/raid1/www/Hosts/bankrupt/TCR_Public/041210.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, December 10, 2004, Vol. 8, No. 272
Headlines
ABC GROUP INC: Case Summary & 11 Largest Unsecured Creditors
AIR CARGO INC: Case Summary & 20 Largest Unsecured Creditors
AMERIQUEST MORTGAGE: Fitch Rates $12.8M Class M-10 Certs. at BB+
AMES DEPT: Files Chapter 11 Plan & Disclosure Statement
AMES DEPT: Selling Leesport Property to First Industrial for 23M
APPLIED EXTRUSION: Files for Joint Plan of Reorganization in Del.
ASSOCIATED MATERIALS: S&P Puts B+ Rating on $42 Million Term Loan
ATRIUM COS: Soliciting Consents to Amend 10-1/2% Sr. Sub. Notes
BARNEY MAC LLC: Case Summary & 6 Largest Unsecured Creditors
BORDEN CHEMICAL: S&P Holds Low-B Ratings & Says Outlook is Stable
BOSTON PROPERTY: Court Formally Terminates Bankruptcy Case
CHI-CHI'S: DIP Loan from Foothill Capital is Paid in Full
CHURCH & DWIGHT: Moody's Rates $175M Senior Sub. Notes at Ba3
CITATION CORP: Creditors Must File Proofs of Claim by Jan. 7
CONTIMORTGAGE CORP: Fitch Junks Seven Mortgage Certificates
CORRPRO COS: Reducing Worldwide Work Force by 6%
COX ENTERPRISES: Completes $8.5 Million Cox Comms. Acquisition
DANA CREDIT: Moody's Rates Planned $450M Sr. Unsec. Notes at Ba2
DENNINGHOUSE INC: Monitor Gets Court Nod for Buck Franchise Sale
DEVLIEG BULLARD: Asks Court to Convert Case to Chapter 7
DII/KBR: Wants to Hire Godwin Gruber as Special Counsel
DOUGLAS DYNAMICS: S&P Rates Planned $150M Sr. Unsec. Notes at B-
DUANE READE: Moody's Rates Planned $160M Sr. Secured Notes at B2
DUANE READE: S&P Rates Proposed $160 Million Senior Notes at B-
DVI INC: Judge Walrath Confirms Amended Plan of Liquidation
EYE CARE: Sale Plans Spur Moody's to Review Junk & Low-B Ratings
FALCON AUTO: Fitch Junks 2003-1 Class F Mortgage Issues
FEDERAL-MOGUL: Gets Court Okay to Settle Environmental Claims
FIRST REPUBLIC: Fitch Assigns Low-B Ratings to Two Issue Classes
GE CAPITAL: Fitch's Rating on $6.2M Class L Certs. Tumbles to D
GITTO GLOBAL: U.S. Trustee Picks 7-Member Creditors Committee
GLOBAL CROSSING: Files First Monthly Post-Confirmation Report
GRACE INDUSTRIES: Case Summary & 40 Largest Unsecured Creditors
HERBST GAMING: 8-1/8% Senior Debt Exchange Offer Expires Today
IMPAC FUNDING: Fitch Junks Three Certificate Classes
IMPAC SECURED: Moody's Slices Ratings on Class B Certs. to Ba3
J. J. H. MAGUIRE INC: Voluntary Chapter 11 Case Summary
JLLCM INC: Case Summary & 13 Largest Unsecured Creditors
KAISER ALUMINUM: Four Parties Balk at Intercompany Claims Pact
KB HOME: Fitch Assigns BB+ Rating to $300M Senior Unsecured Notes
KMART CORP: Proposes Procedures to Resolve 147 Remaining Claims
LB COMMERCIAL: Fitch Junks Mortgage Certificate Classes G & H
MARIAN COMMUNITY: Moody's Withdraws Ba3 Long-Term Bond Rating
MCI INC: S&P Assigns B+ Rating to $5.7 Billion Sr. Unsecured Notes
METROMEDIA INTL: Ad Hoc Group Discloses 71% Preferred Stake
MICROTEC ENTERPRISES: Inks Recapitalization Plan with Securex
MID-CITY PARKING: Case Summary & 20 Largest Unsecured Creditors
MULLIGAN MEDICAL: Voluntary Chapter 11 Case Summary
MUZAK HOLDINGS: S&P Junks Ratings & Says Outlook is Negative
NALCO COMPANY: Fitch Junks Senior Subordinated & Discount Notes
NISTAR: Fitch Upgrades Ratings on Class B-5 Issue to B+ from B
NORTEL NETWORKS: S&P Places B- Rating on CreditWatch Negative
OWENS CORNING: Wants to Sell Valparaiso Property for $325,000
PACIFICARE HEALTH: Fitch Assigns BB+ Rating to New $825M Facility
PACIFIC LUMBER: Weak Performance Cues S&P to Junk Ratings
PENN TRAFFIC: Buys Two Peter's Supermarkets in Syracuse
PRINCESS GROUP: Case Summary & 3 Largest Unsecured Creditors
PROVIDIAN GATEWAY: Fitch Places BB Rating on $64.8M Class E Notes
PROVIDIAN GATEWAY: Fitch Puts BB Rating on $35.8M Class E Notes
PROVIDIAN GATEWAY: Moody's Puts Ba2 Rating on $35.8M Class E Notes
RELIANT ENERGY: S&P Rates Planned $1.1B Sr. Secured Bonds at B+
SCHUFF INTL: Soliciting Consents for 10-1/2% Sr. Notes Due 2008
STONE ENERGY: Moody's Rates Proposed $150M Sr. Sub. Notes at B2
STONE ENERGY: S&P Puts B+ Rating on $150M Sr. Subordinated Notes
SUNSTRAND DEVELOPMENT: Voluntary Chapter 11 Case Summary
TREVOR BOYCE: Case Summary & 20 Largest Unsecured Creditors
TRICO MARINE: Nasdaq Will Delist Common Stock on December 17
TRYAL ACQUISITION: Voluntary Chapter 11 Case Summary
US AIRWAYS: Asks Court to Okay Global Settlement with GE Capital
US AIRWAYS: Rolls-Royce Wants Court to Compel Decision on Contract
USGEN: TransCanada Pushes with $505 Million Hydro Asset Bid
VARTEC TELECOM: Excel Creditors Balk at DIP Financing Proposal
W.R. GRACE: Asks Court to Approve Plan Solicitation Procedures
WELLS FARGO: Fitch Assign Low-B Ratings to Four Issue Classes
* BOOK REVIEW: The Financial Giants In United States History
*********
ABC GROUP INC: Case Summary & 11 Largest Unsecured Creditors
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Debtor: ABC Group, Inc.
dba Come N' Go
1401 Cooks Lane
Fort Worth, Texas 76120-4203
Bankruptcy Case No.: 04-91832
Chapter 11 Petition Date: December 6, 2004
Court: Northern District of Texas (Ft. Worth)
Judge: Russell F. Nelms
Debtor's Counsel: Larry K. Hercules, Esq.
Larry K. Hercules, P.C.
1400 Preston Road, Suite 280
Plano, Texas 75093
Tel: (972) 964-9757
Total Assets: $1,750,100
Total Debts: $1,827,628
Debtor's 11 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Betsy Price, Tax Assessor Trade debt $38,500
PO Box 961018
Fort Worth, Texas 76161-0018
Internal Revenue Service Trade debt $35,000
Attn: Bankruptcy Section
1100 Commerce, MC 5020 DAL
Dallas, Texas 75242
First Data Corporation Trade debt $32,000
Integrated Payment Systems
12500 E. Biford Avenue #M13-M
Englewood, Colorado 80112
Tetco Trade debt $16,000
Tara Energy Trade debt $9,000
Cash Technologies Trade debt $9,000
Texas Comptroller of Trade debt $8,000
Public Accounts
Dr. Ruth E. Haynes, P.C. $2,200
Acuff & Gamboa, LLP $1,055
Internal Revenue Service Trade debt $1,000
Texas Workforce Commission Trade debt $300
AIR CARGO INC: Case Summary & 20 Largest Unsecured Creditors
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Debtor: Air Cargo, Inc.
180 Admiral Cochrane Drive, Suite 305
Annapolis, Maryland 21401
Bankruptcy Case No.: 04-37512
Type of Business: The Debtor provides contract management, freight
bill auditing and consolidated freight invoicing
and payment services for wholesale cargo
customers.
Chapter 11 Petition Date: December 7, 2004
Court: District of Maryland (Baltimore)
Judge: James F. Schneider
Debtor's Counsel: Alan M. Grochal, Esq.
Tydings & Rosenberg, LLP
100 East Pratt Street
Baltimore, MD 21202
Tel: 410-752-9715
Total Assets: $16,300,000
Total Debts: $17,900,000
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Cargo Connection Logistics $505,729
c/o Accord Financial, Inc.
P.O. Box 6704
Greenville, SC 29606
Griley Airfreight $468,425
P.O. Box 92940
Los Angeles, CA 90009
Land Air Express Inc. $460,679
P.O. Box 2250
Bowling Green, KY 42102
Roadsprint Inc. $332,743
610 Airport South Parkway, Ste. 100
Atlanta, GA 30349
Central States Trucking Co. $217,454
Freightmasters Air Express $177,249
Eagle Air Freight Inc. $156,712
GT USA LLC $148,204
Pace Air Freight $138,657
Towne Air Freight Inc. $129,738
Xpress Global Systems Inc. $124,245
Alliance Airlines $122,166
McGill Air Transport $120,245
Black Hawk Freight Svc Inc. $119,736
Worldwide Flight Services Inc. $118,225
Jet Delivery Systems Inc. $109,738
HBI Priority Freight $102,236
Quantem Aviation Services $94,618
Segmentz Inc. $87,444
Boykin Transport Inc. $80,576
AMERIQUEST MORTGAGE: Fitch Rates $12.8M Class M-10 Certs. at BB+
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Ameriquest Mortgage Securities Inc. 2004-R12 certificates are
rated:
-- $1.303 billion privately offered class A-1 and publicly
offered classes A-2 through A-4 'AAA';
-- $63.8 million class M-1 'AA+';
-- $32.3 million class M-2 'AA';
-- $16.5 million class M-3 'AA-';
-- $15.0 million class M-4 'A+';
-- $12.8 million class M-5 'A';
-- $12.0 million class M-6 'A-';
-- $7.5 million class M-7 'BBB+';
-- $5.3 million class M-8 'BBB';
-- $9.0 million class M-9 certificates 'BBB-';
-- $12.8 million privately offered class M-10 'BB+'.
Credit enhancement for the 'AAA' rated class A certificates
reflects the 12.45% subordination provided by classes M-1 through
M-10, monthly excess interest, and initial overcollateralization
-- OC -- of 0.70%.
Credit enhancement for the 'AA+' rated class M-1 certificates
reflects the 8.20% subordination provided by classes M-2 through
M-10, monthly excess interest, and initial OC.
Credit enhancement for the 'AA' rated class M-2 certificates
reflects the 6.05% subordination provided by classes M-3 through
M-10, monthly excess interest, and initial OC.
Credit enhancement for the 'AA-' rated class M-3 certificates
reflects the 4.95% subordination provided by classes M-4 through
M-10 monthly excess interest, and initial OC.
Credit enhancement for the 'A+' rated class M-4 certificates
reflects the 3.95% subordination provided by classes M-5 through
M-10, monthly excess interest, and initial OC.
Credit enhancement for the 'A' rated class M-5 certificates
reflects the 3.10% subordination provided by classes M-6 through
M-10, monthly excess interest, and initial OC.
Credit enhancement for the 'A-' rated class M-6 certificates
reflects 2.30% subordination provided by classes M-7 through M-10,
monthly excess interest, and initial OC.
Credit enhancement for the 'BBB+' rated class M-7 certificates
reflects the 1.80% subordination provided by classes M-8 through
M-10, monthly excess interest, and initial OC.
Credit enhancement for the 'BBB' rated class M-8 certificates
reflects the 1.45% subordination provided by classes M-9, M-10,
monthly excess interest, and initial OC.
Credit enhancement for the 'BBB-' rated class M-9 certificates
reflects the 0.85% subordination provided by class M-10, monthly
excess interest, and initial OC.
Credit enhancement for the non-offered 'BB+' class M-10
certificates reflects the monthly excess interest and initial OC.
In addition, the ratings reflect the integrity of the
transaction's legal structure, as well as the capabilities of
Ameriquest Mortgage Company as master servicer. Deutsche Bank
National Trust Company will act as trustee.
Approximately 76.20% of the total mortgage pool is covered by
primary mortgage insurance, including approximately 75.62% of
group I mortgage loans and 81.16% of group II mortgage loans. The
primary mortgage insurance is provided by Radian Guaranty Inc. and
Mortgage Guaranty Insurance Corporation.
As of the cut-off date, the group I mortgage loans have an
aggregate balance of $905,779,196.00. On the closing date, the
depositor will deposit approximately $226,444,612.00 into a
prefunding account. The amount in this account will be used to
purchase subsequent mortgage loans on or before the 90th day
following the closing date. The weighted average loan rate is
approximately 7.427%. The weighted average remaining term to
maturity is 350 months.
The average cut-off date principal balance of the mortgage loans
is approximately $157,939.00. The weighted average original loan-
to-value ratio is 77.00%, and the weighted average Fair, Isaac &
Co. score was 620. The properties are primarily located in:
* California (16.09%),
* New Jersey (10.51%), and
* Florida (9.41%).
As of the cut-off date, the group II mortgage loans have an
aggregate balance of $294,221,003. On the closing date, the
depositor will deposit approximately $73,555,190.00 into a
prefunding account. The amount in this account will be used to
purchase subsequent mortgage loans on or before the 90th day
following the closing date. The weighted average loan rate is
approximately 7.047%. The weighted average remaining term to
maturity is 355 months.
The average cut-off date principal balance of the mortgage loans
is approximately $361,007. The weighted average original
loan-to-value ratio is 79.00%, and the weighted average Fair,
Isaac & Co. -- FICO -- score was 632. The properties are
primarily located in:
* California (42.63%),
* New York (8.93%), and
* Florida (6.95%).
The mortgage loans were originated or acquired by Ameriquest
Mortgage Company. Ameriquest Mortgage Company is a specialty
finance company engaged in the business of originating,
purchasing, and selling retail and wholesale subprime mortgage
loans.
AMES DEPT: Files Chapter 11 Plan & Disclosure Statement
-------------------------------------------------------
Ames Department Stores, Inc., Ames Merchandising Corporation,
Amesplace.com, Inc., Ames Realty II, Inc., and Ames
Transportation Systems, Inc., filed their consolidated Chapter 11
Plan with the Court on December 6, 2004.
Rolando de Aguiar, President and Chief Wind Down Officer of Ames
Department Stores, Inc., reports that the Plan provides for:
A. Substantive Consolidation
Entry of the Confirmation Order will constitute the approval,
pursuant to Section 105(a) of the Bankruptcy Code, effective
as of the Effective Date, of the substantive consolidation of
Ames Departments Stores and its affiliates for voting,
confirmation, and distribution purposes under the Plan.
After the Effective Date:
(a) all the Debtors' assets and liabilities will be deemed
merged into Ames;
(b) all guaranties of any Debtor of the payment, performance,
or collection of obligations of another Debtor will be
eliminated and canceled;
(c) any obligation of any Debtor and all guaranties executed
by one or more of the other Debtors will be treated as a
single obligation, and the guaranties will be deemed a
single Claim against the consolidated Debtors;
(d) all joint obligations of two or more Debtors and all
multiple Claims against the entities on account of the
joint obligations will be treated and allowed only as a
single Claim against the consolidated Debtors;
(e) all Claims between or among the Debtors will be canceled;
and
(f) each Claim filed in the Chapter 11 case of any Debtor will
be deemed filed against the consolidated Debtors and a
single obligation of the consolidated Debtors on and after
the Effective Date.
The substantive consolidation and deemed merger effected will
not affect:
(a) the Debtors' legal and organizational structure;
(b) defenses to any Causes of Action or requirements for any
third party to establish mutuality to assert a right of
setoff; and
(c) distributions out of any insurance policies or proceeds of
the policies.
B. Establishment of the Liquidating Trust
In the event the Plan Implementation Party elects to establish
a Liquidating Trust to facilitate the liquidation and winding
up of the Debtors, the Plan Implementation Party will transfer
the Liquidating Trust Assets to the Liquidating Trust on the
Transfer Date.
The Plan Implementation Party consists of the Debtors, the
Plan Administrator or the Trustee, as the case may be.
C. Closing of Chapter 11 Cases
When all Disputed Claims filed against the Debtors have become
Allowed Claims or have been disallowed by Final Order, and all
of the Liquidating Trust Assets have been distributed in
accordance with the Plan, the Trustee will seek authority from
the Bankruptcy Court to close the Chapter 11 cases in
accordance with the Bankruptcy Code and the Bankruptcy Rules.
If at any time the Trustee determines that the expense of
administering the Liquidating Trust so as to make a final
distribution to its beneficiaries is likely to exceed the
value of the assets remaining in the Liquidating Trust, the
Trustee will apply to the Bankruptcy Court for authority to:
(a) reserve any amounts necessary to close the Chapter 11
Cases;
(b) donate any balance to a charitable organization exempt
from federal income tax under Section 501(c)(3) of the Tax
Code that is unrelated to Ames, the Liquidating Trust, and
any insider of the Trustee; and
(c) close the Chapter 11 cases in accordance with the
Bankruptcy Code and Bankruptcy Rules.
D. Cancellation of Existing Securities and Agreements
Except for purposes of evidencing a right to distributions
under the Plan, on the Effective Date, all the agreements and
other documents evidencing the Claims or rights of any holder
of a Claim against the Debtors, including all Indentures and
Notes issued evidencing the Claims and any options or warrants
to purchase Equity Interests, or obligating the Debtors to
issue, transfer, or sell Equity Interests or any other capital
stock of the Debtors, will be canceled.
However, the Indentures will continue in effect solely for the
purposes of:
(x) allowing the Indenture Trustees to make any distributions
on account of Allowed General Unsecured Claims in Class 3
pursuant to the Plan and perform other necessary
administrative functions with respect thereto; and
(y) permitting the Indenture Trustees to maintain any rights
or liens they may have for fees, costs, and expenses under
the Indentures.
E. Debtors' Post-Confirmation Role
(a) Payments and Transfers. Except as otherwise provided in
the Plan, on the Effective Date, or as soon thereafter as
is reasonably practicable, the Debtors will make
payments and transfers to holders of Allowed Claims.
(b) Administration of Taxes. Ames will be responsible for
all tax matters of the Debtors until certificates of
cancellation, dissolution, or merger for all the Debtors
will have been filed.
(c) Claims Administration and Prosecution and Plan
Distributions. Except as otherwise provided in the Plan,
the Debtors will continue to have the power and authority
to prosecute and resolve objections to Disputed Claims
and to hold, manage, and distribute Plan distributions to
the holders of Allowed Claims.
(d) Dissolution. Within 30 days after its completion of the
acts required by the Plan, or as soon thereafter as is
practicable, each Debtor will be deemed dissolved for all
purposes without the necessity for any other or further
actions to be taken by or on behalf of each Debtor. Each
Debtor will file with the office of the Secretary of State
or other appropriate office for the state of its
organization a certificate of cancellation or dissolution,
or alternatively, it may be merged with and into another
Debtor and so file an appropriate certificate of merger.
F. Effect of Confirmation
As of the Effective Date, the property of the Debtors' estates
will vest in the Plan Implementation Party.
A full-text copy of Ames' Chapter 11 Plan is available at no
charge at:
http://bankrupt.com/misc/ames_chapter_11_plan.pdf
A full-text copy of Ames' Disclosure Statement is available at no
charge at:
http://bankrupt.com/misc/ames'_disclosure_statement.pdf
Ames Department Stores filed for chapter 11 protection on
August 20, 2001 (Bankr. S.D.N.Y. Case No. 01-42217). Albert
Togut, Esq., Frank A. Oswald, Esq. at Togut, Segal & Segal LLP and
Martin J. Bienenstock, Esq., and Warren T. Buhle, Esq., at Weil,
Gotshal & Manges LLP represent the Debtors in their restructuring
efforts. When the Company filed for protection from their
creditors, they listed $1,901,573,000 in assets and $1,558,410,000
in liabilities. (AMES Bankruptcy News, Issue No. 60; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
AMES DEPT: Selling Leesport Property to First Industrial for 23M
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As a result of their wind-down efforts, Ames Department Stores and
its debtor-affiliates no longer need the commercial real property
constituting a former distribution facility located in Leesport,
Ontelaunee Township, Berks County Pennsylvania. The Property
consists of 181 acres of land with 1.2 million square feet of one-
story warehouse space and 30,000 square feet of two-story office
space.
Neil Berger, Esq., at Togut, Segal & Segal, in New York, relates
that the Debtors have actively sought a purchaser for the Leesport
Property. The offer made by First Industrial Development
Services, Inc., is the best substantive offer made thus far.
Consequently, the parties executed a purchase agreement on October
25, 2004. FIDS agrees to buy the Property on these terms:
(a) Assets to be purchased
* The land and the improvements and all easements,
tenements, hereditaments, rights, licenses, privileges
and appurtenances belonging or relating thereto,
together with all right, title and interest of the
Debtors in and to any streets, roads, alleys or other
public ways adjoining or serving the land, including the
Debtors' rights to any land lying in the bed of any
street, road, alley or other public way, open or
proposed, and any strips, gores, culverts and rights-
of-way adjoining or serving the land.
* All tangible personal property owned by the Debtors at
the Property.
(b) Interim Lease Agreement
The Debtors and FIDS will enter into a lease of the entire
Property for a term not to exceed two years. The Lease
will be an absolute net lease with FIDS maintaining
adequate insurance coverage, including general liability
with a per claim cap of $5 million and property damage not
less than 80% of the replacement cost. The Debtors will
be named as beneficiary under the policies.
(c) Purchase Price
$23 million in cash
FIDS will deposit $2.5 million in the form of an
irrevocable, standby letter of credit issued by Bank One,
N.A., delivered to First American Title Insurance Company,
as escrowee. The Deposit will be drawn upon in accordance
with the terms of the Purchase Agreement for certain costs
relating to the Building during the Lease Term; and
The $20.5 million balance will be paid in cash at the
Closing, subject to prorations and adjustments as may be
provided under the Purchase Agreement.
(d) Closing
Closing on the sale of the Property to FIDS will occur on
the earlier of the Lease Term expiration and the date by
which the Building is fully subleased pursuant to one or
more subleases having terms of less than three years.
(e) No Representations or Warranties
The Property is being sold to FIDS on an "as is, where is"
basis, subject to representations that are customary in
real estate transactions.
The Debtors ask the U.S. Bankruptcy Court for the Southern
District of New York to approve the Lease and the subsequent sale
of the Leesport Property to FIDS, subject to higher and better
offers.
The Debtors propose to sell the Property free and clear of all
Liens, with the Liens to attach to the Sale proceeds.
Mr. Berger relates that the Purchase Agreement is the product of
significant arm's-length negotiations among the parties. The
transfer of the Property to FIDS or to another successful bidder
that submits a higher or better offer will provide the greatest
return to the Debtors' estates and their creditors, and eliminate
further administrative costs to maintain the Property.
The only recorded Lien against the Property is a mortgage in favor
of Kimco Funding, LLC. Kimco has consented to the transactions
with FIDS or with another entity that may submit a higher or
better offer, and will release its Lien against the Property.
Kimco's Liens will transfer to the net proceeds of the Sale.
The Debtors also ask Judge Gerber to exempt the Sale from stamp or
similar taxes under Section 1146(c) of the Bankruptcy Code.
Ames Department Stores filed for chapter 11 protection on
August 20, 2001 (Bankr. S.D.N.Y. Case No. 01-42217). Albert
Togut, Esq., Frank A. Oswald, Esq. at Togut, Segal & Segal LLP and
Martin J. Bienenstock, Esq., and Warren T. Buhle, Esq., at Weil,
Gotshal & Manges LLP represent the Debtors in their restructuring
efforts. When the Company filed for protection from their
creditors, they listed $1,901,573,000 in assets and $1,558,410,000
in liabilities. (AMES Bankruptcy News, Issue No. 60; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
APPLIED EXTRUSION: Files for Joint Plan of Reorganization in Del.
-----------------------------------------------------------------
Applied Extrusion Technologies, Inc., and its debtor-affiliate
filed their Joint Plan of Reorganization with the U.S. Bankruptcy
Court for the District of Delaware.
The Plan provides for a recapitalization of the Company by
swapping $275,000,000 of existing 10-3/4% Series B Senior Notes
due 2011 for a basket of new equity plus $50 million of new notes
plus a cash cookie if the Senior Noteholders support the plan.
Specifically, the Plan provides:
(a) Noteholders holding $500,000 or more of Senior Notes
will receive a ratable portion of:
(1) AET new common stock,
(2) new senior notes to be issued by Reorganized AET,
(3) if the Class of Large Note Claims votes to accept the
plan, $2.5 million in cash will be shared pro rata with
the Class of Small Note Claims, upon satisfaction of
certain conditions, to the existing holders of common
stock of AET or returned to Reorganized AET if those
conditions are not satisfied
(b) Noteholders each holding less than $500,000 of Senior Notes
will receive:
(1) an amount of cash equal to 49% of the outstanding
principal amount of each small note claim, and
(2) if the Class of Small Note Claims votes to accept the
plan, $2.5 million in cash will be shared pro rata with
the Class of Large Note Claims, upon satisfaction of
certain conditions, to the existing holders of common
stock of AET or returned to Reorganized AET if those
conditions are not satisfied
(c) All:
(1) Administrative Claims
(2) Priority Tax Claims
(3) DIP Credit Agreement Claims
(4) Other Priority Claims and
(5) General Unsecured Claims
will be paid in full, in cash.
The Debtors cash obligations under the Plan and Reorganized AET's
working capital needs will be funded by a new credit facility of
up to $125 million to be provided to Reorganized AET on the
effective date of the Plan.
Prior to the bankruptcy petition date, the Class of Large Note
Claims voted to accept the Plan. The Class of Small Note Claims
voted to reject the Plan. The Debtors believe that the Plan is
confirmable pursuant to Section 1129 of the Bankruptcy Code.
Headquartered in New Castle, Delaware, Applied Extrusion
Technologies, Inc. -- http://www.aetfilms.com/ -- develops &
manufactures specialized oriented polypropylene films used
primarily in consumer products labeling and flexible packaging
application. The Company and its debtor-affiliate filed for
chapter 11 protection on Dec. 1, 2004 (Bankr. D. Del. Case No.
04-13388). Edward J. Kosmowski, Esq., and Pauline K. Morgan,
Esq., at Young Conaway Stargatt & Taylor and Sheldon K. Rennie,
Esq., at Fox Rothschild O'Brien & Frankel LLP represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $407,912,000 in
total assets and $414,957,000 in total debts.
ASSOCIATED MATERIALS: S&P Puts B+ Rating on $42 Million Term Loan
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on exterior
building products manufacturer Associated Materials, Inc., to
negative from stable, and affirmed its ratings. At the same time,
Standard & Poor's assigned its 'B+' bank loan rating to a
$42 million add-on to the company's existing $133 million term
loan B.
"The rating actions follow the company's announced
recapitalization that will increase debt leverage and add to
Associated Materials' already very aggressive financial profile,"
said Standard & Poor's credit analyst Lisa Wright. The ratings on
Cuyahoga Falls, Ohio-based Associated Materials reflect its very
aggressive financial profile, position as a midsize manufacturer
of exterior residential building products with exposure to
volatile raw-material costs, cyclical end markets, and higher
overhead costs than many competitors. These negatives overshadow
the company's good geographic diversity and currently stable
industry conditions.
