed for
Chapter 11 protection on March 17, 2003 (Bankr. S.D.N.Y. Case No.
03-11540). James L. Garrity, Jr., Esq., and Marc B. Hankin, Esq.,
at Shearman & Sterling represent the Debtors in their
restructuring efforts. When the Company filed for protection from
its creditors, it listed $1,737,474,862 in assets and
1,706,761,176 in debts. (Spiegel Bankruptcy News, Issue No. 30;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
STONE MACHINE: Case Summary & 17 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Stone Machine & Tool, Inc
2400 Ampere Drive
Louisville, Kentucky 40299
Bankruptcy Case No.: 04-35114
Chapter 11 Petition Date: August 12, 2004
Court: Western District of Kentucky (Louisville)
Judge: David T. Stosberg
Debtor's Counsel: Bruce D. Atherton, Esq.
Atherton & Associates LLC
624 West Main St., Suite 500
Louisville, Kentucky 40202
Tel: (502) 595-8500
Fax: (502) 595-8506
Estimated Assets: $0 to $50,000
Estimated Debts: $1 Million to $10 Million
Debtor's 17 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Fifth Third Bank of Kentucky $995,673
c/o Lloyd & McDonald
PO Box 23200
Louisville, Kentucky 40223-0200
James W. Green $150,000
Leasing One Corporation $92,574
IRS $67,000
Westfield Steel, Inc $9,790
Midwestern Insurance Alliance $3,458
Stites & Harrision $3,225
Staples Office Supplies $2,253
Cutting Tools, Inc. $1,838
Louisville Mill Supply $1,412
Thrifty Truck Rental $1,227
Victory Tube Company, Inc $878
KY Heat Treating Co. $645
Southern Cast Products, Inc $613
Levee Lift $285
Northern Tool & Equipment $218
Manufacturer's News, Inc. $97
SUNRISE CDO: S&P Places B- Rated Class C Notes on Negative Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on the class
A, B, and C notes issued by Sunrise CDO I, Ltd., a CDO backed by a
static pool of primarily ABS and other structured finance
securities, on CreditWatch with negative implications. The
ratings on these notes were previously lowered Nov. 14, 2003.
The CreditWatch placements reflect factors that have negatively
impacted the credit enhancement available to support the notes
since the November 2003 rating actions. These factors primarily
include continued defaults and a negative migration in the overall
credit quality of the assets in the collateral pool.
Standard & Poor's noted that for purposes of calculating its
overcollateralization test ratios, Sunrise "haircuts" (or reduces
the principal value of) assets rated below 'BB-' that exceed 5% of
the net outstanding portfolio collateral balance. Without
haircutting the principal value of these assets:
* the class A overcollateralization ratio, as of the July 23,
2004 monthly report, would have been approximately 133.48%
instead of 116.859%;
* the class B overcollateralization ratio would have been
approximately 107.97% instead of 94.519%; and
* the class C overcollateralization ratio would have been
approximately 101.75% instead of 89.078%.
Standard & Poor's will be reviewing the results of current cash
flow runs generated for Sunrise to determine the level of future
defaults the rated notes can withstand under various stressed
default timing and interest rate scenarios, while still paying all
of the interest and principal due on the notes. The results of
these cash flow runs will be compared with the projected default
performance of the performing assets in the collateral pool to
determine whether the ratings currently assigned to the notes
remain consistent with the credit enhancement available.
Ratings Placed On Creditwatch Negative
Rating
To From
-- ----
Class A AA+/Watch Neg AA+
Class B BBB/Watch Neg BBB
Class C B-/Watch Neg B-
Transaction Information
Issuer: Sunrise CDO I Ltd.
Co-issuer: Sunrise CDO I Inc.
Administrative Advisors: EPIC Asset Management Ltd.
BroadStreet Group LLC
Underwriter: Credit Suisse First Boston
Trustee: Wells Fargo Bank
Transaction type: CDO of ABS Static Pool
Transaction
Tranche Initial Last Current
Information Report Action Action
----------- ------- ------ -------
Date (MM/YYYY) 01/2002 11/2003 08/2004
Class A notes rtg. AAA AA+ AA+/Watch Neg
Class A notes bal. $220.60mm $201.72mm $190.81mm
Class A OC ratio 134.63% 124.86% 116.859%
Class A OC ratio min. 120.00% 120.00% 120%
Class B notes rtg. AA BBB BBB/Watch Neg
Class B notes bal. $45.10mm $45.10mm $45.10mm
Class B OC ratio 111.94% 102.05% 94.519%
Class B OC ratio min. 106.50% 106.50% 106.50%
Class C notes rtg. BBB B- B-/Watch Neg
Class C notes bal. $17.05mm $14.34mm $14.408mm
Class C OC ratio 105.24% 96.44% 89.078%
Class C OC ratio min. 101.75% 101.75% 101.75%
Portfolio Benchmarks Current
-------------------- -------
S&P Wtd. Avg. Rtg.(excl. defaulted) BB+
S&P Default Measure(excl. defaulted) 1.35%
S&P Variability Measure (excl. defaulted) 2.39%
S&P Correlation Measure (excl. defaulted) 1.16
Wtd. Avg. Coupon (excl. defaulted) 7.385%
Wtd. Avg. Spread (excl. defaulted) 2.281%
Oblig. Rtd. 'A-' and above 16.48%
Oblig. Rtd. 'BBB' and above 21.31%
Oblig. Rtd. 'B-' and above 88.18%
S&P Rated Last Current
OC (ROC) Rating Action Rating Action
--------- ------------- -------------
Class A 98.63% (AA+) 94.53% (AA+/Watch Neg)
Class B 99.22% (BBB) 94.48% (BBB/Watch Neg)
Class C 98.06% (B-) 93.70% (B-/Watch Neg)
TRANSWESTERN PUBLISHING: Moody's Puts B1 Rating on First-Lien Loan
------------------------------------------------------------------
Moody's Investors Service has assigned a B1 rating to TransWestern
Publishing Company, LLC's proposed add-on first lien term loan and
a B3 rating to its proposed add-on second lien term loan. Details
of the rating action are:
Ratings assigned:
* proposed $100 million add-on senior secured first lien term
loan, due 2012 -- B1; and
* proposed $50 million add-on senior secured second lien term
loan, due 2012 -- B3.
Ratings affirmed:
* existing $65 million senior secured first lien revolving
credit facility, due 2012 -- B1;
* existing $400 million senior secured first lien term loan,
due 2012 -- B1; and
* senior implied rating -- B1.
Ratings downgraded:
* existing $200 million senior secured second lien term loan,
due 2012 -- to B3 from B2; and
* issuer rating -- to Caa1 from B3.
The rating outlook is stable.
The ratings reflect:
(i) TransWestern's high leverage;
(ii) its willingness to incur incremental debt to fund
dividends;
(iii) competitive pressure in virtually all of its markets;
(iv) the challenges of heavy employee turnover; and
(v) high bad debts experience and operating difficulties
which have led to deferred directory publishing and
canvassing schedules.
