/raid1/www/Hosts/bankrupt/TCR_Public/041228.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, December 28, 2004, Vol. 8, No. 285
Headlines
360NETWORKS: Emerson Telecom Agrees to Pay $1.5 Million
9 WEST 107 LLC: Case Summary & 9 Largest Unsecured Creditors
AMERICAN BUSINESS: Defaults on Bank Debt & Considering Bankruptcy
APM INC: Weintraub Genshlea Approved as Committee Counsel
ARES LEVERAGED: Fitch Upgrades Two Subordinated Debt Ratings
ARMSTRONG: Wants Employee Retention Program Continued in 2005
CALDWELL/VSR: Wants to Hire Cantor Arkema as Bankruptcy Counsel
CALDWELL/VSR: U.S. Trustee Picks 5-Member Creditors Committee
CALPINE CORP: Completes $195M Project Financing for Mexico Center
CEDAR BRAKES: Fitch Revises Outlook on Single-B Rating to Positive
DANA CORP: Inks Long-Term Supply Pact with Federal-Mogul
DELTA AIR: Inks New Service Agreements with Republic Airways
DICK'S SPORTING: Sr. Convert. Noteholders Agree to Amend Indenture
DII/KBR: Court Approves Changes to Chapter 11 Plan Documents
E. CONRAD TRUCKING: Case Summary & 20 Largest Unsecured Creditors
EASI-MEGATECH ENGINEERING: Voluntary Chapter 11 Case Summary
ELN PROFESSIONAL EMPLOYERS: Voluntary Chapter 11 Case Summary
ENRON CORP: Targa Closes Bridgeline Interest Sale
EQUITYLINK I INC: Case Summary & 20 Largest Unsecured Creditors
EXIDE TECH: Citadel Discloses 6.4% Equity Stake
FAIRFAX FINANCIAL: Declares $1.40 Annual Dividend Per Share
FRANKLIN CAPITAL: Raises $4 Million in Private Equity Placement
G-FORCE CDO: Fitch Puts Low-B Ratings on $90 Million Notes
GLOBAL CROSSING: Completes $404 Million Secured Debt Financing
GS MORTGAGE: Fitch Puts Low-B Ratings on Two 1998 GL-II Classes
GOSHAWK RIDGE: Files Chapter 11 Plan of Reorganization
HOLLINGER INT'L: Completes American Publishing Sale for $13.2 Mil.
IESI CORP: Extends 10-1/4% Sr. Debt Offering Until January 21
IMAGIS TECH: Inks Pact for More Financing via Private Placement
INFOCORP COMPUTER: Completes Reorganization Proceedings
INNOVATION HOLDINGS: $15.5M Deficit Triggers Going Concern Doubt
ISLE OF CAPRI: S&P Rates Proposed $650M Sr. Secured Debt at 'BB-'
JUNIPER CBO: Fitch Holds Junk Ratings on Four 2000-1 Note Classes
JUNIPER CBO: Fitch Maintains Junk Ratings on Five 1999-1 Classes
KEWL CORP: Selling 500,000 Common Shares to 1422575 Ontario
KMART HOLDING: Withdraws & Refiles Hart-Scott-Rodino Notice
LAIDLAW INTL: Has Until April 15 to Sell 3.8 Million Common Shares
MASONITE INT'L: Kohlberg Kravis Buying Company for C$3.1 Billion
MASONITE INT'L: S&P Places Low-B Ratings on CreditWatch Negative
MASTEC INC: Posts $46.1 Million Net Loss in First Quarter
MITCHELL WARD: Bankruptcy Court Approves Marten Settlement Pact
MOSLER INC: Has Until March 29 to Object to Proofs of Claim
NAPSTER INC: Requests Final Decree Closing Bankruptcy Case
NATIONSLINK FUNDING: S&P Lifts Low-B Ratings on Four Cert. Classes
NEXTEL PARTNERS: S&P Revises Outlook on Low-B Ratings to Positive
NRG ENERGY: Completes $950 Million Senior Debt Refinancing
NRG ENERGY: Closes $420 Million Offering of Perpetual Pref. Stock
OWENS CORNING: Bondholders Say There is No "Bondholders Agreement"
PACIFIC GAS: Judge Montali Orders 4 Plaintiffs to Dismiss Lawsuit
PARMALAT: Financial Projections Underpinning Chapter 11 Plans
PILGRIM CLO: Fitch Affirms $10 Million Debt Rating at 'BB-'
PINNACLE CBO: Fitch Holds Junk Rating on $78 Mil. Sr. Notes
POPE & TALBOT: Acquiring Fort St. James Sawmill for $32 Million
PROTOCALL TECH: Funding Uncertainties Trigger Going Concern Doubt
RCN CORP: Agrees to Settle CAC Dispute for $2.15 Million
RCN CORP: Hires Friedman LLP to Replace PwC as Accountant
RESIDENTIAL ACCREDIT: Fitch Junks Rating on 1999-QS2 Certificates
RESIDENTIAL ACCREDIT: S&P Puts Low-B Ratings on 33 Cert. Classes
RIVERSIDE FOREST: Loaning CDN$60 Million from Tolko Affiliate
SCIENTIFIC GAMES: Completes Refinancing Transactions
SHILOH INDUSTRIES: S&P Ups Rating to BB- Due to Strong Performance
SOUTH STREET: Fitch Maintains Junk Ratings on Six Classes
SPHERIS INC: Current Management Team to Lead Avicis Merger
STRATUS SERVICES: Auditors Raise Going Concern Doubt in Form 10-K
TENET HEALTHCARE: Completes Sale of Two St. Louis Hospitals
TROPICAL SPORTSWEAR: Taps Akerman Senterfitt as Bankruptcy Counsel
TROPICAL SPORTSWEAR: Section 341(a) Meeting Slated for Jan. 24
TROPICAL SPORTSWEAR: Nasdaq Will Halt Stock Trading on Friday
TRUMP HOTELS: Transfers Management of Trump 29 Casino to Tribe
USG CORP: Asbestos PD Committee Asks for Case Management Order
VENTAS INC: Sells 2 Hospitals to Kindred Healthcare for $21.1-Mil
VOICEIQ: Closes Plan of Arrangement Transaction After Court Okay
VTEX ENERGY: Raising Cash as Auditors Raise Going Concern Doubt
W.R. GRACE: Asks Court to Appoint Raymond Thieme as ADR Mediator
WEIRTON STEEL: Last Day to File Objections to Claims is Feb. 11
WINDSOR WOODMONT: Completes Mountain High Casino Acquisition
WISE METALS: S&P Slices Rating on $150M Senior Sec. Notes to 'B-'
WISE WOOD: Shareholders Approve Diamond Tree Acquisition
* Large Companies with Insolvent Balance Sheets
*********
360NETWORKS: Emerson Telecom Agrees to Pay $1.5 Million
-------------------------------------------------------
Emerson Telecom Systems, Inc., asserted a $3,754,894 general
unsecured claim against 360networks (USA), Inc.
On March 22, 2002, ETS received a demand letter that sought to
recover certain alleged payments and transfers of property
totaling $6,139,374.
The Official Committee of Unsecured Creditors Committee commenced
an adversary proceeding on behalf of the Debtors' estates against
ETS seeking the avoidance, recovery and turnover of the Payments.
Subsequently, the Committee and ETS engaged in settlement
discussions and negotiations concerning the Payments. The parties
wish to amicably resolve, settle and compromise the claims related
to the Payments to avoid the uncertainty and expense of
litigation.
Accordingly, in a Court-approved Stipulation, the parties agree
that:
(a) ETS will pay to the Committee, on behalf of the Debtors'
Estates, by wire transfer, $1,500,000 in full and final
settlement, satisfaction and discharge of the claims
arising from or related to the Payments;
(b) ETS waives its right under Section 502(h) of the
Bankruptcy Code to file a proof of claim or otherwise to
assert a claim in the amount of the Settlement Amount;
(c) the parties will exchange mutual releases; and
(d) the Releases will not be construed to affect ETS's Allowed
Claim.
Headquartered in Vancouver, British Columbia, 360networks, Inc. --
http://www.360.net/-- is a leading independent provider of fiber
optic communications network products and services worldwide. The
Company and its 22 debtor-affiliates filed for chapter 11
protection on June 28, 2001 (Bankr. S.D.N.Y. Case No. 01-13721),
obtained confirmation of a plan on October 1, 2002, and emerged
from chapter 11 on November 12, 2002. Alan J. Lipkin, Esq., and
Shelley C. Chapman, Esq., at Willkie Farr & Gallagher, represent
the Company before the Bankruptcy Court. When the Debtors filed
for protection from its creditors, they listed $6,326,000,000 in
assets and $3,597,000,000 in liabilities. (360 Bankruptcy News,
Issue No. 78; Bankruptcy Creditors' Service, Inc., 215/945-7000)
9 WEST 107 LLC: Case Summary & 9 Largest Unsecured Creditors
------------------------------------------------------------
Lead Debtor: 9 West 160th LLC
95 Delancey Street
New York, New York 10002
Bankruptcy Case No.: 04-18033
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
652 West 160th LLC 04-18038
Chapter 11 Petition Date: December 23, 2004
Court: Southern District of New York (Manhattan)
Judge: Cornelius Blackshear
Debtor's Counsel: Arnold Mitchell Greene, Esq.
Robinson, Brog, Leinwand, Greene
Genovese & Gluck, P.C.
1345 Avenue of the Americas, 31st Floor
New York, New York 10105
Tel: (212) 586-4050
Fax: (212) 956-2164
Total Assets Total Debts
------------ -----------
9 West 107 LLC $1,522,000 $1,417,214
652 West 160th LLC $4,065,000 $203,328
9 West 107 LLC's 5 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Park National $1,300,000
1 Stone Place
Broxville, New York 10708
Altman Hardware $48,354
643 Amsterdam Avenue
New York, New York 10023
David Jaroslawitz $37,550
150 William Street
New York, New York 10038
LB Furniture $16,000
99 South 3rd Street
Hudson, New York 12534
M. Weiss & Company $15,310
3011 Avenue L
Brooklyn, New York 11210
652 West 160th LLC's 4 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Altman Hardware $79,930
643 Amsterdam Avenue
New York, New York 10023
David Jaroslawitz $68,400
150 William Street
New York, New York 10038
M. Weiss & Company $32,518
3011 Avenue L
Brooklyn, New York 11210
LB Furniture $22,480
99 South 3rd Street
Hudson, New York 12534
AMERICAN BUSINESS: Defaults on Bank Debt & Considering Bankruptcy
-----------------------------------------------------------------
American Business Financial Services, Inc. (NASDAQ:ABFI), filed a
registration statement with the Securities and Exchange Commission
in October 2004 and is unable to sell subordinated debentures
until this registration statement is declared effective. This
delay continues to adversely affect the Company's liquidity. The
Company is unable to predict whether or when it will get through
the SEC registration process or the results of such process and,
as a result, the Company is unable to determine at this time when
or whether it will be able to commence sales of the subordinated
debentures under the new registration statement.
The Company's limited ability to sell subordinated debt during the
second quarter of fiscal 2005 and the level of subdebt redemptions
experienced during this period seriously depleted the Company's
cash. As a result, the Company is currently unable to make
principal and interest payments when due under the terms of the
indentures relating to the Company's subordinated debentures and
senior collateralized subordinated notes. The Company's inability
to make principal and interest payments when due creates an event
of default under the terms of these indentures. As a result of
the foregoing, the Company may seek protection under the federal
bankruptcy laws or may be forced into an involuntary bankruptcy
filing. The Company is preparing for this strategic alternative
should it become necessary.
As a result of the Company's continuing liquidity issues,
including its limited ability to sell subordinated debentures
during the second quarter of fiscal 2005, the Company is currently
not in compliance with several requirements in both of its credit
facilities. Under the terms of these credit facilities, this
noncompliance creates an event of default and the lenders may
declare all amounts outstanding under the facilities immediately
due and payable; however, to date, the lenders have not elected to
take such action. An event of default under these credit
facilities also creates an event of default under other debt
instruments to which the Company is a party. The Company is in
discussions with its lenders regarding these defaults. There can
be no assurance that the Company will be able to obtain the
necessary waivers or that the waivers will not contain conditions
that are unacceptable to the Company. The Company has also
received a notice from the landlord of its Philadelphia facility
that the Company is in default under its lease.
As previously disclosed, at various times since June 30, 2003, the
Company has been also been out of compliance with the net worth
requirement in several of its pooling and servicing agreements and
sale and servicing agreements (collectively referred to in this
document as the servicing agreements) and has been required to
obtain waivers from and amendments to these agreements. As a
result of the amendments to the Company's servicing agreements,
all of the Company's servicing agreements associated with bond
insurers now provide for term-to-term servicing and, in the case
of its servicing agreements with two bond insurers, the Company's
rights as servicer may be terminated at the expiration of a
servicing term in the sole discretion of the bond insurer. The
waiver of the net worth covenant, and the reappointment of the
Company as a servicer that it had received from one of the
Company's bond insurers expired on December 14, 2004. As a
condition for further extensions and waivers, this bond insurer
required the Company to appoint a backup servicer and satisfy
other requirements related to the servicing of these loans.