Proceeds from the term loan add-on and $75 million of senior
subordinated notes, to be issued by a newly formed holding company
that will indirectly own Associated Materials, will be used to pay
a $118 million dividend to the company's existing shareholders.
In connection with this recapitalization, a new equity sponsor,
Investcorp International, Inc., will purchase $150 million of
convertible preferred stock of the new holding company for a 50%
equity interest in Associated Materials. Harvest Partners, Inc.,
the current equity sponsor, along with a co-investor, will retain
a 50% interest in the company.
Pro forma for the transaction, total debt, including capitalized
operating leases, will be about $750 million with pro forma debt
to EBITDA for the 12 months ended Sept. 30, 2004, of 5.9x.
Associated Materials manufactures vinyl, aluminum, and steel
siding as well as vinyl windows, fencing, decking, and railing.
Associated Materials markets its products through a captive
network of 125 supply centers as well as 250 independent
distributors.
ATRIUM COS: Soliciting Consents to Amend 10-1/2% Sr. Sub. Notes
---------------------------------------------------------------
Atrium Companies, Inc., commenced a cash tender offer on Dec. 7,
2004 for all of its outstanding 10-1/2% Senior Subordinated Notes
due 2009. $225 million aggregate principal amount of the Notes
are outstanding. In conjunction with the tender offer, the
Company is soliciting consents from holders of the Notes to effect
certain proposed amendments to the indenture governing such Notes.
The tender offer and consent solicitation is being made pursuant
to an Offer to Purchase and Consent Solicitation Statement, dated
as of Dec. 7, 2004. The tender offer and consent solicitation
will expire at 5:00 p.m., New York City time, on Jan. 7, 2005,
unless the tender offer and consent solicitation is extended.
The purchase price for the Notes that are validly tendered and
accepted for payment on or prior to the Expiration Date will be
equal to $1,050.00 per $1,000 principal amount of Notes, plus any
accrued and unpaid interest thereon up to, but not including, the
payment date for such Notes.
In addition to the Tender Offer Consideration, an early consent
payment of $3.75 will be paid for each $1,000 in principal amount
of the Notes to holders who tender their Notes and provide their
consents to the proposed amendments to the indentures governing
the Notes at or prior to the consent payment deadline of 5:00
p.m., New York City time, on Dec. 21, 2004, unless extended.
Subject to certain exceptions, Notes tendered and consents
delivered may not be withdrawn or revoked after the Consent Date.
The Company will pay the Total Consideration for all Notes validly
tendered on or prior to the Consent Date if such Notes are
accepted for payment. The Initial Payment Date is expected to be
on or promptly following the Initial Acceptance Date. Holders who
validly tender their Notes after the Consent Date, but on or prior
to the Expiration Date, will receive the Tender Offer
Consideration if the Notes are accepted for payment, but will not
be entitled to receive the Consent Payment even if the Proposed
Amendments become operative. The Company expects that the Final
Payment Date will be on or promptly following the Final Acceptance
Date.
The Company's acceptance of the Notes tendered on or prior to the
Consent Date is subject to several conditions, including, among
other things:
(i) the issuance of senior discount notes by a newly formed
wholly owned subsidiary of the Company, which subsidiary
will subsequently become a direct subsidiary of our parent
company, Atrium Corporation, through a distribution of the
capital stock of such subsidiary to the Parent, and the
contribution of the net proceeds from the New Notes
Offering to the Company;
(ii) the Company entering into a new senior secured credit
facility;
(iii) the Company receiving gross proceeds from such
contribution and the New Credit Facility of at least
$450.0 million;
(iv) a minimum tender condition; and
(v) the Company receiving the requisite consents to the
proposed amendments and the Company and the trustee under
the indenture executing a supplemental indenture.
The Company expects that New Subsidiary 1 will complete the New
Notes Offering and the Company will enter into the New Credit
Facility on or prior to the Initial Acceptance Date. The Company
may amend, extend or terminate the tender offer and consent
solicitation in its sole discretion.
Among other things, the proposed amendments to the indenture
governing the Notes would eliminate most of the indenture's
restrictive covenants and would amend certain other provisions
contained in the indenture. Adoption of the proposed amendments
requires the consent of the holders of at least a majority of the
aggregate principal amount of the Notes outstanding. Holders who
tender their Notes will be required to consent to the proposed
amendments and holders may not deliver consents to the proposed
amendments without tendering their Notes in the tender offers.
Subject to certain exceptions, tendered Notes may be withdrawn and
consents may be revoked at any time prior to the Consent Date, but
not thereafter.
This press release is neither an offer to purchase nor a
solicitation of an offer to sell the Notes. The offer and consent
solicitation is being made pursuant to the Offer to Purchase and
Consent Solicitation Statement and related materials, copies of
which will be delivered to all noteholders. Persons with
questions regarding the offer and the consent solicitation should
contact the Dealer Manager:
UBS Securities LLC
Tel. No. (203) 719-4210
(888) 722-9555
-- or --
MacKenzie Partners, Inc.
Information Agent
Tel. No. (212) 929-5500
The securities to be offered in the New Notes Offering will not be
registered under the Securities Act of 1933, or any state
securities laws, and unless so registered, may not be offered or
sold in the United States except pursuant to an exemption from, or
in a transaction not subject to, the registration requirements of
the Securities Act and applicable state securities laws. This
press release does not constitute an offer to sell or the
solicitation of an offer to buy any security and shall not
constitute an offer, solicitation or sale in any jurisdiction in
which such offering would be unlawful.
The Company, based in Dallas, Texas, is one of the largest
manufacturers and suppliers of residential windows in North
America, with pro forma net sales exceeding $775 million for the
twelve months ended Sept. 30, 2004, approximately 7,000 employees
and 80 manufacturing facilities and distribution centers in 22
states and Mexico.
* * *
As reported in the Troubled Company Reporter on Dec. 8, 2004,
Moody's Investors Services assigned a B1 rating to the new senior
secured bank credit facilities of Atrium Companies, Inc., and a B3
rating to the senior discount notes issued by Atrium Corporation.
The ratings outlook remains stable but would deteriorate with even
a modest increase in leverage.
Moody's assigned these ratings:
* Atrium Companies, Inc:
-- $50 million 5 year revolver at B1;
-- $325 million 7 year term loan B at B1.
* Atrium Corporation:
-- $125 million senior discount notes due 2012 at B3;
-- Senior implied at B1;
-- Issuer rating at B3.
The outlook remains stable.
Moody's is withdrawing these ratings:
* Atrium Companies, Inc.:
-- $198 million Term Loan B at B1;
-- $225 million 10.5% Senior Subordinated Notes due 2009 at
B3;
-- Senior Implied at B1;
-- Issuer rating at B2.
BARNEY MAC LLC: Case Summary & 6 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Barney Mac, LLC
190 West 4th Street
New York, New York 10014
Bankruptcy Case No.: 04-17768
Chapter 11 Petition Date: December 8, 2004
Court: Southern District of New York (Manhattan)
Judge: Arthur J. Gonzalez
Debtor's Counsel: Mark A. Frankel, Esq.
Backenroth Frankel & Krinsky, LLP
489 Fifth Avenue
New York, New York 10017
Tel: (212) 593-1100
Fax: (212) 644-0544
Total Assets: $220,650
Total Debts: $1,214,896
Debtor's 6 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
State of New York $180,000
120 Broadway
New York, New York 10271
United States of America $140,000
c/o U.S. Attorney
100 Church Street
New York, New York 10007
Lowell Associates Security deposit $125,000
c/o Cutler Minikes & Adelman with Lowell
708 3rd Avenue Associates
New York, New York 10017 Value of Security:
$60,000
Samuel Berman Company, Inc. $4,179
City of New York $3,420
Twins Electric Corporation $3,297
BORDEN CHEMICAL: S&P Holds Low-B Ratings & Says Outlook is Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating and 'B-' senior unsecured debt rating on resins
producer Borden Chemical, Inc.
In addition, Standard & Poor's affirmed its 'BB-' senior secured
bank loan rating and recovery rating of '1' on Borden Chemical's
$175 million secured revolving credit facility. The '1' recovery
rating indicates high expectation of full recovery of principal in
the event of a default. At the same time, Standard & Poor's
affirmed its 'B-' rating and recovery rating of '4' on the
company's senior second secured notes totaling $475 million with
maturity dates of 2010 and 2014. The '4' recovery rating
indicates a marginal (25%-50%) recovery of principal in the event
of a default.
All ratings were removed from CreditWatch with negative
implications, where they were placed Oct. 7, 2004, following the
company's announcement of an agreement to acquire Bakelite AG from
Rutgers AG. The outlook is stable.
Columbus, Ohio-based Borden Chemical has over $850 million of
total debt outstanding.
The acquisition of Bakelite will strengthen Borden's position in
phenolic and epoxy resins.
"The proposed combination with Bakelite would be a meaningful
strategic initiative for Borden, as it would broaden the company's
product portfolio and technology base, and expand end market and
geographic diversification," said Standard & Poor's credit analyst
Peter Kelly.
Borden will acquire Bakelite for about $215 million to
$245 million, subject to certain adjustments. Bakelite had sales
of $610 million in 2003. On a pro forma basis, Borden will have
sales of almost $2.1 billion. The company expects to finance the
transaction with cash and additional senior secured second-lien
notes, but the transaction is not expected to meaningfully
increase Borden's overall debt leverage. The acquisition is
subject to regulatory reviews and is expected to close in the
first half of 2005.
"The overall creditworthiness of Borden Chemical reflects a very
aggressive financial profile resulting from high debt leverage
following the acquisition of Borden Chemical by Apollo Management,
somewhat offset by the company's fair business profile as a
leading global manufacturer of formaldehyde-based resins," added
Mr. Kelly.
Borden Chemical's credit quality reflects its position as a
leading producer of formaldehyde-based thermosetting resins for
the forest products industry and other industrial applications.
End uses include furniture and construction products, such as
structured panels, medium-density fiberboard and particleboard,
and coatings for the foundry industry. The company also is the
leading global manufacturer of formaldehyde, and consumes much of
its production internally.
BOSTON PROPERTY: Court Formally Terminates Bankruptcy Case
----------------------------------------------------------
The Honorable Joel B. Rosenthal of the U.S. Bankruptcy Court for
the District of Delaware formally terminated the bankruptcy case
filed by Boston Property Exchange Transfer Company, Inc., on
December 2, 2004.
The Court dismissed Boston Property's chapter 11 case on
October 28, 2004, pursuant to Section 1112(b) of the Bankruptcy
Code, based on the two separate requests for dismissal:
a) creditor-plaintiffs Gail A. Cahaly, Jeffrey M. Johnston,
Massachusetts Lumber Company, Inc., Joseph Iantosca,
individually and as trustee of Faxon Heights Apartments
Realty Trust and Fern Realty Trust, Belridge Corporation and
Bellemore Associates, LLC, filed on October 12, 2004; and
b) Roberta A. DeAngelis, the Acting U.S. Trustee for Region 3
filed on October 8, 2004.
The Court based its decision to dismiss the Debtor's chapter 11
case on the facts cited by the U.S. Trustee and the
creditor-plaintiffs in their separate motions:
a) Investigations conducted by the U.S. Trustee and the
creditor-plaintiffs concluded that the Debtor is an empty
shell corporation controlled by Daniel and Molly Carpenter
and Jack E. Robinson, Esq.,
b) The Debtor filed its chapter 11 petition to take advantage
of the automatic stay and avoid its responsibilities to the
creditor-plaintiffs, who were awarded $18.8 million in
damages by the Massachusetts District Court for the Debtor's
defrauding of the creditor-plaintiffs;
c) The Debtor's only tangible asset is a dormant brokerage
account at UBS PaineWebber containing approximately $1,000
where the Debtor has a legal claim;
d) The Debtor's other alleged assets are unliquidated legal
claims against Travelers Insurance Company, UBS PaineWebber,
Inc., and Merrill Lynch, Pierce, Fenner, & Smith, Inc.,
which the Debtor contends are potentially worth
$135.3 million;
e) investigations concluded that the Debtor's contention that
its legal claims is worth $135.3 million is speculative and
it has no evidence or proof to validate the legal claims'
real amount;
f) the Debtor has no bank accounts, employees or operations,
and ceased operations on January 2001, more than three and
one-half years before filing its Chapter 11 petition;
g) there is no possibility of reorganization because the
Debtor's creditors are litigants in the Massachusetts State
Court fraud case that will not consent to a plan of
reorganization that will not pay them in full for their
damage claims; and
h) it has been proven that the Debtor has neither a sincere
intent to reorganize nor a need to liquidate its assets for
the benefit of the creditors.
The Court concluded that these facts demonstrated bad faith on the
part of the Debtor, and its attempt to delay the bankruptcy
proceedings and deceive the creditors by preventing them from
enforcing their claims.
Headquartered in Stamford, Connecticut, Boston Property Exchange
Transfer Company, Inc., was a qualified intermediary for deferred
like-kind property exchanges used by real estate investors until
in ceased operations in January 2001. The Company filed for
chapter 11 protection on October 1, 20004 (Bankr. D. Del. Case No.
04-12792). The Court dismissed the Debtor's chapter 11 case on
October 28, 2004, and formally closed the case on Dec. 2, 2004.
Steven M. Yoder, Esq., at The Bayard Firm, represented
the Debtor. When the Debtor filed for chapter 11 protection, it
listed estimated assets of $50 million to $100 million and
estimated debts $10 million to $50 million.
CHI-CHI'S: DIP Loan from Foothill Capital is Paid in Full
---------------------------------------------------------
Lawyers for Chi-Chi's, Inc., disclosed in a bankruptcy court
hearing this week that the company's paid off all loans obtained
under a debtor-in-possession financing facility arranged by
Foothill Capital. Financial reports filed with the bankruptcy
court indicate that Foothill advanced approximately $28 million to
the Debtor. With no need for continued high-priced DIP financing,
Chi-Chi's has elected to terminate the DIP facility.
At that same hearing, the Bankruptcy Court approved the company's
sale of the "Margaritaville" brand to Jimmy Buffett for $100,000.
Last month, Chi-Chi's obtained an order from the Bankruptcy Court
extending its exclusive periods afforded under 11 U.S.C. Sec. 1121
by another year. Specifically, the Honorable Charles G. Case
extended the company's exclusive right to file a chapter 11 plan
through Oct. 3, 2005, and gave the company an extension, through
Dec. 7, 2005, to solicit acceptances of that plan from its
creditors.
As reported in the Class Action Reporter on Feb. 24, 2004,
Chi-Chi's has to resolve claims asserted by some 600 Hepatitis
Claimants, three of which died from the virus after eating tainted
green onions imported from Mexico at a restaurant located in the
Beaver Valley Mall, about 25 miles northwest of Pittsburgh, in
November 2003. Chi-Chi's reports approximately 250 of those
claims have been settled to date. It's impossible, the Debtor
indicates, to propose a confirmable plan until the extent of the
Hepatitis Claims is quantified.
Headquartered in Irvine California, Chi-Chi's, Inc., is a direct
or indirect operating subsidiary of Prandium and FRI-MRD
Corporation and each engages in the restaurant business. The
Debtors filed for chapter 11 protection on October 8, 2003 (Bankr.
Del. Case No. 03-13063-CGC). Bruce Grohsgal, Esq., Laura Davis
Jones, Esq., Rachel Lowy Werkheiser, Esq., and Sandra Gail McLamb,
Esq., at Pachulski, Stang, Ziehl Young & Jones represent the
Debtors in their restructuring efforts. The Debtors estimated
$50 to $100 million in assets and more than $100 million in
liabilities when they filed for bankruptcy.
CHURCH & DWIGHT: Moody's Rates $175M Senior Sub. Notes at Ba3
-------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to the proposed
$175 million senior subordinated notes to be issued by Church &
Dwight, Inc. -- CHD. Along with cash balances, the notes issuance
will be used to refinance the $225 million senior subordinated
notes of Armkel, LLC, which CHD fully-acquired earlier this year.
Existing senior unsecured and senior subordinated debt ratings
have been upgraded by one notch, to Ba2 and Ba3, respectively. In
addition, CHD's Ba2 senior implied and senior secured debt ratings
were affirmed and the ratings outlook was revised to positive from
stable. The rating action reflects CHD's steady operating
performance during fiscal 2004, as well as the prospective
benefits of the refinancing transaction, which reduces the
company's funded debt levels and cash interest expense needs.
These ratings of CHD were affected by this action:
* $175 million senior subordinated notes due 2012, assigned at
Ba3;
* Senior implied rating, affirmed at Ba2;
* $100 million senior secured revolving credit facility due
2009, affirmed at Ba2;
* $29 million senior secured term loan A facility due 2009,
affirmed at Ba2;
* $439 million senior secured term loan B facility due 2011,
affirmed at Ba2;
* $100 million convertible senior debentures due 2033 (putable
in 2010), upgraded to Ba2 from Ba3;
* Senior unsecured issuer rating, upgraded to Ba2 from Ba3.
This rating of Armkel was affected by this action:
* $225 million 9.5% senior subordinated notes due 2009,
upgraded to Ba3 from B1.
Moody's anticipates approximately $8-9 million in cash interest
savings due to the reduced aggregate funded debt level and new
subordinated notes coupon resulting from the proposed refinancing.
Although the transaction is not deleveraging from a net debt
perspective, the use of cash balances to lower funded debt levels
and pay transaction related fees is viewed positively, especially
given ample available liquidity from CHD's remaining cash balances
and revolving credit facility.
In addition to these prospective benefits, the rating upgrades and
outlook change to positive reflect the company's strong operating
performance in fiscal 2004, during which the company has grown
sales in all of its key business segments and continues to drive
gross margin expansion through disciplined cost efficiency
initiatives. The benefits of the company's margin gains are being
reinvested into brand support and product development, which
should support CHD's growth going forward. Importantly, the bond
rating upgrades reflect the company's use of free cash flow to
repay high priority bank debt since the Armkel acquisition earlier
this year. Although the collateral package backing CHD's credit
facilities continues to be viewed positively relative to unsecured
debt, the company's limited tangible assets compared to secured
debt borrowings and its improving enterprise value suggests that
relative default risk between secured and unsecured debt has
tightened. The Ba3 subordinated notes rating reflects both
effective and contractual subordination to a material amount of
senior secured and unsecured debt. The indenture governing the
proposed issuance is expected to contain customary limitations and
provisions. The rating assignment will be subject to a review of
final documentation.
With continued balance sheet focus and capital spending controls
over the coming year, Moody's anticipates CHD's pro forma leverage
metrics to trend well below 3.0x, its EBITDA-less-capex interest
coverage to improve to around 5.0x and its free cash flow levels
to migrate into the low teens as a percentage of funded debt.
Such metrics would likely prompt Moody's to consider a ratings
upgrade. Although Moody's views rating downgrades as highly
unlikely over the coming year, a stable outlook or other
unfavorable rating actions could be possible if CHD deviates from
its historical pattern of disciplined acquisitions and balance
sheet management, or if the company is unable to sustain operating
gains; particularly in its high-profit personal care segment that
includes fast-growing condom products and more challenging
depilatory and toothpaste items.
Ongoing ratings support stems from CHD's diversified product
portfolio, with leading, innovative brands in its premium
categories (Trojan, Arm & Hammer, Nair, First Response), and with
sufficient scale, known brands, and price competitiveness in its
value categories (detergents, cleaners and family toothpastes).
The company's participation in generally stable household and
personal care disposable categories, its growth potential in
international markets, and management's conservative strategic and
financial policies (with a dual focus on brand support and cost
efficiency) are expected to support continued steady free cash
flow generation and deleveraging.
The ratings are restrained by CHD's partially value-branded
participation in mature and competitive product categories against
larger, well-resourced premium-branded competitors. Sales and
margins are further pressured by a consolidating retail
environment, with an increasing presence of store and private
label brands. In part due to these factors, CHD's profit margins
are noticeably below industry average, as CHD must continually
invest in cost controls, brand support, and new product
development to maintain its market positions.
Church & Dwight Co., Inc., with principal executive offices in
Princeton, New Jersey, is a manufacturer of household and personal
care consumer products, historically under the Arm & Hammer brand
name, and is also the world's leading sodium bicarbonate producer.
In 2001, CHD purchased laundry brands from USA Detergents, and
bought Arrid and pet care businesses from Carter-Wallace. Also in
2001, CHD entered into a 50/50 joint venture with equity sponsor
Kelso to purchase other consumer brands from Carter-Wallace,
including leading brands Trojan, Nair and First Response. In
2003, the company purchased Mentadent, Aim, Closeup and Pepsodent
toothpaste brands from Unilever. In 2004, the company acquired
the remaining 50% of Armkel from Kelso. CHD and its affiliates
had pro forma sales of approximately $1.6 billion for the
twelve-month period ended October 2004.
CITATION CORP: Creditors Must File Proofs of Claim by Jan. 7
------------------------------------------------------------
The U.S Bankruptcy Court for the Northern District of Alabama
set January 7, 2004, as the deadline for all creditors owed money
by Citation Corporation and its debtor-affiliates on account of
claims arising prior to September 18, 2004, to file their proofs
of claim.
Creditors must file their written proofs of claim on or before the
January 7 Claims Bar Date, and those forms must be delivered only
to the Debtor's claims and noticing agent:
BSI Bankruptcy Services
P.O. Box 5015
FDR Station
New York, New York 10150-5015
Headquartered in Birmingham, Alabama, Citation Corporation --
http://www.citation.net/-- designs, develops and manufactures
cast, forged and machined components for the capital and durable
goods industries, including the automotive and industrial markets.
Citation uses aluminum, steel, gray iron, and ductile iron as the
raw materials in its various manufacturing processes. The Debtors
filed for protection on Sept. 18, 2004 (Bankr. N.D. Ala. Case No.
04-08130). Michael Leo Hall, Esq., and Rita H. Dixon, Esq., at
Burr & Forman LLP, represent the Debtors. When the Company and
its debtor-affiliates filed for protection from their creditors,
they estimated more than $100 million in assets and debts.
CONTIMORTGAGE CORP: Fitch Junks Seven Mortgage Certificates
-----------------------------------------------------------
Fitch Ratings has performed a review of various ContiMortgage
Corporation Home Equity Loan Transactions. Based on the review,
these rating actions:
ContiMortgage home equity loan trust series 1996-4 Groups 1 & 2:
-- Class A-8 affirmed at 'AAA';
-- Class A-9 affirmed at 'AAA';
-- Class A-10 affirmed at 'AAA'.
ContiMortgage home equity loan trust series 1997-1:
-- Class A-8 affirmed at 'AAA';
-- Class A-9 affirmed at 'AAA';
-- Class M-1 affirmed at 'A'.
ContiMortgage home equity loan trust series 1997-2 Group 1:
-- Class A-8 affirmed at 'AAA';
-- Class A-9 affirmed at 'AAA';
-- Class M-1F affirmed at 'AA-'.
ContiMortgage home equity loan trust series 1997-2 Group 2:
-- Class M-1A affirmed at 'AA+';
-- Class M-2A affirmed at 'A+'.
ContiMortgage home equity loan trust series 1997-3 Group 1:
-- Class A-8 affirmed at 'AAA';
-- Class A-9 affirmed at 'AAA';
-- Class M-1F upgraded to 'AAA' from 'AA'.
ContiMortgage home equity loan trust series 1997-3 Group 2:
-- Class M-2A upgraded to 'AAA' from 'A';
-- Class B-1A affirmed at 'BBB-'.
ContiMortgage home equity loan trust series 1997-4:
-- Class A-7 affirmed at 'AAA';
-- Class A-9 affirmed at 'AAA'.
ContiMortgage home equity loan trust series 1997-5:
-- Class A-6 affirmed at 'AAA';
-- Class A-8 affirmed at 'AAA';
-- Class B downgraded to 'C' from 'CCC'.
ContiMortgage home equity loan trust series 1998-1 Groups 1 & 2:
-- Class A-7 affirmed at 'AAA';
-- Class A-8 affirmed at 'AAA';
-- Class A-9 affirmed at 'AAA';
-- Class B downgraded to 'C' from 'CCC'.
ContiMortgage home equity loan trust series 1998-2:
-- Class A-7 affirmed at 'AAA';
-- Class A-8 affirmed at 'AAA';
-- Class A-9 affirmed at 'AAA';
-- Class B affirmed at 'B'.
ContiMortgage home equity loan trust series 1998-3 Group 1:
-- Class A-7 affirmed at 'AAA';
-- Class A-8 affirmed at 'AAA';
-- Class B-I downgraded to 'C' from 'CCC'.
ContiMortgage home equity loan trust series 1998-3 Group 2:
-- Class A-9 affirmed at 'AAA';
-- Class A-17 affirmed at 'AAA';
-- Class A-20 affirmed at 'AAA';
-- Class B-II downgraded to 'C' from 'CCC'.
ContiMortgage home equity loan trust series 1998-4:
-- Class A affirmed at 'AAA';
-- Class B downgraded to 'C' from 'CCC'.
ContiMortgage home equity loan trust series 1999-1:
-- Class A-6 affirmed at 'AAA';
-- Class A-7 affirmed at 'AAA';
-- Class A-8 affirmed at 'AAA';
-- Class B downgraded to 'C' from 'CCC'.
ContiMortgage home equity loan trust series 1999-3:
-- Class B downgraded to 'C' from 'CCC'.
The upgrades on the M1-F and the M-2A classes of the 1997-3 deal
reflect a substantial increase in credit enhancement relative to
future loss expectations and affect $8,028,213 of outstanding
certificates.
The affirmations affect $838,566,462 of outstanding certificates
and reflect collateral performance and credit enhancement levels
generally consistent with expectations. Included in the
affirmations are the class A notes of certain series benefiting
from a financial guaranty from MBIA (1996-4 Groups 1 & 2, 1997-4,
1998-1 Groups 1 & 2, 1998-2, 1998-3 Groups 1 & 2 and 1998-4) and a
financial guaranty from AMBAC (1999-1).
The downgrades affect $292,805,907 of outstanding certificates and
reflect the fact that the subordinate bonds (class B, B-I or B-II,
as the case may be) have been experiencing write downs due to
losses.
As of the November 2004 distribution date, the pool factor
(current mortgage loans outstanding as a percentage of the initial
pool) for the 1996-4 series was 4.65%. The six-month average
monthly loss after application of monthly excess spread was
$177,966.
The pool factors for the 1997 vintage ranged from 2.80% to 6.82%.
The six-month average monthly loss after application of monthly
excess spread ranged from $10,328 to $130,849 on these deals with
the exception of the 1997-2 Group 2 and 1997-3 Group 2 series
which had positive average net excess spread of $18,215 and
$26,187 respectively, over the same period.
The pool factors for the 1998 vintage ranged from 4.43% to 14.88%.
The six-month average monthly loss after application of monthly
excess spread ranged from $195,929 to $471,485.
The pool factors for the 1999 vintage ranged from 12.99% to
14.12%. The six-month average monthly loss after application of
monthly excess spread ranged from $289,810 to $428,759.
The downgrades to 'C' from 'CCC' for the seven subordinate bonds
is due to the exhaustion of overcollateralization -- OC -- in
these deals and the erosion of credit enhancement as a result of
the write downs experienced by these bonds. OC has started to
build up for some of these deals subsequently but these are no
where near the required levels.
Further information regarding current delinquency, loss, and
credit enhancement statistics is available on the Fitch Ratings
web site at http://www.fitchratings.com.
CORRPRO COS: Reducing Worldwide Work Force by 6%
------------------------------------------------
Corrpro Companies, Inc. (Amex: CO), reported a net reduction in
force of approximately 50 individuals, or 6 percent of its
worldwide personnel. Also, the Company's executive vice president
of U.S. operations will be leaving the Company. The Company has
commenced a search for a new executive to lead its U.S.
operations.