Moody's notes that management has attained recent success in
addressing these operational challenges. Ratings are supported
by:
(i) the predictability of its same store sales;
(ii) growth potential which exceeds that of its incumbent
peers;
(iii) high customer renewal rates;
(iv) attractive cash flow margins; and
(v) the diversification of its customer base and geographic
operations.
The stable outlook incorporates:
(i) the reliability and visibility of TransWestern's top
line;
(ii) the resilience of the yellow page advertising business to
economic downturns; and
(iii) a business model that provides for organic deleverage
over time, absent further dividend payments or
acquisition activity.
TransWestern intends to use proceeds from the proposed
$150 million add-on term loans largely to make a special
distribution to its owners, including CIVC Partners LLC and
Thomas H. Lee Partners.
Although the proposed add-on debt will place heightened pressure
on TransWestern's ratings, Moody's affirmation of the senior
implied rating assumes that leverage will return to below six
times by the end of 2005.
The first lien revolving credit facility and term loan are rated
at parity with the senior implied rating since first lien debt
represents the bulk of TransWestern's capital structure.
The downgrade of the second lien facility to B3 from B2 represents
a widening of the notching below the senior implied rating, and
results from the increase in overall debt levels, especially
priority first lien debt. Second lien debtholders, who are now
contractually subordinated behind $552 million in first lien
facilities (including $65 million of undrawn revolver), may pursue
no remedies against TransWestern for as long as any first lien
debt remains outstanding. The downgrade of the issuer rating to
Caa1 from B3 reflects questionable recovery prospects (in a
distress scenario) for unsecured debt holders who now rank behind
$801 million in senior secured credit commitments (including $65
million of undrawn revolver).
With post-closing leverage expected to exceed 7 times debt to
EBITDA, TransWestern's ratings are considerably more pressured
than at the end of 2003, when leverage stood at 4.3 times EBITDA.
The senior implied rating is affirmed largely because
TransWestern's cash generation can accommodate significant debt
reduction in relatively short order. However, a downgrade or
change in outlook is likely if TransWestern is unable to
demonstrate that it is on track to reduce leverage to below six
times by year-end 2005. Ratings or the rating outlook could also
be lowered if the company makes leverage-stretching acquisitions,
or if it approves additional special dividends of any magnitude in
the near future. Ratings upgrade is unlikely in the near term,
however, ratings lift could result if the company is able to
generate free cash flow in excess of current expectations, or if
it pays down debt from sales of assets or equity.
Moody's is especially concerned that the company has approved a
dividend of such magnitude so soon after the prior distribution
was made in February 2004. In February, TransWestern made a
$205 million special dividend to its equity partners. This
dividend was largely funded by an upsized senior secured credit
facility, which increased leverage to 6.7 times from 4.3 times.
Moody's downgraded TransWestern's senior implied rating to B1 from
Ba3 in connection with the launch of its bank facility in February
2004.
Following the closing of the currently proposed $150 million add-
on facilities, TransWestern will have made $352 million in year-to
date dividend payments resulting in an increase in leverage to 7.3
times debt to EBITDA on a pro-forma basis compared to 4.3 times at
the end of 2003 (excluding the add-back of prototype expenses).
Moody's considers that TransWestern will continue to enjoy
adequate liquidity, with its $65 million revolver completely
unused and available at closing. Given the adequacy of the
company's cash flow generation, Moody's expects that the company
will have no need to draw under this facility to meet its
operating requirements.
The senior secured credit facility is guaranteed by all
significant operating subsidiaries. Lenders are granted a pledge
of the stock of the borrower and its subsidiaries, as well as a
lien on substantially all existing and acquired assets. Lenders
are protected by financial covenants, including total leverage,
senior leverage and interest coverage ratio tests.
Headquartered in San Diego, California, TransWestern Publishing
publishes 330 directories in 25 states. In 2003, the company
reported revenues of $323.6 million.
UNIFLEX, INC.: Committee Hires Lowenstein Sandler as Counsel
------------------------------------------------------------
The Official Unsecured Creditors Committee in Uniflex, Inc.'s
chapter 11 case asks the U.S. Bankruptcy Court for District of
Delaware for authority to hire Lowenstein Sandler PC as its
counsel.
Lowenstein Sandler will:
a) give the Committee legal advice as necessary with respect
to its powers and duties;
b) assist the Committee in investigating the acts, conduct,
assets, liabilities and financial condition of the
Debtor, the operation of the Debtor's business, potential
claims, and any other matters relevant to the case or to
the formulation of a plan of reorganization;
c) participate in the formulation of the Plan;
d) provide legal advice as necessary with respect to any
disclosure statement and Plan filed in this case and with
respect to the process for approving or disapproving
disclosure statements and confirm or deny confirmation of
a Plan;
e) prepare on behalf of the Committee, as necessary,
applications, motions, complaints, answers, orders,
agreements and other legal papers;
f) appear in Court to present necessary motions,
applications and pleadings and protect the interests of
those represented by the Committee;
g) assist the Committee in requesting the appointment of a
Trustee or Examiner, should such action be necessary; and
h) perform such other legal services as may be required and
be in the interest of the Committee and creditors.
Michael S. Etkin, Esq., assures the Court that Lowenstein Sandler
is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code.
Lowenstein Sandler professionals will bill the estate at their
current billing rates:
Position Hourly Rates
-------- ------------
Partners $300 - 565
Counsel 275 - 395
Associates 250 - 350
Legal Assistants 75 - 150
Headquartered in Hicksville, New York, Uniflex, Inc. --
http://www.uniflexbags.com/-- makes custom-printed plastic bags
and other plastic packaging for promotions and advertising. The
Company filed for chapter 11 protection on June 24, 2004 (Bankr.
Del. Case No. 04-11852). Peter C. Hughes, Esq., at Dilworth
Paxson LLP, represents the Debtor in its restructuring efforts.
When the Company filed for protection from its creditors, it
listed both estimated debts and assets of over $10 million.
UNITED AIRLINES: Aircraft N379UA Holds Allowed $8,160,355 Claim
---------------------------------------------------------------
The Aircraft N379UA Trust filed three claims against the United
Airlines and its debtor-affiliates in their chapter 11 cases:
(a) Claim No. 35493 for $24,597,756;
(b) Claim No. 34456 in an unliquidated amount; and
(c) Claim No. 32895 in an unliquidated amount.
The Claims relate to a leveraged lease that finances a Boeing
737-322 aircraft with Tail No. N379UA. On October 9, 2003, the
Debtors and the Trust entered into a Term Sheet, which was filed
under seal, that restructured the operative financing arrangement.
Pursuant to the Term Sheet, the Debtors and the Trust agreed to
resolve all matters related to the Claims.
Consequently, the parties agree that the Claims will be
consolidated as Claim No. 35493 and liquidated for $8,160,355.
The Claim will be settled and allowed without alteration, as a
prepetition general unsecured claim against the Debtors without
priority.
Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the
holding company for United Airlines -- the world's second largest
air carrier. The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis represent the
Debtors in their restructuring efforts. When the Company filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts. (United Airlines
Bankruptcy News, Issue No. 56; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
US AIRWAYS: Asks IRS to Stretch Pension Contributions Over 5 Years
-----------------------------------------------------------------
US Airways will ask the Internal Revenue Service for authority, as
permitted under IRS rules, to reschedule contributions to the
defined benefit pension plans for the Association of Flight
Attendants, AFA, and the International Association of Machinists,
IAM, representing mechanical and related employees.
"Rescheduling these payments will help US Airways to conserve its
cash so that we have sufficient liquidity to operate the airline,"
said Jerry Glass, US Airways senior vice president of Employee
Relations. "This is an important step as we work to ensure our
survival and future prosperity."
A letter has been sent to employees in both work groups explaining
the company's action. The two plans would be treated the same
under the proposed payment rescheduling.
Under IRS rules, US Airways is required to make contributions of
approximately $67.5 million total to the AFA and IAM plans for the
2004 plan year. If the application for a waiver is approved, the
company will be able to spread out these contributions for the
2004 plan year for up to five years, rather than the 18 months
during which the contributions otherwise would have been made.
Because US Airways already has contributed $28.6 million to the
AFA and IAM plans during 2004, the company intends to apply that
amount toward the last 2003 plan year payment, which is due on
September 15.
The proposed payment rescheduling would have no impact on
retirees. For current employees, pension benefits will still
begin when an employee retires and continue throughout the
employee's lifetime.
Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the
holding company for United Airlines -- the world's second largest
air carrier. The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis represent the
Debtors in their restructuring efforts. When the Company filed for
protection from their creditors, they listed $24,190,000,000 in
assets and $22,787,000,000 in debts.
US AIRWAYS: Negotiates Waiver of Credit Rating Triggers
-------------------------------------------------------
On May 5, 2004, Standard & Poor's downgraded US Airways Group's
and US Airways' corporate credit ratings to CCC+. As a result of
the downgrade, General Electric Capital Corporation, Bombardier,
Inc., and Empresa Brasileira de Aeronautica S.A. had the right to
discontinue financing the Company's regional jet purchases, unless
US Airways could meet alternative minimum financial tests. US
Airways does not presently have alternative sources of financing
regional jet purchases, nor does it have the ability to purchase
regional jets without financing.
US Airways, however, reached agreements with GE Capital, Embraer
and Bombardier for continued financing of regional jet deliveries
through September 30, 2004 despite the downgrade by S&P. Any
financing for deliveries on or after October 1, 2004 are subject
to separate negotiations with each of the financiers and will
require that US Airways demonstrate its ability to achieve the
cost savings and low-cost carrier-competitive operating cost
structure encompassed in its Transformation Plan.
In a regulatory filing with the Securities and Exchange
Commission on August 4, 2004, Anita P. Beier, US Airways' Chief
Accounting Officer, relates that, as part of the agreement reached
with Bombardier, US Airways will convert 23 CRJ200 deliveries (50-
seat regional jets) to CRJ701 deliveries (70-seat regional jets)
or, subject to obtaining relief under the scope clause of its
agreement with its pilots, CRJ900 deliveries (90-seat regional
jets). To facilitate this conversion, 19 aircraft previously
scheduled for delivery in 2004 will be deferred to 2005 and 2006.
US Airways also agreed to secure third party financing in lieu of
financing from Bombardier for four aircraft. DVB Bank AG has
provided US Airways with 18-month bridge financing for two of the
four aircraft and has agreed to provide similar financing for the
two remaining aircraft, with the objective of arranging long-term
market financing for the aircraft upon successful implementation
of US Airways' Transformation Plan.
In May 2003, GE Capital also agreed to provide committed financing
for up to 70 regional jets or $1,400,000,000 utilizing lease
equity or mortgage debt. The GE Capital financing commitments, as
well as other financing commitments from the airframe
manufacturers, are subject to certain credit or financial tests,
as well as customary conditions precedent.
On April 30, 2004, US Airways and GE Capital agreed to amend their
regional jet financing agreement. The amendment revised the
conditions precedent that US Airways must satisfy to obtain
financing for scheduled aircraft deliveries through September 30,
2004. The revised conditions precedent require, among other
things, that there be no material adverse change (MAC) since
April 30, 2004 and that US Airways meet specific financial tests,
including, but not limited to, compliance with financial covenants
in the ATSB Loan concerning the fixed charge ratios and ratios of
indebtedness to earnings before interest, taxes, depreciation,
amortization and aircraft rent, as well as minimum cumulative
monthly EBITDAR requirements. The April 30, 2004 amendment also
contains a provision for financing regional jet deliveries beyond
September 30, 2004, subject to revising the conditions precedent
based on the successful implementation of US Airways'
Transformation Plan and the expected financial performance of the
restructured Company, both in a manner acceptable to GE Capital.
GE Capital's financing commitment with respect to regional jets
through September 30, 2004 was also conditioned on US Airways
being permitted under its ATSB Loan to use its regional jets
financed by GE Capital, utilizing mortgage debt as
cross-collateral for other obligations of US Airways to GE
Capital. On May 21, 2004, US Airways amended the ATSB Loan to
allow the cross-collateralization. At the same time, GE Capital
waived the application of the credit rating condition precedent
for regional jet financing through September 30, 2004, thus
securing the continued financing support from GE Capital through
September 2004. In connection with the ATSB Loan amendment, US
Airways made a $5,000,000 prepayment.
In the event US Airways loses its regional jet financing and is
unable to complete the purchase of regional jet aircraft, Ms.
Beier discloses that US Airways would be required to penalties of
up to:
* $27,000,000 for the remainder of 2004;
* $42,000,000 in 2005; and
* $9,000,000 in 2006,
for the regional jet aircraft scheduled to be delivered during
those periods. If US Airways is unable to obtain financing, it
will likely be unable to execute its regional jet business plan
-- an integral part of the Transformation Plan -- which would in
turn likely have a material adverse effect on the Company's future
liquidity, results of operations and financial condition.
(US Airways Bankruptcy News, Issue No. 60; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
VIATICAL LIQUIDITY: Hires Sparber Rudolph as Bankruptcy Counsel
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of California
gave its nod of approval to Viatical Liquidity, LLC's application
to employ Sparber Rudolph Annen as its counsel.
Sparber Rudolph is expected to:
a) perform analysis of the Client's financial situation, and
render advice regarding its rights, responsibilities and
obligations under the Bankruptcy Code.
b) negotiate with creditors pre-petition and post-petition
for accommodations to operate while in Chapter 11 so that
reorganization can be accomplished;
c) prepare and file all required schedules and statement of
affairs;
d) attend the First Meeting of Creditors and meet and
correspond with the U.S. Trustee as is necessary for an
orderly transition into the proceeding;
e) prepare all pleadings and court documents including, but
not limited to oppose relief from stay motions; and,
prepare a disclosure statement and plan of
reorganization;
f) review and analyze claims and, where appropriate, file
and prosecute objections to claims; and
g) attend all hearings and meetings required in the
bankruptcy case.
Gary B. Rudolph, Esq., will lead the team in this engagement. Mr.