Although the Company expects to obtain the necessary waiver and
extension of the servicing agreement, there can be no assurance
that the Company will continue to receive the waivers and
servicing agreement extensions the Company needs to operate or
that such waivers or extensions will not contain conditions that
are unacceptable to the Company. Moreover, the Company was also
notified of an event of default under the amended servicing
agreement by one of the Company's bond insurers.
Also, as a result of these developments, the Company has
determined to postpone until further notice its annual meeting of
shareholders previously scheduled for Dec. 27, 2004 at 3:00 p.m.
The Company has also determined to postpone its contemplated
closing of an exchange offer which was previously scheduled to
close on Dec. 31, 2004.
American Business Financial Services, Inc., together with its
subsidiaries, is a financial services organization operating
mainly in the eastern and central portions of the United States
and California. The Company originates, sells and services home
mortgage loans through its principal direct and indirect
subsidiaries.
APM INC: Weintraub Genshlea Approved as Committee Counsel
---------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District Of California
gave the Official Committee of Unsecured Creditors of APM, Inc.,
permission to employ Weintraub Genshlea Chediak Sproul, Law
Corporation as its counsel.
Weintraub Genshlea will:
a) advise the Committee as to its duties and powers in the
Debtor's chapter 11 case;
b) assist the Committee in its investigation of the acts,
conduct, assets, liabilities and financial condition of the
Debtor, and the operation of its business; and
c) provide all other legal services and representation to the
Committee as maybe necessary and appropriate in order to
protect its interests in the Debtor's chapter 11 case.
Donna T. Parkinson, Esq., and Thomas R. Phinney, Esq., are the
lead attorneys for the Committee. Ms. Parkinson discloses that the
Firm received a $25,000 retainer from the Debtor. Ms. Parkinson
will charge $300 per hour, while Mr. Phinney will charge $250 per
hour.
Ms. Parkinson reports Weintraub Genshlea's professionals bill:
Designation Hourly Rate
----------- -----------
Counsels $120 - 290
Legal Assistants 100 - 150
Weintraub Genshlea assures the Court that it does not represent
any interest adverse to the Committee, the Debtor or its estate.
Headquartered in Los Altos, California, APM, Inc., is engaged in
the business of distributing and marketing wine bottles, capsules
and corks to the international wine industry. The Company filed
for chapter 11 protection on July 27, 2004 (Bankr. E.D. Cal. Case
No. 04-27694). George C. Hollister, Esq., in Sacramento, Calif.,
represents the Company in its restructuring efforts. When the
Debtor filed for protection from its creditors, it reported
estimated assets of $1 million to $10 million and estimated debts
of $10 million to $50 million.
ARES LEVERAGED: Fitch Upgrades Two Subordinated Debt Ratings
------------------------------------------------------------
Fitch Ratings upgrades two classes of Ares Leveraged Investment
Fund, L.P. These rating actions are effective immediately.
-- $97,518,070 senior subordinated notes upgraded to 'BB+'
from 'BB-' and placed on Rating Watch Positive;
-- $67,024,706 subordinated notes upgraded to 'B+' from 'B'.
Ares is a market-value collateralized debt obligation -- CDO --
that closed on Nov. 6, 1997. The fund is managed by Ares
Management L.L.C., which is headquartered in Los Angeles and
manages both market value and cash flow CDOs. Ares Management
maintains a strategic relationship with Apollo Advisors.
At inception, the investment manager targeted a portfolio of:
* approximately 40% high yield securities,
* 15% bank loans, and
* 45% mezzanine and
* special situation assets.
As of the Nov. 30, 2004, valuation date, the asset mix consisted
of:
* 14% high yield securities,
* 19% performing bank loans, and
* 67% mezzanine and
* special situation assets.
On Sept. 30, 2001, Ares failed its class A and B minimum net worth
tests as well as its class B and class C overcollateralization --
OC -- tests. In response to the failures, it entered into a
limited waiver agreement effective Nov. 19, 2001, with the senior
lenders and noteholders that waived current and future compliance
with the provisions of the minimum net worth covenant as well as
the OC tests. Concurrent with the limited waiver, the collateral
manager provided a schedule of asset sales and senior debt
repayment that called for full repayment of the revolving credit
facility and the class A notes (senior debt) by predetermined
dates. As of the May 28, 2004, valuation date, the senior debt
has been paid in full and the senior subordinated notes are now
the controlling class.
As of the Nov. 30, 2004, valuation date, 74% of the senior
subordinated notes have been redeemed and all deferred interests
payments have been paid. Currently, the subordinated notes are
still accruing interest payments. The Ares portfolio had a total
market value of $204.1 million to cover $164.5 million of rated
notes as of the Nov. 30, 2004, valuation date. Since its initial
minimum net worth test failure, the OC levels for the senior
subordinated notes and subordinated notes have increased from
97.7% and 96.0% as of the Oct. 5, 2001, valuation date to 160.5%
and 102.2%, respectively, as of the Nov. 30, 2004, valuation date.
Fitch performed discounted market value analysis under various
stressful liquidation scenarios and determined that there was
sufficient cushion to cover the remaining note balances. After
discussing the current state of the portfolio and the credit
quality of individual assets with Ares Management, rated 'CAM2' by
Fitch, Fitch believes the liquidation is progressing in a manner
consistent with expectations and is benefiting from the improved
market conditions since the initial failure. Fitch places the
senior subordinated notes on Rating Watch Positive as a result of
Ares having a few assets that have pending redemptions.
As a result of this analysis, Fitch has determined that the
ratings assigned to the senior subordinated notes and the
subordinated notes no longer reflect the current risk to
noteholders.
Additional deal information and historical data are available on
the Fitch Ratings web site at http://www.fitchratings.com/
ARMSTRONG: Wants Employee Retention Program Continued in 2005
-------------------------------------------------------------
Armstrong World Industries, Inc., and its debtor-affiliates
previously implemented an employee retention program for senior
level executives and managers, which was developed by AWI's senior
management with the assistance of the Human Capital Division of
Arthur Andersen and Lazard Freres & Co., LLC -- the Debtors'
financial advisers. The Current Employee Retention Program, in
conjunction with AWI's customary incentive compensation programs,
was developed shortly after the Petition Date and constituted a
comprehensive program designed to provide the necessary financial
and other security and incentives to:
* minimize key employee turnover;
* encourage key employees to remain with AWI, notwithstanding
the uncertainty surrounding its Chapter 11 case;
* attract highly competent new executives; and
* motivate all key employees to work diligently and
productively to maximize enterprise value throughout AWI's
chapter 11 case.
The Current Employee Retention Program includes:
(a) annual cash retention payments for certain key employees;
(b) a severance benefit plan; and
(c) the assumption of certain -- and the ability to enter into
new -- change in control agreements and an employment
agreement.
Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, relates that the Cash Retention Program, in
particular, was designed to address the fact that, as a result of
the Debtors' bankruptcy filing, the stock-based compensation the
key employees had previously received had become worthless, and
AWI faced significant retention issues and increased senior
management attrition. The Cash Retention Program served to ensure
that total compensation paid to AWI's key employees remained
competitive with other potential employers, and to provide
employees with an incentive to remain with the company. Under the
Cash Retention Program, approximately 150 key employees were
eligible to receive annual cash retention payments over the
three-year period ending December 31, 2003. Each year's payment
ranged from 30% to 110% of base salary depending on the position
level and the nature of the work performed by the key employees.
The Severance Pay Plan includes a severance benefit schedule that
provides approximately 195 eligible key employees with severance
payments for a specified number of months, depending on the
employee's position, in the event they are terminated during the
course of the Debtors' Chapter 11 cases, unless their employment
is terminated as a result of death or disability, unacceptable
performance or disciplinary reasons, voluntary termination, or the
key employee's election not to accept an AWI offer of comparable
employment.
Pursuant to the Severance Pay Plan, the participating key
employees will receive continued employee benefits for the
duration of their applicable severance period and outplacement
services. Unlike the Cash Retention Program, the severance
protections under the Current Employee Retention Program have not
expired and will remain in effect through the Plan's effective
date. After that time, the Severance Pay Plan will be amended to
incorporate changes described in the Plan and assumed by
Reorganized AWI.
AWI also maintains customary incentive compensation plans in which
the key employees participate. These compensation plans consist
of an annual incentive plan for key managers and senior level
executives, and a long-term cash incentive plan.
The Plan, once effective, provides for the implementation of the
New Long-term Incentive Plan, pursuant to which key employees are
eligible for awards through grants of stock shares, restricted
stock, stock options, performance shares and stock appreciation
rights, or cash incentives in lieu of equity-based awards.
Mr. Collins states that the Current Employee Retention Program has
been extremely successful. For the three year-period ending
December 31, 2003, AWI had an average annual management voluntary
turnover rate of approximately 4%.
Unfortunately, however, due to recent circumstances beyond
control, AWI has been unable to emerge from Chapter 11, and this
has created uncertainty and concern among key employees. Because
AWI had expected to emerge from Chapter 11 in December 2003, it
did not seek to adopt a Cash Retention Program for 2004. Once the
Plan becomes effective, AWI will be able to return to equity-based
incentive compensation as part of the compensation packages it can
offer its key employees.
With the continued uncertainty over AWI's emergence, though, the
key employees have had a year in which, instead of participating
in the New Long-term Incentive Plan contemplated by the Plan or
receiving cash bonuses as provided under the Cash Retention
Program, they received no special incentive compensation. This
has contributed to AWI experiencing a key employee voluntary
turnover rate of 9.6% -- more than two times its average turnover
rate for the first three years of its bankruptcy -- during the
first 10 months of 2004.
Realistically, Mr. Collins says that it is now certain that AWI
will not emerge from bankruptcy until, at the earliest, 2005.
AWI's instability has also intensified because corporate
headhunters are targeting its key employees. In addition, the
Debtors' Cash Retention Program expired over a year ago. AWI
believes that a renewed cash retention program for 2005 is
necessary to achieve low-key employee turnover.
Thus, the Debtors ask the Court to continue the Cash Retention
Program through December 31, 2005.
Because the current Cash retention Program was developed almost
four years ago, AWI has examined the program to determine whether
it continues to be properly structured to motivate key employees
to remain and to provide them with competitive compensation
packages. As a result of these efforts, the Continued Cash
Retention Program was presented to the Compensation Committee of
the Board of Directors of Armstrong Holdings, Inc. -- AWI's
indirect parent corporation -- and approved by AWI's Board of
Directors.
In determining to adopt the Continued Cash Retention Program, the
Compensation Committee considered, among other things:
(1) the renewed and obvious need to retain key employees;
(2) the costs associated with the program implementation and
the costs of similar programs previously offered;
(3) AWI's operational and financial performance;
(4) the compensation received by senior management personnel
at other companies;
(5) the consistency of compensation practices within AWI;
(6) similar programs implemented in other reorganization
cases; and
(7) the disruption and costs associated with losing and
having to replace key employees.
Mr. Collins notes that AWI's Key Employees is an extremely
valuable asset. They possess unique knowledge, skills, experience
and customer and supplier relationships, which are vital to the
business enterprise and, in many cases, impossible to replicate.
"It is self-evident that the continued employment, dedication,
motivation and loyalty of these key employees is not only
essential to AWI's maintenance, preservation and prosperity, but
also to the success of the entire reorganization effort."
Headquartered in Lancaster, Pennsylvania, Armstrong World
Industries, Inc. -- http://www.armstrong.com/-- the major
operating subsidiary of Armstrong Holdings, Inc., designs,
manufactures and sells interior finishings, most notably floor
coverings and ceiling systems, around the world. The Company and
its debtor-affiliates filed for chapter 11 protection on
December 6, 2000 (Bankr. Del. Case No. 00-04469). Stephen
Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C.
Silberglied, Esq., at Richards, Layton & Finger, P.A., represent
the Debtors in their restructuring efforts. When the Debtors
filed for protection from their creditors, they listed
$4,032,200,000 in total assets and $3,296,900,000 in liabilities.
(Armstrong Bankruptcy News, Issue No. 70; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
CALDWELL/VSR: Wants to Hire Cantor Arkema as Bankruptcy Counsel
---------------------------------------------------------------
Caldwell/VSR, Inc., asks the U.S. Bankruptcy Court for the Eastern
District of Virginia for permission to employ Cantor Arkema, P.C.
as its general bankruptcy counsel.
Cantor Arkema is expected to:
a) advise and assist the Debtor in the discharge of its rights
and duties as a debtor-in-possession in the continued
operation of its business within the strictures of the
bankruptcy law;
b) advise the Debtor in the formulation of a proposed plan of
reorganization;
c) represent the Debtor's interests in adversary proceedings
and contested matters before the Court; and
d) perform other legal services as necessary and appropriate in
the Debtor's chapter 11 case.
Neil E. McCullagh, Esq., a Principal at Cantor Arkema, is the lead
attorney for the Debtor's restructuring. Mr. McCullagh discloses
that the Firm received a $70,000 retainer. Mr. McCullagh will bill
the Debtor $185 per hour.
Mr. McCullagh reports Cantor Arkema's professionals bill:
Designation Hourly Rate
----------- -----------
Partners $220 - 275
Associates 135 - 185
Legal Assistants 55 - 75
Cantor Arkema assures the Court that it does not represent any
interest adverse to the Debtor or its estate.