The Company anticipates that the total cost of this initiative
will be approximately $1 million, consisting primarily of
severance benefits. The majority of the charge associated with
these costs will be taken in the third fiscal quarter ending
Dec. 31, 2004. With the concurrence of the Company's lenders, the
Company has reduced the potential impact of the charge on
compliance with applicable financial covenants.
"This restructuring is part of our ongoing efforts to improve our
business model," commented Joseph P. Lahey, Corrpro's Chief
Executive Officer and President. "This action is not merely to
reduce our operating and administrative expenses, but to allow us
to invest in sustaining our growth strategy and improve
efficiencies in our sales, services, and administration."
Corrpro Companies, Inc., headquartered in Medina, Ohio, with over
30 offices worldwide, is the leading provider of corrosion control
engineering services, systems and equipment to the infrastructure,
environmental and energy markets around the world. Corrpro is the
leading provider of cathodic protection systems and engineering
services, as well as the leading supplier of corrosion protection
services relating to coatings, pipeline integrity and reinforced
concrete structures.
At Sept. 30, 2004, Corrpro Companies' balance sheet showed a
$3,275,000 stockholders' deficit, compared to a $2,729,000 deficit
at March 31, 2004.
COX ENTERPRISES: Completes $8.5 Million Cox Comms. Acquisition
--------------------------------------------------------------
Cox Enterprises, Inc., successfully completed its previously
announced acquisition of the publicly held minority interest of
Cox Communications, Inc., for $8.5 billion. Cox Holdings, Inc., a
wholly owned subsidiary of Cox Enterprises, acquired Cox
Communications through a cash tender offer for $34.75 per share
and a short-form merger completed Wednesday.
As a result of the merger, any outstanding shares of Class A
common stock not purchased in the tender offer, other than those
as to which appraisal rights are perfected, were converted into
the right to receive $34.75 per share in cash, without interest.
Wachovia Bank, N.A., the depositary for the tender offer, will
mail to non-tendering stockholders materials to advise them of
their rights and facilitate receipt of payment for their Cox
Communications shares. Cox Communications shares is to be
delisted from the New York Stock Exchange and trading to be
suspended prior to market opening on Dec. 9.
Consistent with becoming a wholly owned subsidiary of Cox
Enterprises, Cox Communications intends to take steps over time to
permit it to cease filing periodic reports and other information
with the Securities and Exchange Commission. However, even if Cox
Communications is no longer required to file SEC reports, Cox
Communications intends to continue to provide certain information
to its investors, including future audited annual financial
statements and unaudited quarterly interim financial statements.
All of Cox Communications' debt securities that are currently
outstanding were sold in public offerings registered under the
Securities Act of 1933, and should Cox Communications' obligation
to file periodic reports with the SEC be suspended, such
suspension will not change the status of Cox Communications'
outstanding debt securities as freely tradeable under the federal
securities laws.
Citigroup Global Markets, Inc., and Lehman Brothers, Inc., served
as Cox Enterprises' exclusive financial advisors in this
transaction. Goldman, Sachs & Co. served as exclusive financial
advisor to the Special Committee of Cox Communications' board of
directors in this transaction. Citigroup, Lehman and J.P. Morgan
Chase & Co. provided $10 billion to fund the transaction, pay
related fees and expenses, and provide Cox Enterprises and Cox
Communications additional liquidity.
About Cox Communications
Cox Communications, Inc. -- http://www.cox.com/-- a Fortune 500
company, is a multi-service broadband communications company with
approximately 6.6 million total customers, including approximately
6.3 million basic cable subscribers. The nation's third-largest
cable television provider, Cox offers both analog cable television
under the Cox Cable brand as well as advanced digital video
service under the Cox Digital Cable brand. Cox provides an array
of other communications and entertainment services, including
local and long distance telephone under the Cox Digital Telephone
brand; high-speed Internet access under the Cox High Speed
Internet brand; and commercial voice and data services via Cox
Business Services. Local cable advertising, promotional
opportunities and production services are sold under the Cox Media
brand. Cox is an investor in programming networks including the
Discovery Channel.
About Cox Enterprises
Cox Enterprises -- http://www.coxenterprises.com/-- is one of the
nation's leading media companies and providers of automotive
services, with 2003 revenues of $10.7 billion and 77,000
employees. Major operating subsidiaries include Cox
Communications, Inc. (cable television distribution, telephone,
high-speed Internet access and other advanced broadband services);
Cox Newspapers, Inc. (newspapers, local and national direct mail
advertising and customized newsletters); Cox Television
(television and television sales rep firms); Cox Radio, Inc.
(broadcast radio stations and interactive Web sites); and Manheim
Auctions, Inc. (vehicle auctions, repair and certification
services and web-based technology products). Cox Enterprises also
owns an equity stake in AutoTrader.com, the world's largest and
most visited online source of vehicle listings for dealers and
consumers.
* * *
As reported in the Troubled Company Reporter on Aug. 04, 2004,
Standard & Poor's Ratings Services placed its ratings on
diversified media company Cox Enterprises, Inc., and all related
entities on CreditWatch with negative implications. The action
follows Cox Enterprises' announcement of its proposal to acquire
the outstanding publicly held 38% minority interest in 62%-owned
subsidiary Cox Communications, Inc., a major cable TV system
operator, for cash consideration of $7.9 billion, including fees
and expenses. Assuming the transaction is completed as described,
the corporate credit rating on Cox Enterprises, which is analyzed
on a consolidated basis with Cox Communications, 62%-owned Cox
Radio Inc., and non-public auto auction, newspaper, and TV
broadcasting operations, would be lowered to 'BBB-' from 'BBB'.
The senior unsecured debt of Cox Enterprises would be lowered to
'BBB-' or 'BB+', depending on the resulting placement of debt
within the consolidated capital structure. The senior unsecured
debt of Cox Communications and Cox Radio, Inc., would be lowered
to 'BBB-' from 'BBB'. The commercial paper ratings on Cox
Enterprises and Cox Communications would be lowered to 'A-3' from
'A-2'.
DANA CREDIT: Moody's Rates Planned $450M Sr. Unsec. Notes at Ba2
----------------------------------------------------------------
Moody's Investors Service upgraded all existing long-term ratings
for Dana Corporation and Dana Credit Corporation -- DCC, and
confirmed the company's SGL-2 speculative grade liquidity rating.
The rating upgrades incorporate Moody's belief that Dana is
increasingly focused on the generation of organic growth of core
operations and realization of sustainable improvements in
operating fundamentals. The rating actions also factor in the
material reduction in total debt which Dana will realize through
the application of net proceeds from sale of its Automotive
Aftermarket Group -- AAG -- to The Cypress Group which was
completed on November 30, 2004. Total consideration received for
AAG approximated $950 million in cash, plus a seller note valued
at $50 million upon closing. Of this amount, Dana will contribute
approximately $200 million to its under-funded pension plan and
will apply approximately $635 million to repay existing high yield
notes which have been tendered in accordance with the company's
tender offer in progress and cover associated premiums and
transaction fees and expenses.
Ba2 Rating on Proposed Senior Unsecured Notes
Moody's additionally assigned a Ba2 rating to Dana's $450 million
of proposed senior unsecured notes due 2015. The new notes will
primarily be utilized to refinance the balance of the company's
notes, which have been tendered at a premium.
The rating actions conclude the review for possible upgrade that
was initiated on July 9, 2004, upon Dana's announcement that it
had signed a definitive agreement to sell AAG. The rating outlook
is now stable.
These specific rating actions were taken:
-- Upgrade to Ba2, from Ba3, of the rating for Dana's
$400 million senior unsecured revolving credit facility due
November 2005;
-- Upgrade to Ba2, from Ba3, of the ratings of Dana's
approximately $2.2 billion of existing senior unsecured
notes with various rates and maturities;
-- The balance of these notes will be reduced by the
approximately $835 million of principal to be repurchased
upon the conclusion of Dana's tender offer;
-- Upgrade to Ba2, from Ba3, of the ratings of DCC's medium
term notes with various rates and maturities, supported by
Dana;
-- Upgrade to Ba2, from Ba3, of the senior implied rating for
Dana;
-- Upgrade to Ba2, from Ba3, of the senior unsecured issuer
rating for Dana;
-- Confirmation of Dana's SGL-2 speculative grade liquidity
rating.
Dana commenced a tender offer on November 15, 2004 for its
$250 million of 10.25% notes due 2010, Euro 200 million of 9% Euro
notes due 2011 and $575 million of 9% notes due 2011. The holders
of approximately $835 million in aggregate principal amount of
these notes have tendered their notes pursuant to the offer) at an
aggregate premium estimated at $180 million). This represents
approximately 76% of the principal amount of Notes included in the
offer. In addition at least 51% of the holders of each issue have
tendered, providing the company with the requisite consents to
adopt its proposed amendments with respect to each series of notes
subject to the offer. The amendments will be applicable to the
stub portion of the notes, which were not tendered.
Moody's has rated the stub portion of high yield notes that were
not tendered on a parallel basis with all of Dana's other senior
unsecured notes, despite the fact that the terms will be amended
to remove most of the covenants and certain events of default.
While these notes will no longer possess either cross-acceleration
rights or an automatic event of default upon bankruptcy or
insolvency, non-payment of interest or principal will be retained
as events of default. In addition, the holders of the stub notes
will retain the right to vote along with all other senior
unsecured creditors regarding their approval of any future plan or
reorganization.
Dana currently has a maximum of $200 million of additional
availability in place under its accounts receivable securitization
facility, which is not rated by Moody's. The maximum amount of
the securitization commitment was reduced from $400 million in
connection with the sale of AAG.
The upgrades of Dana's and DCC's fundamental debt ratings and the
stable outlook reflect the pro forma principal and interest
reductions that will result from the sale of AAG and the proposed
notes offering. It is additionally Moody's belief that Dana is
realizing sustainable improvements of its performance metrics and
operating cash flow generation (although these improvements were
to some extent offset in 2004 by rising steel prices, lowered
North American light vehicle production levels, and higher-than-
expected launch costs incurred for several new platforms).
Management is confident that the implementation of several
structural changes to the way Dana conducts business will continue
generating improved cash flows on a prospective basis.
The most notable developments include:
(1) Dana's near-completion of its restructuring and
consolidation program, which is driving improved operating
margins and will result in greatly reduced future cash
outflows that supported the plan's implementation;
(1) greater centralization of key business decisions; and
(1) the establishment of a series of best practices.
Dana's most recent initiative to centralize its purchasing
function (which comprises approximately 60% of the company's
overall cost of goods sold) is reportedly now well under way and
is expected to be the critical change that will enable Dana to
fully offset anticipated customer price givebacks during 2005. At
this point Dana has also made significant headway with regard to
up-front cash outlays associated with scheduled new program
launches, has realized better operating control over these
launches, and is now benefiting from revenue generation associated
with several of these launches.
Dana's fundamental ratings remain constrained by the company's
concentration of approximately 69% of its revenues within North
America, where light vehicle production volumes are weakening due
to high dealer inventories. Dana's revenue base is heavily
concentrated with Ford, General Motors, and DaimlerChrysler, which
account for approximately 49% of the company's revenues but are
notably experiencing greater competitive pressures and lower
anticipated production volumes. Moody's additionally notes that
Dana's achievement of its base case 2005 financial plan is highly
dependent upon assumptions regarding the company's realization of
significant purchasing savings, new business launches, and market
growth. Other potentially meaningful offsets to Dana's
anticipated cash flow improvements include the potential for steel
and other commodity prices to continue to rise or for the
popularity of SUV's to decline in the face of rising gasoline
prices. Dana must absorb an estimated 2.5% (approx. $220 million)
of customer price reductions annually.
While Dana's sale of the AAG business will result in net cash
proceeds to the company approximating $950 million, the company
will be giving up an asset that was formerly accretive to Dana's
overall cash flow performance. Dana's remaining operations will
notably be considerably less diversified following the AAG asset
sale, which may offset the expected benefits to management of
being able to focus Dana's financial capital and managerial
efforts on the original equipment business lines. On the other
hand, there was very limited crossover of product lines between
Dana's OEM and aftermarket businesses, which limited the synergies
that the company was able to realize by maintaining both
businesses.
Moody's believes that Dana's new business awards over the past
year have lagged the industry due to insufficient focus on new
business or new technology development until recently, as well as
a distractions from the hostile takeover attempt by ArvinMeritor
last year and the unanticipated transition to a new CEO. New
structures launches during the past year have been significant,
but did encounter unanticipated complications. Dana has since
resolved the procedural problems surrounding these launches and
does not expect them to be repeated as a result of the
implementation of a series of best practices.
Moody's continues to rate Dana and DCC on a parallel basis, given
the operating agreement in place among Dana and DCC, as well as a
tax sharing agreement. Moody's also notes the existence of
certain cross defaults among the respective debt commitments of
Dana and DCC. While DCC expects to have sufficient ability to
liquidate assets to cover its own scheduled debt reduction and
Dana has never previously downstreamed funds for this purpose,
Moody's believes that Dana would be highly motivated to downstream
funds to DCC if this were determined to be necessary to preclude
any future payment defaults by DCC. As of September 30, 2004, DCC
had approximately $490 million of debt still outstanding. Moody's
also notes that the deferred tax liability at DCC will steadily
unwind over time, given that no new business is being created at
the finance subsidiary. While Dana's existing NOL carryforwards
are expected to cover a significant portion of the resulting tax
obligations, the company will eventually have to satisfy the
balance of the tax obligations with cash payments over a several
year period.
The confirmation of the SGL-2 speculative-grade liquidity rating
reflects that Dana continues to have good liquidity. Moody's
estimates that Dana would have pro forma consolidated cash of
approximately $630 million at September 30 after consideration of
the excess proceeds from the aftermarket sale and notes offering.
Existing cash would satisfy the near-term maturities. Moody's
notes that it is presently necessary for Dana to maintain an
approximately $350 million base level of cash to cover
approximately $190 million in cash collateral requirements for
letters of credit and surety bonds, account for cash located at
foreign subsidiaries, and support daily operations. Dana Credit's
cash balance exceeds debt maturities through the end of 2006.
Moody's believes Dana will generate positive free cash flow after
capital expenditures and dividends in 2005. Management believes
cash requirements for interest payments and pension contributions
will decline due to the debt reduction, lowered coupon rate on the
new bonds relative to the existing notes, and the special
contribution to the pension. Dana's $200 million accounts
receivable securitization program and $400 million revolving
credit facility mature in 2005. However, Moody's notes that
because Dana's assets are not encumbered, the company should have
substantial flexibility to either obtain new liquidity agreements
or pursue asset sales to generate additional cash if necessary.
Future events that would likely result in an improved outlook or
additional rating upgrades include steadily improving credit
protection measures, a proven ability to offset customer price
concessions and materials costs with operating improvements,
continued debt and leverage reductions through free cash flow
generation and possibly secondary offerings of common stock, and a
stepped up pace of new business awards for high-value-added
products with a more diversified customer base.
Future events that could result in a lowered outlook or ratings
downgrade include:
(1) an inability to offset any future increases in steel,
energy or other critical commodity prices,
(2) sharply reduced North American production levels,
(3) an inability to generate the projected purchasing savings,
evidence of declining markets shares,
(4) a failure to continue development of state-of-the-art
technologies,
(5) a material debt-financed acquisition,
(6) increasing customer price compression,
(7) material increases in the company's dividend policy, or
(8) the initiation of substantial programs for share
repurchases.
The following ratios for Dana (with DCC on an equity basis) are
presented pro forma for the sale of AAG, the proposed application
of AAG net proceeds, and the proposed notes offering. For the
last twelve months ended September 30, 2004 Dana had pro forma net
debt/EBITDA leverage approximating 3.1x including only on-balance
sheet items as debt. Only cash in excess of $350 million was
credited against debt due to the amount of cash located at foreign
subsidiaries and also the company's cash requirements to
collateralize letters of credit and surety bonds and support daily
operations. Pro forma total debt/EBITDAR leverage (including the
present value of operating leases and certain other off-balance
sheet items debt) approximates 4.2x. EBIT coverage of cash
interest for the LTM period ended September 30, 2004, approximated
2.2x. Reported EBIT and EBITDAR were adjusted to add back an
estimated $10 million of non-recurring charges.
Dana Corporation, headquartered in Toledo, Ohio, is a global
leader in the engineering, manufacture and distribution of
products and services for the automotive, engine, heavy truck,
off-highway, industrial and leasing markets. Dana Credit
Corporation is a wholly owned leasing and finance subsidiary of
Dana Corporation, which is in the process of being liquidated.
Dana's current annual revenues for continuing operations
(excluding sales of the automotive aftermarket business) is
approximately $8.8 billion.
DENNINGHOUSE INC: Monitor Gets Court Nod for Buck Franchise Sale
----------------------------------------------------------------
Denninghouse, Inc., (TSX: DEH) and related companies, operator of
Buck or Two and Quebec-based Dollar Ou Deux stores across Canada
reported that RSM Richter, Inc., the court-appointed Monitor in
the Company's proceedings under the Companies' Creditors
Arrangement Act, received approval from the Ontario Superior Court
of Justice on Dec. 7, 2004, for a transaction to sell the
Company's franchise business to Buck or Two Extreme Retail Inc.
and Buck or Two (2004), Inc. These companies are unrelated to the
Company and its affiliates.
The Company has been operating in CCAA since August 16, 2004,
pursuant to the terms of the Initial Order issued on that date.
The Initial Order authorized Richter to conduct a marketing and
sale process for the Company's franchise business. This process
was carried out contemporaneously with the Company's other
restructuring efforts.
The closing of the sale of the franchise business is scheduled to
occur in various stages, with the first stage scheduled for
December 9, 2004.
The estimated proceeds of realization from the sale of the
franchise business and the Company's other assets are not
projected to be sufficient to satisfy its obligations, and
accordingly there is not expected to be any value for the
Company's equity holders.
Denninghouse, Inc., operates 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. The Company and
certain of its subsidiaries has voluntarily sought and obtained
protection pursuant to the Companies' Creditors Arrangement Act on
Aug. 16, 2004. RSM Richter, Inc., was appointed the CCAA Monitor.
DEVLIEG BULLARD: Asks Court to Convert Case to Chapter 7
--------------------------------------------------------
DeVlieg Bullard II, Inc., asks the U.S. Bankruptcy Court for the
District of Delaware to convert its Chapter 11 case to a Chapter 7
proceeding effective as of December 31, 2004.
The Debtor gives the Court four reasons militating in favor of the
conversion:
a) The Debtor ceased all its business operations and is in
the process of liquidating its remaining assets and winding
down its business affairs and its debtor-in-possession
financing facility will expire on December 31, 2004;
b) The Debtor and its retained professionals have worked
diligently to sell and liquidate the Debtor's assets in a
manner that has maximized the value of its assets for the
benefit of its estate and its creditors;
c) The Debtor can't pay administrative and priority claims due
to lack of funding and can't formulate or confirm a
plan of reorganization or liquidation; and
d) The Debtor has worked with its secured lenders to ensure
that a proposed Chapter 7 Trustee will have funds available
to administer a chapter 7 estate.
The Court will convene a hearing at 3:00 p.m., on Dec. 29, 2004,
to consider approval of the Debtor's request to convert its
Chapter 11 case to a Chapter 7 proceeding.
Headquartered in Machesney Park, Illinois, DeVlieg Bullard II,
Inc. -- http://www.devliegbullard.com/-- provides a comprehensive
portfolio of proprietary machine tools, aftermarket replacement
parts, field service and premium workholding products. The
Company filed for chapter 11 protection on July 21, 2004 (Bankr.
D. Del. Case No. 04-12097). James E. Huggett, Esq., at Flaster
Greenberg, represents the Company in its restructuring efforts.
When the Debtor filed for protection from its creditors, it
estimated debts and assets of $10 million to $50 million.
DII/KBR: Wants to Hire Godwin Gruber as Special Counsel
-------------------------------------------------------
DII Industries, LLC and its debtor-affiliates seek the United
States Bankruptcy Court for the Western District of Pennsylvania's
authority to employ Godwin Gruber, LLP, as their special counsel,
nunc pro tunc to the bankruptcy petition date.
The Debtors want Godwin Gruber to continue representing them in
10 lawsuits:
(a) DII Industries, LLC, Successor by Conversion to Dresser
Industries, Inc., v. Underwriters at Lloyd's, London, and
Certain London Market Companies, et al; No. 03-0693; In
the Supreme Court of Texas; remanded to the 333' Judicial
District Court of Harris County, Texas; Cause No. 98
-44026;
(b) DII Industries, LLC, Successor by Conversion to Dresser
Industries, Inc. v. Underwriters at Lloyd's, London, and
Certain London Market Companies, et al; Cause No. 01
-07414; In the 192" Judicial District Court, Dallas
County, Texas; and related mandamus action, In re: Certain
Underwriters at Lloyd's London, et al; No. 03-0559;
(c) DII Industries, LLC, f/k/a Dresser Industries, Inc., v.
Alba General Insurance Co., et al.; Adversary No. 03-3072;
In the United States Bankruptcy Court for the Western
District of Pennsylvania; related to Harbison-Walker
Refractories Company v. DII Industries, LLC;
(d) DII Industries, LLC, Successor by Conversion to Dresser
Industries, Inc., v. RIII Refractories Holding Company;
Cause No. 2003-43959; In the 80' Judicial District Court
of Harris County, Texas;
(e) Kellogg Brown & Root, Inc., v. AIU Insurance Company, et
al.; Cause No. 20133-03653; In the 11" Judicial District
Court of Harris County, Texas;
(f) DII Industries, LLC, and Kellogg Brown & Root, Inc., vs.
California Coastal Communities, Inc., and Resco Holdings,
Inc.; Cause No. 2003-03653; In the 58' Judicial District
Court of Jefferson County, Texas;
(g) Smith International Acquisition Corp. v. Dresser
Industries, Inc., et al.; Cause No. 2003-16631; In the 55"
Judicial District Court of Harris County, Texas;
(h) M-1, L.L.C, and Smith International Acquisition
Corporation vs. Dresser Industries, Inc., et al.; Civil
Action No. H-03-5044; USDC, Southern District, Houston
Division;
(i) Bienvenido M. Cadalin, et al., v. Brown & Root
International, Inc., and Asia International Builders
Corporation, et al.; NLRC NCS Case No. POEA-84-06-555;
Romeo Patag, et al., v. Brown & Root International, Inc.,
and Asia International Builders Corporation, et al.; NLRC
NCR Case No. PLEA-85-1.0-777; and Solomon B. Reyes v.
Brown & Root International, Inc., and Asia International
Builders Corporation, et al.; NLRC NCR Case No. POEA-86
-10-799; and
(j) William Boyd v. Texas Utilities, et al.; Cause No. 4163;
in the 249th District Court, Somervell County, Texas.
Godwin Gruber was employed by and has continuously represented the
Debtors in these matters since before the Petition Date because of
the firm's recognized experience and expertise. It would be
inefficient and costly to require the Debtors to now identify and
retain substitute counsel to represent them in these matters. In
addition, doing so could be detrimental to the progress of these
lawsuits, compromise the Debtors' interests and result in harm to
their estates.
Godwin Gruber will be paid for its services on an hourly basis:
Partner $175 - 525
Participating Associates 175 - 300
Associates 100 - 220
Legal Assistants 60 - 130
Godwin Gruber will also be reimbursed for all reasonable and
necessary out-of-pocket expenses incurred in connection with its
employment.
Rick L. Lambert, Esq., at Godwin Gruber, assures the Court that
the firm does not hold or represent an interest adverse to the
Debtors, their creditors, or estates with respect to the matters
for which it will be engaged.
Headquartered in Houston, Texas, DII Industries, LLC, is the
direct or indirect parent of BPM Minerals, LLC, Kellogg Brown &
Root, Inc., Mid-Valley, Inc., KBR Technical Services, Inc.,
Kellogg Brown & Root Engineering Corporation, Kellogg Brown & Root
International, Inc., (Delaware), and Kellogg Brown & Root
International, Inc., (Panama). KBR and its subsidiaries provide a
wide range of services to energy and industrial customers and
government entities in over 100 countries. DII has no business
operations. DII and its debtor-affiliates filed a prepackaged
chapter 11 petition on December 16, 2003 (Bankr. W.D. Pa. Case No.
02-12152). Jeffrey N. Rich, Esq., Michael G. Zanic, Esq., and
Eric T. Moser, Esq., at Kirkpatrick & Lockhart LLP, represent the
Debtors in their restructuring efforts. On June 30, 2004, the
Debtors listed $6.255 billion in total assets and $5.295 billion
in total liabilities. (DII & KBR Bankruptcy News, Issue No. 22;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
DOUGLAS DYNAMICS: S&P Rates Planned $150M Sr. Unsec. Notes at B-
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' senior
unsecured debt rating to the proposed $150 million senior
unsecured notes (jointly issued by unrated Douglas Dynamics
Finance Co.) of Milwaukee, Wisconsin-based Douglas Dynamics LLC
((B+/Stable/--) due 2011, which will be privately placed under SEC
Rule 144A without registration rights.
At the same time, S&P raised our senior secured debt rating on the
company's $55 million revolving credit facility to 'BB-' from 'B+'
and assigned our 'BB-' senior secured debt rating to the company's
proposed $50 million term loan, which ranks pari passu with the
revolving credit facility. The recovery ratings on both the
revolving credit facility and term loan are '1', indicating that
there is a strong likelihood for full recovery of principal in the
event of a default or bankruptcy.
In addition, S&P affirmed its corporate credit rating on Douglas
Dynamics. The outlook remains stable. Pro forma for the
transactions noted, Douglas Dynamics had about $216 million of
total debt outstanding at Nov. 29, 2004.
"The affirmation of the corporate credit rating reflects Douglas
Dynamics' good operating performance in 2004, our expectation of
continued solid near-term results, the company's improved term
debt structure with the proposed note offering, as well as the
increased leverage assumed in the proposed transaction to enable a
dividend to the company's equity sponsor," said Standard & Poor's
credit analyst Joel Levington. "We believe that operating
performance will remain sufficient to meet our expectations for
credit measures and liquidity. Should it be somewhat stronger, we
would expect the financial sponsor to pursue additional dividends,
which also limits credit quality."
Douglas Dynamics manufactures snow- and ice-control equipment, a
niche segment of the winter-related products industry. Products
include snowplows and salt and sand spreaders for
attachment/addition to pick-up trucks/light-duty vehicles,
including wiring harnesses, mounts, and hydraulics.
The company's high financial leverage and business risks
associated with its weather-related sales and operations make it
somewhat vulnerable to vagaries of weather. It is important,
therefore, that it execute and maintain strict cost control
because of the inherent business risks.
DUANE READE: Moody's Rates Planned $160M Sr. Secured Notes at B2
----------------------------------------------------------------
Moody's Investor's Service rated the proposed $160 million
second-lien Senior Secured Note issue of Duane Reade, Inc., at B2,
subject to review of final documentation, and affirmed the Senior
Subordinated Notes at Caa1.
Proceeds from the new debt principally will be used to replace the
$155 million second-lien Term Facility. While more expensive, the
new secured notes will have less stringent covenants than the
retired Term Facility.
The ratings reflect Moody's expectations that sales and operating
profits will remain weak until the New York metro economy recovers
and lease adjusted leverage will stay higher than 7 times and
fixed charge coverage will stay near 1 time over the medium-term.
However, the adequate liquidity position with elimination of
potential restrictions from Term Facility covenants and Duane
Reade's leading market share in and around Manhattan benefit the
ratings.
The Rating assigned is:
-- $160 million second-lien Senior Secured Notes (2010) at B2.