Rudolph reports that Sparber Rudolph professionals currently bill:
Position Hourly Billing Rate
-------- -------------------
Partners $325 - 350
Junior Partners 285 - 320
Associates 250 - 280
Law Clerks 100
Paralegals 75 - 120
Headquartered in San Diego, California, Viatical Liquidity, LLC, a
company engaged in the insurance industry, filed for chapter 11
protection on June 18, 2004 (Bankr. S.D. Calif. Case No.
04-05472). Gary B. Rudolph, Esq., at Sparber Rudolph Annen
represents the Debtor in its restructuring efforts. When the
Company filed for protection from its creditors, it listed
$119,083,608 in total assets and $47,538,071 in total debts.
VIVENTIA BIOTECH: Equity Deficit Tops $13 Million at June 30
------------------------------------------------------------
Viventia Biotech, Inc., (TSX:VBI) reported a $8,828,000 net loss
for six months ended June 30, 2004 compared to $5,896,000 or $0.21
per share on a comparative post consolidation basis for the same
six-month period in 2003.
At June 30, 2004, Viventia's shareholders' deficit widened to
$13,283,000, compared to a $4,484,000 deficit at Dec. 31, 2003.
Financial results for the three months ended June 30, 2004 reflect
a net loss of $5,480,000 compared to a net loss of $2,970,000 on a
comparative post consolidation basis. The increase in the net
operating loss in both the six and three month periods is
primarily related to increased research costs, increased personnel
costs as well as increased administrative, interest costs and the
one time write off of $1,164,000 associated with the withdrawn
public offering of units on August 16.
Total research and development expenditures amount to $6,578,000
for the six months ended June 30, 2004 compared to $5,034,000 for
the same period in 2003 and $3,799,000 for the three months ended
June 30, 2004 compared to $2,598,000 for the same three months in
2003. The increase in both the six and three month periods is
primarily related to clinical trial costs associated with the
Phase I clinical trials for Proxinium(TM) in Russia and Brazil.
There were no similar expenditures in 2003. Salaries and benefits
costs increased primarily as a result of severance costs related
to the re-organization in January 2004 and to a lesser extent as a
result of increased benefits costs.
The increase in occupancy costs is a result of the leasing of
additional space in the Winnipeg facility. The increase in
operating expenditures is primarily due to increased travel costs
related to the clinical trials and the public offering.
General and administrative expenditures amounted to $632,000 for
the six months ended June 30, 2004 compared to $387,000 for the
same period last year and $297,000 for the three months ended June
30, 2004 compared to $162,000 for the same three month period in
2003. The increase for both the three and six month periods is
largely attributable to one time investor relations costs
associated with the Company's special meeting of shareholders on
May 7, 2004 and the related professional legal and accounting
fees. In addition, recruitment costs increased as a result of the
re-organization in January of 2004 and increased staff levels. A
small loss on foreign exchange for 2004 compared to a gain on
foreign exchange for the comparative periods in 2003 also
contributed to the overall variance.
Interest expense increased to $308,000 for the six months ended
June 30, 2004 compared to $223,000 for the same period in 2003.
The increase is solely attributed to interest expense related to
the bridge financing loans.
On August 16, 2004 the Company withdrew from its previously
announced public offering of units and entered into a non-binding
term sheet with the Dan Group for a private placement equity
financing for $14,000,000. Consequently deferred financing
expenses related to the public offering of $1,164,000 incurred to
June 30, 2004 were written-off.
Viventia Biotech Inc. (VBI: TSX) is a biopharmaceutical company
advancing a new generation of monoclonal antibody therapeutics
designed to offer safer, more beneficial therapies for cancer
patients. Viventia's fully integrated technology platform is based
upon the isolation of human monoclonal antibodies from cancer
patients and the development of those antibodies to deliver cancer
killing payloads directly to cancer cells. Viventia's lead
product candidate, Proxinium(TM), is in clinical development for
the treatment of head and neck cancer, and several other product
candidates are in pre-clinical development.
W.R. GRACE: Separation Group Acquires Alltech Int'l Holdings
------------------------------------------------------------
W. R. Grace & Co.'s (NYSE:GRA) subsidiary, The Separations Group,
has acquired Alltech International Holdings, Inc., a global
manufacturer and supplier of chromatography products headquartered
in Deerfield, Illinois. Alltech will be integrated into the
separations business of Grace's Davison Specialty Materials unit.
Terms of the deal were not disclosed.
Founded in 1970, Alltech is a privately held company with
manufacturing facilities and R&D laboratories in the United
States, England and Belgium and has an extensive sales, marketing
and distribution organization with 21 locations worldwide,
including China, Australia, England, Germany, and the United
States. Its products are used in high performance liquid, gas,
and ion chromatography, as well as solid phase extraction
technologies, for drug discovery and production.
Grace has been building its separations business through a
strategy of internal growth and acquisitions. This is the
company's fifth acquisition for the separations business. It
recently acquired Grom Analytik + HPLC GmbH and in 2003, MODcol
Corporation and the Jones Chromatography high performance liquid
chromatography line. Each acquisition has broadened the company's
offering of liquid and gas chromatography columns, media, systems,
and packing services to its global biotechnology and
pharmaceutical customers.
"This acquisition is an integral part of our strategy to grow in
the materials-based separations business," said Fred Festa,
President and COO of Grace, "and significantly expands our product
portfolio to better assist our customers in meeting the demands
they have to innovate and improve their products."
"This acquisition combines our 80 years of silica material and
surface chemistry science expertise with Alltech's proven
technology and demonstrated success in designing and producing
chromatography products," explained Greg Poling, President, Grace
Davison Specialty Materials. "Alltech's extensive product
portfolio, customer support, and technical capabilities provide a
platform that will enable us to expand our product offerings on a
worldwide basis. We look forward to welcoming this world-class
business to our organization."
Grace is a leading global supplier of catalysts and silica
products, specialty construction chemicals, building materials,
and sealants and coatings. With annual sales of approximately
$2.0 billion, Grace has over 6,000 employees and operations in
nearly 40 countries. For more information, visit Grace's Web site
at http://www.grace.com/. For more information about Alltech,
visit http://www.alltechweb.com/
Headquartered in Columbia, Maryland, W.R. Grace & Co., --
http://www.grace.com/-- supplies catalysts and silica products,
especially construction chemicals and building materials, and
container products globally. The Debtors filed for chapter 11
protection on April 2, 2001 (Bankr. Del. Case No: 01-01139).
James H.M. Sprayregen, Esq., at Kirkland & Ellis and Laura Davis
Jones, Esq., at Pachulski, Stang, Ziehl et al. represent the
Debtors in their restructuring efforts. (W.R. Grace Bankruptcy
News, Issue No. 69; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
WASTE SERVICES: Discloses $29.3 Million Half-Year Net Loss
----------------------------------------------------------
Waste Services, Inc. (Nasdaq: WSII), the successor to Capital
Environmental Resource Inc., reported financial results for the
three months ended June 30, 2004. Revenue for the quarter
increased by $41.3 million, or 132%, to $72.6 million in 2004
compared to $31.3 million in 2003. The increase is primarily
attributable to new business acquisitions in the United States,
since the company initiated a disposal-based growth strategy to
enter the U.S. solid waste market in 2003.