Headquartered in Mechanicsville, Virginia, Caldwell/VSR, Inc. --
http://www.caldwellvsr.com/-- manufactures high-quality, finished
wood blind and shutter components. The Company filed for chapter
11 protection on December 15, 2004 (Bankr. E.D. Va. Case No. 04-
41560). When the Debtor filed for protection from its creditors,
it listed total assets of $7,367,512 and total debts of
$22,682,205.
CALDWELL/VSR: U.S. Trustee Picks 5-Member Creditors Committee
-------------------------------------------------------------
The United States Trustee for Region 4 appointed five creditors
to serve on the Official Committee of Unsecured Creditors in
Caldwell/VSR, Inc.'s chapter 11 case:
1. Summitt Forest Products
Attn: Jim B. Summitt
3822 Vista Blanca
San Clemente, California 92672
Phone: 949-361-4714, Fax: 949-361-4721
2. Maze Mouldings
Attn: Steven J. Mazeika
P.O. Box 78000
1252 W. Roger Rd.
Tucson, Arizona 85703
Phone: 520-888-9743, Fax: 520-888-5850
3. The Valspar Corporation
Attn: Jeff Hansen
1101 S. Third St.
Minneapolis, Minnesota 55415
Phone: 612-375-7789, Fax: 612-375-7728
4. Solvents & Chemicals, Inc.
Attn: Bruce R. McKee
4704 Shank Rd.
Pearland, Texas 77588
Telephone: 281-485-1458 ext. 290, Fax: 281-822-1064
5. Packaging Services
Attn: Debra Pierce
2848 Anode Lane
Dallas, Texas 75220
Phone: 214-350-3911. Fax: 214-350-3765
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 Mechanicsville, Virginia, Caldwell/VSR, Inc. --
http://www.caldwellvsr.com/-- manufactures high-quality, finished
wood blind and shutter components. The Company filed for chapter
11 protection on December 15, 2004 (Bankr. E.D. Va. Case No. 04-
41560). Neil E. McCullagh, Esq., at Cantor Arkema, P.C.,
represents the Debtor in its restructuring. When the Debtor filed
for protection from its creditors, it listed total assets of
$7,367,512 and total debts of $22,682,205.
CALPINE CORP: Completes $195M Project Financing for Mexico Center
-----------------------------------------------------------------
Calpine Corporation (NYSE: CPN) reported that its indirect
subsidiary Compania de Generacion Valladolid, S. de R.L. de C.V.
-- CGV -- completed a $195 million, non-recourse project financing
for the Valladolid III Energy Center in Valladolid, Mexico. The
financing facility will fund the construction of the 525-megawatt
generation project that Calpine is developing with partners Mitsui
& Co., Ltd. and Chubu Electric Power Co., Inc.
Financing is being provided by the Japan Bank for International
Cooperation -- JBIC -- and three commercial banks from their
Tokyo-based offices. The banks include Mizuho Corporate Bank,
Ltd., Sumitomo Mitsui Banking Corporation and Standard Chartered
Bank. Mizuho also acted as Lead Arranger for the transaction.
The long-term financing facility will mature in October 2020.
Pricing under the facility will be fixed for 60 percent of the
principal and floating for the remaining 40 percent based on LIBOR
plus a margin.
Calpine has supplied two General Electric F-class combustion gas
turbines in exchange for a 45-percent interest in CGV. Valladolid
III is expected to begin operations in mid-2006 and sell its full
output to the Comision Federal de Electricidad -- CFE -- under a
25-year power purchase agreement.
"With its long-term power sales contract already in place, we are
proud of achieving another milestone for our Valladolid project in
Mexico," said Calpine Chief Financial Officer Bob Kelly. We
appreciate the support of JBIC and the commercial banks in
completing this landmark financing for Calpine and we look forward
to working with them on future transactions."
Mitsui & Co., Ltd., headquartered in Tokyo, Japan, is one of the
largest general trading companies in the world. Chubu Electric
Power, located in Nagoya, Japan, is the third-largest electric
utility in Japan with a generating capacity of nearly 33,000
megawatts. CFE, based in Mexico City, provides electric power
service to most of Mexico.
Calpine Corporation -- http://www.calpine.com/-- is a North
American power company dedicated to providing electric power to
customers from clean, efficient, natural gas-fired and geothermal
power plants. The company generates power at plants it owns or
leases in 21 states in the United States, three provinces in
Canada and in the United Kingdom. The company, founded in 1984,
is listed on the S&P 500 and was named FORTUNE's 2004 Most Admired
Energy Company. Calpine is publicly traded on the New York Stock
Exchange under the symbol CPN.
* * *
As reported in the Troubled Company Reporter on Oct. 13, 2004,
Standard & Poor's Ratings Services assigned its 'CCC+' rating to
Calpine Corp.'s (B/Negative/--) $736 million unsecured convertible
notes due 2014. The rating on the notes is the same as Calpine's
existing unsecured debt and two notches lower than the corporate
credit rating. The outlook is negative.
CEDAR BRAKES: Fitch Revises Outlook on Single-B Rating to Positive
------------------------------------------------------------------
Fitch Ratings has revised the Rating Watch Status on bonds for
Cedar Brakes I LLC and Cedar Brakes II LLC to Positive from
Negative.
Cedar Brakes I LLC:
-- $285.8 million senior secured bonds 'B'.
Cedar Brakes II LLC:
-- $379.7 million senior secured bonds 'B'.
The rating action follows yesterday's announcement that El Paso
Marketing -- EPM, an affiliate of El Paso Corp. -- EP, has reached
an agreement to transfer its power supply obligations under Cedar
Brakes to Constellation Energy Commodities Group, Inc. -- CECG, an
affiliate of 'A-' rated Constellation Energy Group.
The Cedar Brakes entities were originally created as part of El
Paso Corp.'s Qualifying Facility contract restructuring program.
Cedar Brakes I and II currently purchase energy from El Paso
Marketing and resell that energy to Public Service Electric & Gas
Co. (senior unsecured rated 'A-' by Fitch) under long term
contracts. Although Cedar Brakes I and II are bankruptcy-remote,
indirect subsidiaries of EP, their ratings have been constrained
by the underlying credit quality of EP due to EP's guarantee of
EPM's performance under the supply contracts. Upon closing of the
transfer of EPM's supply obligations to CEGG, Fitch expects to
raise its ratings to reflect the higher credit quality of the CEG
group versus that of EP.
DANA CORP: Inks Long-Term Supply Pact with Federal-Mogul
--------------------------------------------------------
Dana Corporation (NYSE: DCN) has signed a long-term agreement with
Federal- Mogul Corporation (OTC Bulletin Board: FDMLQ) to supply
Dana with grey iron castings from its western Michigan facility.
Grey iron castings are used in the manufacture of piston rings.
Consequently, Dana will close its Muskegon, Mich., foundry
operations. Production is expected to end in the third quarter of
2005, eliminating approximately 240 jobs. This action will result
in an after-tax charge of approximately $12 million, of which $11
million will be recorded in the fourth quarter of 2004.
"This decision was necessary due to the excess capacity for grey
iron piston ring castings," said Mike Laisure, president of Dana's
Automotive Systems Group. "Our foundry is severely underutilized
and no longer a viable operation. This action will strengthen our
overall competitiveness.
"Affected Dana employees will receive outplacement training and
separation benefits. We will do everything possible to support
our people in their search for new employment," he added.
About the Company
Dana Corporation is a global leader in the design, engineering,
and manufacture of value-added products and systems for
automotive, commercial, and off-highway vehicles. Delivering on a
century of innovation, the company employs approximately 45,000
people worldwide dedicated to advancing the science of mobility.
Founded in 1904 and based in Toledo, Ohio, Dana operates
technology, manufacturing, and customer-service facilities in 30
countries. Sales from continuing operations totaled $7.9 billion
in 2003.
* * *
As reported in the Troubled Company Reporter on Dec. 09, 2004,
Fitch Ratings has upgraded Dana Corporation's senior unsecured
debt rating to 'BBB-' from 'BB+' and assigns a rating of 'BBB-' to
new $450 million 10-year senior unsecured notes.
The Positive Rating Watch put in place on Aug. 2, 2004 has now
been resolved as the proceeds from a new issuance of senior
unsecured notes and the sale of the Automotive Aftermarket Group -
- AAG -- will be used to make a voluntary pension fund
contribution and to retire outstanding indebtedness in a tender
offer currently in progress. Including the completion of the
tender offer, approximately $2 billion of Dana's debt is affected
by this rating action.
Fitch's rating action reflects Dana's enhanced liquidity, sharply
improved credit metrics, and improved business profile, as well as
Dana's improved operational performance.
DELTA AIR: Inks New Service Agreements with Republic Airways
------------------------------------------------------------
Republic Airways Holdings Inc.'s (NASDAQ:RJET) Republic Airlines
subsidiary has agreed with Delta Air Lines, Inc., to operate 16
Embraer 170 aircraft as a Delta Connection partner. The Embraer
170 agreement is subject to execution of the final definitive code
share agreement. Also, its Chautauqua Airlines subsidiary has
amended its existing Delta Connection agreement.
Republic Airlines will operate 16, 70-passenger Embraer 170
aircraft. Aircraft deliveries will begin in mid 2005 with the
last aircraft delivery to occur in mid 2006. In connection with
the new agreement, Republic Airways Holdings will issue warrants
to Delta allowing for the purchase of up to 960,000 of its common
shares at an exercise price of $11.60, which is the closing price
of the stock on Dec. 22, 2004. The warrant is subject to a number
of conditions including the number of aircraft delivered and the
continued performance of Delta over the duration of the service
agreement. The term of the new Republic agreement is 14 years,
and Delta received a termination for convenience right, which can
be exercised no earlier than the eighth year of the agreement.
The Republic Airlines code-share agreement will be substantially
similar to the existing Chautauqua Airlines agreement.
Chautauqua Airlines amended agreement calls for a two year
contract term extension to May 31, 2016, a one year extension of
the notice date of Delta's termination for convenience option to
Nov. 30, 2009, and a cancellation of 2,025,000 existing warrants,
or 45% of the warrants previously granted to Delta by RJET. Also,
Delta has agreed to cancel its order for eight, Embraer ERJ 145,
50 passenger aircraft that were scheduled for delivery during the
first half of 2005. In return for these contractual changes,
Chautauqua has agreed to reduce its compensation levels on the
existing ERJ-145 fleet, by three percent (3%) for the remainder of
the contract.
"We are very pleased we were able to take a proactive stance
towards working with Delta in their successful restructuring
efforts. In doing so we were able to provide Delta long-term
savings in our existing business and also provide a cost effective
solution for new 70 seat EMB-170 regional jets. These agreements
represent a strong example of a `win-win' business partnership,"
said Bryan Bedford, Chairman, President and Chief Executive
Officer of Republic Airways Holdings. "Our company has an
excellent tradition of delivering safe, reliable and cost
effective service to our partners. We are excited to add the
Embraer 170 to the Delta Connection program. This aircraft has
received excellent customer acceptance from passengers and sets a
new standard in regional airline service in North America."
"Chautauqua continues to be a reliable and cost-efficient provider
of regional jet service to Delta," said Fred Buttrell, President
and Chief Executive Officer of Delta Connection, Inc. "We are
pleased to replace existing orders for 50-seat aircraft with roomy
and customer-friendly Embraer 170s which better fit our growth
plans for 2005 and 2006 and allow us to promptly respond to
changing market conditions. The Embraer 170s range and enhanced
customer amenities will play an important role in fulfilling
network requirements not currently met by Delta Connection
carriers existing fleet of regional jet aircraft."
The Embraer 170 will be configured with 6 first class seats in a
two and one configuration and 64 coach seats in a two by two
configuration. First class passengers will enjoy a 36 inch seat
pitch while coach passengers will enjoy a 32 inch seat pitch.
Republic Airways Holdings, based in Indianapolis, Indiana, is an
airline holding company. Chautauqua Airlines offers scheduled
passenger service on more than 670 flights daily to 70 cities in
30 states, the District of Columbia, Canada and the Bahamas
through code sharing agreements with four major U.S. airlines.
Republic Airlines is currently completing its FAA certification.
The airline currently operates a fleet of 110 Embraer regional
jets, including 68 ERJ-145's, 15 ERJ-140's, 17 ERJ-135's and ten
Embraer 170's. All of its flights are operated under its major
airline partner brand, such as AmericanConnection, Delta
Connection, United Express and US Airways Express. The airline
employs more than 2,400 aviation professionals.
More information on Republic Airways Holdings and its subsidiaries
can be found at http://www.rjet.com/
Delta Air Lines -- http://delta.com/-- is the world's second
largest airline in terms of passengers carried and the leading
U.S. carrier across the Atlantic, offering daily flights to 493
destinations in 87 countries on Delta, Song, Delta Shuttle, the
Delta Connection carriers and its worldwide partners. Delta's
marketing alliances allow customers to earn and redeem frequent
flier miles on more than 14,000 flights offered by SkyTeam,
Northwest Airlines, Continental Airlines and other partners.
Delta is a founding member of SkyTeam, a global airline alliance
that provides customers with extensive worldwide destinations,
flights and services.
At September 30, 2004, Delta Air Lines reported a $3.58 billion
shareholder deficit, compared to a $659 million shareholder
deficit at December 31, 2003.