These ratings are affirmed:
-- $155 million second-lien secured Term Facility (2010) at B2,
-- $195 million 9.75% Senior Subordinated Notes (2011) at Caa1,
-- Senior implied rating at B2, and the
-- Long-term issuer rating at Caa2.
The rating on the Term Facility will be withdrawn following
completion of the contemplated transaction. Moody's does not rate
the $250 million Revolving Credit Facility that is collateralized
by a first-lien on accounts receivable, inventory, and pharmacy
prescription files.
Negatively impacting the ratings are the company's highly
leveraged financial condition, the exposure to the economic
fortunes of a restricted geographic region (Manhattan and
surrounding areas), and Moody's belief that free cash flow will
remain small even as the company scales back its store development
program relative to recent years. Pressure on operating margins
as low margin drugs (relative to general merchandise) steadily
make up a larger proportion of the sales mix and weak trends in
merchandise comparable store sales also negatively impact the
ratings.
However, the ratings recognize the company's leading market share
in the New York metropolitan area generally (and Manhattan
specifically), the adequate liquidity resources following
elimination of Term Facility covenants and reduction in the store
development program, and the relatively small requirement for
repair & maintenance given the modern condition of the company's
store base. The expectation that prescription drug sales will
remain strong and Moody's opinion that the company has significant
asset value in the form of accounts receivable, inventory,
prescription drug files, and below-market leases also benefit the
ratings.
The stable rating outlook reflects Moody's expectations that
operating performance and debt protection measures will modestly
decline from current levels and incremental permanent borrowings
on the Revolving Credit Facility will be minimal. Ratings would
be negatively impacted if EBITDA margin fails to improve from
current levels, debt protection measures remain weak, or liquidity
becomes a concern. Over the longer term, ratings could be raised
as sales and operating profit recover, debt protection measures
meaningfully improve (such as a lease-adjusted leverage declining
below 6 times and fixed charge coverage increasing above
1.5 times), and newly opened stores inside and outside of
Manhattan become accretive.
The B2 rating on the six-year Senior Secured Notes considers that,
in addition to guarantees from the operating subsidiaries, this
class of debt has a second priority lien relative to the unrated
Revolving Credit Facility with respect to the most easily
monetizable assets of accounts receivable, inventory, and pharmacy
files. The secured notes have a first-lien on all other tangible
and intangible assets. In spite of the large proportion of the
Revolving Credit Facility in the company's debt structure, the
secured notes are rated at the same level as the senior implied
rating because of Moody's belief that asset fair market value
approximately equals total secured debt.
The Caa1 rating on the Senior Subordinated Notes considers that
this debt is guaranteed by the company's operating subsidiaries.
However, this subordinated class of debt is contractually
subordinated to significant amounts of more senior obligations.
Pro-forma for the pending transaction, in Sept. 2004 the more
senior claims principally would have been comprised of the
asset-based Revolving Credit Facility, the Secured Notes, and
$85 million of trade accounts payable. In a hypothetical default
scenario with the revolving credit facility fully utilized,
Moody's believes that recovery for this subordinated class of debt
would rely on ongoing enterprise value given likely liquidation
proceeds relative to book value for tangible assets.
For the past year, Duane Reade's front-end comparable store sales
have been substantially lower than its chain drug store peers as
the New York metro economy has been weaker than the national
average. Operating margin (excludes one-time charges) has
declined to 1.8% in the first nine months of 2004 from 2.6% and
4.8% in 2003 and 2002, respectively. Relative to prior
expectations, Moody's now believes delays in revenue and operating
profit growth will postpone substantial improvements in financial
flexibility. Given Moody's expectation the new Secured Notes will
be more expensive than the replaced Term Facility, Moody's expects
that cash interest expense will marginally increase by around
$2 million. Going forward, Moody's anticipates that the company
will maintain adequate liquidity by adjusting the pace of its new
store development program.
Duane Reade, Inc., headquartered in New York City, operates
255 drug stores principally in Manhattan and the outer boroughs of
New York City. Revenue for the twelve months ending September
2004 equaled $1.4 billion.
DUANE READE: S&P Rates Proposed $160 Million Senior Notes at B-
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on New
York, New York-based drug retailer, Duane Reade Inc. The corporate
credit rating was lowered to 'B-' from 'B'. The outlook is
negative.
At the same time, Standard & Poor's assigned its 'B-' rating to
Duane Reade's proposed $160 million senior floating-rate notes due
2010. The notes are being issued under Rule 144A with
registration rights. Proceeds from the notes will be used to
repay the company's existing $155 million senior term loan.
"The downgrade is based on concerns over weaker-than-expected
sales and operating trends and the increase in interest costs
related to the proposed notes," explained Standard & Poor's credit
analyst Diane Shand. "We believe that credit protection measures
will remain weak given Duane Reade's inability to reverse a three-
year trend of flat-to-negative sales on its high-margin front-end
merchandise. Ratings reflect the company's leveraged capital
structure, thin cash flow protection measures, and narrow
geographic focus, with a very heavy concentration of stores in
Manhattan."
Duane Reade's financial performance has been affected by the weak
New York economy and increased competition since the fourth
quarter of 2001. The company's operating margin is expected to
decline to about 7.5% in 2004 from 11.9% in 2000. The margin
erosion is attributable to weak sales of high-margin front-end
merchandise, increased labor expense, an increased portion of
low-margin pharmacy sales, and greater competition from national
drugstore chains. Margins are expected to remain under pressure
in the near term, as Duane Reade's front-end merchandising
strategy appears to be struggling.
Cash flow protection measures are thin, with EBITDA coverage of
interest at 1.5x. Leverage is high, with total debt to EBITDA in
excess of 8.0x.
DVI INC: Judge Walrath Confirms Amended Plan of Liquidation
-----------------------------------------------------------
The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware confirmed on Nov. 24, 2004, the Amended Joint
Plan of Liquidation filed by DVI, Inc., and its debtor-affiliates.
The plan will monetize all of DVI's remaining property and
distribute the estate's cash assets to creditors in order of their
statutory priority. The plan proposes to pay general unsecured
creditors just under 3 cents-on-the-dollar and delivers just over
32 cents-on-the-dollar to the healthcare finance company's
noteholders.
DVI, Inc., the parent company of DVI Financial Services, Inc., DVI
Business Credit Corp., and DVI Financial Services, Inc., provides
lease or loan financing to healthcare providers for the
acquisition or lease of sophisticated medical equipment. The
Company, along with its affiliates, filed for chapter 11
protection (Bankr. Del. Lead Case No.: 03-12656) on
Aug. 25, 2003, before the Honorable Mary F. Walrath. Bradford J.
Sandler, Esq., of Adelman Lavine Gold and Levin, PC, represents
the debtors in their restructuring efforts. When the Company
filed for protection from its creditors, it listed $1,866,116,300
in total assets and $1,618,751,400 in total debts.
EYE CARE: Sale Plans Spur Moody's to Review Junk & Low-B Ratings
----------------------------------------------------------------
Moody's Investors Service has placed the ratings of Eye Care
Center of America on review direction uncertain following the
recent announcement that the company has signed a sale agreement
to a consortium comprised of Golden Gate Capital and affiliates of
Moulin International Holdings Limited.
These ratings of Eye Care Center were placed on review direction
uncertain:
* Senior implied rating of B2;
* $25 million secured revolving credit facility maturing 12/06
of B2;
* $55 million secured Term A loan facility amortizing through
12/05 of B2;
* $62 million secured Term B loan facility amortizing through
11/07 at B2;
* Long-term senior unsecured issuer rating of B3;
* $100 million 9.125% senior subordinated notes due 2008 of
Caa1;
* $29.7 million 9.125% senior subordinated discount notes due
2008 of Caa1.
On December 2, 2004, Eye Care Center announced that it had signed
a definitive agreement to sell Thomas H. Lee Partners ownership of
the company to a consortium of Moulin, an unrated Hong Kong based
company, that designs, manufactures and distributes eyeware
products, and Golden Gate Capital. The transaction is valued at
approximately $450 million, or approximately 8x LTM September 2004
EBITDA. Eye Care Center shareholders approved the merger, which
is expected to close in the first quarter of 2005. Eye Care
Center ended September 30, 2004 with approximately 4.1x debt-to-
EBITDA, excluding preferred stock.
The review will focus on the financial and operating profile of
Eye Care Center as a legal entity within the wider Moulin group.
Key factors in the review will include:
(1) the amount and structure of Eye Care Center's outstanding
debt after the transaction closes;
(2) whether Moulin intends to support this debt; and
(3) how Eye Care Center's operations are to be integrated into
Moulin's operations and the implications of this
integration for the company's cash flow generation,
financial flexibility and market position.
Ratings could be upgraded if Eye Care Center's new debt is
guaranteed or otherwise supported by Moulin or if Eye Care
Center's credit profile is otherwise enhanced given its role in
the Moulin group. Ratings could be downgraded if Eye Care
Center's credit profile is weaker following the transaction due to
higher financial leverage. Moody's will withdraw its ratings on
Eye Care Center's existing debt if they are refinanced in
connection with the transaction as is expected.
Headquartered in San Antonio, Texas, Eye Care Center of America is
the world's third largest retail optical chain in the United
States as measured by net revenues. The company operates or
manages 373 stores principally under the EyeMasters, Visionworks,
Vision World and Doctor VisionWork brand names. Sales for the
twelve-month period ending September 30, 2004, were approximately
$386 million.
FALCON AUTO: Fitch Junks 2003-1 Class F Mortgage Issues
-------------------------------------------------------
Fitch takes rating actions on these classes of Falcon Auto
Dealership Loan Trust 2003-1:
-- Class IO affirmed at 'AAA'
-- Class A affirmed at 'AAA';
-- Class B downgraded to 'A' from 'AA';
-- Class C downgraded to 'BBB-' from 'A';
-- Class D downgraded to 'BB-' from 'BBB-';
-- Class E affirmed at 'B+';
-- Class F affirmed at 'CCC.'
Fitch removes from Rating Watch Negative classes B, C, D, E and F.
The rating actions are a result of the expected impact to the
trust of a workout of the Gorman Family Holding LLC loan and a
growing concern with the low fixed charge coverage ratio -- FCCR
-- of a large borrower who represents approximately 5% of the
pool.
As of November 2004, the Gorman Family Holdings LLC loan
represents 6.7% (approximately $9.2 million) of the pool. Since
first going delinquent in August of 2003, the Gorman loan has
continued to receive servicer advances resulting in outstanding
advances of $1.44 million through November 2004.
At underwriting the collateral value of the loan was $16,390,000,
consisting of $5,350,000 of real estate and $11,040,000 of
business value. An updated real estate appraisal was obtained in
November 2003 with the real estate valued at $5,850,000.
The franchise agreement has since been surrendered to
DaimlerChrysler. Foreclosure was filed in May 2004 and is
currently moving forward, the loan still remains unresolved.
Increasing servicer advances continue to reduce Fitch's expected
net recovery on the real estate value of the loan. No material
recovery is anticipated on the business value portion of the loan.
Fitch will continue to closely monitor the performance of the pool
as additional information becomes available.
FEDERAL-MOGUL: Gets Court Okay to Settle Environmental Claims
-------------------------------------------------------------
Judge Lyons of the U.S. Bankruptcy Court for the Southern District
of New York approves the request of Federal-Mogul Corporation and
its debtor-affiliates to approve a settlement agreement, pursuant
to which the U.S. Debtors and at least 14 claimants agreed to
resolve certain issues between them relating to existing,
potential, or threatened claims advanced by the holders of
approximately 100 proofs of claim, amounting to $252 million with
respect to their existing or potential environmental liabilities.
As reported in the Troubled Company Reporter on Oct. 28, 2004,
some of the Claimants and their claims to be settled are:
Claimant Site/Location Claim No.
-------- ------------- ---------
State of Georgia M&J Solvents Site, Georgia 6794
State of Indiana Frankfort, Indiana 6125
State of Indiana Mooresville, Indiana 6126
State of Indiana Orland, Indiana 6124
State of Indiana Michigan City, Indiana 6129
Commonwealth
of Kentucky Scottsville, Kentucky 5220
Commonwealth
of Pennsylvania Hellertown, Pennsylvania 6922
City of Battle Verona Well Field Superfund
Creek, Michigan Site, Battle Creek, Michigan 10365
Board of County
Commissioners King Road Landfill Superfund 6876
Lucas County, Ohio Lucas County, Ohio 6877
Paikes Enterprises Hellertown, Pennsylvania 5923
Commercial Oil Commercial Oil Services 5978
Services Site Grp. Superfund Site, Ohio 5979
5980
Third Site Trust Third Site Superfund Site,
Fund Trustees Boone County, Indiana 6944
Stickney/Tyler Stickney/Tyler Superfund Site,
Administrative Grp. Toledo, Lucas County, Ohio 6841
Fultz Landfill PRP Fultz Landfill Site,
Group Byesville Guernsey County, Ohio 6292
The Settlement Agreement addresses each of the Environmental
Claims as well as acknowledges that some liability may not yet be
known or quantifiable and that some sites are yet to be discovered
or linked to the U.S. Debtors.
The Debtors are authorized to enter into the Settlement, subject
only to the submission by the United States Government, of a
notice of no public comment or notice of public comment and the
Government's responses. The Government, nonetheless, may withdraw
or withhold consent of final approval as set forth in the
Settlement.
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
October 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 their creditors, they listed $10.15 billion in
assets and $8.86 billion in liabilities. (Federal-Mogul
Bankruptcy News, Issue No. 68; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
FIRST REPUBLIC: Fitch Assigns Low-B Ratings to Two Issue Classes
----------------------------------------------------------------
Fitch Ratings has taken rating actions on these First Republic
Bank issues:
Series 2000-FRB1:
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AAA';
-- Class B-2 affirmed at 'AAA';
-- Class B-3 upgraded to 'AA' from 'AA-';
-- Class B-4 upgraded to 'A' from 'BBB+';
-- Class B-5 affirmed at 'BB+'.
Series 2000-FRB2:
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AAA';
-- Class B-2 upgraded to 'AA+' from 'AA';
-- Class B-3 upgraded to 'AA' from 'A+';
-- Class B-4 upgraded to 'A' from 'BBB+';
-- Class B-5 upgraded to 'BB+' from 'BB'.
The affirmations reflect credit enhancement -- CE -- levels
consistent with future loss expectations and affect $216,678,617
of outstanding certificates. The upgrades reflect an increase in
credit enhancement relative to future loss expectations and affect
$6,706,004 of outstanding certificates detailed above.
The current CE for all classes from series 2000-FRB1 has more than
doubled from their original levels:
* class A benefits from 6.05% of CE (originally 2.75%),
* class B-1 benefits from 4.40% (originally 2%),
* class B-2 benefits from 3.30% (originally 1.50%),
* class B-3 benefits from 2.20% (originally 1%),
* class B-4 benefits from 1.10% (originally 0.50%) and
* class B-5 benefits from 0.55% (originally 0.25%).
As of the November distribution date, the pool factor (mortgage
principal outstanding as a percentage of original mortgage
principal as of closing) is 22% and there have been no losses to
the certificates. The mortgage pool consists of negative
amortizing COFI adjustable-rate mortgages, and fully amortizing
LIBOR, CMT, and prime based adjustable-rate, first lien, one- to
four-family residential mortgages.
The current CE levels for all classes from series 2000-FRB2 have
doubled from their original levels:
* class A benefits from 5.5% of CE (originally 2.75%),
* class B-1 benefits from 4% (originally 2%),
* class B-2 benefits from 3.20% (originally 1.60%),
* class B-3 benefits from 2.40% (originally 1.20%),
* class B-4 benefits from 1.30% (originally 0.65%) and
* class B-5 benefits from 0.70% (originally 0.35%).
As of the November distribution date, 50% of the original
collateral has paid off and there have been no losses to the
certificates. In addition, there are no delinquent loans. The
mortgage pool consists of fully amortizing COFI, LIBOR, CMT, and
prime based adjustable-rate, first lien, one- to four-family
residential mortgage loans.
GE CAPITAL: Fitch's Rating on $6.2M Class L Certs. Tumbles to D
---------------------------------------------------------------
GE Capital Commercial Mortgage Corp.'s commercial mortgage
pass-through certificates, series 2000-1, are downgraded:
-- $6.2 million class H to 'B+' from 'BB-';
-- $5.3 million class I to 'B' from 'B+';
-- $7.1 million class J to 'CCC' from 'B-';
-- $6.2 million class K to 'C' from 'CC';
-- $6.2 million class L to 'D' from 'C'.
These classes are affirmed by Fitch:
-- $69.1 million class A-1 'AAA';
-- $429.2 million class A-2 'AAA';
-- Interest only class X 'AAA';
-- $28.3 million class B 'AA';
-- $31.8 million class C 'A';
-- $8.8 million class D 'A-';
-- $23 million class E 'BBB';
-- $8.8 million class F 'BBB-';
-- $23.9 million class G 'BB+'.
Fitch does not rate the $.314 million class M.
The downgrades are due to the imminent loss on one loan and the
expected losses on several specially serviced loans. Class L is
expected to be completely depleted and class K is expected to
suffer losses with one month.
There are currently five loans (6.4%) in special servicing. An
office building located in Des Moines, IO (1.7%) is currently real
estate owned. A sales contract is in place that is expected to
close by the end of 2004 that will result in a loss of
approximately $6.0 million to $7.0 million.
The largest specially serviced loan (2.3%) is collateralized by a
66,000 square foot office property located in Santa Clara,
California (2.3%). The loan is currently greater than 90 days
delinquent. Due to the decline in the real estate market in the
Silicon Valley area, the property has experienced a decline in
occupancy and asking rents. The special servicer is expected to
foreclose on the property within the coming months. Significant
losses are expected following the disposition of the loan.
As of the November 2004 distribution date, the pool's aggregate
balance has been reduced by 7.5%, to $654.2 million, compared with
$707.3 million at issuance. Year-end 2003 financials have been
reported for 93.7% of the pool, with a weighted average debt
service coverage ratio -- WADSCR -- of 1.36 times, a negligible
decrease since issuance. The certificates are currently
collateralized by 100 commercial and multifamily mortgages, with
concentrations in retail (26%) and office (25%). The properties
are located in 28 states with the largest concentrations in
California (19%) and Texas (18%).
GITTO GLOBAL: U.S. Trustee Picks 7-Member Creditors Committee
-------------------------------------------------------------
The United States Trustee for Region 1 appointed seven creditors
to serve on the Official Committee of Unsecured Creditors in
Gitto Global Corporations' chapter 11 case:
1. Shawnee Chemical Corp.
Attn: Terrence Hurley
136 Main Street, Suite 300
Princeton, New Jersey 08540
Phone: 609-799-3930, Fax: 609-799-6576
2. East Coast Trading, Inc.
Attn: Christopher Perry
28 Charron Avenue, #2
Nashua, New Hampshire 03063
Phone: 603-881-9099, Fax: 603-881-9199
3. Sumitomo Corp. of America
Attn: Lynn Stewart
600 3rd Avenue
New York, New York 10016
Phone: 212-207-0471 Fax: 212-207-0855
4. AK Additives
Attn: Fred Yorg
223 Eagle Road
Newtown, Pennsylvania 18940
Phone: 215-860-4180, Fax: 215-860-2246
5. Resin Distribution, Inc.
Attn: Michael S. Smith
1 Sculley Road
Ayer, Massachusetts 01432
Phone: 978-772-1616, Fax: 978-772-5533
6. Great Lakes Chemical Corporation
Attn: James Bianculli
Great Lakes Boulevard
West Lafayette, Indiana
Tel: 765-497-6064, Fax: 765-497-5525
7. BASF Corporation
Attn: Peter Argiriou
100 Campus Drive
Florham Park, New Jersey 07932
Tel: 973-245-6577
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 Lunenburg, Massachusetts, Gitto Global
Corporation -- http://www.gitto-global.com/-- manufactures
polyvinyl chloride, polyethylene, polypropylene and thermoplastic
olefinic compounds. The Company filed for chapter 11 protection
on September 24, 2004 (Bankr. D. Mass. Case No. 04-45386). Andrew
G. Lizotte, Esq., at Hanify & King P.C., represents the Debtor in
its restructuring efforts. When the Debtor filed for protection
from its creditors, it listed estimated assets of $10 million to
$50 million and estimated debts of $50 million to $100 million.
GLOBAL CROSSING: Files First Monthly Post-Confirmation Report
-------------------------------------------------------------
The Global Crossing Estate Representative delivered to the
Bankruptcy Court the First Monthly Status Report pursuant to the
Court's order establishing procedures governing all adversary
proceedings brought pursuant to Sections 544, 547, 548 and 550 of
the Bankruptcy Code.
The First Report addresses those adversary proceedings settled or
voluntarily dismissed by the GX Representative through October
2004.
A list of the 167 dismissed avoidance actions and the 66 settled
avoidance actions is available for free at:
http://bankrupt.com/misc/Settled_or_Dismissed_Avoidance_Actions.pdf
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 December 9, 2003. (Global Crossing Bankruptcy News,
Issue No. 71; Bankruptcy Creditors' Service, Inc., 215/945-7000)
GRACE INDUSTRIES: Case Summary & 40 Largest Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: Grace Industries, Inc.
dba Anthony Grace & Sons, Inc
dba Grace Contracting
151-21 Sixth Road
Whitestone, New York 11357
Bankruptcy Case No.: 04-27013
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Grace Asphalt, Inc. 04-27015
Type of Business: The Company specializes in asphalt manufacturing
& paving, concrete paving, airport, highway, &
bridge construction, electrical, interior &
exterior, engineering & design, demolition,
foundations, piling, real estate, and roads,
sewer & water main construction.
See http://www.graceindustriesinc.com/
Chapter 11 Petition Date: December 6, 2004
Court: Eastern District of New York (Brooklyn)
Judge: Carla E. Craig
Debtor's Counsel: Matthew G. Roseman, Esq.
Cullen and Dykman Bleakley Platt LLP
100 Quentin Roosevelt Boulevard
Garden City, New York 11530
Tel: (516) 296-9106
Financial Condition as of December 1, 2004
Total Assets: $46,000,000
Total Debts: $30,000,000
A. Grace Industries, Inc.'s 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Welsbach Electric Corporation $2,552,397
111-01 14th Avenue
PO Box 560252
College Point, New York 11356-025
Pavers Local 1010/1018 $1,231,632
136-25 37th Avenue
Flushing, New York 11354
Gatz Landscaping $700,000
1800 Sound Avenue
PO Box 45
Mattituck, New York 11952
Vincent A. DeIorio, Law Office $606,170
2975 Westchester Avenue, Suite 207
Purchase, New York 10577
Hellman Electric Corporation $546,536
855 Brush Avenue
Bronx, New York 10465
Quadrozzi Equipment Leasing $524,019
73-02 Amstel Boulevard
Arverne, New York 11692
Daidone Electric, Inc. $517,365
200 Raymond Boulevard
Newark, New Jersey 07105
Lockton Companies of New York $372,005
PO Box 340096
Boston, Massachusetts 02241-0496
Bel-Air Construction, Inc. $300,298
30 Stewart Street
Hewlett, New York 11557
Jarlab Enterprises $258,074
107 Bridghtside Avenue
Central Islip, New York 11722
Local 282 $227,215
Grassi & Company, CPA's PC $189,227
Aspro Mechanical Contract $187,338
M.Y.W.-LOCAL 1175 $173,943
Vanbro Corporation $150,518
Graniteworks $132,435
Macadam Company, Inc. $129,547
Triboro Hardware & Supply $99,646
Local 731 $95,305
A. Santilli Land Development $74,200
B. Grace Asphalt, Inc.'s 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Tilcon New York, Inc. $498,260
162 Old Mill Road
West Nyack, New York 10994
Citgo Asphalt Refining Company $417,729
Tulsa, Oklahoma
Mystic Materials Management Inc. $34,882
19-01 Steinway Street
Astoria, New York 11105
Con Edison $32,048
Castle Oil Corporation $31,122
Constantinople Consulting $22,500
Rapid Ready Mix $18,992
Lockton Companies $18,500
Runway Tire Service Company Inc. $12,033
Libra Systems Corporation $11,620
ABC Electric Corporation $10,070
Gerhart Scale Corporation $10,000
N & T Repairs Corporation $9,865
Aircomatic Air Conditioning $9,700
Acme Power Transmissions $9,591
Michael Security Company, Inc. $8,402
James Scherocman $7,624
Ren Products Company $5,242
Richard B. Ruch $4,391
Black Bear Company, Inc. $3,942
HERBST GAMING: 8-1/8% Senior Debt Exchange Offer Expires Today
--------------------------------------------------------------
Herbst Gaming, Inc., is extending its offer to exchange an
aggregate principal amount of up to $160,000,000 of its 8-1/8%
Senior Subordinated Notes due 2012 registered under the Securities
Act of 1933 for a like principal amount of its unregistered 8-1/8%
Senior Subordinated Notes due 2012 validly tendered in the
exchange offer.
The exchange offer was originally scheduled to expire at 5:00
p.m., New York City time on Dec. 8, 2004. The expiration date has
been extended until 5:00 p.m., New York City time today,
Dec. 10, 2004.
Headquartered in Las Vegas, Nevada, Herbst Gaming, Inc., owns both
slot route operations and casino operations. Route operations
involve the exclusive installation and operation of slot machines
in non-casino locations such as grocery stores, drug stores, bars
and restaurants. Herbst also owns and operates five casino
facilities throughout Nevada: two in Pahrump, one in Henderson,
one in Searchlight, and one in Las Vegas.
* * *
As reported in the Troubled Company Reporter on Nov. 05, 2004,
Moody's Investors Service assigned a B3 rating to Herbst Gaming
Inc.'s proposed $150 million 10-year senior subordinated notes.
Moody's also assigned a B1 rating to the company's $275 million
senior secured amended and restated bank credit facility effective
October 8, 2004. The bank facility consists of a $175 million
5-year revolver and $100 million 6-year term loan B. Proceeds
from the bank facility and new note offering will be used to fund
the acquisition of Grace Entertainment and refinance Herbst's
existing debt including the company's $160 million 8.125% senior
subordinated notes due 2012.
Herbst's ratings consider that the Grace acquisition will not
materially change Herbst's overall credit profile. Although
debt/EBITDA will increase to 4.7x on a pro forma basis compared to
4.0x for the latest 12-month period ended June 30, 2004. Herbst
will continue to generate free cash flow, a portion of which is
expected to maintain leverage at or near 4.0x over the
intermediate and long-term. Additionally, the company is expected
to benefit from an increased level of size and diversification.
The stable rating outlook continues to reflect the company's high
recurring revenue stream from slot operations, positive free cash
flow profile, good liquidity profile and favorable growth
prospects. Despite the increase in size and diversification,
ratings upside is limited at this time given the large size of the
Grace acquisition relative to Herbst's existing asset base. Slower
than expected deleveraging and another debt financed acquisition
prior to the integration of the Grace assets could negatively
impact ratings.
IMPAC FUNDING: Fitch Junks Three Certificate Classes
----------------------------------------------------
Fitch Ratings has taken action on these Impac Funding Corp.
mortgage pass-through certificate issues:
Impac SAC Mtge. Pass-Through Certificates, Series 1998-3:
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AAA';
-- Class M-2 affirmed at 'AAA';
-- Class M-3 upgraded to 'AAA' from 'A+';
-- Class B-1 upgraded to 'A' from 'BB';
-- Class B-2 affirmed at 'B'.
Impac SAC Mtge. Pass-Through Certificates, Series 1998F-1:
-- Class A affirmed at 'AAA';
-- Class B-1 upgraded to 'AAA' from 'BB';
-- Class B-2 upgraded to 'BB' from 'B'.