In the second quarter Waste Services completed its acquisitions of
Florida Recycling Services and the Jacksonville, Florida
operations of Allied Waste. Operating income before depreciation,
depletion and amortization was $8.7 million for the second quarter
of 2004, compared to $3.5 million for the same period last year.
Net loss attributable to Common Shareholders for the three months
ended June 30, 2004, was $18.6 million, versus a loss of $16.0
million, share, for the comparable period last year.
For the six months ended June 30, 2004, revenue increased to
$122.9 million from $56.6 million for the comparable period in
2003, an increase of $66.3 million, or 117%. Operating income
before depreciation, depletion and amortization was $14.4 million
for the first six months of 2004, compared to $7.8 million for the
same period last year. Net loss attributable to Common
Shareholders was $29.3 million for the six months ended
June 30, 2004, compared to a net loss attributable to Common
Shareholders of $24.3 million, for the comparable period last
year.
The Company completed its corporate migration on July 31, pursuant
to which Waste Services, Inc., a Delaware corporation, became the
ultimate parent company and Capital Environmental Resource, Inc.,
an Ontario corporation and the former parent company, became a
subsidiary. As part of this transaction, the company has changed
its name to Waste Services, Inc. and changed its ticker symbol to
"WSII".
In the second quarter, the company received permission to expand
the service area of the JED Landfill, located in Osceola County
Florida, to include 13 additional counties adjacent to the
original service area. This service area expansion significantly
broadens the waste shed from which the landfill can draw volume.
Based on second quarter results and management's outlook for the
balance of the year, the company has revised its internal
expectations for the second half of 2004:
(1) The company's Canadian operations and its operations in
Florida acquired from Allied Waste are expected to perform
within the range of previous expectations;
(2) In the Phoenix market area, the company opened its
Southeast Regional Landfill (formerly known as the Cactus
Waste Landfill) and two transfer stations in July and
expects the performance of its collection, transfer and
disposal operations in Arizona to be in the range of
previous expectations;
(3) The company expects that its Fort Bend Regional Landfill,
located outside of Houston, Texas, will be open by the end
of August 2004.
(4) Management is currently addressing permitting issues, which
may delay the expected opening of the previously announced
transfer station in the southwest Houston area that could
deliver up to 850 tons per day of solid waste to the
landfill. The transfer station was previously expected to
open in the fourth quarter of 2004;
(5) Management had previously expected that the JED Landfill
would be receiving 3,000 to 4,000 tons per day by the end
of 2004. This increase in volume was driven, in part, by
the expectation of the opening of three transfer stations
associated with the acquisition of Florida Recycling
Services, which were all expected to be operating by the
fourth quarter of 2004, enabling the company to internalize
significant volume collected by its own operations into the
JED Landfill. Due to development delays at each of the
three transfer stations, the company now expects two of the
transfer stations to open in the second quarter of 2005 and
one transfer station to open in the third quarter of 2005.
As a result, management now expects contribution from the
JED Landfill in the third, fourth and first quarters will
be below previous expectations;
(6) The Company acquired Florida Recycling Services on
April 30, 2004. The performance of the operations of
Florida Recycling has been below our expectations and we
are in the process of conducting a thorough review of all
aspects of Florida Recycling's business in an effort to
identify the factors contributing to this current level of
performance; and
(7) Management has detailed action plans for each of its
geographic markets targeting performance improvement driven
by components such as landfill volume increases, operating
expense reduction, improving working capital turnover, and
rationalizing general and administrative expenses. In
addition, the Company is currently undertaking a
comprehensive review of its corporate, general and
administrative expenses and expects to take steps to reduce
these expenses in future periods. These action plans are
expected to result in improvements to both profit margins
and cash flow in each of the Company's geographic markets
over the next several quarters.
The Chairman and Chief Executive Officer of the company, David
Sutherland-Yoest, stated "While we are disappointed with the delay
in getting the volumes into the JED Landfill and the performance
of FRS, we remain confident in our market position and asset base
in Florida. The balance of the company's businesses are
performing as anticipated and we are working on increasing the
contribution of the Florida business by taking aggressive steps to
reduce costs and improve performance in all of our markets in the
near-term. We are pleased to report there has not been any
reported damage or disruption to the Company's operations in
Florida as a result of Hurricane Charley over this past weekend.
The Company is in the process of working together with its
customers, government authorities and regulatory officials to
proactively respond to their immediate increased needs for
service."
Waste Services, Inc. is a multi-regional integrated solid waste
services company that provides collection, transfer, disposal and
recycling services in the United States and Canada. The company's
web site is http://www.wasteservicesinc.com/
As reported in the Troubled Company Reporter on April 20, 2004,
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Scottsdale, Arizona-based Waste Services Inc. At
the same time, Standard & Poor's assigned a 'B-' rating to the
company's then-proposed $160 million senior subordinated notes due
2014. The senior subordinated notes, S&P explained at the time,
were rated two notches below the corporate credit rating because
of the expectation that the substantial amount of priority debt
(comprised primarily of secured bank facilities) in relation to
total assets will meaningfully weaken noteholders' prospects for
recovery of principal in the event of a default. Moody's
Investors Services rates the $160 million issue of 9-1/2%
privately placed notes at Caa1.
WASTE SERVICES: Fails to Meet Covenants in Senior Credit Agreement
------------------------------------------------------------------
Waste Services, Inc. (Nasdaq: WSII), the successor to Capital
Environmental Resource Inc., discloses that while most of its
businesses have performed at or near management's second quarter
expectations, the expected profit contribution from the JED
Landfill in Florida and the performance of the operations acquired
as part of the Florida Recycling Services acquisition have
performed below expectations. Development delays related to the
planned transfer station network and lower than expected volumes
from third parties were the primary factors during the second
quarter that resulted in lower than anticipated performance at the
JED Landfill. As a result, the company failed to meet certain
financial covenants contained in its senior credit agreement.
The company is in discussions with its senior lenders concerning a
temporary waiver regarding non-compliance with these covenants and
expects to receive a waiver in the near-term.