* * *
As reported in the Troubled Company Reporter on Dec. 1, 2004,
Standard & Poor's Ratings Services lowered its rating on the class
B certificates issued by Delta Funding Home Equity Loan Trust
1999-2 to 'B' from 'BB+'. At the same time, ratings are affirmed
on the remaining classes from the same series.
DICK'S SPORTING: Sr. Convert. Noteholders Agree to Amend Indenture
------------------------------------------------------------------
Dick's Sporting Goods, Inc. (NYSE: DKS) discloses the successful
completion of its previously announced solicitation to amend the
indenture related to its 2.375% Senior Convertible Notes due 2024.
The amendment eliminates a provision in the indenture that
prohibits the Company from paying cash upon a conversion of the
Notes if an event of default, as defined in the indenture, has
occurred and is continuing at that time.
Georgeson Shareholder acted as information agent for the consent
solicitation. Merrill Lynch & Co. acted as the solicitation agent.
About Dick's Sporting Goods, Inc.
Pittsburgh-based Dick's Sporting Goods, Inc. is an authentic full-
line sporting goods retailer offering a broad assortment of brand
name sporting goods equipment, apparel, and footwear in a
specialty store environment. As of October 30, 2004, the Company
operated 233 stores in 32 states primarily throughout the Eastern
half of the U.S. under the Dick's Sporting Goods and Galyan's
names.
* * *
As reported in the Troubled Company Reporter on Nov. 25, 2004,
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Pittsburgh, Pennsylvania-based Dick's Sporting
Goods Inc.
A 'B' rating was assigned to the company's $172.5 million senior
unsecured convertible notes due 2024. The senior notes are rated
one notch below the corporate credit rating due to the amount of
secured bank debt in the capital structure. The outlook is
negative.
"The ratings reflect Dick's rapid growth, the integration risk
associated with the company's recent acquisition of Galyans
Trading Co. Inc., and a leveraged financial profile, though the
company has a leading regional market position," said Standard &
Poor's credit analyst Kristi Broderick. Dick's has grown
organically, from a base of two stores in 1984 to about 180 big-
box, full-line sporting goods stores 20 years later. On
July 29, 2004, Dick's acquired Galyans for about $362 million,
funded by $192 million in cash on hand and $170 million in
borrowings from the company's revolving credit facility. The
potential integration risk is significant, as Dick's intends to
convert Galyans' 47 stores into the Dick's format by the first
half of 2005. This reformatting involves changes to merchandise
assortment and branding, as well as an adjustment to managing
Galyans stores. Nonetheless, the rating assumes a relatively
smooth transition, despite the significant challenges.
DII/KBR: Court Approves Changes to Chapter 11 Plan Documents
------------------------------------------------------------
In anticipation of the effective date of their chapter 11 plan,
DII Industries, LLC, and its debtor-affiliates have been working
closely with the Asbestos PI Trustee, the Silica PI Trustee, and
Futures Representative to prepare for the creation and funding of
the Asbestos PI Trust and the Silica PI Trust.
Jeffrey N. Rich, Esq., at Kirkpatrick & Lockhart, LLP, in New
York, relates that the Trustees of both trusts have asked the
Debtors to consider various mechanical, technical, and clarifying
changes to several of the trust-related documents in light of
practical considerations, as well as discussions with banks and
other parties who will be involved in making disbursements to
creditors. Other changes were proposed to bring the trust
documents in line with "best practices" employed by other
similarly situated trusts.
After reviewing the Trustees' suggestions, the Debtors have
indicated their willingness to agree to most of them -- in some
cases with slight alterations -- because the Debtors do not
believe that the Trustees' suggestions are material or will alter
the risk to creditors under the Plan.
Because the changes are not substantive or material, they do not
necessarily require approval in light of the Court's authorization
for the parties to enter into the Plan Documents in their agreed
form. However, the Trustees have asked the Debtors to file a
motion and for the Documents to be filed for public record. The
proposed changes to the Documents are:
Document Overview of Changes
-------- -------------------
Asbestos PI Trust -- Changes to article 2.3 to clarify,
Agreement consistent with other funding
documents, that payments to settled
claimants are to be made only under the
Asbestos PI Trust Funding Agreement.
-- Change to clarify the name that may be
used by the Asbestos PI Trust.
-- Change to article 1.4(e) to clarify that
the Reorganized Debtors, Halliburton,
and other indemnitees are not entitled
to indemnity under that provision for a
qualifying settled claim if there has
been a default in funding for that claim
under the Asbestos PI Trust Funding
Agreement.
-- Changes to various meeting and
administration procedures in the trust
agreement to bring trust documents in
line with the current standard for the
documents in other cases.
-- Change to articles 5.6 and 6.5 to
implement an agreed cap on the fees of
the Legal Representative and Asbestos
TAC.
-- Changes in various sections to clarify
the confidential and privileged nature
of certain trust records.
Asbestos PI Trust -- Changes to provisions relating to
Funding Agreement procedures for payment of qualifying
settled asbestos claims in light of
discussions with paying bank.
-- Changes to payment formulas to reflect
agreements with Asbestos Committee to
escrow of a portion of payments to be
made under agreement prior to the
creation of the trust.
-- Addition of an agreement providing for
Halliburton and the Reorganized Debtors
to indemnify the trust in the event that
a claim is qualified but not funded
under the agreement.
Asbestos PI Trust -- Amendment to clarify that the
Indemnification Reorganized Debtors may not seek
Agreement indemnity for amounts paid into the
the trust.
-- Changes to clarify that the Reorganized
Debtors, Halliburton, and other
indemnitees are not entitled to
indemnity for a qualifying settled claim
if money for that claim is not funded
under the Asbestos PI Trust Funding
Agreement.
Asbestos TDP -- Changes and clarifications negotiated
between the Trustees, the Legal
Representative, and the Asbestos TAC in
light of the issues and experiences of
other asbestos trusts. The changes to
the Asbestos TDP are consistent with the
changes, clarifications, and
modifications that have been
incorporated in TDPs that were approved
in other bankruptcy cases or the subject
of amendment by required parties, and
those changes make the Asbestos TDP
generally in line and consistent with
the TDPs that are currently in effect.
-- Changes to conform use of certain
defined terms.
Silica PI Trust -- Changes to article 2.3 to clarify that
Agreement payments to settled claimants are to be
made only under the Silica PI Trust
Funding Agreement.
-- Change to article 1.4(b) to clarify that
the Reorganized Debtors, Halliburton,
and other indemnitees are not entitled
to indemnity for a qualifying settled
claim if there has been a default in
funding for that claim under the Silica
PI Trust Funding Agreement.
-- Changes to various meeting and
administration procedures in the trust
agreement to bring trust documents in
line with the current standard for the
documents in other cases.
-- Change to articles 5.6 and 6.5 to
implement an agreed cap on the fees of
the Legal Representative and Silica TAC.
-- Changes in various sections to clarify
the confidential and privileged nature
of certain trust records.
Silica PI Trust -- Changes to provisions relating to
Funding Agreement procedures for payment of qualifying
settled silica claims in light of
discussions with paying bank.
-- Changes to payment formulas to reflect
agreements with Silica TAC to escrow of
a portion of payments to be made under
agreement prior to creation of the
trust.
-- Addition of an agreement providing for
Halliburton and the Reorganized Debtors
to indemnify the trust in the event that
a claim is qualified but not funded
under the agreement.
-- Changes to clarify the joint and several
nature of obligations under the
agreement.
Silica PI Trust -- Amendment to clarify that the
Reorganized Debtors may not seek
Indemnification Agreement indemnity for
amounts paid into the trust.
-- Changes to clarify that the Reorganized
Debtors, Halliburton, and other
indemnitees are not entitled to
indemnity for a qualifying settled claim
if money for the claim is not funded
under the Silica PI Trust Funding
Agreement.
The Plan provides the Court with the power and authority to
"interpret the terms and conditions of the Plan Documents." At
the Debtors' behest, the Court approves the form of the Plan
Documents and authorizes the Debtors and the Trustees of the
Asbestos PI Trust and the Silica PI Trust to execute and deliver
those Documents on the Effective Date with the proposed changes.
According to Mr. Rich, the settlement agreements that have been
entered into between the Debtors and their insurers will
facilitate the resolution of the pending appeals of the
Confirmation and Affirmation Orders. The Debtors anticipate being
in a position to fund each of the Asbestos and Silica PI Trusts
and to otherwise consummate all other provisions of the Plan in
January 2005.
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. 23;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
E. CONRAD TRUCKING: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: E. Conrad Trucking, Inc.
1285 Industrial Park
Van Wert, Ohio 45891
Bankruptcy Case No.: 04-70698
Type of Business: The Company is an interstate and intrastate
trucking company.
Chapter 11 Petition Date: December 26, 2004
Court: Northern District of Ohio (Toledo)
Debtor's Counsel: Steven L Diller, Esq.
Steven L Diller Law Firm
124 East Main Street
Van Wert, Ohio 45891
Tel: (419) 238-6621
Total Assets: $6,297,807
Total Debts: $10,284,510
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Lanes Motel, Inc. Loan to Debtor $179,261
Highway 56
PO Box 224
French Lick, Indiana 47432
Selking International Past parts and $101,984
1850 West Highway 224 rental of equipment
PO Box 447
Decatur, Indiana 46733
Gas America Fuel accounts $99,166
2700 West Main Street
Greenfield, Indiana 46140
Ahern & Associates, Ltd. Claimed fees for $75,000
Camelback Professional Building Audit
5107 North 7th Street, Suite 102
Phoenix, Arizona 85014
Double A Trailer Sales, Inc. Parts on account $47,737
Easter Tire & Retreading Tires $47,033
Transportation Clearing House Fuel $45,000
Humacare Past payroll not $40,000
funded by debtor
Koesters Repairs $32,428
Qualcomm Incorporated Services provided $28,743
on account
Top Line Express, Inc. Alleged $25,000
Misappropriation
Ottawa Oil Company Fuel $22,561
CW Service, Inc. Fuel $18,752
Conrad Family Partnership Loan to Debtor $17,505
Wilkinson Printing Printing services $17,413
Daves Heavy Towing Services for wreck $16,000
clean up
Greenbaum Doll & McDonald PLLC Legal Services $15,820
FYDA Freightliner Trade Debt $15,000
Community First Bank & Trust Credit Card $12,500
Fleet Maintenance Center Trade Debt $10,009
EASI-MEGATECH ENGINEERING: Voluntary Chapter 11 Case Summary
------------------------------------------------------------
Debtor: EASi-Megatech Engineering, L.L.C.
1551 East Lincoln Avenue
Madison Heights, Michigan 48071
Bankruptcy Case No.: 04-76049
Type of Business: The Company provides analysis, design, IT, PDM
and enterprise solutions to a wide range of
customers in the automotive, aerospace, marine,
and consumer products industries.
See http://www.easiusa.com/
Chapter 11 Petition Date: December 22, 2004
Court: Eastern District Of Michigan (Detroit)
Judge: Thomas J. Tucker
Debtor's Counsel: Julie Beth Teicher, Esq.
Erman, Teicher, Miller, Zucker & Freedman, PC
400 Galleria Officentre, Suite 444
Southfield, Michigan 48034-2162
Tel: (248) 827-4100
ELN PROFESSIONAL EMPLOYERS: Voluntary Chapter 11 Case Summary
-------------------------------------------------------------
Lead Debtor: ELN Professional Employers Group
546 East Main Street
Batavia, New York 14020
Bankruptcy Case No.: 04-19312
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Empire ASO 04-19313
Chapter 11 Petition Date: December 22, 2004
Court: Western District of New York (Buffalo)
Judge: Michael J. Kaplan
Debtor's Counsel: Mehmet Kirk Okay, Esq.
Okay Law Firm
PO Box 622
Batavia, New York 14021-0622
Tel: (585) 344-3161
Total Assets Total Debts
------------ -----------
ELN Professional Employers Group $0 to $50,000 $1M to $10M
Empire ASO $0 to $50,000 $1M to $10M
The Debtors did not file a list of their 20 Largest Unsecured
Creditors.
ENRON CORP: Targa Closes Bridgeline Interest Sale
-------------------------------------------------
Targa Resources, Inc., an independent company formed in 2003 by
management, and Warburg Pincus, the global private equity firm,
closed an acquisition of Enron North America's 40% interest in
Bridgeline LLC and similar interest in Bridgeline Holdings, LP.
Targa paid $100 million plus or minus certain post-closing
adjustments for working capital.
Bridgeline was originally formed by Enron and Texaco to combine
pipeline and storage facilities in southern Louisiana and
ChevronTexaco continues to retain a 60% interest. Bridgeline
owns and operates over 1,000 miles of intrastate natural gas
pipelines and two fully integrated storage facilities with 12.7
Bcf of working gas capacity.
Bridgeline has a significant merchant presence within the
Mississippi River Corridor end-user community, serving
industrial, chemical, electric utility and LDC customers.
Bridgeline accesses supply from gas fields in Louisiana, Texas
and the Gulf of Mexico (both shelf and deep water).