Impac SAC Mtge. Pass-Through Certificates, Series 2000-1:
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AAA';
-- Class M-2 upgraded to 'AAA' from 'AA';
-- Class M-3 affirmed at 'BBB';
-- Class B-1 downgraded to 'CCC' from 'B';
-- Class B-2 downgraded to 'C' from 'CC'.
Impac SAC Mtge. Pass-Through Certificates, Series 2000-3:
-- Class A affirmed at 'AAA';
-- Class M-1 upgraded to 'AAA' from 'AA';
-- Class M-2 affirmed at 'BBB+';
-- Class M-3 downgraded to 'C' from 'CCC'.
Impac Secured Assets Corp. Mtge. Pass-Through Certificates, Series
2000-4:
-- Class A affirmed at 'AAA';
-- Class M-1 upgraded to 'AAA' from 'AA';
-- Class M-2 upgraded to 'AA' from 'A';
-- Class B affirmed at 'BBB' and removed from Rating Watch
Negative.
Impac Secured Assets Corp. Mtge. Pass-Through Certificates, Series
2000-5:
-- Class A affirmed at 'AAA';
-- Class M-1 upgraded to 'AAA' from 'AA';
-- Class M-2 upgraded to 'AA' from 'A';
-- Class B affirmed at 'BBB' and removed from Rating Watch
Negative.
Impac SAC Mtge. Pass-Through Certificates, Series 2001-1 Pool 1:
-- Class A-1 affirmed at 'AAA';
-- Class M-1 upgraded to 'AAA' from 'AA';
-- Class M-2 upgraded to 'AA' from 'A';
-- Class B affirmed at 'BBB'.
Impac SAC Mtge. Pass-Through Certificates, Series 2001-1 Pool 2:
-- Class A-2 affirmed at 'AAA'.
Impac SAC Mtge. Pass-Through Certificates, Series 2001-2:
-- Class A affirmed at 'AAA';
-- Class M-1 upgraded to 'AA+' from 'AA';
-- Class M-2 upgraded to 'A+' from 'A';
-- Class B affirmed at 'BBB'.
Impac SAC Mtge. Pass-Through Certificates, Series 2001-3 Pool 1:
-- Class A-1 affirmed at 'AAA';
-- Class M-1 upgraded to 'AAA' from 'AA';
-- Class M-2 upgraded to 'AA' from 'A';
-- Class B affirmed at 'BBB'.
Impac SAC Mtge. Pass-Through Certificates, Series 2001-3 Pool 2:
-- Class A-2 affirmed at 'AAA'.
Impac SAC Mtge. Pass-Through Certificates, Series 2001-4 Pool 1:
-- Class AI affirmed at 'AAA';
-- Class M-1 upgraded to 'AA+' from 'AA';
-- Class M-2 upgraded to 'A+' from 'A';
-- Class B affirmed at 'BB+'.
Impac SAC Mtge. Pass-Through Certificates, Series 2001-4 Pool 2:
-- Class AII affirmed at 'AAA'.
Impac SAC Mtge. Pass-Through Certificates, Series 2001-5 Pool 1
-- Class AI affirmed at 'AAA' ;
-- Class M-1 upgraded to 'AA+' from 'AA';
-- Class M-2 upgraded to 'A+' from 'A';
-- Class B affirmed at 'BBB'.
Impac SAC Mtge. Pass-Through Certificates, Series 2001-5 Pool 2
-- Class AII affirmed at 'AAA'.
Impac SAC Mtge. Pass-Through Certificates, Series 2001-6 Pool 1
-- Class AI affirmed at 'AAA';
-- Class M-1 upgraded to 'AA+' from 'AA';
-- Class M-2 upgraded to 'A+' from 'A';
-- Class B downgraded to 'BB' from 'BBB'.
Impac SAC Mtge. Pass-Through Certificates, Series 2001-6 Pool 2
-- Class AII affirmed at 'AAA'.
Impac SAC Mtge. Pass-Through Certificates, Series 2001-7 Pool 1:
-- Class AI affirmed at 'AAA' ;
-- Class M-1 upgraded to 'AA+' from 'AA';
-- Class M-2 upgraded to 'A+' from 'A';
-- Class B affirmed at 'BBB'.
Impac SAC Mtge. Pass-Through Certificates, Series 2001-7 Pool 2:
-- Class AII affirmed at 'AAA'.
Impac SAC Mtge. Pass-Through Certificates, Series 2001-8:
-- Class A affirmed at 'AAA';
-- Class M-1 upgraded to 'AAA' from 'AA';
-- Class M-2 upgraded to 'AA' from 'A';
-- Class M-3 affirmed at 'BBB'.
Impac SAC Mtge. Pass-Through Certificates, Series 2002-1 Pool 1:
-- Class AI affirmed at 'AAA';
-- Class M-1 upgraded to 'AA+' from 'AA';
-- Class M-2 upgraded to 'A+' from 'A';
-- Class B affirmed at 'BBB'.
Impac SAC Mtge. Pass-Through Certificates, Series 2002-1 Pool 2:
-- Class AII affirmed at 'AAA'.
Impac CMB Trust Series 2001-3:
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class B affirmed at 'BBB'.
Impac CMB Trust Series 2001-4:
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class B affirmed at 'BBB'.
Impac CMB Trust Series 2002-6F:
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A'.
Impac CMB Trust Series 2002-7:
-- Class A affirmed at 'AAA';
-- Class B affirmed at 'BBB'.
Impac CMB Trust Series 2002-8:
-- Class A affirmed at 'AAA';
-- Class B affirmed at 'BBB'.
Impac CMB Trust Series 2002-9F:
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class B affirmed at 'BBB'.
Impac CMB Trust Series 2003-2F:
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class B affirmed at 'BBB'.
Impac CMB Trust Series 2003-5:
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AAA';
-- Class M-2 affirmed at 'AA';
-- Class B affirmed at 'BBB'.
The upgrades, affecting $111,416,988 of outstanding certificates,
are being taken as a result of low delinquencies and losses, as
well as significantly increased credit support levels. The
affirmations, affecting over $1.43 billion of certificates, are
due to stable collateral performance and moderate growth in credit
enhancement. The negative rating actions are the result of poor
collateral performance and the deterioration of asset quality
beyond original expectations, and affect $7,796,695 of outstanding
certificates.
Downgrades to the single C level (series SAC 2000-1, class B-2;
series SAC 2000-3, class M-3) are indicative of an exhaustion of
overcollateralization -- OC -- and/or other forms of credit
enhancement to the class and signify that the class is
experiencing monthly writedown as a result of monthly loan losses.
The pools are seasoned from a range of 18 to 55 months. The pool
factors (current principal balance as a percentage of original)
range from approximately 0.08% to 51% outstanding.
Further information regarding current delinquency, loss and credit
enhancement statistics is available on the Fitch Ratings web site
at http://www.fitchratings.com/
IMPAC SECURED: Moody's Slices Ratings on Class B Certs. to Ba3
--------------------------------------------------------------
Moody's Investors Service upgraded eleven certificates, downgraded
one certificate and confirmed the rating of one certificate, from
Impac Secured Asset Corp., Mortgage Pass-Through securitization
deals issued in 2001. The transactions consist of first-lien
fixed-rate alternative-A mortgage loans that were originated by
Impac Funding Corporation and serviced by GMAC Mortgage
Corporation.
Eleven certificates from five 2001 deals have been upgraded due to
the substantial build-up in credit support. The projected
pipeline losses are not expected to significantly affect the
credit support for these certificates. The seasoning of the loans
and low pool factor reduce loss volatility.
The most subordinate tranche in the 2001-6 transaction has been
downgraded because existing credit enhancement levels are low
given the current projected losses on the underlying pools. The
transaction has taken losses causing gradual erosion of the
overcollateralization. As of the 11/25/04 reporting date, the
pools only have $381,975 of overcollateralization, well below the
OC target of $1M.
The rating of the most subordinate tranche in the 2001-4
transaction has been confirmed because existing credit enhancement
levels provide sufficient protection for the certificate.
Issuer: Impac Secured Asset Corp., Mortgage Pass-Through
Certificates
Upgrade:
* Series 2001-1; Class M-1, upgraded from Aa1 to Aaa
* Series 2001-1; Class M-2, upgraded from A1 to Aaa
* Series 2001-1; Class B, upgraded from Baa1 to A2
* Series 2001-3; Class M-1, upgraded from Aa2 to Aaa
* Series 2001-3; Class M-2, upgraded from A2 to Aa2
* Series 2001-4; Class M-1, upgraded from Aa2 to Aaa
* Series 2001-4; Class M-2, upgraded from A2 to Aa2
* Series 2001-5; Class M-1, upgraded from Aa2 to Aaa
* Series 2001-5; Class M-2, upgraded from A2 to Aa2
* Series 2001-7; Class M-1, upgraded from Aa2 to Aaa
* Series 2001-7; Class M-2, upgraded from A2 to Aa3
Downgrade:
* Series 2001-6; Class B, downgraded from Baa2 to Ba3
Confirmed
* Series 2001-4; Class B, Baa2 rating confirmed
J. J. H. MAGUIRE INC: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: J. J. H. Maguire, Inc.
142 Mott Street
Trenton, New Jersey 08611
Bankruptcy Case No.: 04-48435
Chapter 11 Petition Date: December 7, 2004
Court: District of New Jersey (Trenton)
Judge: Raymond T. Lyons Jr.
Debtor's Counsel: Stephen Dicht, Esq.
Stephen P. Dicht & Associates, P.C.
High Ridge Commons, Suite 201
200 Haddonfield-Berlin Road
Gibbsboro, New Jersey 08026
Tel: (856) 783-5755
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $500,000 to $1 Million
The Debtor did not file a list of its 20 Largest Unsecured
Creditors.
JLLCM INC: Case Summary & 13 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: JLLCM, Inc.
dba Little Red Wagon School
2582 County Road 4106
Kaufman, Texas 75142
Bankruptcy Case No.: 04-83164
Type of Business: The Company operates a school.
Chapter 11 Petition Date: December 6, 2004
Court: Northern District of Texas (Dallas)
Judge: Barbara J. Houser
Debtor's Counsel: Eric A. Liepins, Esq.
Eric A. Liepins, P.C.
12770 Coit Road, Suite 1100
Dallas, Texas 75251
Tel: (972) 991-5591
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 13 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Kaufman County Tax District $93,000
100 Mulberry Street
Kaufman, Texas 75142
Rick Graham $4,000
Two Lincoln Center
5420 LBJ Freeway, Suite 300
Dallas, Texas 75240
Credit Systems International $3,195
P.O. Box 1088
Fort Worth, Texas 76112
Sunbeam $3,000
3324 Delido Road
Dallas, Texas 75228
Konica Business Solutions $2,748
Kiester, Lockwood & Babb $2,580
Buy-Low Auto $1,700
Discourt School Supply $1,045
Fasco $797
Richard R. Della Croce $760
Shepps $471
Focus Receivables Management $415
Crandall Electic $300
KAISER ALUMINUM: Four Parties Balk at Intercompany Claims Pact
--------------------------------------------------------------
Several objections to the Kaiser Aluminum Corporation, its debtor-
affiliates and the Official Committee of Unsecured Creditors'
intercompany claims settlement and release were filed by:
* the Official Committee of Asbestos Claimants and Martin J.
Murphy, the legal representative for future asbestos
claimants;
* the U.S. Trustee;
* the United States of America, on behalf of:
-- the Bonneville Power Administration,
-- the Environmental Protection Agency,
-- the Department of Interior, and
-- the National Oceanic and Atmospheric Administration; and
* Anne M. Ferazzi, as the legal representative for the Future
Silica Claimants.
The Objections assert a variety of basis for denial of the Joint
Motion including, among others, that the Settlement and Release
Agreement constitutes a plan sub rosa for the Debtors. Many of
the basis for objection raised involved substantial factual issues
with respect to which the parties are engaging in discovery.
However, the factual issues related to the issue of whether the
Settlement and Release Agreement constitute a plan sub rosa are
essentially undisputed.
The United States Bankruptcy Court for the District of Delaware
held a status conference on the Settlement and Release
Agreement Motion on November 8, 2004. At the hearing, Judge
Fitzgerald scheduled further an evidentiary hearing on the Joint
Motion for January 11, 2005, through February 2, 2005.
Concurrently, four Debtor-subsidiaries filed two separate joint
liquidation plans:
* Alpart Jamaica, Inc., and Kaiser Jamaica Corporation; and
* Kaiser Alumina Australia Corporation and Kaiser Finance
Corporation.
Approval of the Settlement and Release Agreement is a condition
precedent of both Liquidation Plans.
ACC and FCR Want Hearing Bifurcated
In the interest of judicial economy and efficiency, the Asbestos
Committee and the Futures Representative ask Judge Fitzgerald to
bifurcate the hearing on the Settlement and Release Agreement.
The Asbestos Committee and the Futures Representative propose that
a hearing be held on January 5, 2005 at 1:30 p.m. Easter Time, to
address the sole issue of whether the Settlement and Release
Agreement constitutes a plan sub rosa.
According to Marla R. Eskin, Esq., at Campbell & Levine, LLC, in
Wilmington, Delaware, if the Court concludes -- as the Asbestos
Committee and the Futures Representative have -- that the
Settlement and Release Agreement constitutes a plan sub rosa, the
Debtors' estates will not have to bear the costs related to a
month's worth of additional extensive expedited discovery on the
other basis for objection to the Joint Motion. Moreover, the
Asbestos Committee and the Futures Representative believe that
with the holidays, January will be the month within a large amount
of discovery will take place, including additional document
requests and depositions.
As previously reported, the Asbestos Committee and the Futures
Representative strongly dispute the position of the Debtors and
the Creditors Committee that there is no basis to substantially
consolidate the Debtors' estates. "This is just one of the issue
raised in the Objections which will require significant time,
effort, and expense prior to the currently scheduled Evidentiary
Hearing," Ms. Eskin notes.
Costs seem to be of particular concern to the Debtors. Ms. Eskin
maintains that the Liquidating Debtors' estates will be relieved
of the costs related to the solicitation of the conditional
Liquidation Plans. In the event Judge Fitzgerald concludes that
the Settlement and Release Agreement does not constitute a plan
sub rosa, the parties can proceed with the currently scheduled
Evidentiary Hearing with respect to the remaining basis for
objection to the Joint Motion.
The Asbestos Committee and the Futures Representative argue that
the proposed bifurcation and schedule modification should not
increase, and has the potential to substantially reduce, the time
and costs associated with litigating the objections to the Joint
Motion. Furthermore, the bifurcated scheduling will not prejudice
any of the parties.
Headquartered in Houston, Texas, Kaiser Aluminum Corporation --
http://www.kaiseral.com/-- operates in all principal aspects of
the aluminum industry, including mining bauxite; refining bauxite
into alumina; production of primary aluminum from alumina; and
manufacturing fabricated and semi-fabricated aluminum products.
The Company filed for chapter 11 protection on February 12, 2002
(Bankr. Del. Case No. 02-10429). Corinne Ball, Esq., at Jones
Day, represent the Debtors in their restructuring efforts. On
June 30, 2004, the Debtors listed $1.619 billion in assets and
$3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 55;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
KB HOME: Fitch Assigns BB+ Rating to $300M Senior Unsecured Notes
-----------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to KB Home's (NYSE: KBH)
$300 million, 5.875% senior unsecured notes due Jan. 15, 2015.
The Rating Outlook is Positive. Proceeds from the new debt issue
will be largely used to pay down bank debt in the short term and
for other corporate purposes.
The current ratings and Outlook reflect KB Home's solid,
consistent profit performance in recent years and the expectation
that the company's credit profile will continue to improve as it
executes its business model and embarks on a new period of growth.
The ratings also take into account the company's primary focus on
entry-level and first-step trade-up housing (the deepest segments
of the market), its conservative building practices, and effective
utilization of return on invested capital criteria as a key
element of its operating model.
Over recent years the company has improved its capital structure
and increased its geographic diversity and has better positioned
itself to withstand a meaningful housing downturn. Fitch also has
taken note of KB Home's role as an active consolidator within the
industry. Risk factors also include the cyclical nature of the
homebuilding industry. Fitch expects leverage (excluding
financial services) to remain comfortably within KB Home's stated
debt to capital target of 45%-55%.
The company has expanded EBITDA margins over the past several
years on steady price increases, volume improvements and
reductions in SG&A expenses. Also, KB Home has produced record
levels of home closings, orders and backlog as the housing cycle
extended its upward momentum. KB Home realizes a significant
portion of its revenue from California, a region that has proved
volatile in past cycles. But the company has reduced this
exposure as it has implemented its growth strategy and currently
sources approximately 17% of its deliveries from California,
compared with 69% in fiscal 1995.
Over recent years KB Home shifted toward a presale strategy,
producing a higher backlog/delivery ratio and reducing the risk of
excess inventory and debt accumulation in the event of a slowdown
in new orders. The strategy has also served to enhance margins.
The company maintains a five-year supply of lots (based on
deliveries management has projected for 2004), approximately 49%
of which are owned and the balance controlled through options.
Inventory turnover has been consistently at or above 1.4 times
during the past nine years.
Balance sheet liquidity has continued to improve as a result of
efforts to reduce long-dated inventories, quicken inventory turns
and improve returns on capital. Progress in these areas has
allowed the company to accelerate deliveries without excessively
burdening the balance sheet.
As the housing cycle progresses, creditors should benefit from KB
Home's solid financial flexibility supported by cash and
equivalents of $1.9 million and $583.6 million available under its
$1 billion domestic unsecured credit facility (net of
$135.4 million of letters of credit) as of Aug. 31, 2004. In
addition, liquid, primarily pre-sold work-in-process and finished
inventory totaling $3.16 billion provides comfortable coverage for
construction debt. Debt is well laddered and the current
$1 billion revolving credit facility matures in four years.
Management's share repurchase strategy has been aggressive at
times, but has not impaired the company's financial flexibility.
KB Home repurchased $81.9 million of stock in fiscal 1999,
$169.2 million in 2000, $190.8 million in 2002, $108.3 million
(two million shares) in fiscal 2003 and $66 million (one million
shares) through the first three quarters of fiscal 2004. At the
end of August 2004, one million shares remained under the board of
directors' repurchase authorization.
Notwithstanding these repurchases, book equity has increased
$1,148.5 million since the end of 1999, while construction debt
grew $1,027.4 million. The company has had a moderate dividend.
In early December 2004 the board of directors sharply raised the
annual dividend from $1.00 per share to $1.50 per share -- a pay
out of 10.7%, based on forecast earnings for fiscal 2005.
However, the cash expenditures on dividends represent only about
$58 million, based on the current share count.
KB Home has lessened its dependence on the state of California,
but it is still the company's largest market in terms of
investment. Operations are dispersed within multiple markets in
the north and in the south. During the 1990s the company entered
various major Western metropolitan markets, including Phoenix, Las
Vegas, Denver, Dallas, Austin and San Antonio, and has risen to a
top five ranking in each market except Dallas (number 10 ranking).
In an effort to further broaden and enhance its growth prospects
it has established operations (greenfield and by acquisition) in
the southeastern U.S., including various markets in Florida,
Atlanta, Georgia, North and South Carolina. Recently, the company
entered the Midwest (Chicago and Indianapolis) via acquisitions.
Fitch recognizes the company as a consolidator in the industry,
but expects future acquisitions will be moderate in size and
largely funded through cash flow.
KMART CORP: Proposes Procedures to Resolve 147 Remaining Claims
---------------------------------------------------------------
Andrew N. Goldman, Esq., at Wilmer, Cutler, Pickering, Hale, and
Dorr, LLP, in New York, relates that Kmart Corporation and its
debtor-affiliates made enormous progress in resolving a great
majority of the claims that arose in connection with its
assumption and rejection of over 5,000 real estate leases and
subleases during the pendency of their Chapter 11 cases.
As of November 19, 2004, the landlords:
(a) for rejected locations have filed 2,893 real estate lease
rejection claims aggregating $3,807,281,910. To date,
Kmart has fully settled 2,698 of the claims, leaving 195
of the remaining disputed rejection claims totaling
$311,117,133, unresolved; and
(b) for assumed locations have filed 3,646 lease cure claims
aggregating $957,233,393. To date, Kmart has fully
settled 3,534 of the claims, leaving 112 of the remaining
disputed cure claims totaling $59,344,837, unresolved.
Kmart asks the United States Bankruptcy Court for the Northern
District of Illinois to establish specific procedures designed to
efficiently and expeditiously resolve 147 of the remaining
disputed real estate lease rejection claims and cure claims.
The procedures are intended to aid parties in either settling or
adjudicating, in an expedited manner, the 147 Disputed Claims
consistent with any due process protections.
Kmart asks the Court to implement these procedures to supplement
the objection and response procedures already in place under its
confirmed Plan of Reorganization:
(A) "Meet and Confer" Phase
(1) Within 10 business days after the service of the Order
approving the Procedures, each holder of a Disputed Claim
will file with the Court and serve on Kmart a summary
explanation of the component parts of its claim and
attach all supporting documentation. The Statement will
contain appropriate contact information for the Claimant.
If a Claimant fails to file a Statement within the
allowed time, Kmart will submit an order to the
Bankruptcy Court without further notice allowing the
Disputed Claim at what it believes to be the allowable
amount for each Disputed Claim, and disallowing any
additional amounts sought;
(2) Within 30 days after Kmart's receipt of the Statement,
Kmart will meet and confer with each Claimant that
submits a Statement and attempt to settle each Disputed
Claim consensually; and
(3) If Kmart and a Claimant jointly determine that they are
unable to resolve consensually the Disputed Claim within
30 days, Kmart will file and serve the Claimant with a
response to the Statement within 10 business days. The
Kmart Response will contain Kmart's summary of its
objection to the Disputed Claim and attach supporting
documentation. The parties will then move on to the
Hearing Phase.
(B) Hearing Phase
(1) Hearing Dates
In the event that Kmart and the Claimant are unable to
resolve consensually any Disputed Claim, Kmart will then
seek to schedule one hour "mini-trials" on any Disputed
Claim on "off-omnibus" dates of the Court's choosing, to
be held on dates reasonably acceptable to the Claimants.
Kmart will promptly notify each Claimant of the
applicable mini-trial date; and
(2) Pleadings
The only pleadings that will be submitted in connection
with the proposed mini-trials are the Statement, the
Kmart Response, and any supporting affidavits. The
pleadings will be submitted to the Court no later than
seven calendar days before the date of the mini-trial
established by the Court. Direct witness testimony will
be by proffer only, with witnesses available in Court for
cross examination.
Mr. Goldman asserts that approval and implementation of the
Procedures will allow Kmart and the Claimant to reconcile the
Disputed Claims in a straightforward and streamlined manner,
increasing the likelihood of settlement for many of the Claims.
In the event that a trial is required, the Procedures provide an
efficient and economical process for resolving each of the
Disputed Claims on a mini-trial basis. Moreover, the Procedures
are consistent with the protections granted to the Claimants under
the Bankruptcy Code.
Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART
Holding Corporation) -- http://www.bluelight.com/-- is the
nation's second largest discount retailer and the third largest
merchandise retailer. Kmart Corporation currently operates
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam. The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474). Kmart emerged from chapter 11 protection on May 6,
2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts. The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection. (Kmart Bankruptcy News, Issue No. 85; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
LB COMMERCIAL: Fitch Junks Mortgage Certificate Classes G & H
-------------------------------------------------------------
Fitch Ratings downgrades LB Commercial Conduit Mortgage Trust II's
commercial pass-through certificates, series 1996-C2:
-- $21.8 million class F to 'B+' from 'BB';
-- $13.9 million class G to 'D' from 'CCC';
-- $4.5 million class H to 'D' from 'CC'.
The $15.9 million class E, currently rated 'A', is placed on
Rating Watch Negative -- RWN.
Fitch also affirms these classes:
-- $40.7 million class A at 'AAA';
-- $27.8 million class B at 'AAA';
-- Interest-only class IO at 'AAA';
-- $23.8 million class C certificates at 'AAA';
-- $15.9 million class D certificates at 'AA+'.
Class E has been placed on RWN due to anticipated interest
shortfalls from the recovery of servicer advances. Shortfalls
will begin in December and continue for three months. Fitch
expects the shortfalls to be repaid in March 2005, at which time
the RWN will be removed.
The ratings downgrades are the result of anticipated losses on
loans currently in special servicing. Fitch expects losses to
deplete the balance of class G and severely impact class H within
the next 30-60 days.
Currently, seven loans are in special servicing representing 15.5%
of the transaction. The largest loan in special servicing (2.20%)
is a 284-unit multifamily property in Grand Blanc, Michigan. The
loan transferred in December 2003 as the result of a monetary
default. The special servicer is currently in the process of
foreclosing on the property and recent appraised value indicates
losses upon liquidation.
The second-largest loan in special servicing (1.47%) is a real
estate owned -- REO -- hotel in Sioux City, Iowa. The property
was sold in December with a significant loss.
There are three additional limited service REO hotels with the
special servicer. These properties are expected to be liquidated
within 60 days and result in additional losses to the trust.
MARIAN COMMUNITY: Moody's Withdraws Ba3 Long-Term Bond Rating
-------------------------------------------------------------
Moody's Investors Service has withdrawn its Ba3 long-term bond
rating on Marian Community Hospital's Series 1997 Bonds issued
through the Scranton-Lackawanna Health & Welfare Authority,
Pennsylvania. The outstanding Series 1997 Bonds were defeased on
August 12, 2004. Marian Community Hospital has no other
outstanding debt.
MCI INC: S&P Assigns B+ Rating to $5.7 Billion Sr. Unsecured Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to global telecommunications carrier MCI, Inc. A
'B+' rating also was assigned to the company's aggregate
$5.7 billion of senior unsecured notes. The outlook is negative.
MCI is the second-largest U.S. provider of long-distance services
and one of the largest Internet backbone network operators. The
company is the successor to WorldCom, Inc., and emerged from
Chapter 11 bankruptcy protection on April 20, 2004. MCI had about
$5.9 billion debt and capital leases as of Sept. 30, 2004. The
interest rate on the three senior unsecured debt issues is subject
to a one-time reset based on the initial ratings received from
Standard & Poor's Ratings Services and Moody's Investors Service.
Based on Standard & Poor's 'B+' rating, the additional interest
margin on the three debt issues will be 0%, 1%, or 2%, depending
on Moody's ratings outcome. This range of interest rate outcomes
is encompassed in the current ratings. The debt issue ratings
also incorporate the ability under note covenants to incur up to
$1 billion of secured debt.
"Ratings on MCI reflect intense industry competition and declining
pricing for commodity voice and data services because of
overcapacity, exacerbated by technological and regulatory shifts,"
said Standard & Poor's credit analyst Eric Geil. Weak
profitability and negative free cash flow may continue for the
foreseeable future because of low double-digit percentage revenue
declines largely resulting from MCI's reduced emphasis on the
consumer segment, continuing pricing pressure on business customer
revenue, and higher costs compared with those of peers.
Commitment to a substantial dividend could undermine the company's
currently good financial cushion. Tempering factors include a
substantial, relatively stable base of large enterprise customers
and good near-term liquidity from a cash balance currently
approximating debt obligations.
METROMEDIA INTL: Ad Hoc Group Discloses 71% Preferred Stake
-----------------------------------------------------------
Metromedia International Group, Inc. (OTCBB: MTRME and PINK
SHEETS: MTRMP), the owner of interests in various communications
and media businesses in Russia and the Republic of Georgia, has
agreed to pay certain legal expenses, subject to a cap, incurred
by an ad hoc group of holders of the Company's preferred stock.
This group purports to own approximately 71% of the outstanding
shares of preferred stock and the Company anticipates undertaking
discussions with the group concerning the allocation of
consideration that would be paid to the holders of the Company's
preferred and common stock if the previously announced proposed
merger of the Company is consummated.