Waste Services, Inc., entered into a $160,000,000 AMENDED AND
RESTATED CREDIT AGREEMENT on April 30, 2004, with LEHMAN BROTHERS
INC., as Arranger; LEHMAN COMMERCIAL PAPER INC., as Administrative
Agent and a Lender; CANADIAN IMPERIAL BANK OF COMMERCE, as
Canadian Agent and a Lender; CIBC INC., as a Lender; CIBC WORLD
MARKETS CORP., as Syndication Agent; and BANK OF AMERICA, N.A., as
Documentation Agent. The Credit Agreement requires Waste Services
to comply with three key financial covenants:
(A) Waste Services promises that its Consolidated Leverage
Ratio as at the last day of any period of four consecutive
fiscal quarters will not exceed:
For the Four
Fiscal Quarters Total Leverage Ratio
Ending Will Not Exceed
-------------- --------------------
FQ2 2004 5.50 : 1.00
FQ3 2004 5.50 : 1.00
FQ4 2004 5.25 : 1.00
FQ1 2005 5.00 : 1.00
FQ2 2005 4.75 : 1.00
FQ3 2005 4.50 : 1.00
FQ4 2005 4.25 : 1.00
FQ1 2006 4.25 : 1.00
FQ2 2006 4.25 : 1.00
FQ3 2006 4.25 : 1.00
FQ4 2006 4.00 : 1.00
FQ1 2007 4.00 : 1.00
FQ2 2007 4.00 : 1.00
FQ3 2007 4.00 : 1.00
FQ4 2007 4.00 : 1.00
FQ1 2008 4.00 : 1.00
FQ2 2008 4.00 : 1.00
FQ3 2008 4.00 : 1.00
FQ4 2008 4.00 : 1.00
FQ1 2009 4.00 : 1.00
FQ2 2009 4.00 : 1.00
FQ3 2009 4.00 : 1.00
FQ4 2009, and thereafter 3.75 : 1.00
(B) Waste Services promises that it will maintain a
Consolidated Senior Secured Leverage Ratio that does not
exceed:
For the Four Consolidated Senior Secured
Fiscal Quarters Leverage Ratio
Ending Will Not Exceed
-------------- ---------------------------
FQ2 2004 2.50 : 1.00
FQ3 2004 2.50 : 1.00
FQ4 2004 2.25 : 1.00
FQ1 2005 2.25 : 1.00
FQ2 2005 2.25 : 1.00
FQ3 2005, and thereafter 2.00 : 1.00
(C) Waste Services promises that its Consolidated Interest
Coverage Ratio will not fall below:
For the Four
Fiscal Quarters Minimum Consolidated
Ending Interest Coverage Ratio
--------------- -----------------------
FQ2 2004 2.50 : 1.00
FQ3 2004 2.50 : 1.00
FQ4 2004 2.75 : 1.00
FQ1 2005 2.75 : 1.00
FQ2 2005 3.00 : 1.00
FQ3 2005 3.00 : 1.00
FQ4 2005 3.00 : 1.00
FQ1 2006 3.00 : 1.00
FQ2 2006 3.00 : 1.00
FQ3 2006 3.00 : 1.00
FQ4 2006, and thereafter 3.25 : 1.00
In his bank financing transaction, Waste Services, Inc., obtained
legal counsel from:
William J. Wiegmann, Esq.
Shearman & Sterling LLP
599 Lexington Avenue
New York, New York 10022
Telephone:(212) 848-8204
Telecopy: (212) 848-7179
and the Lenders obtained legal counsel from:
Christopher R. Plaut, Esq.
Latham & Watkins LLP
885 Third Avenue, Suite 1000
New York, New York 10022
Telephone: (212) 906-1200
Telecopy: (212) 751-4864
Waste Services, Inc. is a multi-regional integrated solid waste
services company that provides collection, transfer, disposal and
recycling services in the United States and Canada. The company's
web site is http://www.wasteservicesinc.com/
As reported in the Troubled Company Reporter on April 20, 2004,
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Scottsdale, Arizona-based Waste Services Inc. At
the same time, Standard & Poor's assigned a 'B-' rating to the
company's then-proposed $160 million senior subordinated notes due
2014. The senior subordinated notes, S&P explained at the time,
were rated two notches below the corporate credit rating because
of the expectation that the substantial amount of priority debt
(comprised primarily of secured bank facilities) in relation to
total assets will meaningfully weaken noteholders' prospects for
recovery of principal in the event of a default. Moody's
Investors Services rates the $160 million issue of 9-1/2%
privately placed notes at Caa1.
WESTLAKE CHEMICAL: S&P Raises Credit Rating to BB after IPO
-----------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on Westlake
Chemical Corp. and removed all ratings from CreditWatch with
positive implications, following the completion of an IPO. The
outlook is positive.
At the same time, Standard & Poor's assigned its recovery rating
of '1' to Westlake's secured bank loan facilities. The '1'
recovery rating indicates high expectation of full recovery of
principal in the event of a default.
"The upgrade reflects the improvement to credit quality as a
result of the IPO and the expectation that management will adopt
financial policies in line with the new rating," said Standard &
Poor's credit analyst Peter Kelly.
The ratings on Houston, Texas-based Westlake reflect the company's
aggressive financial profile and its below-average business
position as a commodity chemical producer.
Ratings originally were placed on CreditWatch on May 25, 2004,
following the company's announcement that it had filed with the
SEC to undertake an IPO. The CreditWatch was updated on July 26,
2004, following a review of Westlake's strategic plans and
financial policies. At that time, Standard & Poor's indicated
that once the IPO had been completed, the CreditWatch listing
would be resolved and the corporate credit rating of Westlake
would be raised to 'BB' from 'BB-'. The IPO was completed on
August 16, 2004.
Westlake, whose majority owner is the Chao Group, is a midsize
producer of petrochemical products, with market positions in two
broad categories and annual sales of more than $1.5 billion.
WILSONS LEATHER: Pays $8.6 Million 11-1/4% Sr. Notes at Maturity
----------------------------------------------------------------
Wilsons The Leather Experts, Inc., (Nasdaq:WLSN) paid the
principle and interest due at maturity on its remaining $8.6
million 11-1/4% Senior Notes due August 15, 2004. As a result of
such payment at maturity, there are no longer any outstanding
11-1/4% Senior Notes.
About Wilsons Leather
Wilsons Leather is the leading specialty retailer of leather
outerwear, accessories and apparel in the United States. As of
July 31, 2004, Wilsons Leather operated 453 stores located in 45
states and the District of Columbia, including 329 mall stores,
108 outlet stores and 16 airport stores. The Company regularly
supplements its permanent mall stores with seasonal stores during
its peak selling season from October through January.
* * *
In its Form 10-Q for the quarterly period ended May 1, 2004, filed
with the Securities and Exchange Commission, Wilsons the Leather
Experts, Inc., reports:
"The Company currently does not have the funds to pay the
outstanding principal amount of the 11-1/4% Senior Notes when
they are due on August 15, 2004. The senior credit facility
prohibits the Company from incurring any indebtedness which
refunds, renews, extends or refinances the 11-1/4% Senior Notes on
terms more burdensome than the current terms of such notes, and
the rate of interest with respect to any replacement notes cannot
exceed the sum of the rate of interest on United States treasury
obligations of like tenor at the time of such refunding, renewal,
extension or refinancing, plus 7.0% per annum. The Company
anticipates that it will not be able to refund, renew, extend or
refinance the 11-1/4% Senior Notes with indebtedness that would
comply with such limitations. However, if the Company completes
a sale of its capital stock by August 15, 2004, on terms that
are acceptable to the lenders under the senior credit facility,
such lenders have agreed that the Company may use the proceeds
from such sale to pay the 11-1/4% Senior Notes. The lenders have
agreed that the terms of the Equity Financing if consummated,
would be acceptable for this purpose. If the Company is unable to
close the Equity Financing for any reason, it will need to find
an alternative source of permitted financing for the repayment of
the 11-1/4% Senior Notes before it will be permitted to borrow
under the senior credit facility. The Company anticipates that it
will need to access the revolving portion of the senior credit
facility by the middle of July 2004."