In addition to its merchant activities, Bridgeline transports
and/or stores gas for other third party marketers, producers and
end users. Shippers take advantage of the NYMEX market liquidity
through Bridgeline's physical, bi-directional access at the Henry
Hub, as well as its interconnects with numerous intrastate and
interstate pipelines.
Rene Joyce, CEO of Targa, said, "We are very pleased to have been
successful in this acquisition. The Bridgeline assets and their
associated businesses are a strong complement to Targa's strategy
and existing portfolio in Louisiana and Texas."
Targa's existing Louisiana assets consist of an integrated
gathering and processing system that covers approximately 2,000
square miles, from Lake Charles to Lafayette, with approximately
700 miles of pipeline and processing capacity of about 260
MMcf/d. The Louisiana system supplies approximately 40% of the
Lake Charles industrial and refinery market. Current Texas
assets consist of an integrated gathering and processing system
with approximately 1,200 miles of low and high-pressure lines and
processing capacity of 140 MMcf/d gathered from approximately 750
wellhead and central delivery locations in the Permian Basin.
About Targa Resources
Targa Resources, Inc. is an independent company that was formed in
2003 to pursue gas gathering, processing, and pipeline asset
acquisition opportunities. The Company's strategy is to
acquire high quality assets and grow this base into a leading
focused midstream energy company, predominantly in the Gulf
Coast, Mid-Continent and Rocky Mountain regions of the United
States. The management team consists of Rene Joyce, CEO; Roy
Johnson, EVP; Joe Bob Perkins, President; Mike Heim, COO, Jeff
McParland, CFO; and Paul Chung, General Counsel. The team has a
combined 165 years of experience in the midstream energy business
and is prepared to rapidly assess and close on available
acquisition opportunities through negotiated transactions and
limited auctions. For more information, please visit --
http://www.targaresources.com/
About Warburg Pincus
With approximately $13 billion under management, including
$3 billion available for investment, Warburg Pincus has been a
leading private equity investor since 1971. The firm has
invested more than $18 billion in approximately 490 companies in
30 countries.
Warburg Pincus -- http://www.warburgpincus.com/-- has invested
approximately $1.3 billion in energy companies since the late
1980s including exploration and production, power and oilfield and
other services companies.
Example energy portfolio companies include: Bill Barrett
Corporation, Encore Acquisition Company, Spinnaker Exploration,
Antero Resources, Carneros Energy, Competitive Power Ventures,
emgs (ElectroMagnetic GeoServices), Gryphon Exploration, Kosmos
Energy, Latigo Petroleum, MEG Energy, and Targa Resources. In
addition, the firm is a significant investor in many advanced
technology companies pioneering new semiconductor, software, and
telecommunications products around the world. Throughout its
history in private equity, Warburg Pincus has invested at all
stages of a company's life cycle, from founding start-ups and
providing growth capital, to leading restructurings,
recapitalizations and buyouts.
Headquartered in Houston, Texas, Enron Corporation is in the midst
of restructuring various businesses for distribution as ongoing
companies to its creditors and liquidating its remaining
operations. Before the company agreed to be acquired, controversy
over accounting procedures had caused Enron's stock price and
credit rating to drop sharply.
Enron filed for chapter 11 protection on December 2, 2001 (Bankr.
S.D.N.Y. Case No. 01-16033). Judge Gonzalez confirmed the
Company's Modified Fifth Amended Plan on July 15, 2004, and
numerous appeals followed. Martin J. Bienenstock, Esq., and Brian
S. Rosen, Esq., at Weil, Gotshal & Manges, LLP, represent the
Debtors in their restructuring efforts. (Enron Bankruptcy News,
Issue No. 132; Bankruptcy Creditors' Service, Inc., 15/945-7000)
EQUITYLINK I INC: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: Equitylink I, Inc.
8620 Wolff Court, Suite 200
Westminster, Colorado 80031
Tel: (303)427-9005
Bankruptcy Case No.: 04-37622
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Equitylink, LLC 04-37637
Type of Business: The Company is a real estate agent and broker.
Chapter 11 Petition Date: December 23, 2004
Court: District of Colorado (Denver)
Judge: Elizabeth E. Brown
Debtor's Counsel: Julie Trent, Esq.
Bieging, Shapiro & Burrus LLP
4582 South Ulster Street Parkway, Suite 1650
Denver, Colorado 80237
Tel: (720) 488-0220
Fax: (720) 488-7711
-- and --
David M. Miller, Esq.
Lee M. Kutner, Esq.
Kutner Miller, PC
303 East 17th Avenue, Suite 500
Denver, Colorado 80203
Tel: (303) 832-2400
Total Assets Total Debts
------------ -----------
Equitylink I, Inc. $1 Mil. to $10 Mil. $1 Mil. to $10 Mil.
Equitylink, LLC $1 Mil. to $10 Mil. $1 Mil. to $10 Mil.
Consolidated List of the Debtors' 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Musgrave & Theis, LLP Trade Debt $218,207
Republic Plaza, Suite S
Englewood, Colorado 80110
Tom Oberle Ownership Interest $123,233
1310 Woodmont Way Buyout
Castle Rock, Colorado 80104
Perkins Cole Legal Fees $42,141
1201 Third Avenue, 40th Floor
Seattle, Washington 98101-3099
Bloom Murr & Accomazzo PC Trade Debt $19,288
John Hamner Trade Debt $13,817
Tom Oberle Notes Payable $10,595
Benson Wells & Company Trade Debt $10,283
Thomas & Shelly Adams Rent to own deposit $10,000
Benson Wells & Company Trade Debt $9,656
A&M Home Maintenance Care Trade Debt $9,580
Benson Wells & Company Trade Debt $7,806
Tom Oberle Notes Payable $5,298
Deason-Mahan Family LLC Trade Debt $4,272
Quality Construction Trade Debt $3,635
Richard Todd Trade Debt $3,247
Marxaire, Inc. Trade Debt $3,091
L&D Painting Trade Debt $2,941
Coldiron & Associates, PC Trade Debt $2,454
Herman A. Lohse, III, PC Trade Debt $1,909
Benson Wells & Company Trade Debt $1,881
EXIDE TECH: Citadel Discloses 6.4% Equity Stake
-----------------------------------------------
In a Schedule 13G filing with the Securities and Exchange
Commission dated December 8, 2004, 12 Citadel Entities disclose
that they beneficially own 1,558,195 shares of Exide Technologies
Common Stock, representing 6.4% based on 24,161,910 shares of
Common Stock issued and outstanding as of November 11, 2004:
-- Citadel Limited Partnership,
-- GLB Partners, L.P.,
-- Citadel Investment Group, L.L.C.,
-- Kenneth Griffin,
-- Citadel Wellington Partners, L.P.,
-- Citadel Wellington Partners, L.P. SE,
-- Citadel Kensington Global Strategies Fund Ltd.,
-- Citadel Equity Fund Ltd.,
-- Citadel Credit Products Ltd.,
-- Citadel Jackson Investment Fund Ltd.,
-- Citadel Credit Trading Ltd., and
-- Citadel Antaeus International Investments Ltd.
Headquartered in Princeton, New Jersey, Exide Technologies is the
worldwide leading manufacturer and distributor of lead acid
batteries and other related electrical energy storage products.
The Company filed for chapter 11 protection on April 14, 2002
(Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and
Kirk A. Kennedy, Esq., at Kirkland & Ellis, represent the Debtors
in their restructuring efforts. Exide's confirmed chapter 11 Plan
took effect on May 5, 2004. On April 14, 2002, the Debtors listed
$2,073,238,000 in assets and $2,524,448,000 in debts. (Exide
Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
FAIRFAX FINANCIAL: Declares $1.40 Annual Dividend Per Share
-----------------------------------------------------------
Fairfax Financial Holdings Limited (TSX:FFH.SV) (NYSE:FFH)
declared a dividend of US$1.40 per share on its outstanding
multiple voting and subordinate voting shares, payable on
January 28, 2005 to shareholders of record on January 14, 2005.
Applicable Canadian withholding tax will be applied to dividends
payable to non-residents of Canada.
This dividend continues the policy, instituted in 2001, of payment
of a modest annual dividend. This policy was discussed in
Fairfax's 2000 Annual Report. The dividend declared in 2003 was
also US$1.40 per share.
Fairfax Financial Holdings Limited is a financial services holding
company, which, through its subsidiaries, is engaged in property
and casualty insurance and reinsurance, investment management and
insurance claims management.
* * *
As reported in the Troubled Company Reporter on Nov. 12, 2004,
Fitch Ratings commented that Fairfax Financial Holdings Limited's
ratings and Rating Watch Negative status are unaffected by its
recent disclosures via its third-quarter 2004 financial filings
and investor conference held on November 8, 2004.
These ratings remain on Rating Watch Negative by Fitch:
* Fairfax Financial Holdings Limited
-- No action on long-term issuer rated 'B+';
-- No action on senior debt rated 'B+'.
* Crum & Forster Holdings Corp.
-- No action on senior debt rated 'B'.
* TIG Holdings, Inc.
-- No action on senior debt rated 'B';
-- No action on trust preferred rated 'CCC+'.
* Members of the Fairfax Primary Insurance Group
-- No action on insurer financial strength rated 'BBB-'.
* Members of the Odyssey Re Group
-- No action on insurer financial strength rated 'BBB+'.
* Members of the Northbridge Financial Insurance Group
-- No action on insurer financial strength rated 'BBB-'.
* Members of the TIG Insurance Group
-- No action on insurer financial strength rated 'BB+'.
* Ranger Insurance Co.
-- No action on insurer financial strength rated 'BBB-'.
The members of the Fairfax Primary Insurance Group include:
* Crum & Forster Insurance Co.
* Crum & Forster Underwriters of Ohio
* Crum & Forster Indemnity Co.
* Industrial County Mutual Insurance Co.
* The North River Insurance Co.
* United States Fire Insurance Co.
* Zenith Insurance Co. (Canada)
The members of the Odyssey Re Group are:
* Odyssey America Reinsurance Corp.
* Odyssey Reinsurance Corp.
Members of the Northbridge Financial Insurance Group include:
* Commonwealth Insurance Co.
* Commonwealth Insurance Co. of America
* Federated Insurance Co. of Canada
* Lombard General Insurance Co. of Canada
* Lombard Insurance Co.
* Markel Insurance Co. of Canada
The members of the TIG Insurance Group are:
* Fairmont Insurance Company
* TIG American Specialty Ins. Company
* TIG Indemnity Company
* TIG Insurance Company
* TIG Insurance Company of Colorado
* TIG Insurance Company of New York
* TIG Insurance Company of Texas
* TIG Insurance Corporation of America
* TIG Lloyds Insurance Company
* TIG Specialty Insurance Company
FRANKLIN CAPITAL: Raises $4 Million in Private Equity Placement
---------------------------------------------------------------
Franklin Capital Corporation (AMEX: FKL) disclosed that, as a
result of the Company's receipt of additional proceeds in
connection with a fourth closing of the Company's previously
announced private placement of shares of its common stock and
warrants to purchase additional shares of its common stock, the
Company has received to date aggregate proceeds of approximately
$4.0 million from the private placement. These proceeds will be
used in connection with the Company's previously announced
restructuring and recapitalization plan, including to expedite the
Company's entry into the medical products/health care solutions
industry and financial services industry.
The shares of common stock and warrants to purchase additional
shares of common stock issued in connection with the private
placement have not been registered under the Securities Act of
1933, as amended, and may not be offered or sold unless they are
so registered or are exempt from the registration requirements.
* * *
As reported in the Troubled Company Reporter on Aug. 24, 2004,
Franklin Capital Corporation's former independent accountants,
Ernst & Young LLP, indicated in its reports dated March 5, 2004
and March 7, 2003 on Franklin's financial statements, substantial
doubt about the company's ability to continue as a going concern.
G-FORCE CDO: Fitch Puts Low-B Ratings on $90 Million Notes
----------------------------------------------------------
Fitch Ratings affirms 13 classes of notes issued by G-FORCE CDO
2003-1, Ltd.. These affirmations are the result of Fitch's review
process and are effective immediately:
-- $161,672,443 class A-1 notes affirmed at 'AAA';
-- $20,000,000 class A-2 notes affirmed at 'AAA';
-- $28,750,000 class BFL notes affirmed at 'AA';
-- $30,000,000 class BFX notes affirmed at 'AA';
-- $12,000,000 class CFL notes affirmed at 'A';
-- $34,155,000 class CFX notes affirmed at 'A';
-- $13,800,000 class D notes affirmed at 'A-';
-- $26,200,000 class E notes affirmed at 'BBB+';
-- $21,550,000 class F notes affirmed at 'BBB';
-- $26,000,000 class G notes affirmed at 'BBB';
-- $30,000,000 class H notes affirmed at 'BBB-';
-- $40,000,000 class J notes affirmed at 'BB';
-- $50,000,000 class K notes affirmed at 'B'.
G-FORCE CDO 2003-1 is a static collateralized debt obligation --
CDO -- selected by G Funds Asset Management, LLC which closed Dec.
18, 2003. G-FORCE CDO 2003-1 is composed of commercial mortgage-
backed securities -- CMBS. Included in this review, Fitch
discussed the current state of the portfolio with the collateral
administrator and their portfolio management strategy going
forward.