As previously announced, the non-binding letter of intent the
Company has executed in respect of the proposed merger assigns an
aggregate preliminary enterprise value to the Company of
$300 million. Of this amount, approximately $152.0 million would
be allocated to retirement, following the closing of the proposed
merger, of the Company's outstanding 10 1/2% Senior Discount Notes
due 2007. An additional amount, estimated to be in the range of
approximately $11.7 million to $16.5 million, would be used to
fulfill certain existing obligations to the Company's senior
executives. The contractual arrangements reflecting these
obligations are currently being finalized between the Company's
Board of Directors and the respective senior executives. The
remainder would be allocated between the holders of the Company's
preferred and common stock in a manner to be determined by the
Company's Board of Directors prior to the execution of a
definitive merger agreement.
Although no such determination of allocation has yet been made,
the Company's Board of Directors expects to consider in connection
with this matter, among other things and without limitation, the
historical trading price of the preferred stock and the common
stock, the fact that a merger of the Company is not a liquidation
pursuant to the terms of the Company's preferred stock, the net
present value of funds that the Company estimates would be
available for distribution to the holders of preferred stock and
common stock if the Company were liquidated in September 2007 (the
maturity date of the Senior Notes), certain prior transactions,
the perpetual nature of the Company's preferred stock, the fact
that an affirmative vote of the holders of a majority of the
Company's common stock is required to approve the proposed merger
and the fact that no vote by holders of the Company's preferred
stock is required in connection with the merger.
There can be no assurances that the proposed merger will take
place nor can any assurance be given with respect to the timing or
terms of any such transaction. There can also be no assurances
concerning the arrangement, content or outcomes of any discussions
that may be held with the aforementioned ad hoc group of preferred
stockholders or any other stakeholder group. Details of the terms
of a final agreement, if any, reached between the Company and the
other parties to the proposed merger will be disclosed upon
signing of definitive agreements. Details of contractual
commitments to the Company's senior executives will be disclosed
when finalized. The letter of intent the Company has executed in
respect of the proposed merger is non-binding.
About Metromedia International Group
Through its wholly owned subsidiaries, the Company owns interests
in communications businesses in Russia and the Republic of
Georgia. Since the first quarter of 2003, the Company has focused
its principal attentions on the continued development of its core
telephony businesses, and has substantially completed a program of
gradual divestiture of its non-core cable television and radio
broadcast businesses. The Company's core telephony businesses
include PeterStar, the leading competitive local exchange carrier
in St. Petersburg, Russia, and Magticom, the leading mobile
telephony operator in the Republic of Georgia.
At Sept. 30, 2004, Metromedia International's balance sheet showed
a $6,497,000 stockholders' deficit, compared to a $13,155,000
deficit at Dec. 31, 2003.
MICROTEC ENTERPRISES: Inks Recapitalization Plan with Securex
-------------------------------------------------------------
Microtec Enterprises, Inc., (TSX:EMI) disclosed the signing of a
non-binding recapitalization agreement with Securex Investments
Ltd and Securex Master Limited Partnership. This agreement aims
to refinance and regroup the shareholdings of Microtec and the
units of Securex Master Limited Partnership under a new entity.
This recapitalization plan is part of the restructuring plan,
which Microtec wishes to make by virtue of the Court order issued
on November 11, 2004, by the Superior Court of Quebec.
The Company plans to group under the same entity the 100,000
subscribers of Microtec with the 18,000 subscribers of Securex
Master. Also, the shareholders of Microtec would have the choice
to obtain $0.40 per share in cash or a participation in the new
entity estimated at $0.625 per share. The Company also intends to
maintain Microtec's current activities. This agreement grant to
Securex an exclusivity with respect to any recapitalization plan
but allows the Company to receive any proposal relating to an
asset transaction.
The Company said its restructuring plan received support from all
its employees and suppliers.
Solidly established in Canada, Microtec Enterprises Inc. (TSX:EMI)
provides a wide range of security and home automation services
that ensure the protection and well-being of its residential and
commercial customers. The Company is building on its strong
position in the industry by developing new products and services,
expanding its subscriber base, and creating strategic alliances.
* * *
As reported in the Troubled Company Reporter on Nov. 15, 2004,
Microtec Enterprises, Inc., has obtained an order from the
Superior Court of the Province of Quebec for protection under the
Companies' Creditors Arrangement Act in order to facilitate its
financial restructuring. The filing includes the Company and all
its subsidiaries.
The order provides the Company with additional time to finalize
and complete the recapitalization plan already being negotiated,
facilitate the proposal of an arrangement, including with its
lenders, and obtain adequate protection for directors and officers
of the Company in the course of their duties. The Court has
appointed Raymond Chabot, Inc., as monitor for the restructuring.
Requests for information intended to the monitor should be
directed to:
Jean Gagnon -- or -- Jean Chiasson
514-878-2691 418-647-3151
MID-CITY PARKING: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Mid-City Parking, Inc.
188 North Wells Street, Suite 200
Chicago, Illinois 60606
Tel: (312) 664-1400
Bankruptcy Case No.: 04-45177
Chapter 11 Petition Date: December 8, 2004
Court: Northern District of Illinois (Chicago)
Judge: Jacqueline P. Cox
Debtor's Counsel: Allen J Guon, Esq.
Shaw Gussis Fishman Glantz Wolfson & Tow
321 North Clark Street, Suite 800
Chicago, Illinois 60610
Tel: (312) 541-0151
Fax: (312) 980-3888
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
City of Chicago Parking Tax $325,516
Department of Revenue
22149 Network Place
Chicago, Illinois 60673
The Hartford $132,841
PO Box 2907
Hartford, Connecticut 06104
Lake Forest Bank & Trust $113,000
727 B. Bank Lane
Lake Forest, Illinois 60045
F.A.Y. Properties, Inc. Rent $90,680
Lake and Wells Account Rent $62,903
William O'Neill Rent $53,436
Teamsters Local Union 727 Health & Welfare $49,828
312 W. Huron Ltd Rent $45,171
Hershel Herendorf $38,000
Cook County Collector Parking Tax $33,000
McGann Associates, Inc. $29,438
327 Chicago LLC Rent $22,750
705 South Clark Street LLC $18,248
Mesirow Insurance Services $17,625
Frank - Chris $17,500
Building Partners
River North LP#1 Rent $14,941
Tin-Fuh Tseng $14,400
Teamsters Local Union 727 $13,166
Pension
David Gassman Rent $12,842
320 Erie Associates Rent $12,675
MULLIGAN MEDICAL: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Mulligan Medical Consultants, LLC
P.O. Box 70245
Houston, Texas 77270
Bankruptcy Case No.: 04-47506
Chapter 11 Petition Date: December 7, 2004
Court: Southern District of Texas (Houston)
Judge: Letitia Z. Clark
Debtor's Counsel: Lawrence J. Maun, Esq.
Lawrence J. Maun PC
9800 Richmond Avenue, Suite 520
Houston, TX 77042
Tel: 713-266-2560
Fax: 713-266-2568
Total Assets: $3,900,000
Total Debts: $2,660,035
The Debtor did not file a list of its 20-largest creditors.
MUZAK HOLDINGS: S&P Junks Ratings & Says Outlook is Negative
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Muzak
Holdings LLC and Muzak LLC, including the corporate credit ratings
to 'CCC+' from 'B-'.
At the same time, Standard & Poor's removed all of the ratings
from CreditWatch. The outlook is negative. Both Muzak Holdings
LLC and Muzak LLC are analyzed on a consolidated basis. The Fort
Mill, South Carolina-based provider of business music services had
about $426 million in consolidated debt and $157 million in
debt-like preferred stock at Sept. 30, 2004.
"The downgrade and negative outlook are due to the expectation
that Muzak's earnings weakness will be more significant and drawn
out than expected, which will extend its discretionary cash flow
losses and keep its credit measures and liquidity under pressure,"
according to Standard & Poor's credit analyst Steve Wilkinson. He
continued, "Muzak continues to struggle to stem its net cash
usage, which persists due to various cost pressures, the upfront
cash needs of its business model, aggressive growth strategy, and
its substantial debt service."
Significant execution problems with a major program to centralize
its operations, and higher licensing fees are impairing operating
results, depressing third quarter EBITDA (before for restructuring
and impairment charges) by 9.4%, despite a 4.0% revenue gain.
These factors will continue to hamper profitability and Muzak now
believes that restructuring benefits will be deferred from the
fourth quarter of 2004 to at least mid-2005. Profitability and
cash flow could be further undermined if reorganization
disruptions lead to an increase in customer churn. Muzak has very
limited pricing power to offset cost increases due to the limited
demand and non-critical nature of its offerings and competitive
alternatives, despite its leading position in its niches for
business music services.
NALCO COMPANY: Fitch Junks Senior Subordinated & Discount Notes
---------------------------------------------------------------
Fitch Ratings has initiated ratings on Nalco Company's senior
unsecured debt at 'B'. Fitch has also assigned a rating to
Nalco's senior secured credit facility at 'B+' and assigned a
'CCC+' to Nalco's senior subordinated notes. The senior discount
notes held at Nalco Finance Holdings LLC are rated 'CCC+'.
The Rating Outlook is Stable. The ratings were initiated by Fitch
as a service to users of our ratings and are based on public
information.
The Stable Rating Outlook reflects the improvement in Nalco's
businesses and the strengthening of the economies around the
world. Margins have declined slightly in 2004 due to higher raw
material and transportation costs but are expected to strengthen
as price increases take effect and as the market fundamentals
strengthen. Fitch remains moderately concerned about the
sustainability of the economic recovery with increasing energy
costs and the overall effect of high raw material prices on
demand.
As of Sept. 30, 2004, Nalco's balance sheet debt including the
accounts receivable program balance totaled $3.5 billion. The
company had a total debt-to-EBITDA of 7.4 times, including the
senior discount notes for the latest 12 months ended
Sept. 30, 2004. EBITDAR to interest incurred plus rental expense
was 1.9x for the same period. Balance sheet debt consists of
$1.32 billion in senior secured term loans, $913 million in senior
unsecured notes, $713 million in senior subordinated notes, and
$477.8 million in senior discount notes. In addition, the
company's $100 million A/R program had a balance of $47.6 million
at the end of the third quarter.
Nalco has a very modest maturity schedule. Nalco's first
significant maturity is the term loan A due in November 2009.
This term loan had approximately $225 million outstanding as of
Sept. 30, 2004. Nalco is expected to have financial flexibility
to repay and replace such debt maturities given Fitch's base case
projections for operating cash flow, access to the debt market,
and adequate availability under its credit facility.
The ratings are supported by Nalco's leading market position,
broad product offerings, geographical reach, and strong customer
retention. Concerns include a highly leveraged capital structure,
and the majority of assets are intangibles. Growth rates in the
water treatment segment are modest and tend to track gross
domestic product; however, growth rates vary by end-use segment
and region. Fitch estimates growth in North America in 2005 to be
close to 2%. Emerging markets such as Latin America Eastern
Europe and the Pacific region are likely to grow at 2.5%-5% per
year. Therefore, Nalco is likely to realize more volume growth in
emerging markets. Fitch estimates overall sales growth for Nalco
in 2005 to be close to 4%.
Nalco is a leading global provider of integrated water treatment
and process improvement services, chemicals, and equipment
programs for industrial and institutional applications. Nalco's
products and services are typically used in water treatment
applications to prevent corrosion, contamination, and the buildup
of harmful deposits, or in production processes to enhance process
efficiency and improve the customers' end products.
The company generated EBITDA of $453 million on $2.76 billion in
sales in 2003:
* North America accounts for 51% of sales,
* Europe, Africa, and the Middle East accounts for 31%,
* the Pacific region accounts for 11%, and
* Latin America accounts for 7%.
They are organized into three divisions, which correspond to the
end markets they serve:
* industrial and institutional services,
* energy services, and
* paper services.
NISTAR: Fitch Upgrades Ratings on Class B-5 Issue to B+ from B
--------------------------------------------------------------
Fitch rates NISTAR series 1999-2:
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AAA';
-- Class B-2 is affirmed at 'AAA';
-- Class B-3 upgraded to 'AA+' from 'AA-';
-- Class B-4 upgraded to 'A' from 'BB+';
-- Class B-5 upgraded to 'B+' from 'B'.
The upgrades reflect a substantial increase in credit enhancement
relative to future loss expectations and affect $3,195,533 of
outstanding certificates. The affirmations reflect credit
enhancement consistent with future loss expectations and affect
$20,916,693 of outstanding certificates.
The mortgage pool consists of conventional, 30- and 15-year
fixed-rate mortgages secured by one- to four-family residential
properties.
As of the November 2004 distribution date, the credit enhancement
levels for all classes are at least four times their original
levels.
The credit enhancement levels for classes:
* A 49.32%,
* B-1 24.82%,
* B-2 15.10%,
* B-3 7.89%,
* B-4 3.93%, and
* B-5 2.13%
Currently, the deal is more than five years seasoned and 88% of
the original collateral has paid off. Cumulative losses equal
0.13% (total loss as a percentage of the original pool balance)
and 4.40% of the loans in the deal are currently delinquent.
Further collateral performance and credit enhancement statistics
are available on the Fitch Ratings Web site at
http://www.fitchratings.com/
NORTEL NETWORKS: S&P Places B- Rating on CreditWatch Negative
-------------------------------------------------------------
Standard & Poor's Ratings Services placed its B-/Watch Developing
credit rating on Nortel Networks Lease Pass-Through Trust
certificates series 2001-1 on CreditWatch with negative
implications.
The rating on the pass-through trust certificates is dependent
upon the ratings assigned to Nortel Networks Ltd. and ZC Specialty
Insurance Co. This CreditWatch revision follows the Dec. 3, 2004,
withdrawal of the ratings assigned to ZC Specialty Insurance Co.
Previously, the rating had a CreditWatch developing status due to
the CreditWatch developing status on the rating assigned to
Nortel.
The pass-through trust certificates are collateralized by two
notes that are secured by five single-tenant, office/R&D buildings
that are leased to Nortel ('B-'). Nortel guarantees the payment
and performance of all obligations of the tenant under the leases.
The lease payments do not fully amortize the notes. A surety bond
from ZC Specialty Insurance Co. insures the balloon amount.
The notes mature in August 2016, at which time a final principal
payment of $74.7 million is due. If this amount is not repaid,
the indenture trustee can obtain payment from the surety, provided
certain conditions are met.
The notes will remain on CreditWatch while Standard & Poor's
examines the impact of the withdrawal of the ratings on ZC
Specialty Insurance Co.
OWENS CORNING: Wants to Sell Valparaiso Property for $325,000
-------------------------------------------------------------
According to J. Kate Stickles, Esq., at Saul Ewing, in Wilmington,
Delaware, Owens Corning and its debtor-affiliates own real
property located at 2552 Industrial Drive, in Valparaiso, Indiana,
comprised of 40.49 acres of undeveloped land. The Debtors owned
the Property since 1970, when it was purchased for the purpose of
constructing an office facility. The office facility was never
constructed and the Property remains vacant.
Since 1984, the Debtors leased the Property on an annual basis to
a farmer who uses the Property to grow crops. The Debtors no
longer intend to build an office facility on the Property, and the
Debtors do not need the Property for their operations.
Accordingly, the Debtors engaged in efforts to sell the Property.
The Property was first placed on the market in March 1995 when it
was listed for a $480,000 sale price. The Debtors listed the
Property with The Staubach Company and Coldwell Banker Commercial
NRT, their real estate brokers. In 2000, the sale price was
reduced to $350,000, and in 2003, to $295,000.
The Debtors also marketed the Property through the City of
Valparaiso Web site, the Northwest Indiana Forum, and several
economic development Web sites. The Property has been appraised
at a value of $285,000. A primary objection that potential buyers
have had to the Property since it was listed is that the Property
contains a 100-foot easement, which is shared by three separate
property owners.
Since November 2003, three interested parties have made offers on
the Property. One interested party rescinded its offer and the
remaining two offers were unacceptable to the Debtors. These
offers ranged from $275,000 to $297,000.
The Debtors later received an offer from Shipshehanna, LLC, to
purchase the Property for $325,000. The Debtors believe that the
offer was fair and reasonable when compared to prior offers.
Accordingly, the Debtors proceeded to enter into a purchase and
sale agreement with Shipshehanna.
The principal terms of the Sale Agreement are:
(a) Shipshehanna will make a $10,000 initial deposit, which
will be refundable under certain circumstances;
(b) The Agreement provides for an "Investigation Period,"
commencing on the date the escrow holder has received the
executed original Agreement, and continuing for 60 days.
During the Investigation Period, Shipshehanna is entitled
to investigate certain matters regarding the Property,
including:
* the Property's zoning, any applicable use permits or any
other governmental rules and regulations affecting the
use of the Property;
* documents regarding environmental assessment data, real
property tax bills, soil and building reports and
engineering data; and
* the Property's environmental condition.
The Sale Agreement contains provisions to resolve any
objections by Shipshehanna connection with certain
matters;
(c) During the Investigation Period, Shipshehanna is entitled
to review the title commitment and survey to be obtained
with respect to the Property, and is required to either
approve the commitment or notify the Debtors of any items
which are objectionable to them;
(d) Shipshehanna will accept the Property on an "as is"
condition, and the Debtors have no further obligations
regarding the condition of the Property;
(e) Closing under the Agreement will be held within seven days
after the conditions set forth in the Agreement have been
satisfied, but no later than February 26, 2005, unless
extended by mutual agreement between the parties; and
(f) The Debtors will pay Staubach and Coldwell a brokerage
commission. A portion of Staubach's commission will be
paid to Luther Williams, Shipshehanna's broker.
Ms. Stickles relates that there are prepetition real property
taxes owed with respect to the Property, totaling $8,973 in
principal, plus interest, penalties and other charges totaling
$1,600. In addition, valid liens have been or may be asserted
against the Property or, alternatively, are likely entitled to
"priority" status under Section 507(a) of the Bankruptcy Code.
The Debtors seek the Court's authority to:
(a) sell the Valparaiso Property, free and clear of all liens,
claims, encumbrances and interests, with any liens,
claims, encumbrances and interests to attach to the
proceeds of sale; and
(b) pay the Property Taxes at closing from the proceeds of
sale.
The Debtors believe that Shipshehanna is financially capable of
consummating the transaction. Ms. Stickles adds that the
Agreement is the result of arm's-length, good faith negotiations
between the Debtors and Shipshehanna. Shipshehanna is not an
"insider" of the Debtors within the meaning of Section 101(31) and
is not controlled by, or acting on behalf of, any insider of the
Debtors.
Headquartered in Toledo, Ohio, Owens Corning --
http://www.owenscorning.com/-- manufactures fiberglass
insulation, roofing materials, vinyl windows and siding, patio
doors, rain gutters and downspouts. The Company filed for chapter
11 protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837).
Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom,
represents the Debtors in their restructuring efforts. At
Sept. 30, 2004, the Company's balance sheet shows $7.5 billion in
assets and a $4.2 billion stockholders' deficit. The company
reported $132 million of net income in the nine-month period
ending Sept. 30, 2004. (Owens Corning Bankruptcy News, Issue No.
89; Bankruptcy Creditors' Service, Inc., 215/945-7000)
PACIFICARE HEALTH: Fitch Assigns BB+ Rating to New $825M Facility
-----------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' bank loan rating to PacifiCare
Health System's Inc. new credit facility. The Rating Outlook is
Stable.
PacifiCare intends to use the new facility to refinance its
existing $150 term loan and fund the approximate $502 million
acquisition of American Medical Security Group. Fitch affirmed
all PacifiCare's ratings on Sept. 15, 2004, after the company
announced its intention to acquire all of the outstanding shares
of American Medical Security Group, Inc. -- AMS, a publicly traded
health insurer based in Green Bay, Wisconsin.
The new credit facility of $825 million will consist of a
$200 million term loan A maturing in five years, a $425 million
term loan B maturing in six years, and a $200 million revolver,
which is not expected to be drawn upon at this time. After the
close of the AMS transaction, PacifiCare will have approximately
$1.09 billion of debt consisting of $625 million of term loans,
$325 million of senior notes, and $135 million of subordinated
convertible debentures.
On a pro forma basis, PacifiCare's financial leverage (as defined
by the ratio of total debt to capital) is expected to increase to
approximately 35%. Fitch expects PacifiCare to reduce outstanding
debt following the acquisition and decrease financial leverage to
under 30% by year-end 2005. Fitch expects EBIT/interest coverage
ratios to remain above 10 times.
PacifiCare's ratings continue to reflect it's well established
competitive position in several major markets, improved outlook
for the Medicare Advantage program following the passage of the
Medicare Modernization Act in 2003, and the positive steps taken
over the past two years to improve profitability and strengthen
its balance sheet. While Fitch believes that improvements in
margins in 2005 will be modest compared with 2004, profitability
is expected to improve driven mainly by expanding membership
growth in the senior and small group and individual segments.
The ratings also consider PacifiCare's large Medicare exposure,
Fitch's outlook for increased commercial pricing competition in
2005, and the challenges associated with rising medical costs and
evolving regulatory environment.
PacifiCare Health Systems, Inc.:
-- Bank loan rating assigned 'BB+' with a Stable Outlook.
PACIFIC LUMBER: Weak Performance Cues S&P to Junk Ratings
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Scotia, California-based Pacific Lumber Co. to 'CCC+'
from 'B-'.
"The rating action reflects the company's continued weak
performance and concerns about its very low level of liquidity,
which provides only a small cushion in the event of any operating
disruptions or other adverse developments," said Standard & Poor's
credit analyst Dominick D'Ascoli. The outlook is negative.
The ratings on Pacific Lumber reflect its modest-size operations,
narrow product mix, industry cyclicality, and reliance for logs on
Scotia Pacific, its highly leveraged, bankruptcy-remote, special-
purpose subsidiary. The ratings on Pacific Lumber do not assume
any support from Scotia Pacific or from Pacific Lumber's parent,
MAXXAM, Inc.
Pacific Lumber's performance on a stand-alone basis (excluding
subsidiary Scotia Pacific Co. LLC) has been poor, with negative
EBITDA generated in each of the first three quarters of 2004.
This occurred despite above-average volumes and average to
above-average prices on Redwood and Douglas fir common grades for
the first three quarters of 2004, compared with the past five
years, calling into question the long-term viability of Pacific
Lumber. To improve performance, the company recently built a
sawmill, which should reduce costs and result in other synergies
that Standard & Poor's estimates could save between $10 million
and $20 million annually.
Negative EBITDA, along with capital expenditures associated with
the new sawmill, resulted in negative free cash flow during the
first nine months of 2004 and reduced liquidity to very low
levels. The company's low liquidity is a key rating factor and
results in short term concerns that outweigh the potential
intermediate benefit from the new sawmill.
Pacific Lumber's primary business is the production of lumber from
logs purchased at market prices, primarily from Scotia Pacific,
which owns and manages timberlands and whose only customer is
Pacific Lumber.
PENN TRAFFIC: Buys Two Peter's Supermarkets in Syracuse
-------------------------------------------------------
P&C's corporate parent, The Penn Traffic Company (OTC: PNFTQ.PK),
reported that the U.S. Bankruptcy Court for the Southern District
of New York in White Plains approved the Company's purchase of two
supermarkets from Peter's Groceries. Penn Traffic will convert
these two stores to P&C's.
"Buying the Peter's supermarkets at these excellent locations
demonstrates both the underlying strength of our core operations
as we emerge from reorganization and our long-term commitment to
be the supermarket of choice in Syracuse," said Bob Chapman,
President and Chief Executive Officer of The Penn Traffic Company.
"This strategic acquisition clearly makes sense for P&C and Penn
Traffic at this time."
Peter's will close its two supermarkets at 620 Nottingham Road
near Syracuse University and in the Shop City Mall on Teall Avenue
near Sunnycrest Park at 7:00 PM on Friday, December 10, and P&C
will reopen them as P&C's on Tuesday, December 14 at 8:00 AM.
"We intend to build on the loyal customer base in these stores by
offering a broader selection of high-quality perishables and
grocery products with attentive customer service at competitive
prices," said Mr. Chapman. "By hiring most of Peter's associates,
we will continue to provide excellent customer service in these
stores and maintain the loyal long-term customer base established
by John and Joe Peter and the hard work of Peter's employees."
With the acquisition, Penn Traffic will operate 109 supermarkets,
including 22 in the Syracuse area. Penn Traffic has been operating
under chapter 11 of the federal bankruptcy code since May 2003.
In addition to the Peter's acquisition, Penn Traffic has remodeled
nine stores over the past twelve months and five additional store
remodels are in progress.
Headquartered in Rye, New York, The Penn Traffic Company
distributes through retail and wholesale outlets. The Group
through its supermarkets carries on the retail and wholesale
distribution of food, franchise supermarkets and independent
wholesale accounts. The Company filed for chapter 11 protection
on May 30, 2003 (Bankr. S.D.N.Y. Case No. 03-22945). Kelley Ann
Cornish, Esq., at Paul Weiss Rifkind Wharton & Garrison, represent
the Debtors in their restructuring efforts. When the grocer filed
for protection from their creditors, they listed $736,532,614 in
total assets and $736,532,610 in total debts.
PRINCESS GROUP: Case Summary & 3 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Princess Group, Inc.
aka Get Fit Day Spa
915 Skyline Drive
Arlington, Texas 76011
Bankruptcy Case No.: 04-91816
Type of Business: The Company operates a salon, spa and gift shop.
See http://www.getfitdayspa.com/
Chapter 11 Petition Date: December 6, 2004
Court: Northern District of Texas (Ft. Worth)
Judge: Russell F. Nelms
Debtor's Counsel: Frank R. Jelinek, III, Esq.
Frank R. Jelinek, Inc.
801 East Abram, Suite 102
Arlington, Texas 76010
Tel: (817) 461-1100
Fax: (817) 461-1109
Total Assets: $1,526,000
Total Debts: $671,339
Debtor's 3 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Betsy Price State, County, $36,708
Tax Assessor/Collector City & School ad
100 East Weatherford Street valorem taxes for
Fort Worth, Texas 76196 the real property
owned by debtor
Betsy Price State, County, $4,941
Tax Assessor/Collector City & School District
100 East Weatherford Street ad valorem taxes on
Fort Worth, Texas 76196 personal property.
Linebarger, Goggan, Blair & Attorney's fees on Unknown
Sampson unpaid ad valorem
Oil & Gas Building, Suite 100 tax claim
309 West 7th Street
Fort Worth, Texas 76102
PROVIDIAN GATEWAY: Fitch Places BB Rating on $64.8M Class E Notes
-----------------------------------------------------------------
Providian Gateway Owner Trust, series 2004-E:
-- $327.2 million class A floating-rate asset-backed notes,
'AAA';
-- $49.4 million class B floating-rate asset-backed notes
'AA';
-- $61.7 million class C floating-rate asset-backed notes
'A';
-- $61.7 million class D floating-rate asset-backed notes
'BBB';
-- $64.8 million class E floating-rate asset-backed notes
'BB';
-- $52.5 million class F notes floating-rate asset-backed
notes are not rated.
The class E and class F notes are unoffered and will be retained
by Providian. Class A and B noteholders will receive monthly
interest payments of 1-month LIBOR (1mL) + 0.13% and 1mL+0.28% per
annum, respectively, and class C and D noteholders will receive
monthly interest payments of 1mL+0.58% and 1mL+0.93% per annum
respectively. The coupon on the class E notes is 1mL+3.50%; the
class F notes have a 0% coupon. All noteholders will receive
monthly interest payments paid on the 15th business day of each
month or the next business day, commencing Dec. 15, 2004.
The ratings reflect the series certificate's interest in the
assets of the master trust, the quality of the receivables, the
credit enhancement provided, the sound legal and cash flow
structures, and the servicing capabilities provided by Providian
National Bank.