WILSONS LEATHER: Appoints Executives to New Leadership Roles
------------------------------------------------------------
Peter G. Michielutti will assume additional responsibilities as
Wilsons The Leather Experts Inc.'s (Nasdaq:WLSN) Chief Operating
Officer effective immediately.
In his new position as Executive Vice President, Chief Financial
Officer and Chief Operating Officer, Mr. Michielutti will report
to Joel N. Waller, Chairman and Chief Executive Officer. Prior to
joining Wilsons Leather, Mr. Michielutti served as Executive Vice
President, Information Services and Operations at US Bancorp, and
Executive Vice President, COO of Fingerhut Companies Inc.
Wilsons Leather also promoted Stacy A. Kruse, Director of Finance,
Treasurer to Vice President Finance, Treasurer effective
immediately. Ms. Kruse will continue to report to Peter G.
Michielutti, Executive Vice President, Chief Financial Officer and
Chief Operating Officer.
The Company previously promoted Teresa L. Wright, General
Merchandise Manager, Outlets to Vice President, General
Merchandise Manager for all Wilsons Leather concepts effective
June 28, 2004. In her new position, Ms. Wright reports to Joel N.
Waller, Chairman and Chief Executive Officer.
Commenting on these promotions, Joel Waller said, "I believe that
these well-deserved promotions are evidence that we have solid
bench strength and a strong management team in place to drive the
Company forward."
About Wilsons Leather
Wilsons Leather is the leading specialty retailer of leather
outerwear, accessories and apparel in the United States. As of
July 31, 2004, Wilsons Leather operated 453 stores located in 45
states and the District of Columbia, including 329 mall stores,
108 outlet stores and 16 airport stores. The Company regularly
supplements its permanent mall stores with seasonal stores during
its peak selling season from October through January.
* * *
In its Form 10-Q for the quarterly period ended May 1, 2004, filed
with the Securities and Exchange Commission, Wilsons the Leather
Experts Inc. reports:
"The Company currently does not have the funds to pay the
outstanding principal amount of the 11-1/4% Senior Notes when
they are due on August 15, 2004. The senior credit facility
prohibits the Company from incurring any indebtedness, which
refunds, renews, extends or refinances the 11-1/4% Senior Notes on
terms more burdensome than the current terms of such notes, and
the rate of interest with respect to any replacement notes cannot
exceed the sum of the rate of interest on United States treasury
obligations of like tenor at the time of such refunding, renewal,
extension or refinancing, plus 7.0% per annum. The Company
anticipates that it will not be able to refund, renew, extend or
refinance the 11-1/4% Senior Notes with indebtedness that would
comply with such limitations. However, if the Company completes
a sale of its capital stock by August 15, 2004, on terms that
are acceptable to the lenders under the senior credit facility,
such lenders have agreed that the Company may use the proceeds
from such sale to pay the 11-1/4% Senior Notes. The lenders have
agreed that the terms of the Equity Financing if consummated,
would be acceptable for this purpose. If the Company is unable to
close the Equity Financing for any reason, it will need to find
an alternative source of permitted financing for the repayment of
the 11-1/4% Senior Notes before it will be permitted to borrow
under the senior credit facility. The Company anticipates that it
will need to access the revolving portion of the senior credit
facility by the middle of July 2004."
WORLDCOM INC: Asks Court for Summary Judgment on Acosta's Claim
----------------------------------------------------------------
Amy R. Miller, Esq., at Stinson Morrison Hecker, LLP, in Kansas
City, Missouri, relates that Raul Acosta was a production support
analyst of the Debtors in their Colorado Springs facility until he
was terminated on January 26, 2004, as part of a company-wide
reduction in force. Mr. Acosta was an at-will employee during the
entire period he was employed.
In 1999 and 2003, Mr. Acosta complained to the Debtors that he had
been promised a promotion. Human Resources Manager Marsha Bowen
investigated Mr. Acosta's complaint at both times and informed him
that he would not be promoted.
Mr. Acosta eventually contacted the MCI Ethics Office concerning
his claim that he was not promoted in 1999. The Ethics Office
determined that the Debtors' Human Resources Department should
handle the complaint and forwarded the complaint to Chuck Trusty,
who assigned the issue to Ms. Bowen. Mr. Trusty was Ms. Bowen's
manager.
In a letter to the Bankruptcy Court, Mr. Acosta asked Judge
Gonzalez to compel the Debtors to pay him a $60,000 administrative
claim for wages based on the alleged promise of promotion.
In December 2003, Dave Morgan informed Annette Hagopian, MCI's
Mass Markets Billing Support Manager, and Mr. Acosta's supervisor,
that the company was realigning its business. As a result, some
employees would lose their jobs. Mr. Morgan further informed Ms.
Hagopian that one member of her team would be included in the
reduction in force.
Mr. Morgan asked Ms. Hagopian to rank her team members in
preparation for selecting an employee for the reduction in force
and to forward the ranking to him. When preparing the ranking of
her team members, Ms. Hagopian was not aware that Mr. Acosta filed
an administrative claim or communicated with the Bankruptcy
Court. When evaluated, Mr. Acosta was the lowest ranking member
on the team due to performance problem.
After Ms. Hagopian forwarded the ranking, Mr. Morgan, in
consultation with his manager, Sanjay Bagai, made the decision to
include Mr. Acosta in the reduction. Mr. Morgan was also unaware
that Mr. Acosta filed an administrative claim.
Mr. Acosta believes that the Debtors terminated his employment to
retaliate against him because he filed an administrative claim.
Mr. Acosta indicated that "all WorldCom management that was
pertinent to [him] knew" about the letter submitted to the
Bankruptcy Court. Mr. Acosta believes that a causal connection
exists because of Mr. Trusty's status as Ms. Bowen's manager, and
the knowledge that he contacted the MCI Ethics Office.
Ms. Miller asserts that there is no merit to Mr. Acosta's
allegations or his administrative claim because:
(a) Mr. Acosta cannot establish that his particular claim of
retaliatory discharge constitutes a recognized legal cause
of action under which he would be entitled to relief; and
(b) Mr. Acosta cannot establish a causal connection between
any alleged protected activity and the termination of his
employment as part of a company-wide reduction in force,
which are the essential elements of a retaliatory
discharge.
Mr. Acosta was an at-will employee of the Debtors whose employment
". . . may be terminated by either party without cause and without
notice, and whose termination does not give rise to a cause of
action." Even if the reason for discharge is wrong or incorrect,
the employer can legally terminate employment "as long as the
reason asserted does not trigger a recognized exception to the
at-will doctrine . . ."
The Debtors ask the Court for summary judgment disallowing Mr.
Acosta's claim.
Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI-- http://www.worldcom.com-- is a pre-eminent global
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts.