Currently, G-FORCE CDO 2003-1 contains no defaulted assets and
only two securities are rated below 'CCC+' which were purchased
prior to closing. Since closing there have been no portfolio
assets downgraded and a total of three portfolio assets upgraded.
According to the most recent note valuation report dated Nov. 22,
2004, both the overcollateralization -- OC -- test and interest
coverage -- IC -- test are passing their required levels.
The OC ratio has decreased from 165.8% as of Sept. 27, 2004, to
164.3% as of the Nov. 22, 2004, report. The decrease in the OC
ratio is due to an approximately $6 million distribution payment
to the preference shares on the Sept. 27, 2004. The distribution
is the result of having excess initial proceeds beyond the target
par requirement. Any amounts remaining in the initial deposit
account, after reaching the target additional collateral
securities amount, is required to be transferred to the interest
collection account for distribution.
The ratings on class A-1, class A-2, class BFL and class BFX notes
addresses the likelihood that investors will receive full and
timely payments of interest, as well as the ultimate payment of
principal by the legal final maturity date. The ratings on the
class CFL, CFX, D, E, F, G, H, J and K notes address the
likelihood that investors will receive ultimate payment of
interest, as well as the ultimate payment of principal by the
legal final maturity date. As a result of this analysis, Fitch
has determined that the original ratings assigned to all of
G-Force 2003-1 notes still reflect the current risk to
noteholders.
Fitch will continue to monitor and review this transaction for
future rating adjustments. Additional deal information and
historical data are available on the Fitch Ratings web site at
http://www.fitchratings.com/ For more information on the Fitch
VECTOR Model, see 'Global Rating Criteria for Collateralised Debt
Obligations,' dated Sept. 13, 2004.
GLOBAL CROSSING: Completes $404 Million Secured Debt Financing
--------------------------------------------------------------
Global Crossing (Nasdaq: GLBC) completed a debt financing by the
company's wholly owned subsidiary, Global Crossing (UK) Finance
Plc. The approximately $404 million financing consists of:
-- $200 million of 10.75-percent U.S. dollar-denominated senior
secured notes due in 2014; and
-- 105 million pounds of 11.75-percent British pounds sterling-
denominated senior secured notes due in 2014.
The notes are guaranteed by Global Crossing's principal operating
subsidiary in the United Kingdom, Global Crossing (UK)
Telecommunications Limited, and are secured by certain of GCUK's
assets. The notes were sold at a discount resulting in aggregate
gross proceeds of approximately $398 million (currency equivalent)
before underwriting discounts.
"The debt financing, together with the North American accounts
receivable facility that we anticipate putting in place in the
first quarter of 2005 and previously announced recapitalization
steps, is expected to result in our business plan being fully
funded," commented John Legere, Global Crossing's chief executive
officer.
The financing is part of Global Crossing Limited's previously
announced recapitalization plan. Pursuant to the recapitalization
plan, the following actions took place:
-- The GCUK Finance senior notes were issued and sold for gross
proceeds of approximately $398 million.
-- Funds transfers were initiated to repay $75 million
principal amount (plus accrued interest) of the $200 million
in senior notes previously issued by a U.S. subsidiary of
Global Crossing to an affiliate of Singapore Technologies
Telemedia Pte. Ltd.
-- The remaining $125 million of senior notes and the $125
million bridge loan facility previously provided by an
affiliate of ST Telemedia to GCUK were refinanced by $250
million principal amount of 4.7 percent payable-in-kind
secured notes that will mandatorily convert into common
equity of GCL after four years, or will convert earlier at
ST Telemedia's option, into approximately 16.2 million
shares of GCL's common stock (assuming conversion after four
years), subject to certain adjustments.
In the first quarter of 2005, the company anticipates entering
into a $50 million to $100 million working capital facility
secured primarily by North American accounts receivable. The net
proceeds from the GCUK Finance debt financing, together with such
working capital facility, are expected to meet Global Crossing's
long-term financing needs, until the company reaches cash flow
breakeven.
The GCUK Finance senior notes have not been registered under the
U.S. Securities Act of 1933, as amended, and may not be offered or
sold in the United States absent registration or an applicable
exemption from the registration requirements of the Securities
Act.
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.
GS MORTGAGE: Fitch Puts Low-B Ratings on Two 1998 GL-II Classes
---------------------------------------------------------------
GS Mortgage Securities -- GSMC -- Corporation II's, commercial
mortgage pass-through certificates, series 1998-GL II are
upgraded:
-- $91.6 million class B to 'AA+' from 'AA';
-- $84.5 million class C to 'A+' from 'A';
-- $98.6 million class D to 'BBB+' from "BBB';
In addition, these classes are affirmed:
-- $98.6 million class A-1 at 'AAA';
-- $694.3 million class A-2 at 'AAA';
-- Interest only class X at 'AAA';
-- $70.5 million class E at 'BBB-';
-- $63.4 million class F at 'BB'
-- $28.2 million class G at 'B-'
The upgrades are due primarily to the defeasance of the Pier 39
loan, a retail/entertainment complex in San Francisco, California,
and amortization of 12.7% resulting in delevering of the loans.
Although net cash flow -- NCF -- for most of the loans has
declined, due to amortization, the overall Fitch weighted average
debt service coverage ratio -- DSCR -- is stable at 1.39 times
as of trailing twelve months -- TTM -- ending June 30, 2004,
compared to 1.38x at issuance. As part of its review, Fitch
analyzed the performance of each loan and the underlying
collateral. The DSCRs are calculated using Fitch adjusted net
cash flow and debt service payments based on the current balance
and Fitch's stressed refinance constant.
The Marriott Desert Springs loan (7.4%), an 884 room luxury hotel
located in Palm Desert, California, has experienced a severe
decline in NCF since issuance due to increased competition in the
area. However, recent performance has improved: revenue per
available room -- RevPAR -- increased to $119 as of TTM June 04,
from $110 as of year-end 2003. The servicer reported TTM June
2004 NCF decreased 28.6% since issuance. The Fitch adjusted DSCR
is 1.37x as of TTM June 30, 2004, up from 1.28x as of TTM June
2003, and compared to 1.71x at issuance. Although performance has
declined, refinance risk is not an immediate concern as the loan's
anticipated repayment date is not until 2010. The credit
assessment for this loan remains below investment grade.
Although Fitch is concerned with the pool's concentration of
limited service hotels (25.8%) and cold storage (28.7%), each loan
is collateralized by a geographically diverse pool of properties.
The Tharaldson Pools A and B represent a combined 26% of the
pool's principal balance, and are secured by 86 and 90 limited
service hotels, respectively. The DSCR as of TTM June 30, 2004,
for Pool A has decreased to 1.56x from 1.66x at issuance. The TTM
June 30, 2004, DSCR for Pool B increased to 1.60x from 1.59x as of
TTM June 30, 2003, and 1.67x at issuance. Increases in room
expense and operations and maintenance in both pools contributed
to decreased NCF.
The two cold storage pools have remained stable. The DSCR as of
TTM June 30, 2004 for the URS loan (18%) increased to 1.56x from
1.54x as of TTM June 2003, and decreased slightly from 1.57x at
issuance. The Americold loan (11%), representing a 50%
participation interest in the whole loan, showed improved
performance during the most recent TTM period. The corresponding
DSCR as of TTM June 30, 2004 increased to 1.64x from 1.61x at
issuance.
The Green Acres loan (11.9%) is secured by a regional mall in
Valley Stream, New York. The Sterns anchor vacated in August
2001. Federated Department Stores, parent company of both Sterns's
and Macy's, has taken the majority of the space to expand Macy's
one of three anchor tenants at the mall. The former Kmart space
has been leased by Wal-Mart as of October 2003, increasing overall
mall occupancy to 97% as of August 2004. As a result of increased
occupancy, performance has increased markedly. As of TTM June
2004, the DSCR is 1.65x compared to 1.49x as of TTM June 2003, and
1.36x at issuance.
The Las Vegas Showcase (5.8%) is a retail/entertainment complex in
Las Vegas, Nevada. The former Boxing Hall of Fame space (36,172
sq. ft.) has been converted to a food court with several smaller
units. With the completion of the food court conversion,
occupancy has increased to 100% as of August 2004, up from 75% at
issuance. Based on leases in place, the pro forma DSCR increased
to 1.18x compared to 1.05x as of TTM June 2003, and 1.18x at
issuance.
The One Commerce Square loan (6%) is secured by an office property
in downtown Philadelphia, Pennsylvania. International Business
Machines Corp., with 53% of net rentable area -- NRA, vacated the
building in September 2002. IBM was paying significantly above
market rent, and although leasing activity has been strong, the
current rental rates are well below IBM's rental rate. As a
result NCF as of TTM June 04 has decreased 14.8% from TTM June 03.
The corresponding DSCR as of TTM June 04 is 1.32x compared to
1.53x as of TTM June 03, and 1.09x at issuance.
Performance has improved at the Crystal City loan (5%), a mini-
pool of three office properties in Crystal City, Virginia. The
DSCR as of TTM June 30, 2004 increased to 1.55x, from 1.36x at
issuance. As of June 2004, the three properties are 95.5%
occupied, compared to 94% as of June 2003. However, NCF decreased
7.4% as of TTM June 2004 compared to TTM June 2003, as a result of
increased expenses and rental downtime. The corresponding DSCR is
1.55x as of TTM June 04, compared to 1.64x as of TTM June 03, and
1.36x at issuance.
GOSHAWK RIDGE: Files Chapter 11 Plan of Reorganization
------------------------------------------------------
Goshawk Ridge Development, Ltd., presented to Judge Gregg W. Zive
of the U.S. Bankruptcy Court for the District of Nevada its
Chapter 11 Plan of Reorganization and a Disclosure Statement
explaining that Plan on December 9, 2004.
Terms of the Plan
The Plan contemplates the full payment of these claims, plus
interest, over two years:
* $3,063,978.20 claim of the Richard H. Welze Trust
* $274,000 claim of the L and C Lusvardi Trust
The Debtor plans to pay holders of general allowed unsecured
claims in full with 4% interest, over two years.
Equity claims are unimpaired under the Plan.
The Debtor expects to generate $5,000,000 to $6,000,000 of net
revenues over the next two years, which will be sufficient to
cover its obligations to its creditors under the Plan.
The Debtor owns real property located on U.S. Highway 50 in
Douglas County Nevada. A forced sale liquidation of the Debtor's
assets will fetch $4,000,000, according to the Plan.
Goshawk's total liabilities are $3,427,310.37.
A copy of the Debtor's Chapter 11 Plan of Reorganization and
Disclosure Statement is available for free at:
http://bankrupt.com/misc/GoshawkPlan.pdf
Headquartered in Incline Village, Nevada, Goshawk Ridge
Development, Ltd., filed for Chapter 11 protection on
Sept. 10, 2004 (Bankr. D. Nev. Case No. 04-52701). Stephen R.
Harris, Esq., at Belding, Harris, & Petroni, Ltd., represents the
Debtor in its restructuring efforts. When the Debtor filed for
protection from its creditors, it estimated more than $10 million
in assets and debts.
HOLLINGER INT'L: Completes American Publishing Sale for $13.2 Mil.
------------------------------------------------------------------
Hollinger International, Inc., completed the sale by its indirect
subsidiary, American Publishing Holdings, Inc., of the Palestine
Post Limited, the publisher of The Jerusalem Post and The
Jerusalem Report, to Mirkaei Tikshoret Ltd., a leading publisher
of newspapers in Israel. The purchase price was $13.2 million.
Hollinger International Inc. is a newspaper publisher whose assets
include The Chicago Sun-Times and a large number of community
newspapers in the Chicago area, as well as in Canada.
* * *
As reported in the Troubled Company Reporter on August 6, 2004,
Moody's Investors Service changed the rating outlook on Hollinger
International Publishing, Inc., to positive from stable and has
withdrawn other ratings. Details of this rating action are:
Ratings withdrawn:
* $45 million Senior Secured Revolving Credit Facility, due
2008 -- Ba2
* $210 million Term Loan "B", due 2009 -- Ba2
* $300 million of 9% Senior Unsecured Notes, due 2010 -- B2
Ratings confirmed:
* Senior Implied rating -- Ba3
* Issuer rating -- B2
The outlook is changed to positive.
IESI CORP: Extends 10-1/4% Sr. Debt Offering Until January 21
-------------------------------------------------------------
IESI Corporation has extended the expiration date for its
previously announced tender offer for its 10-1/4% Senior
Subordinated Notes due 2012 to 9:00 a.m., New York City time, on
Friday, Jan. 21, 2005 (unless extended). The Company also
announced that the value of the consideration for each $1,000
principal amount of Notes validly tendered and accepted for
purchase will be determined of 10:00 a.m., New York City time, on
Jan. 6, 2005, and will be calculated in accordance with the Offer
to Purchase.
The Company's Offer to Purchase and Consent Solicitation
Statement, dated Nov. 29, 2004, more fully sets forth the terms
and conditions of the cash tender offer to purchase any and all of
the $150,000,000 outstanding principal amount of the Notes and the
consent solicitation to eliminate substantially all of the
restrictive and reporting covenants, certain events of default and
certain other provisions contained in the indenture governing the
Notes. As of 5:00 p.m., New York City time, on Dec. 21, 2004, the
Company had received tenders and consents for approximately 98.2%
of the outstanding principal amount of the Notes. The percentage
of consents received exceeds the requisite consents needed to
amend the indenture governing the Notes.