Credit enhancement for the 'AAA' rated class A notes is provided
through subordination of class B, class C, class D, class E and
class F notes totaling 47%. The 'AA' rated class B notes draw on
the 39% subordination of class C, class D, class E and class F
notes as credit enhancement. The 'A' rated class C notes receive
credit enhancement from 29% of class D, class E and class F notes.
Class D notes are enhanced by 19% of subordinate class E and class
F notes plus a spread account established for the benefit of class
D and class E notes.
The ratings address the likelihood of investors receiving timely
interest payments in accordance with the terms of the underlying
documents and full repayment of principal by the Nov. 15, 2011,
legal final termination date. They do not address the likelihood
of principal repayment by the expected note payment date of Nov.
17, 2007 for class A, B, C and D notes.
PROVIDIAN GATEWAY: Fitch Puts BB Rating on $35.8M Class E Notes
---------------------------------------------------------------
Providian Gateway Owner Trust, series 2004-F:
-- $236.2 million class A fixed-rate asset-backed notes
'AAA';
-- $27.4 million class B fixed-rate asset-backed notes 'AA';
-- $48.5 million class C fixed-rate asset-backed notes 'A';
-- $37.9 million class D fixed-rate asset-backed notes 'BBB';
-- $35.8 million class E fixed-rate asset-backed notes 'BB';
-- $35.8 million class F fixed-rate asset-backed notes are
not rated.
The class E and class F notes are unoffered and will be retained
by Providian. Class A and B noteholders will receive monthly
interest payments of 3.65% and 3.80% per annum, respectively, and
class C and D noteholders will receive monthly interest payments
of 4.05% and 4.45% per annum respectively. The coupon on the
class E notes is 7%; the class F notes have a 0% coupon. All
noteholders will receive monthly interest payments paid on the
15th business day of each month or the next business day,
commencing Dec. 15, 2004.
The ratings reflect the series certificate's interest in the
assets of the master trust, the quality of the receivables, the
credit enhancement provided, the sound legal and cash flow
structures, and the servicing capabilities provided by Providian
National Bank.
Credit enhancement for the 'AAA' rated class A notes is provided
through subordination of class B, class C, class D, class E and
class F notes totaling 44%. The 'AA' rated class B notes draw on
the 37.5% subordination of class C, class D, class E and class F
notes as credit enhancement. The 'A' rated class C notes receive
credit enhancement from 26% of class D, class E and class F notes.
Class D notes are enhanced by 17% of subordinate class E and class
F notes plus a spread account established for the benefit of class
D and class E notes.
The ratings address the likelihood of investors receiving timely
interest payments in accordance with the terms of the underlying
documents and full repayment of principal by the Nov. 15, 2011,
legal final termination date. They do not address the likelihood
of principal repayment by the expected note payment date of Nov.
17, 2007, for class A, B, C and D notes.
PROVIDIAN GATEWAY: Moody's Puts Ba2 Rating on $35.8M Class E Notes
------------------------------------------------------------------
Moody's Investors Service assigned ratings of Aaa, Aa2, A2, Baa2
and Ba2 to the Class A, Class B, Class C, Class D and Class E
Notes, respectively, issued from the Providian Gateway Owner Trust
2004-F.
Issuer: Providian Gateway Owner Trust 2004-F
* $236,145,000 Fixed Rate Class A Asset Backed Notes, Series
2004-F, Rated Aaa
* $27,410,000 Fixed Rate Class B Asset Backed Notes, Series
2004-F, Rated Aa2
* $48,494,000 Fixed Rate Class C Asset Backed Notes, Series
2004-F, Rated A2
* $37,951,000 Fixed Rate Class D Asset Backed Notes, Series
2004-F, Rated Baa2
* $35,843,000 Fixed Rate Class E Asset Backed Notes, Series
2004-F, Rated Ba2
The Class A, Class B, Class C, Class D and Class E notes have a
fixed rate coupon payable monthly. These notes have an expected
principal payment date of November 15, 2007, and a legal maturity
date of November 15, 2011. The Class E certificates will
initially be retained by Providian National Bank -- PNB.
Each class of notes benefits from subordination provided by the
more junior tranches. The Class D and Class E notes also benefit
from a segregated spread account. Moody's rating addresses the
likelihood of timely payment of interest and the return of
principal by the legal maturity date.
The assets of the trust consist of credit card receivables that
were originated by PNB, which also services the portfolio. PNB's
principal executive offices are located in Tilton, New Hampshire.
PNB's long-term bank deposits are rated Ba2, its other senior
obligations are rated Ba3, and its bank financial strength rating
is D. PNB is the ninth largest credit card issuer in the United
States.
RELIANT ENERGY: S&P Rates Planned $1.1B Sr. Secured Bonds at B+
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' rating to
Reliant Energy Inc.'s proposed $1.1 billion floating or fixed rate
senior secured bonds maturing in 2010 and 2014, respectively, and
its proposed $1.1 billion term loan B maturing in 2010. At the
same time, it assigned its '3' recovery rating to all of the
issues. The '3' recovery rating indicates that the lenders can
expect to receive meaningful recovery of principal (50%-80%). The
outlook is stable.
The rating action is driven by several factors, including the
effect of the about $4 billion proposed refinancing which
simplifies Reliant's financing structure. The proposed
refinancing evens out Reliant's maturity schedule by alleviating
the large bullet payment that is due in March 2007. It also
removes the restrictive covenants at Orion Power Holdings Inc.
(B+/Stable/--) allowing monies to flow freely between entities.
Standard & Poor's bases its ratings on the company's consolidated
credit profile, which incorporates the credit quality of Reliant's
wholesale and retail businesses. The wholesale operation is
characterized by high business risk including regulatory
uncertainty and volatile cash flows. Reliant's retail business
tempers the more volatile cash flows from the unregulated power
segment. Reliant provides electricity and energy services to more
than 1.8 million retail customers in Texas, serves commercial and
industrial customers in the PJM Interconnection region, and
provides electricity to wholesale customers in a number of regions
of the U.S. through a portfolio of about 19,000 MW.
The stable outlook reflects the expectation that Reliant's
financial ratios will continue to improve in 2005 and beyond as a
result of debt reduction and cost savings.
Reliant expects to use the proceeds from any additional asset
sales (after a $300 million basket) to reduce debt leverage. As of
Sept. 30, 2004, Reliant had $6.3 billion of outstanding debt,
including off-balance-sheet debt and debt equivalents.
SCHUFF INTL: Soliciting Consents for 10-1/2% Sr. Notes Due 2008
---------------------------------------------------------------
Schuff International, Inc. (AMEX:SHF) commenced a consent
solicitation relating to its 10-1/2% Senior Notes due June 2008.
The record date for the consent solicitation is November 11, 2004.
As of the record date, there was approximately $85 million
aggregate principal amount of the Notes outstanding.
Pursuant to the consent solicitation, Schuff is requesting that
Holders of the Notes consent to a proposed amendment to the
Indenture relating to the Notes that would eliminate Schuff's
obligation under the Indenture to publicly file financial reports
with the Securities and Exchange Commission if Schuff is no longer
required to file these reports under federal securities laws and
regulations. If the proposed amendment is approved, Schuff would
no longer be required to publicly file financial reports with the
SEC but would continue to make available to the Holders of the
Notes financial information substantially similar to the financial
reports it has provided since the issuance of the Notes. The
consent of the Holders of at least a majority in aggregate
principal amount of the outstanding Notes is required pursuant to
the terms of the Indenture for the proposed amendment to be
approved and binding on the Holders or any subsequent Holder of
the Notes.
If the requisite consent is received, Schuff will pay to each
consenting Holder a consent fee of $0.25 per $100 principal amount
of Notes owned by that Holder as of the record date for which
consent is given. The consent solicitation expires at 5:00 p.m.,
New York City time, on Monday, December 20, 2004, unless
terminated or extended by Schuff in its sole discretion. At
Schuff's option, if the requisite consents are obtained prior to
the expiration date, the proposed amendment will become effective
promptly following receipt of the requisite consents.
Accordingly, Holders of Notes that do not deliver their consents
on or before the date on which the requisite consents have been
obtained may not receive the consent fee. Holders of Notes that
do not deliver their consents on or before the expiration date
will not be eligible to receive the consent fee.
This announcement is not an offer to purchase, a solicitation of
an offer to purchase, or a solicitation of consent with respect to
any securities. The consent solicitation is being made solely by
the Consent Solicitation Statement of Schuff International, Inc.
dated December 8, 2004.
Guggenheim Capital Markets, LLC, is serving as the Solicitation
Agent in connection with the consent solicitation. Any questions
regarding the terms of the consent solicitation should be directed
to the Solicitation Agent at 212-381-7500, Attention: Joe
Bencivenga. Global Bondholder Services Corporation is serving as
Tabulation Agent and Information Agent in connection with the
consent solicitation. Questions regarding the delivery procedures
for the consents and request for additional copies of the Consent
Solicitation Statement or related documents should be directed to
the Information Agent at 212-430-3774.
About the Company
Schuff International, Inc., is a family of steel fabrication and
erection companies providing a fully integrated range of steel
construction services, including design engineering, detailing,
joist manufacturing, fabrication and erection, and project
management expertise. The company has multi-state operations
primarily focused in the U.S. Sunbelt.
* * *
As reported in the Troubled Company Reporter on June 21, 2004,
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured debt ratings on Schuff International, Inc.,
to 'CCC' from 'B-'. The outlook is negative.
STONE ENERGY: Moody's Rates Proposed $150M Sr. Sub. Notes at B2
---------------------------------------------------------------
Moody's:
* affirmed the Ba3 senior implied rating for Stone Energy Corp,
* assigned a B2 to the company's proposed $150 million senior
subordinated notes offering, and
* changed the rating outlook to negative from stable at this
time.
The change in outlook reflects:
(1) Moody's calculation that 2004 finding and development --
F&D -- costs will be at least $27/boe/boe ($4.50/mcfe), or
more than double Stone's three year average and single year
2003 unit reserve replacement costs;
(2) increased leverage (Debt/PD reserves) to a new high for
Stone of $4.74/PD boe, pro forma for its exercise of
preferential rights to buy additional working interests in
properties sold by Anadarko Petroleum; and
(3) declining organic production and reserve replacement trends
for the first nine months of 2004.
In spite of strong upcycle pre-capex cash flows (in line-with
sector trends) and Stone's efforts to diversify its reserve base
and lengthen its PD reserve life, the change in outlook from
stable to negative is due to sharply eroded capital productivity
in 2004 and a need to see substantial improvement in that metric.
Stone has had considerable difficulty sustaining production and
reserve levels in recent year, in spite of spending roughly
$1.5 billion for reserve replacement since 2001. Stone's
quarterly production trends for the past year have already been
flat to slightly down compared with early 2001 levels, a time that
has also included three acquistions. The current reserve
replacement cost -- RRC -- trend needs to be reduced to
supportable levels over time. Moody's will review Stone's
year-end results, particularly FAS 69, to confirm the company's
reserve replacement mix and our RRC estimate for 2004.
Moving the outlook back to stable would be dependent upon the
company beginning to generate solid sequential quarter production
trends that are commensurate with capital spending levels, an
equity offering, and RRC's for 2005 being substantially lower than
2004 levels. Downward ratings pressure could result from
continuing negative production trends, sustained unsupportable RRC
trends, and if leverage does not improve or erodes further.
The ratings will also consider future acquisitions and whether
they are suffiently funded with a combination of cash flow and new
common equity and if they are viewed to add strength to the
company's property base. A material acquisition that is largely
equity funded and has a significantly more durable PD reserve life
than Stone's could also solidify the ratings.
As the new management team pursues its stated strategy of entering
the higher front-end cost, higher risk deepwater GOM, Stone's risk
profile could increase, especially if this endeavor is largely
debt funded. However, thus far the company has been able to
temper this risk by taking comparatively small positions in
prospects run by larger operators with considerable experience in
deep water exploration, development, and production.
The ratings are supported by:
(1) Stone's seasoned, highly skilled management;
(2) strong commodity price support for strong pre-capex cash
flows into 2005;
(3) a high percentage of operated properties;
(4) sound balance sheet leverage and ample liquidity;
(5) the new acquisition of increased working interest from
Anadarko on existing properties that will add to production
and provide the company with new drilling opportunities;
and
(6) financial discipline of selectively pursuing leveraged
acquisitions for growth.
Stone's ratings reflect:
(1) lagging productivity of capital evidenced by rising;
(2) a high concentration of (90% +) reserves located in the
short-lived Gulf Coast -- GC -- and Gulf of Mexico -- GOM
-- regions, which compounds the challenges of growing
reserves and production;
(3) high full cycle costs which consume a greater portion of
cash flows for reserve replacement; and
(4) over $400 million of cash flow needed to convert
non-producing reserves to the producing stage.
The proceeds from the new notes offering will be used to repay
borrowings under the company's revolver. The company recently
funded $106 million to exercise its preferential rights on
multiple South Timbalier Blocks in the Gulf of Mexico sold y
Anadarko.
Moody's ratings for Stone Energy are as follows:
* Assigned a B2 -- Stone's proposed $150 million senior sub.
notes offering
* Affirmed at B2 -- Stone's 8.25% senior sub. notes due 2011
* Affirmed at Ba3 -- Stone's senior implied rating
* Affirmed at B1 -- Stone's senior unsecured issuer rating
The senior subordinated notes are two notches below the senior
implied rating to reflect their position in the capital structure.
The notes are not guaranteed by Stone's subsidiaries.
Stone Energy Corporation is headquartered in Lafayette, Louisiana.
STONE ENERGY: S&P Puts B+ Rating on $150M Sr. Subordinated Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed Stone Energy Corp.'s
'BB' ratings and issued its 'B+' rating to the company's
$150 million, new 10-year senior subordinated notes. The outlook
on Stone remains negative. Proceeds from the notes will refinance
funds recently drawn under the company's credit facility used to
acquire additional working interests from Anadarko Petroleum Corp.
through exercising preferential rights on several offshore blocks
in South Timbalier (Gulf of Mexico shelf).
Pro forma for the transactions, Lafayette, Louisiana-based Stone
will have about $481 million in long-term debt.
Stone is expected to be acquisitive as it attempts to expand its
reserve base, extend its reserve life, and broaden its operations.
"The negative outlook reflects the potential operating risks and
increased debt leverage associated with the company's outlined
strategy that could negatively affect credit quality," said
Standard & Poor's credit analyst Jeffrey B. Morrison. "However,
to the extent that Stone benefits from robust pricing and can
execute its growth initiatives in a manner that does not
materially weaken credit measures or significantly deteriorate its
capital structure, the outlook could be revised to stable," he
continued.
SUNSTRAND DEVELOPMENT: Voluntary Chapter 11 Case Summary
--------------------------------------------------------
Debtor: Sunstrand Development Corporation
1616 Berkley Street
Elgin, Illinois 60123
Bankruptcy Case No.: 04-45020
Chapter 11 Petition Date: December 7, 2004
Court: Northern District of Illinois (Chicago)
Judge: Carol A. Doyle
Debtor's Counsel: Michael J. Chmiel, Esq.
Chmiel & Matuszewich
100 South Main Street, Suite 300
Crystal Lake, Illinois 60014
Tel: (815) 459-3120
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20 Largest Unsecured
Creditors.
TREVOR BOYCE: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Trevor Boyce Associates, Inc.
dba Can-Am Rubber Company
aka Trevor Boyce and Associates, Inc.
P.O. Box 367
Dayton, Texas 77535
Bankruptcy Case No.: 04-11763
Type of Business: The Debtor manufactures sheet rubber linings.
See http://www.trevorboyce.com/
Chapter 11 Petition Date: December 6, 2004
Court: Eastern District of Texas (Beaumont)
Judge: Bill Parker
Debtor's Counsel: Floyd A. Landrey, Esq.
Moore Landrey, L.L.P.
390 Park Street, Suite 500
Beaumont, TX 77701
Tel: 409-835-3891
Fax: 409-835-2707
Total Assets: $1,800,000
Total Debts: $394,230
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Wells Fargo Bank Trade debt $43,787
Business District Division
MAC A0514-011
P.O. Box 90099
San Jose, CA 95109
Dayton ISD Taxes $29,612
Jack Carraway, Tax Assessor
P.O. Box 457
Dayton, TX 77575
Liberty County Taxes $18,854
P.O. Box 1810
Liberty, TX 77575
Western Commerce Bank Insurance $16,922
Astlett Rubber, Inc. Trade debt $8,199
Cooper Electric Trade debt $7,873
United Employers Inc. Agency Insurance $2,634
Shell, Inc. Trade debt $2,495
Phillips 66 Trade debt $2,429
National Hose & Accessory Trade debt $2,380
Entergy Trade debt $1,954
Browning and Farris Ind. Trade debt $1,619
F. A. Ripps Tire Center Trade debt $1,509
J & L Auto Trade debt $1,462
W. B. Williamson Company Trade debt $1,410
Peoples Building Center Trade debt $1,035
Specialty Sand Company Trade debt $932
John J. Hebert Trade debt $821
Coastal Welding Trade debt $638
International Sulpher Trade debt $480
TRICO MARINE: Nasdaq Will Delist Common Stock on December 17
------------------------------------------------------------
Trico Marine Services, Inc., (Nasdaq: TMAR) received written
notice from The Nasdaq Listing Qualifications Staff that, because
of the Company's failure to comply with the $1.00 minimum bid
price per share necessary for continued listing on The Nasdaq
National Market as set forth in Marketplace Rule 4450(a)(5), the
Company's common stock will be delisted from The Nasdaq National
Market at the opening of business on December 17, 2004, unless the
Company appeals the Staff's determination. This determination
follows the Staff's initial notice of our non-compliance with Rule
4450(a)(5) as previously announced by the Company on
June 14, 2004. At this time, the Company does not believe it has
any reasonable basis for challenging the Staff's determination to
delist the Company's common stock effective at the opening of
business on December 17, 2004, and therefore is not planning to
appeal this determination.
After the Company's common stock is delisted from The Nasdaq
National Market, the Company expects that the common stock may be
available for trading on the Pink Sheets and the Over-The-Counter
Bulletin Board, although there is no assurance that the Company's
common stock will remain or be available for trading on either of
these quotation services, or that a trading market for the
Company's common stock will develop or be maintained after
delisting from The Nasdaq National Market.
As previously announced on November 12, 2004, the Company and its
two primary U.S. subsidiaries, Trico Marine Assets, Inc., and
Trico Marine Operators, Inc., have commenced solicitation of
consents from the holders of the Company's outstanding
$250 million 87/8% senior notes due 2012 to approve a
"pre-packaged" plan of reorganization under Chapter 11 of Title 11
of the United States Code. The Plan contemplates, among other
things, that all outstanding shares of the Company's common stock
will be cancelled, and that the holders of these outstanding
shares at the time of cancellation will receive, in exchange for
their shares, warrants for new common stock on a basis yet to be
determined. Details of the Plan, including a copy of the Plan,
the Company's disclosure statement and related documents are
available at http://www.kccllc.net/trico/ The solicitation period
will expire on December 13, 2004, and promptly thereafter the
Company intends to commence a voluntary petition for
reorganization under the Code. While there is no assurance that
the Company will file such a reorganization petition or that the
Plan will be adopted or implemented as contemplated in the
solicitation, under the Plan the outstanding shares of Company's
common stock will likely have no value other than the value of the
warrants to be exchanged for such shares.
Trico Marine Services, Inc. -- http://www.tricomarine.com/--
provides a broad range of marine support services to the oil and
gas industry, primarily in the Gulf of Mexico, the North Sea,
Latin America, and West Africa. The services provided by the
Company's diversified fleet of vessels include the marine
transportation of drilling materials, supplies and crews, and
support for the construction, installation, maintenance and
removal of offshore facilities. Trico has principal offices in
Houma, Louisiana, and Houston, Texas.
TRYAL ACQUISITION: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Tryal Acquisition 1 LLC
1414 S. Friendswood Drive
Friendswood, Texas 77546
Bankruptcy Case No.: 04-47493
Chapter 11 Petition Date: December 7, 2004
Court: Southern District of Texas (Houston)
Judge: Karen K. Brown
Debtor's Counsel: Jim D. Hamilton, Esq.
Ross Banks May Cron & Cavin
2 Riverway, Suite 700
Houston, TX 77056
Tel: 713-626-1200
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20-largest creditors.
US AIRWAYS: Asks Court to Okay Global Settlement with GE Capital
----------------------------------------------------------------
US Airways, Inc., and its debtor-affiliates seek the authority of
the U.S. Bankruptcy Court for the Eastern District of Virginia to
enter into a Global Settlement with General Electric Capital
Corporation, acting through its agent GE Capital Aviation
Services, Inc., GE Engine Services, Inc., and General Electric
Company, GE Transportation Component.
GECC is the Debtors' largest aircraft creditor. GECC directly
financed or leased 150 aircraft to the Debtors prior to the
Petition Date, comprised of 111 mainline jets and 39 regional
jets. GE Engine Services is a critical vendor because it
maintains the engines for almost all of the Debtors' aircraft.
GECC is one of the few financial institutions with the ability and
willingness to lease or acquire regional jets, which are a
critical component of the Debtors' business plan.
The Debtors are stabilizing the airline. The Transformation Plan
requires cost savings from constituent groups in excess of
$1,000,000,000. The Debtors are renegotiating aircraft financing
agreements and re-evaluating service agreements for their
aircraft. Brian P. Leitch, Esq., at Arnold & Porter, in Denver,
Colorado, notes that the Debtors have an extensive and critical
relationship with the GE Entities that extends to aircraft
financing, general debt financing and aircraft and engine
servicing.
Under the Global Settlement, there are three types of
transactions:
(1) Phase I Transactions are scheduled for December 20, 2004;
(2) Phase II Transactions are scheduled to occur on or before
January 18, 2005, and prior to the Debtors' emergence from
bankruptcy; and
(3) Exit Transactions will be implemented upon consummation
of a plan of reorganization and the Debtors' emergence
from Chapter 11.
The Debtors must consummate a plan of reorganization by June 30,
2005.
The key aspects of the Global Settlement are:
(A) The Bridge Facility
The Bridge Facility will provide up to $55,506,545 from GECC
in a series of weekly drawdowns from December 20, 2004, to
June 30, 2005. Interest on the Bridge Facility will accrue
at LIBOR plus 4.25%, payable in cash or in kind at the
Debtors' option.
The Bridge Facility will mature on the Debtors' emergence
from bankruptcy, and will be exchanged for the Convertible
Notes. The Bridge Facility will be cross-collateralized and
cross-defaulted with all other obligations owed by any Debtor
to GECC and will be treated as an administrative expense
claim with priority over all other administrative claims
other than aircraft financing deferrals, which will be pari
passu, and subordinate to:
(1) the super-priority administrative expense claim of
the ATSB and the ATSB Lenders,
(2) postpetition wages and benefits, and
(3) any other new money DIP Financing.
This status will be waived upon the Debtors' emergence from
bankruptcy and the issuance of the Convertible Notes.
(B) Amendments to the 2001 Credit Facility
The 2001 Credit Facility will be amended to:
(1) permit the Debtors to make a $10,000,000 draw on
January 18, 2005, upon consummation of the sale-
leaseback of the 2001 Credit Facility Assets and the
CRJ Mortgaged Assets,
(2) revise the amortization schedule of the 2001 Credit
Facility, once the prepayment is made, so that the
principal begins amortizing over 24 months following
emergence from bankruptcy,
(3) change the interest rate to LIBOR plus 4.25% for the
Remaining Term, and
(4) secure the loan by a third lien position on four CRJ-
700 aircraft, subject to first and second lien
positions, conditioned upon consent of senior lien
holders, and a first lien position on one CF34 spare
engine, with senior liens not to aggregate more than
$62,000,000.
(C) Aircraft Lease Term Sheet
The Aircraft Lease Term Sheet sets forth the treatment of
GECC-owned and mortgaged aircraft subject to a 1110(b)
Stipulation. These aircraft will be subject to consensual
1110(a) agreements:
(1) For the operating leases of nine A319s and one A320
aircraft, the leases will provide for early expiration
corresponding to a modified return schedule;
(2) The A321 leases subject to an EETC transaction will
remain unchanged. The Debtors will:
(a) pay all cure amounts on December 20, 2004,
(b) upon emergence, repay GECC for a cure amount
that GECC paid on the Debtors' behalf, and
(c) perform all obligations, including payment of
full contract rents, including supplemental
rents, during the pendency of their cases.
(3) The Debtors will pay all amounts due for a B737-300
aircraft and B757 aircraft, and perform all
obligations for certain B737-400 single investor
leases, with reduced monthly rentals payable after
emergence;
(4) For five B737-400 aircraft, the lessor will relinquish
its interest, with no claims to be asserted against
the estate;
(5) After emergence, the Debtors will have an option to
restructure and "buy down" the monthly rental
obligations of additional B737-400 single investor
leases upon issuance of the Convertible Notes.
(D) Sale-Leaseback of 2001 Credit Facility Assets and
CRJ Mortgaged Assets
By January 18, 2005, GECC will purchase the three A319s, the
three A320s, the five A321s, the 14 CFM56-5B spare engines,
the 14 CFM56-3B spare engines and engine stands that secure
the 2001 Credit Facility and the 2003 Liquidity Facility.
GECC will also purchase the nine CRJ-200s and one CRJ-700
aircraft currently mortgaged debt financed by GECC for
$640,000,000.
The 2001 Credit Facility Assets and the CRJ Mortgaged Assets
will be leased back to the Debtors expiring on the earlier of
emergence from bankruptcy and June 30, 2005. The sale
proceeds will be applied to repay, in order, the 2003
Liquidity Facility, the GECC mortgage-debt financed CRJ
aircraft and the 2001 Credit Facility. This will leave
$15,000,000 before the $10,000,000 additional drawdown on the
2001 Credit Facility.
The leases will be extended upon the Debtors' emergence from
bankruptcy and will be cross-defaulted with all other GE
Obligations, subject to return conditions. Each lease will
be a postpetition agreement, but rent payable through
June 30, 2005, and return obligations will be granted
administrative expense status. All other claims under these
leases, including rejection damages, will be unsecured
prepetition claims.
(E) Regional Jet Leasing Term Sheet
Pursuant to the Regional Jet Leasing Term Sheet, GECC will
provide leases for up to 31 70-100 seat regional jet
aircraft, manufactured by Bombardier and/or Embraer. Six
CRJ-700s will be leased to the Debtors between January 18 and
February 28, 2005, ending on the earlier of emergence from or
June 30, 2005. These leases will be extended upon emergence.
The Debtors and GECC will, effective as of January 18, 2005,
reinstate that portion of the RJ Lease Transaction and Debt
Financing Agreement, dated December 18, 2003, pursuant to
which GECC agreed to provide single investor lease
transactions. Each lease will be a postpetition agreement,
but rent payable through June 30, 2005, and return
obligations will receive administrative expense status. All
other claims under the lease, including rejection damages,
will be unsecured prepetition claims.
(F) GEAE Restructuring Term Sheet
The GEAE Restructuring Term Sheet addresses five engine
repair and maintenance agreements. GEAE will:
-- forgive and release the Debtors from certain
prepetition obligations,
-- defer certain payment obligations under the agreements,
-- extend certain maintenance agreements,
-- continue certain existing deferrals, and
-- determine the treatment of certain removal charges.
(G) Convertible Notes
Upon emergence from bankruptcy, as partial consideration for
entering into the Global Settlement Agreement, the Debtors
will issue $125,000,000 in Convertible Notes of Reorganized
US Airways to an affiliate of GECC. The Convertible Notes
will be Convertible, at the holders' election, into common
stock of Reorganized US Airways at a conversion price equal
to the product of (x) 140%-150% (at US Airways' option) and
(y) the average closing price of the Common Stock for the 60
trading days following emergence from bankruptcy and listing
of the Common Stock on NASDAQ or a national stock exchange.