On April 20, 2004, the company (WCOEQ, MCWEQ) formally emerged
from U.S. Chapter 11 protection as MCI, Inc. This emergence
signifies that MCI's plan of reorganization, confirmed on October
31, 2003, is now effective and the company has begun to distribute
securities and cash to its creditors. (Worldcom Bankruptcy News,
Issue No. 58; Bankruptcy Creditors' Service, Inc., 215/945-7000)
XO COMMS: Appoints Heather Burnett Gold Government Relations VP
---------------------------------------------------------------
XO Communications, Inc. (BULLETIN BOARD: XOCM.OB), the nation's
largest facilities-based provider of national local
telecommunications services focused exclusively on businesses,
named Heather Burnett Gold senior vice president of Government
Relations. Gold will report directly to Carl Grivner, chief
executive officer of XO Communications. In this newly created
role, Gold will oversee all of XO's regulatory and legislative
advocacy with the federal government, including Congress, the FCC,
other federal agencies, and the White House, and with state
regulatory agencies and legislatures.
As the telecommunications industry's largest competitive provider
of facilities-based services for businesses, XO's appointment of a
well-known government and regulatory affairs veteran highlights
the increasing activist role the company will take in seeking to
protect a competitive telecommunications market. Recent court
decisions have mandated a rewrite of the FCC's rules on local
telephone competition and could potentially increase prices for
access to the regional Bell operating companies' facilities to
levels that would adversely affect the ability of competitive
carriers to compete effectively against the incumbent Bell
monopolies.
"We're very pleased to have someone with Heather's caliber and
experience join XO as we expand our participation in shaping
public policy and regulatory issues in our industry," said Carl
Grivner. "XO has invested billions of dollars to bring
competition to local markets across the United States, and we will
look to Heather to ensure XO has a greater voice in Washington,
D.C. and all the states where XO provides services."
"XO exemplifies the original intent of the Telecommunications Act
of 1996 by bringing true, facilities-based competition to the
local incumbents," said Gold. "Local competition has benefited
millions of businesses, large and small, with innovative services
that have helped them save billions of dollars each year. I'm
very excited to join XO as it seeks to be a leading voice for
competition at a critical time in the industry."
A telecommunications veteran with more than 20 years of
experience, Gold is known throughout the industry as an advocate
for facilities-based local competition in the telecommunications
industry. Gold will join XO from The KDW Group, where she is a
co-founder and principal. At The KDW Group, Gold provided
strategic, policy, and financial planning advice to companies and
trade organizations in the telecommunications industry with
respect to opportunities created by regulatory change.
Prior to The KDW Group, Gold was vice president of industry
affairs at Intermedia Communications where she oversaw the
company's regulatory, legislative and industry relations at both
the state and federal levels.
Before Intermedia, she served as president of the Association for
Local Telecommunications Services (ALTS) from 1993 to 1998.
During her tenure at ALTS, Gold was a leading proponent for
opening local telecommunications markets to facilities-based
competition and a driving force behind the Telecommunications Act
of 1996. Before joining ALTS, she served as vice president of
member services for the Competitive Telecommunications Association
(CompTel).
Gold holds an MBA in marketing and finance from Washington
University in St. Louis and Bachelors and Masters degrees in
Economics from Tufts University.
Headquartered in Reston, Virginia, XO Communications --
http://www.xo.com/-- provides local, long distance, and data
services to small and midsize business customers as well as to
national enterprise accounts. Through its acquisition of
Concentric Network Corp. in June 2000, the company has been able
to serve more upscale large accounts with enhanced data services
such as Web hosting, virtual private networks, and high-capacity
data network services, including dedicated wavelength and Ethernet
services. The Company filed for chapter 11 protection on June 17,
2002, (Bankr. S.D.N.Y. Case No. 02-12947). XO's stand-alone plan
of reorganization was confirmed on Nov. 15. 2002, and the company
emerged from bankruptcy in January 2003. Matthew Allen Feldman,
Esq., and Tonny K. Ho, Esq., at Willkie Farr & Gallagher represent
the Debtors in their restructuring efforts.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
September 18-21, 2004
AMERICAN BANKRUPTCY INSTITUTE
Southwest Bankruptcy Conference
The Bellagio, Las Vegas, Nevada
Contact: 1-703-739-0800 or http://www.abiworld.org/
October 9-10, 2004
INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING
CONFEDERATION
IWIRC Annual Fall Conference
Nashville, Tennessee
Contact: 1-703-449-1316 or http://www.iwirc.com/
October 10-13, 2004
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
Seventy Seventh Annual Meeting
Nashville, Tennessee
Contact: http://www.ncbj.org/
October 15-18, 2004
TURNAROUND MANAGEMENT ASSOCIATION
2004 Annual Convention
Marriott Marquis, New York City
Contact: 312-578-6900 or www.turnaround.org/
November 29-30, 2004
BEARD GROUP & RENAISSANCE AMERICAN MANAGEMENT
The Eleventh Annual Conference on Distressed Investing
Maximizing Profits in the Distressed Debt Market
The Plaza Hotel - New York City
Contact: 1-800-726-2524; 903-592-5168;
dhenderson@renaissanceamerican.com
December 2-4, 2004
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Marriott's Camelback Inn, Scottsdale, Arizona
Contact: 1-703-739-0800 or http://www.abiworld.org/
March 9-12, 2005
TURNAROUND MANAGEMENT ASSOCIATION
2005 Spring Conference
JW Marriott Desert Ridge, Phoenix, Arizona
Contact: 312-578-6900 or http://www.turnaround.org/
April 28- May 1, 2005
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
J.W. Marriot, Washington, D.C.
Contact: 1-703-739-0800 or http://www.abiworld.org/
June 2-4, 2005
ALI-ABA
Partnerships, LLCs, and LLPs: Uniform Acts, Taxation,
Drafting, Securities and Bankruptcy
Omni Hotel, San Francisco
Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/
July 14 -17, 2005
AMERICAN BANKRUPTCY INSTITUTE
Ocean Edge Resort, Brewster, Massachusetts
Contact: 1-703-739-0800 or http://www.abiworld.org/
July 27- 30, 2005
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
Kiawah Island Resort and Spa, Kiawah Island, S.C.
Contact: 1-703-739-0800 or http://www.abiworld.org/
October 19-23, 2005
TURNAROUND MANAGEMENT ASSOCIATION
2005 Annual Convention
Chicago Hilton & Towers, Chicago
Contact: 312-578-6900 or http://www.turnaround.org/
November 2-5, 2005
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
Seventy Eighth Annual Meeting
San Antonio, Texas
Contact: http://www.ncbj.org/
December 1-3, 2005
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Hyatt Grand Champions Resort, Indian Wells, Calif.
Contact: 1-703-739-0800 or http://www.abiworld.org/
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via e-mail
to conferences@bankrupt.com are encouraged.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
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however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
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Nothing in the TCR constitutes an offer or solicitation to buy or
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affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
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the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
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than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
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For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
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of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,
USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L.
Metzler, Emi Rose S.R. Parcon, Bernadette C. de Roda, Rizande B.
Delos Santos, Jazel P. Laureno, Cherry Soriano-Baaclo, Marjorie
Sabijon and Peter A. Chapman, Editors.
Copyright 2004. All rights reserved. ISSN: 1520-9474.
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*** End of Transmission ***