The Company reserves the right to extend the expiration date and
time of the tender offer at any time subject to applicable law.
In the event that the tender offer is extended for any period of
time longer than ten business days from the previously scheduled
expiration date, a new price determination date will be
established that will be the tenth business day immediately
preceding the expiration date as so extended.
The consummation of the tender offer is conditioned on, among
other things, the closing of the Company's previously announced
merger, as described in more detail in the Offer to Purchase.
Credit Suisse First Boston LLC is the dealer manager and
solicitation agent for the tender offer and the consent
solicitation. Questions regarding the tender offer and consent
solicitation may be directed to Credit Suisse First Boston LLC at
(800) 820-1653 (U.S. toll-free) or (212) 538-0652. Requests for
documents may be directed to:
Morrow & Co., Inc.
Information Agent
U.S. Toll Free: (800) 607-0088
Email: iesi.info@morrowco.com
This announcement is not an offer to purchase, a solicitation of
an offer to purchase, or a solicitation of tenders or consents
with respect to, the Notes. The tender offer and consent
solicitation are being made solely pursuant to the Offer to
Purchase and related transmittal documents.
About the Company
IESI Corporation is one of the leading regional, non-hazardous
solid waste management companies in the United States and has
grown rapidly through a combination of strategic acquisitions and
internal growth. IESI provides collection, transfer, disposal and
recycling services to 272 communities, including more than 560,000
residential customers and 56,000 commercial and industrial
customers, in nine states.
* * *
As reported in the Troubled Company Reporter on Dec. 20, 2004,
Standard & Poor's Ratings Services raised its ratings on waste
management company IESI Corp. to 'BB' from 'B+' following a review
of the proposed purchase of IESI by BFI Canada Income Fund (the
fund). Standard & Poor's also assigned its 'BB' senior secured
debt rating to the company's proposed US$375 million senior
secured credit facilities, and a recovery rating of '2' to the
facilities, indicating a substantial recovery of principal (80%-
100%) in a post-default scenario. At the same time, the ratings
were removed from CreditWatch where they were placed Nov. 30,
2004. The outlook is currently stable.
The new ratings are based on the completion of the proposed
transaction. If the deal does not close as proposed the ratings
could be revised. If the proposed transaction is cancelled, the
existing 'B+' rating could be reinstated.
IESI is being purchased by the fund for more than US$900 million.
The acquisition is scheduled to be completed in January 2005. The
purchase is being primarily financed through the issuance of
equity and approximately US$220 million of debt (not including
intercompany debt). Existing senior debt of IESI will be redeemed.
"The revised rating reflects the benefits that are expected to
accrue to IESI following the acquisition, which include
deleveraging, a more diverse business profile, and strengthened
financial flexibility through access to equity markets," said
Standard & Poor's credit analyst Kenton Freitag.
The ratings on IESI are based on the consolidated credit profile
of the fund. The fund has two wholly owned holdings in the waste
management industry: U.S.-based IESI and Canada-based BFI Canada.
IESI will not merge its operations with BFI Canada following the
acquisition but is considered core to the fund due to its size; it
is expected to account for approximately two-thirds of
consolidated revenues and EBITDA. Furthermore, the fund's holding
company for its operating subsidiaries (BFI Canada Newco) will
guarantee IESI's credit facilities.
The fund's credit profile reflects the limited size and diversity
of its subsidiaries, the industry risks associated with obtaining
landfill permits, and the high levels of competition in the
fragmented waste management industry, and the limited operating
history of both IESI and BFI Canada. These factors are offset by
efficient operations, and favorable industry characteristics.
The outlook is stable. Efficient operations, steady revenue
streams, and defensible positions in selected markets should
offset the risks associated with regulatory uncertainties and
limited diversity. Ratings could be lowered if operating margins
deteriorate or if leverage materially exceeds the fund's target of
2x. Conversely, ratings could be raised in future if the company
diversifies and demonstrates a longer period of stable margins.
IMAGIS TECH: Inks Pact for More Financing via Private Placement
---------------------------------------------------------------
Imagis Technologies Inc. (OTCBB:IMTIF) (TSX Venture Exchange:WSI)
(DE:IGYA) has reached agreement for a private placement of up to
CDN $1,000,000. The private placement will consist of up to
2,857,143 Units at $0.35 per Unit. Each Unit will consist of one
common share and one common share purchase warrant. Each warrant
will entitle the holder for two years from the date of issue of
the Units to acquire one additional common share in the capital of
Imagis at an exercise price of $0.45 in the first year and $0.55
in the second year. A portion of the private placement will pay a
commission of 7.5% in cash. The private placement is subject to
regulatory approval.
Concurrent with the proposed private placement the Company is
seeking regulatory approval to settle $331,158 in debt with an
arms-length party. The debt will be settled through the issuance
of 946,166 Units under the same terms as those of the private
placement described above.
The common shares and warrants are subject to a four-month hold
period that will expire four months from the date of closing the
private placement and debt settlement.
"We are very pleased with the local investment community's
participation in this financing as it reflects a strong belief in
the future of our company and the strength of our core
technologies," said Roy Trivett, President and CEO of Imagis.
"This financing is available as a result of strong supplemental
demand for participation in the financing that previously closed
on December 1, 2004 and will broaden the financial base for the
Company's growth."
The Company is also pleased to announce that it has appointed Mr.
James Smith to the role of Vice President, Engineering. Mr. Smith
originally joined Imagis in April 1999 as a Senior Software
Engineer and was a key engineer in the development of the
company's Face Recognition technology and Applications. Mr. Smith
left Imagis in May 2003 to work for Microsoft as a technical
evangelist on many varied security and surveillance software
projects. He is regarded as an expert on 64-bit technology and
was the key speaker in a 15 city Microsoft worldwide seminar
series on 64-bit migration. Mr. Smith rejoined the Imagis team in
Aug 2004 as a senior software engineer. Prior to joining Imagis,
he developed software for several Physics research projects for
the Institute of Ocean Sciences, the UBC TRIUMF particle
accelerator and most recently the Centre for Water Research in
Perth, Australia. Mr. Smith holds a Bachelor of Science degree in
Computer Science from the University of Victoria. Mr. Smith has
been granted 80,000 common share purchase options at an exercise
price of $0.33 with an expiry date of Dec. 16, 2007. One third of
these options will vest immediately, one third will vest after one
year from the date of grant, and the final third will vest two
years after the date of grant. These options are in addition to
20,000 options at $0.40 granted to Mr. Smith as an employee.
With respect to both the private placement and the debt
settlement, the securities in question will not be registered
under the United States Securities Act of 1933, as amended, and
may not be offered or sold within the United States or to, or for
the account or benefit of, "U.S. persons", as such term in defined
in Regulation S promulgated under the Securities Act, except in
certain transactions exempt from the registration requirements of
the U.S. Securities Act.
This news release shall not constitute an offer to sell or an
offer to buy the securities in any jurisdiction.
About Imagis Technologies Inc.
Based in Vancouver, British Columbia, Imagis specializes in
developing and marketing software products that enable integrated
access to applications and databases. The company also develops
solutions that automate law enforcement procedures and evidence
handling. These solutions often incorporate Imagis' proprietary
facial recognition algorithms and tools. Using industry standard
"Web Services", Imagis delivers a secure and economical approach
to true, real-time application interoperability. The corresponding
product suite is referred to as the Briyante Integration
Environment (BIE).
* * *
In its Form 10-Q for the quarterly period ended Sept. 30, 2004,
filed with the Securities and Exchange Commission, Imagis
Technologies' disclosed that:
"The Auditors' Report on the Company's Dec. 31, 2003 Financial
Statements includes additional comments by the auditor on Canada-
United States reporting differences that indicate the financial
statements are affected by conditions and events that cast
substantial doubt on the Company's ability to continue as a going
concern.
"At Sept. 30, 2004, the Company has a working capital deficiency
of $1,201,322. For the nine-month period ended Sept. 30, 2004,
the Company has incurred a loss from operations of $4,187,757 and
a deficiency in operating cash flow of $1,830,245. Also, the
Company has incurred significant operating losses and net
utilization of cash in operations in all prior periods.
Accordingly, the Company will require continued financial support
from its shareholders and creditors until it is able to generate
sufficient cash flow from operations on a sustained basis.
Failure to obtain ongoing support of its shareholders and
creditors may make the going concern basis of accounting
inappropriate, in which case the Company's assets and liabilities
would need to be recognized at their liquidation values."
INFOCORP COMPUTER: Completes Reorganization Proceedings
-------------------------------------------------------
Infocorp Computer Solutions Ltd. (TSE: INP) successfully completes
its reorganization proceedings; pursuant to the court approval
confirming the company's proposal to creditors. Infocorp filed a
"Notice of Intent to File a Proposal" under the Bankruptcy and
Insolvency Act in September 2004. The confirmed proposal enables
Infocorp to continue its business operations uninterrupted, led by
its current management team, and accomplishes the Company's
primary goal of restructuring a number of leases and related
obligations. In addition, the confirmed proposal provides that
the Company's shareholders retain their equity interest in the
Company.
Throughout 2004, the Company has been successful in bringing about
a series of strategic initiatives to strengthen the business and
its future prospects. These include reducing overall debt by
about $5.9 million and conversion of management debt into equity
as approved by shareholders in June 2004; the relocation of the
company to its new office facilities in both Winnipeg and Toronto,
and a current initiative to seek new investment capital to fuel
the growth of the company.
Since its founding in 1987, Infocorp Computer Solutions Ltd.
designs and delivers e-government and e-retail revenue management
solutions.
INNOVATION HOLDINGS: $15.5M Deficit Triggers Going Concern Doubt
----------------------------------------------------------------
Innovation Holdings, Inc., formerly known as Blagman Media
International, Inc., incurred a net loss of $3,328,784 and a
negative cash flow from operations of $3,633,695 for the nine
months ended September 30, 2004. It has a working capital
deficiency of $15,130,138 and a stockholders deficiency of
$15,504,601 at September 30, 2004, which raises substantial doubt
about its ability to continue as a going concern. The Company's
working capital deficiency as of September 30, 2004 may not enable
it to meet such objectives as presently structured.
The ability of the Company to continue as a going concern is
dependent on the Company's ability to raise additional capital and
implement its business plan. Management believes that actions
presently taken to obtain additional funding provide the
opportunity for the Company to continue as a going concern. The
Company is also actively seeking businesses to acquire.
In the fourth quarter of 2004, the Company issued 21,000,000
common shares, in the aggregate, to various consultants for
consulting services to be provided over varying terms, which
expire at various dates during the fiscal years 2005 and 2006.
In the fourth quarter of 2004, a total of 70,000,000 shares of
common stock were issued to the Company's Securities and Exchange
Commission attorney as compensation for legal services rendered
and for future legal services.
In October 2004, the Company's Board of Directors authorized a
six-thousand-for-one reverse stock split of the Company's common
stock. In December 2004, the Company's Board of Directors
authorized a one-thousand-for-one reverse split of the Company's
common stock.
The Company's current assets increased from $9,647 at
December 31, 2003 to $103,738 for the nine-month period ended
September 30, 2004, mainly due to the issuance of stock valued at
$100,000 as a retainer for legal counsel.
In connection with the various initiatives being pursued by
management to expand the Company's operations internally and
through strategic alliances or acquisitions with other industry
partners, additional capital funding will be required. The
Company hopes to raise these funds through an increase in general
business profits due to a shift in the main focus of its core
business. The Company plans to pass low profit making activity
such as media buying to third party contracted companies. The
Company also plans to invest in product ownership and development
as well as actively pursue opportunities to expand the marketing
aspects of these products. As the advertising industry goes
through its transitions, the Company plans to react by adjusting
its focus away form pure media buying to product development.
Product development continues to be a strong avenue for the direct
response advertising business. Affiliations and associations with
other advertising agencies will also expand the Company's ability
to increase cash flow and revenues without adding staff. The
Company also plans to investigate the possibility of additional
acquisitions that will allow the Company to become a holding
company in name only. By diversifying and expanding its base
operations the Company will endeavor to create a more productive
future.
During 2003 and in the current quarter, the market price of
Innovative Holdings' common shares has continued to drop
precipitously. Management believes that there are two underlying
causes. First, that the Company apparently was one of the
companies targeted in an organized pattern of depressing prices
through "shorting" by a group pursuing a coordinated effort to
effect and profit from a falling share price and from attempts to
extort favorable stock issuances from the Company without fair
consideration. Management initiated referrals to appropriate
regulatory agencies for their action. While actions from these
referrals may reduce future manipulation, it cannot eliminate the
impact of the downward price spiral. The second factor apparently
affecting the Company's price was the market reaction to the
increase in authorized and issued common shares, which the Company
undertook to compensate consultants in the industry, to support
Company growth to effect the Century transaction. Following the
acquisition of Century Media in March 2002, the Company has
determined that Century Media was not strategic to the Company's
ongoing objectives and has discontinued capital and human resource
investment in Century Media effective as of December 2002.
Management is currently unwinding the Century transaction,
evaluating other opportunities and pursuing other initiatives to
expand the Company's operations internally and through strategic
alliances or acquisitions with other industry partners. These
endeavors will be funded in part from operations but will also
require additional capital funding which the Company hopes to
raise through debt or equity financing arrangements, if
appropriate financing is available, on reasonable and acceptable
terms.