The Convertible Notes' interest rate will be determined 30
days prior to the Debtors' date of emergence from bankruptcy,
will be payable semi-annually, in arrears, and will mature in
2020. The Debtors may redeem some or all of the Convertible
Notes by the fifth anniversary of issuance, at a redemption
price, payable in cash or, subject to certain conditions,
Common Stock. Holders may require US Airways to repurchase
their Convertible Notes on the fifth and tenth anniversary of
issuance at 100% of principal, plus accrued and unpaid
interest to the date of repurchase, payable, at US Airways'
election, in cash or Common Stock.
The Convertible Notes will be senior unsecured obligations
and will rank equally with unsecured senior obligations of
Reorganized US Airways. The Convertible Notes will be
guaranteed by the parent holding company of Reorganized US
Airways.
In order to grant the security interests and liabilities and
perform the obligations to the GE Entities under the Global
Settlement, the Debtors have consented to a lifting of the
automatic stay.
Mr. Leitch asserts that the Court should approve the Global
Settlement with the GE Entities. The Global Settlement reflects
GECC's unique relationship with the Debtors and its willingness to
provide critical regional jet leases, both during the pendency of
these Cases and after emergence from bankruptcy. It cannot be
emphasized enough how important the Global Settlement is to the
estates, creditors and other parties-in-interest. Absent the
Global Settlement, the Debtors' ability to reorganize would be
jeopardized.
The Global Settlement contains confidential information.
Accordingly, the Exhibits are filed in a redacted form. The
Committee and any party having a legitimate interest will be
provided with the non-redacted versions of the Exhibits, subject
to signed confidentiality agreements acceptable to the Debtors and
the GE Entities.
Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of:
* US Airways, Inc.,
* Allegheny Airlines, Inc.,
* Piedmont Airlines, Inc.,
* PSA Airlines, Inc.,
* MidAtlantic Airways, Inc.,
* US Airways Leasing and Sales, Inc.,
* Material Services Company, Inc., and
* Airways Assurance Limited, LLC.
Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts. In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts. (US Airways Bankruptcy News, Issue
No. 74; Bankruptcy Creditors' Service, Inc., 215/945-7000)
US AIRWAYS: Rolls-Royce Wants Court to Compel Decision on Contract
------------------------------------------------------------------
Rolls-Royce plc is organized under the laws of England with a
registered office and principal place of business at 65 Buckingham
Gate, London SW1E 6AT, England. On June 27, 2003, upon emergence
from the Debtors' first Chapter 11 case, Rolls-Royce and US
Airways, Inc., and its debtor-affiliates entered a TotalCare
Program Agreement. The term of the TCPA is 6 years and 4 months
and covers the Debtors' fleet of 31 Boeing 757-200 aircraft, each
of which is equipped with two Rolls-Royce Model RB211-535E4
engines, plus 7 spare engines of the same model.
The TCPA shifts engine product risk, including maintenance and
overhaul, whether due to scheduled removals or breakdowns and
failures, to the manufacturer. Under the TCPA, the airline makes
predictable monthly payments in exchange for assurance that it
will have an adequate supply of serviceable engines. The TCPA's
rates provide the engine manufacturer with a profit over the term
of the Agreement. At any given time, the manufacturer may be in
the red when the monthly TCPA rate is compared to the amount the
airline would have been billed for work at Rolls-Royce's customary
rates. A TCPA may become temporarily unprofitable due to several
factors, including the number and timing of normal scheduled
engine removals and the number and timing of unscheduled removals
due to engine breakdowns and failures. However, if the airlines
pay throughout the TCPA, the arrangement is profitable for Rolls-
Royce.
Harvey A. Strickon, Esq., at Paul, Hastings, Janofsky & Walker, in
New York City, tells the Court that the Debtors were party to a
similar agreement with Rolls-Royce Canada Limitee, a subsidiary of
Rolls-Royce. However, that agreement was rejected by the Debtors
in the first Chapter 11 case, resulting in an $85,000,000 allowed
damage claim by Rolls-Royce Canada and a recovery of a fraction of
a cent on the dollar.
At the bankruptcy petition date, the Debtors owed Rolls-Royce
$2,993,281 for the August 2004 TCPA payment and $2,655,587 for the
September 2004 TCPA payment. With the October payment due, the
Debtors are three months in arrears. Rolls-Royce has performed
the overhaul or repair of all engines removed from service. Thus,
the Debtors have benefited from the TCPA.
On the Petition Date, Rolls-Royce Canada was in possession of
4 engines in various stages of overhaul. While one engine was
recently sent back to the Debtors, another installed engine is
scheduled for removal and overhaul in November and three more
engines have been removed from service that will likely need major
rework. Currently, the Debtors are left with only one fully
overhauled spare engine, which could be used to either replace the
installed engine to be taken out of service or to replace any
other engine that might be removed.
To avoid a crisis -- in the form of an Aircraft On Ground
condition by running out of spare engines -- the Debtors and
Rolls-Royce met in Pittsburgh, Pennsylvania, on Sept. 24, 2004.
Rolls-Royce proposed that the Debtors make sufficient TCPA
payments to cover the repair or overhaul of the four engines with
Rolls-Royce Canada and the engine scheduled for routine removal.
On September 28, 2004, Rolls-Royce sent the Debtors a letter
agreement setting forth payment dates and overhaul dates, which
would assure a sufficient number of spare engines and protect
Rolls-Royce from shortfalls under the TCPA. The Debtors requested
and were furnished with backup information on historic overhaul
costs, but have not agreed to the proposal.
With a scheduled removal approaching, whereby the Debtors would be
out of spare engines, the parties reached a temporary agreement.
The Debtors would make the September 2004 payment in exchange for
the return of one engine. Despite the agreement, the Debtors only
tendered $1,581,513 as partial payment. In the spirit of
cooperation, Rolls-Royce released Engine ESN 30889, reserving its
rights under the TCPA.
Mr. Strickon says that given the amount of work anticipated on the
engines in Rolls-Royce's possession, plus the possibility of
unanticipated engine failures or foreign object damage, the sum
paid so far by the Debtors is substantially below that necessary
to complete the repair or overhaul. Rolls-Royce estimates that it
would have charged $15,000,000 to $20,000,000 more to the Debtors
if it had worked on the engines based on its normal time and
materials charges. With average charges of $4,000,000 for each
engine overhaul, the amount left on the table by Rolls-Royce could
double over the next three months. Rolls-Royce cannot
indefinitely perform its obligations without adequate
compensation. This leaves the Debtors with an open-ended right to
reject the TCPA, again relegating Rolls-Royce to the ranks of
general unsecured creditors with the prospect of compensation at a
fraction of a cent on the dollar for the second time.
In this regard, Rolls-Royce asks the Court to set a deadline for
the Debtors to assume or reject the TCPA. If the Debtors want to
receive the benefits provided by the TCPA, they should assume the
TCPA, cure all defaults and payments due, and make all future
payments on time and in full.
Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of:
* US Airways, Inc.,
* Allegheny Airlines, Inc.,
* Piedmont Airlines, Inc.,
* PSA Airlines, Inc.,
* MidAtlantic Airways, Inc.,
* US Airways Leasing and Sales, Inc.,
* Material Services Company, Inc., and
* Airways Assurance Limited, LLC.
Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts. In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts. (US Airways Bankruptcy News, Issue
No. 73; Bankruptcy Creditors' Service, Inc., 215/945-7000)
USGEN: TransCanada Pushes with $505 Million Hydro Asset Bid
-----------------------------------------------------------
USGen New England, Inc., and an affiliate of TransCanada
Corporation (TSX:TRP) (NYSE:TRP) reported that TransCanada will
purchase hydroelectric generation assets with a total generating
capacity of 567 megawatts for $505 million US in cash, subject to
adjustment. No qualified competing bids were received by the
court-ordered deadline so the auction originally scheduled for
December 9 did not take place.
The purchase is subject to the sale of the 49 MW Bellows Falls
hydroelectric facility to the Vermont Hydroelectric Power
Authority, which will result in a $72 million US reduction in
purchase price.
The sale, previously announced in September 2004, is now pending a
bankruptcy court hearing scheduled for Dec. 15, 2004. Other
regulatory approvals and conditions also will need to be met prior
to closing.
The assets include generating systems on two rivers in New
England: the 484 MW Connecticut River system in New Hampshire and
Vermont and the 83 MW Deerfield River system in Massachusetts and
Vermont. The systems include 13 dams with 41 hydroelectric
generating units. On a ten-year average, the generating systems
produced approximately 1.4 million MW-hours of electricity
annually. The output is not subject to long-term contracts.
The Town of Rockingham has an option agreement with USGen New
England to purchase the Bellows Falls facility for $72 million US.
On Dec. 7, 2004, the Town exercised the option and assigned its
rights to the Vermont Hydroelectric Power Authority. Should the
Bellows Falls transaction close, TransCanada's acquisition will
exclude that facility and the purchase price will be reduced to
$433 million US.
The transaction is expected to close in the first half of 2005.
TransCanada will finance the acquisition in a manner consistent
with maintaining its solid financial position and credit ratings.
TransCanada expects the transaction to be immediately accretive to
earnings and cash flow.
Headquartered in Bethesda, Maryland, USGen New England, Inc., an
affiliate of PG&E Generating Energy Group, LLC, owns and operates
several electric generating facilities in New England and
purchases and sells electricity and other energy-related products
at wholesale. The Debtor filed for Chapter 11 protection on
July 8, 2003 (Bankr. D. Md. Case No. 03-30465). John E. Lucian,
Esq., Marc E. Richards, Esq., Edward J. LoBello, Esq., and Craig
A. Damast, Esq., at Blank Rome, LLP, represent the Debtor in their
restructuring efforts. When it sought chapter 11 protection, the
Debtor reported assets amounting to $2,337,446,332 and debts
amounting to $1,249,960,731.
VARTEC TELECOM: Excel Creditors Balk at DIP Financing Proposal
--------------------------------------------------------------
As previously reported in the Troubled Company Reporter, the
Honorable Steven A. Felsenthal of U.S. Bankruptcy Court for the
Northern District of Texas gave VarTec Telecom, Inc., permission
to borrow money from the Rural Telephone Finance Cooperative under
a debtor-in-possession financing facility on an interim basis. An
ad hoc committee of creditors of VarTec's Excel subsidiary blocked
the company's ability to secure final approval of the financing.
The ad hoc committee is comprised of creditors holding claims
against Excel Communications. The Ad Hoc Committee objects to
Excel's assets being encumbered because Excel doesn't need any
postpetition financing. The Ad Hoc Committee want Excel's assets
shielded from its greedy parent.
To avoid leaving VarTec without any working capital, Judge
Felsenthal extended interim approval of the borrowing arrangement
through the conclusion of a final DIP financing hearing on
January 12, 2005.
Headquartered in Dallas, Texas, Vartec Telecom Inc. --
http://www.vartec.com/-- provides local and long distance service
and is considered a pioneer in promoting 10-10 calling plans. The
Company and its affiliates filed for chapter 11 protection on
November 1, 2004 (Bankr. N.D. Tex. Case No. 04-81695). Daniel C.
Stewart, Esq., William L. Wallander, Esq., and Richard H. London,
Esq., at Vinson & Elkins, represent the Debtors in their
restructuring efforts. When the Company filed for protection from
its creditors, it listed more than $100 million in assets and
debts.
W.R. GRACE: Asks Court to Approve Plan Solicitation Procedures
--------------------------------------------------------------
W.R. Grace & Co. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware to:
-- establish procedures for solicitation and tabulation of
votes to accept or reject the Plan;
-- approve forms and distribution of ballots and master
ballots;
-- establish a record date for voting purposes; and
-- establish dates and deadlines in connection with the
confirmation of the Plan.
Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub, P.C., in Wilmington, Delaware, relates that the
Debtors' Plan of Reorganization will pay all claimants in full and
will leave most claimants, including holders of asbestos claims,
unimpaired. Specifically, the Plan provides that nine classes of
claims or equity interests will be unimpaired, and are thus deemed
to accept the Plan without the need to solicit their votes:
* Class 1 - Priority Claims
* Class 2 - Secured Claims
* Class 3 - Unsecured Pass-Through Employee Related Claims
* Class 4 - Workers' Compensation Claims
* Class 5 - Intercompany Claims
* Class 6 - Asbestos PI-SE Claims
* Class 7 - Asbestos PI-AO Claims
* Class 8 - Asbestos PD Claims
* Class 11 - Equity Interests of Debtors Other than the
Parent
General Unsecured Claims (Class 9) and Equity Interests in the
Parent (Class 10) are impaired under the Plan and are entitled to
vote to accept or reject it. The solicitation of votes of General
Unsecured Claims and Equity Interests is straightforward and
contemplates the use of standard balloting forms and voting
instructions.
Proposed Voting Procedures
Pursuant to Section 1126 of the Bankruptcy Code and Rule 3018 of
the Federal Rules of Bankruptcy Procedure, the Debtors will
distribute solicitation packages including ballots and master
ballots to holders of Class 9 and Class 10 claims.
(a) Contents of Solicitation Package
The Debtors propose that each holder of a Claim or Equity
Interest that is entitled to vote be sent a package by BMC
Corp. -- the Voting Agent -- containing:
(i) the court-approved Confirmation Hearing Notice;
(ii) the order approving the Disclosure Statement;
(iii) the Disclosure Statement as approved by the Bankruptcy
Court;
(iv) the Exhibit Book, with a copy of the Plan;
(v) one or more applicable Ballots or Master Ballots,
together with voting instructions and information
relative to the return of the Ballots or Master
Ballots; and
(vi) any other material ordered by the Court to be included.
For purposes of efficiency and economy, the Debtors ask the
Court to authorize their Voting Agent to utilize CD-Rom
diskettes, in lieu of printed documents, for purposes of
distributing the Disclosure Statement and contents of the
Exhibit Book to Holders of Claims and Equity Interests
entitled to vote on the Plan. Holders of Claims and Equity
Interests will have the opportunity to request that the
Voting Agent send them printed copies of the subject
documents.
Solicitation Packages will not be distributed to:
-- holders of claims against, or interests in, the Debtors
who are placed in a class under the Plan that is not
entitled to vote to accept or reject the Plan; or
-- those persons requesting notice pursuant to Bankruptcy
Rule 2002 who are not entitled to vote to accept or reject
the Plan.
Instead, the Debtors will send the Non-voting Parties the
Confirmation Hearing Notice and a notification of non-voting
status, including instructions on how to obtain copies of the
Solicitation Package, if so desired.
(b) Voting Agent
BMC Corp. is the entity that developed the Debtors'
computerized claims database and will be responsible for the
distribution of Solicitation Packages to, and the tabulation
of ballots and master ballots received from, all individuals
and entities.
(c) Solicitation Distribution Date
Pursuant to the Voting Procedures, the Voting Agent will
distribute Solicitation Packages to all known Holders of
General Unsecured Claims and Equity Interests on or before
the date which is 20 calendar days after the date on which
the Court enters an order approving the adequacy of the
Disclosure Statement.
(d) Pending Objections
Consistent with the provisions of the Bankruptcy Code and
Bankruptcy Rules, the Voting Procedures will provide that the
Holders of Class 9 Claims or Class 10 Equity Interests that
are subject of pending objections are not entitled to vote on
the Plan unless the Bankruptcy Court enters an order allowing
their Class 9 Claims or Class 10 Equity Interests.
(e) Voting Motion
Any Holder of a Claim or Equity Interest that is not entitled
to vote because its Claim or Equity Interest is the subject
of an objection pending before the Bankruptcy Court or is
entitled to vote but seeks to challenge the amount of the
Claim or Equity Interest for voting purposes, may file a
Motion to vote. A Voting Motion must be filed within 20
calendar days after the later of:
-- service of the Confirmation Hearing Notice; and
-- service of the notice of an objection, in any, to the
Claim or Equity Interest.
(f) Voting Deadline
The Debtors ask the Court to set April 1, 2005, at 4:00 p.m.,
as the last day for Ballots and Master Ballots to be received
by the Voting Agent to be counted for accepting or rejecting
the Plan.
(g) Class 9
Holders of General Unsecured Claims were required to file a
proof of claim by the March 2003 Bar Date. The Voting
Procedures provide that, unless the Court enters an order
allowing the Claim in a different amount, Holders of timely
filed General Unsecured Claims will be entitled to a vote
equal to the amount of their claims as indicated on their
proofs of claim as of the Voting Record Date. Each holder of
a General Unsecured Claim that timely filed a proof of claim
that has not been withdrawn, expunged or disallowed by the
Voting Record Date will be sent a Solicitation Package, and,
if no objection to the General Unsecured Claim is pending as
of the Voting Record Date, a Ballot.
(h) Class 10
As of the Petition Date, Grace had common stock that was
issued and outstanding. The Voting Procedures provide that
Holders of Equity Interests in the Parent will be entitled to
a vote equal to the number of their shares of the Parent
Common Stock as of the Voting Record Date. The Voting Agent
will cause a Solicitation package to be served on each
registered record Holder, as of the Voting Record Date, of
any Equity Interest in the Parent.
The Debtors contend that the these procedures adequately recognize
the complex structure of the securities industry, enable them to
transmit materials to the Holders of the publicly traded Parent
Common Stock, and afford beneficial owners of Parent Common Stock
a fair and reasonable opportunity to vote. The Debtors believe
that the proposed Voting Procedures embody an orderly and logical
method for soliciting and tabulating the ballots of those parties
entitled to vote as is contemplated by the Bankruptcy Code and the
Bankruptcy Rules.
Ballots and Master Ballots
Rule 3017(d) of the Federal Rules of Bankruptcy Procedure requires
the Debtors to mail a form of ballot, which substantially conforms
to the Official Form No. 14, to "creditors and equity security
holders entitled to vote on the plan." The Debtors propose to
distribute to certain Holders of Claims or Equity Interests one or
more Ballots or Master Ballots. According to Ms. Jones, the forms
for the Ballots and Master Ballots are based on Official Form No.
14, but have been modified to address the particular aspects of
the Debtors' Chapter 11 cases and to include certain additional
information that the Debtors believe to be relevant and
appropriate for each class of claims or equity interests.
Voting Record Date
In accordance with Bankruptcy Rules 3017(d) and 3018(a), the
voting record date is typically the date an order approving the
disclosure statement is entered. Nevertheless, to set a voting
record date, the registrars of the Parent Common Stock need
advance notice of approximately two full business days to enable
those responsible for assembling ownership lists of the parent
Common Stock to compile a list of Holders as of a certain date.
Accurate lists often cannot be prepared retroactively as to
ownership on a prior date. Moreover, although the Debtors may be
able to give entities advance notice of the date of the hearing on
the Disclosure Statement, the hearing could be continued by the
Bankruptcy Court, or the Disclosure Statement Order might not be
entered on the date of the hearing. Accordingly, the Debtors ask
the Court to set the date that is two business days after the
entry of the Disclosure Statement Order as the Voting Record Date
for purposes of determining the creditors and interest holders
entitled to vote on the Plan.
With respect to transfers of Claims or Equity Interests governed
by Bankruptcy Rule 3001(e), the Voting Procedures specify that the
deadline for any objection to the proposed transfer must have been
passed as of the Voting Record Date for the transferee to be
considered the Holder of the Claim entitled to vote the Claim or
otherwise receive a Solicitation Package.
Confirmation Notice and Objection Procedures
(a) Confirmation Hearing
In accordance with Bankruptcy Rule 3017(c) and in view of the
Debtors' proposed solicitation schedule, the Debtors ask the
Court to schedule a hearing on the confirmation of the Plan
on June 27, 2005, at 12:00 p.m. The Confirmation Hearing may
be continued from time to time without further notice except
for adjournments announced in open court. The proposed
schedule is in compliance with the Bankruptcy Rules and will
enable the Debtors to pursue consummation of the Plan in
accordance with the statutory timetable.
Bankruptcy Rules 2002(b) and (d) require not less than 25
days' notice to all creditors and interest holders of the
time fixed for filing objections and the hearing to consider
the confirmation of a Chapter 11 plan. In accordance with
Bankruptcy Rules 2002 and 3017(d), the Debtors propose to
provide to all known holders of Claims and Equity Interests,
simultaneously with the distribution of solicitation
packages, a copy of the Confirmation Hearing Notice, setting
forth the Voting deadline and the time fixed for filing
confirmation objections.
In addition, the Debtors will publish the Confirmation
Hearing Notice electronically on their Web site
http://www.grace.com/and the Web site of the Debtors'
Noticing Agent http://www.bmccorp.net/
(b) Confirmation Objections
Pursuant to the Bankruptcy Rule 3020(b)(1), confirmation
objections must be filed and served within a time fixed by
the Court. The proposed Confirmation Hearing Notice provides
that objections or proposed modifications, if any, to the
confirmation of the Plan must:
-- be in writing;
-- state the name and address of the objecting party and the
amount and nature of any objection or proposed
modification; and
-- be filed, together with proof of service, with the
Bankruptcy Court and serviced so that they are received
by:
* the Clerk of the Court;
* counsel for the Debtors;
* counsel to all official committees appointed by the
United States Trustee; and
* the U.S. Trustee
at the addresses set forth in the Confirmation Hearing
Notice, no later than June 1, 2005, at 4:00 p.m.
The proposed objection deadline will afford the Bankruptcy
Court and the Debtors sufficient time to consider the
objections and proposed modifications before the Confirmation
Hearing.
The Debtors additionally propose that the Bankruptcy Court
set June 20, 2005, at 4:00 p.m. as the date by which they
must file their omnibus reply to any objections and
supplemental brief in support of Plan confirmation.
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 Company and its debtor-
affiliates 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, Young, Jones & Weintraub, represent the Debtors in
their restructuring efforts. (W.R. Grace Bankruptcy News, Issue
No. 76; Bankruptcy Creditors' Service, Inc., 215/945-7000)
WELLS FARGO: Fitch Assign Low-B Ratings to Four Issue Classes
-------------------------------------------------------------
Fitch Ratings has taken rating actions on the Wells Fargo Asset
Securities Corporation issues:
Series 2002-1:
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AAA';
-- Class B-2 upgraded to 'AA' from 'A';
-- Class B-3 upgraded to 'A' from 'BBB';
-- Class B-4 affirmed at 'BB';
-- Class B-5 affirmed at 'B'.
Series 2003-1:
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 affirmed at 'BB';
-- Class B-5 affirmed at 'B'.
The affirmations reflect credit enhancement levels consistent with
future loss expectations and affect $207,910,759 of outstanding
certificates. The upgrades reflect an increase in credit
enhancement relative to future loss expectations and affect
$3,181,500 of outstanding certificates detailed above.
The current enhancement levels (as of the November distribution)
for classes B-2 and B-3 from series 2002-1 are more than 4 times
their original enhancement levels. Class B-2 currently benefits
from 8.48% subordination (originally 1.75%) and class B-3 benefits
from 5.87% subordination (originally 1.25%). Classes A, B-1, and
B-4 have also experienced increases in credit enhancement. As of
the November distribution date, 81% of the original collateral has
paid down and cumulative losses total only 0.12% (total loss as a
percentage of the original pool balance). The underlying
collateral consists of conventional, 20- to 30-year fixed-rate
mortgage loans secured by one- to four-family residential
properties.
As of the November distribution, 27% of the original collateral
for series 2003-1 has paid down and there have been no losses.
Currently, 2.09% of the loans in the deal are delinquent and 1.56%
delinquent for more than 90 days.
* BOOK REVIEW: The Financial Giants In United States History
------------------------------------------------------------
Author: Meade Minnigerode
Publisher: BeardBooks
Paperback: 260 pages
List Price: $34.95
Order your personal copy at
http://www.amazon.com/exec/obidos/ASIN/1587981491/internetbankrupt
The financial giants were Stephen Girard, John Jacob Astor, Jay
Cooke, Daniel Drew, Cornelius Vanderbilt, Jay Gould, and Jim Fisk.
The accomplishments of some have made them household names today.
But all were active in the mid 1800s. This was a time when the
United States, having freed itself from Great Britain only a few
decades earlier, was gaining its stride as an independent nation.
The country was expanding westward, starting to engage in
significant international trade, and laying the foundations for
becoming a major industrial power. Astor, Vanderbilt, Gould, and
the others played major parts in all these areas. During the
Civil War in the first half of the 1860s, some became leading
suppliers of goods or financiers to the Federal government.
Minnigerode's focus is the highlights of the life of each of the
seven. Along with this, he identifies each one's prime
characteristics contributing to his road to fortune and how his
life turned out in the end. Not all of the men managed to keep
and pass on the fortunes they amassed. They are seen a "financial
giants" not only because they made fortunes in the early days of
American business and industry, but also for their place in laying
out the groundwork for American business enterprise, innovation,
and leadership, and for the notoriety they had in their day.
Minnigerode summarizes the style or achievement of each man in a
single word or short phrase. Stephan Girard is "The Merchant
Banker"; Cornelius Vanderbilt, "The Commodore." "The Old Man of
the Street" summarizes Daniel Drew"; with "The Wizard of Wall
Street" summarizing Jay Gould. Jim Fisk is "The Mountebank."
Jay Cooke, "The Tycoon," was to be "known throughout the country
for his astonishingly successful handling of the great Federal
loans which financed the Civil War." After the War, one of the
leaders of the Confederacy remarked that the South was really
defeated in the Federal Treasury Department thus, even on the
enemy side, giving recognition to Cooke's invaluable work of
enabling the Federal government to meet the huge costs of the War.
After the War, having earned the reputation as "the foremost
financier in the country," Cooke became involved in many large
financial ventures, including the building of a railroad to link
the East and West coasts of America. In this railroad venture,
however, Cooke and his banking firm made a fatal misstep in
investing in the Northern Pacific railway. The Northern Pacific
turned out to be a house of cards. When Cooke's firm was unable
to meet interest payments it owed because of money it had put into
the Northern Pacific, the firm went bankrupt; and this caused
alarm in the stock market and financial circles.
The roads to wealth of the "financial giants" were not smooth.
Like others amassing great wealth, they had to take risks. The
tales Minnigerode tells are not only instructive on how
individuals have historically made fortunes in business and the
characteristics they had for this, but are also cautionary tales
on the contingency of great wealth in some circumstances. Jim
Fisk, for instance, a larger-than life character "jovial and quick
witted [who was also] a swindler and a bandit, a destroyer of law
and an apostle of fraud," was presumably killed by a former
business partner. Unlike Cooke and Fisk, Cornelius Vanderbilt and
John Jacob Astor built fortunes that lasted generations.
Vanderbilt - nicknamed Commodore - starting in the New York City
area, built ships and established domestic and international
merchant and passenger lines. With the government coming to
depend on these with the rapid growth of commerce of the period
and the Civil War for a time, Vanderbilt practically had
monopolistic control of private shipping in the U.S. Astor made
his fortune by developing trade and other business in the upper
Midwest, which was at the time the sparsely-populated frontier of
America, rich in natural resources and other potential with the
Great Lakes and regional rivers as a means for transportation.
Although the social and business conditions in the early and mid
1800s when the U.S. was in the early stages of its development
were unique to that period, by concentrating on the
characteristics, personalities, strategies, and activities of the
seven outstanding businessmen of this period, Minnigerode
highlights business traits and acumen that are timeless. His
sharply-focused, short biographies are colorful and memorable.
This author has written many other books and worked in the
military and government.
*********
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
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
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
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
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
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
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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, Rizande B. Delos Santos, Jazel P.
Laureno, Cherry Soriano-Baaclo, Marjorie Sabijon, Terence Patrick
F. Casquejo and Peter A. Chapman, Editors.
Copyright 2004. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $675 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
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