If substantial additional working capital does not become
available, management believes that the active search and
completion of key acquisitions along with proper legal
restructuring and planning will be sufficient to meet essential
capital requirements for the next 12 months, but will not support
growth.
Innovation Holdings, Inc., formerly known as Blagman Media
International, Inc., is a Nevada corporation, which is the
successor to a corporation founded in 1961. It is a direct
marketing, direct response and media enterprise based in Century
City, California which principally provides direct market services
and media buying for its clients and their products and services
through television, radio, Internet, print and outdoor advertising
media. In addition, the Company organizes direct response media
campaigns on radio, television and in print and provides
assistance in backend marketing and creative production.
ISLE OF CAPRI: S&P Rates Proposed $650M Sr. Secured Debt at 'BB-'
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' rating and a
recovery rating of '2' to Isle of Capri Casino Inc.'s proposed
$650 million senior secured credit facility, indicating Standard &
Poor's expectation that the lenders would realize a substantial
recovery of principal (80%-100%) in the event of default.
At the same time, Standard & Poor's affirmed its ratings on Isle,
including its 'BB-' corporate credit rating. The rating on the
company's existing bank facility will be withdrawn once the new
facility closes. The outlook remains negative. Total pro forma
debt outstanding at Oct. 24, 2004, was approximately $1.1 billion.
The new facility is secured by a first priority interest in
substantially all the present and future assets of Isle and its
restricted subsidiaries. The bank loan rating is the same as the
corporate credit rating given this recovery expectation. Proceeds
from the proposed bank facility will be used to refinance existing
bank debt, to pre-fund future development activities, and for fees
and expenses.
"The ratings reflect Isle's aggressive growth strategy and the
second-tier market position of many of its properties. These
factors are somewhat tempered by the company's large and diverse
portfolio of casino assets," said Standard & Poor's credit analyst
Peggy Hwan.
JUNIPER CBO: Fitch Holds Junk Ratings on Four 2000-1 Note Classes
-----------------------------------------------------------------
Fitch affirms the rating of one class of notes and upgrades the
rating of two class of notes issued by Juniper CBO 2000-1
Ltd./(Delaware) Corp., which closed Apr. 4, 2000. These rating
actions are effective immediately:
-- $89,971,272 class A-2L notes affirmed at 'AAA';
-- $20,000,000 class A-3L notes to 'A' from 'BBB';
-- $30,000,000 class A-3 notes to 'A' from 'BBB'.
The ratings of the class A-4L, A-4, B-1 and B-2 notes remain at
'C'.
Juniper CBO 2000-1 is a collateralized bond obligation -- CBO --
managed by Wellington Management Company, LLP. The collateral of
Juniper CBO 2000-1 is composed of high yield corporate bonds.
Payments are made semi-annually in April and October and the
reinvestment period ended in April 2004.
The deal is currently amortizing the most senior notes due to the
failure of the class A overcollateralization -- OC -- test, which
increases the credit enhancements for these notes. According to
the Dec. 2, 2004, trustee report, Juniper CBO 2000-1's collateral
includes a par amount of $9.62 million (5.02%) defaulted assets.
The deal also contains $53.93 million (28.58%) assets rated 'CCC+'
or below excluding defaults. The senior class A OC test is
passing at 133.8% with a trigger of 120%. The class A OC test is
failing at 104.7% with a trigger of 110% and the class B OC test
is failing at 89.4% with a trigger of 103%. This transaction is
currently in an event of default due to the failure to maintain an
OC test at least equal to 90% of the OC trigger. This event has
not been cured and the trading ability of the current asset
manager has been limited.
The ratings of the class A notes address the likelihood that
investors will receive full and timely payments of interest, as
per the governing documents, as well as the aggregate outstanding
amount of principal by the stated maturity date. The rating of
the class B notes addresses the likelihood that investors will
receive ultimate interest and deferred interest payments, as per
the governing documents, as well as the aggregate outstanding
amount of principal by the stated maturity date.
Fitch will continue to monitor Juniper CBO 2000-1 closely to
ensure accurate ratings. Deal information and historical data on
Juniper CBO 2000-1 is available on the Fitch Ratings web site at
http://www.fitchratings.com/
JUNIPER CBO: Fitch Maintains Junk Ratings on Five 1999-1 Classes
----------------------------------------------------------------
Fitch upgrades the ratings on two classes of notes issued by
Juniper CBO 1999-1 Ltd./(Delaware) Corp., which closed Mar. 23,
1999. These rating actions are effective immediately:
-- $104,301,625 class A-1 notes to 'A+' from 'A-';
-- $34,000,000 class A-2 notes to 'BB' from 'BB-'.
The ratings of the class A-3A and A-3B notes remain at 'CC'. In
addition, the ratings of the class B-1, B-2, and B-2A remain at
'C'.
Juniper CBO 1999-1 is a collateralized bond obligation -- CBO --
managed by Wellington Management Company, LLP. The collateral of
Juniper CBO 1999-1 is composed of high yield corporate bonds.
Payments are made semi-annually in April and October and the
reinvestment period ended in April 2003.
The deal is currently amortizing the most senior notes due to the
failure of the class A overcollateralization -- OC -- test, which
increases the credit enhancements for these notes. According to
the Dec. 2, 2004, trustee report, Juniper CBO 1999-1's collateral
includes a par amount of $27.38 million (13.47%) defaulted assets.
The deal also contains $57.55 million (30.01%) assets rated 'CCC+'
or below excluding defaults. The class A OC test is failing at
75.7% with a trigger of 116% and the class B OC test is failing at
59.6% with a trigger of 104%. This transaction is currently in an
event of default due to the failure to maintain an OC test at
least equal to 90% of the OC trigger. This event has not been
cured and the trading ability of the current asset manager has
been limited.
The ratings of the class A notes address the likelihood that
investors will receive full and timely payments of interest, as
per the governing documents, as well as the aggregate outstanding
amount of principal by the stated maturity date. The rating of
the class B notes addresses the likelihood that investors will
receive ultimate interest and deferred interest payments, as per
the governing documents, as well as the aggregate outstanding
amount of principal by the stated maturity date.
Fitch will continue to monitor Juniper CBO 1999-1 closely to
ensure accurate ratings. Deal information and historical data on
Juniper CBO 1999-1 is available on the Fitch Ratings web site at
http://www.fitchratings.com/
KEWL CORP: Selling 500,000 Common Shares to 1422575 Ontario
-----------------------------------------------------------
Kewl Corporation (TSX Venture Exchange: KL) reported that, subject
to approval from the TSX Venture Exchange, 1422575 Ontario Inc.,
an affiliate of the Accolade Group a global supplier of
embellished apparel and wearable accessories, will invest $50,000
in Kewl Corporation. This investment consists of a private
placement offering of 500,000 common shares at a price of $0.10
per common share (representing the maximum discount permitted by
the TSX Venture Exchange based on Kewl's shares closing price on
December 22, 2004).
This private placement is part of the previously announced plan to
reorganize Kewl's capital structure. If completed, this private
placement would make Accolade Kewl's largest shareholder with
approximately 15.7% of the outstanding shares.
Kewl has issued approximately 2.2 million common shares to the
holders of unsecured debt in connection with the share for debt
exchange, which has taken place in connection with its court
approved restructuring. The shares were issued to Kewl's
unsecured creditors on the basis of one common share of Kewl for
each $1.00 of unsecured debt.
About Kewl Corporation
Kewl Corporation is based in Barrie, Ontario and its shares are
traded on the TSX Venture Exchange under the symbol KL. Kewl
products are sold across Canada and are endorsed by some of the
biggest names in professional hockey including Shayne Corson,
Darcy Tucker, Ryan Smith, Travis Green and Bryan Marchment.
* * *
As reported in the Troubled Company Reporter on Dec. 03, 2004,
Kewl reports that 1422575 Ontario acquired from Toronto Dominion
Bank, $546,328.27 of indebtedness owed by Kewl to the Toronto
Dominion Bank. This debt represents all of the indebtedness of
Kewl to the Toronto Dominion Bank. The terms of the debt remain
unchanged, however, a portion of the security for the indebtedness
has been released by Accolade.
As was previously announced The Ontario Superior Court of Justice
(Bankruptcy and Insolvency) approved of an exchange of shares for
debt with Kewl's unsecured creditors on the basis of one common
share of Kewl for each $1.00 of unsecured debt. Kewl will issue
up to approximately 2.2 million common shares pursuant to this
exchange.
KMART HOLDING: Withdraws & Refiles Hart-Scott-Rodino Notice
-----------------------------------------------------------
Following informal discussions with the staff at the Federal Trade
Commission, during which the FTC requested additional time, in
light of the holiday season, to complete its review of the merger,
Kmart and Sears reported that they voluntarily agreed to withdraw
their previously filed Hart-Scott-Rodino Notification and Report
Forms and will refile them today, Dec. 28, 2004, when the 30-day
waiting period will recommence. Kmart and Sears now expect the
FTC review period to expire in January 2005.
Kmart and Sears have been working cooperatively with the FTC as it
conducts its review of the merger, including voluntarily providing
additional information to the FTC staff in response to their
informal request. In that regard, the FTC staff recently
requested certain information, which the parties provided, and the
staff has requested more time to review it in light of the holiday
season. The parties remain confident that the HSR review will be
concluded without causing any delay in the transaction. The
parties remain committed to continuing to cooperate with the FTC
and expect the transaction to close by early March 2005.
About Sears, Roebuck and Co.
Sears, Roebuck and Co. -- http://http://www.sears.com/-- is a
leading broadline retailer providing merchandise and related
services. With revenues in 2003 of $41.1 billion, the company
offers its wide range of home merchandise, apparel and automotive
products and services through more than 2,300 Sears-branded and
affiliated stores in the U.S. and Canada, which includes
approximately 870 full-line and 1,100 specialty stores in the U.S.
Sears also offers a variety of merchandise and services through
sears.com, landsend.com, and specialty catalogs. Sears is the only
retailer where consumers can find each of the Kenmore, Craftsman,
DieHard and Lands' End brands together -- among the most trusted
and preferred brands in the U.S. The company is the largest
provider of product repair services with more than 14 million
service calls made annually.
Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART
Holding Corporation) -- http://www.bluelight.com/-- is a mass
merchandising company that offers customers quality products
through a portfolio of exclusive brands that include Thalia Sodi,
Jaclyn Smith, Joe Boxer, Martha Stewart Everyday, Route 66 and
Sesame Street. 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.
LAIDLAW INTL: Has Until April 15 to Sell 3.8 Million Common Shares
------------------------------------------------------------------
Laidlaw International, Inc., (NYSE:LI) reported that the Pension
Benefit Guaranty Corporation has agreed to extend the deadline for
the sale of the approximately 3.8 million shares of Laidlaw
International common stock held in trust for the benefit of the
Greyhound U.S. Pension Plans to April 15, 2005. Laidlaw
International intends to use a portion of the proceeds from the
sale of its healthcare companies, due to close by the end of March
2005, to repurchase all or a portion of those shares.
Headquartered in Arlington, Texas, Laidlaw, Inc., now known as
Laidlaw International, Inc., -- http://www.laidlaw.com/-- is
North America's #1 bus operator. Laidlaw's school buses transport
more than 2 million students daily, and its Transit and Tour
Services division provides daily city transportation through more
than 200 contracts in the US and Canada. Laidlaw filed for
chapter 11 protection on June 28, 2001 (Bankr. W.D.N.Y. Case No.
01-14099). Garry M. Graber, Esq., at Hodgson Russ LLP, represents
the Debtors. Laidlaw International emerged from bankruptcy on
June 23, 2003.
* * *
As reported in the Troubled Company Reporter on Dec. 27, 2004,
Moody's Investors Service has placed the long-term debt ratings of
Laidlaw International, Inc., under review for possible upgrade.
The review is prompted by the recent announcement by the company
that it had entered into a definitive agreement to sell both of
its healthcare businesses to Onex Partners LP, an affiliate of
Onex Corporation, for $820 million. Net proceeds after fees and
assumption of a small amount of debt by the buyer is estimated at
$775 million, with a majority of the proceeds intended to be used
to repay substantial levels of Laidlaw's existing debt. Moody's
has also assigned a Speculative Grade Liquidity Rating of SGL-2 to
Laidlaw International, Inc. As part of the rating action, Moody's
has reassigned to Laidlaw International, Inc., certain ratings,
including the senior implied and senior unsecured issuer ratings,
originally assigned at Laidlaw, Inc., in order to reflect more
appropriately the company's current organizational structure.
As reported in the Troubled Company Reporter on Dec. 9, 2004,
Standard & Poor's Ratings Services placed its ratings, including
its 'BB' corporate credit rating, on Laidlaw International Inc. on
CreditWatch with positive implications. The rating action follows
Laidlaw's announcement that it has entered into definitive
agreements to sell both of its health care companies, American
Medical Response and Emcare, to Onex Partners L.P. for
$820 million. Laidlaw expects to receive net cash proceeds of
$775 million upon closing of the transaction, which is expected by
the end of March 2005. Naperville, Illinois-based Laidlaw
currently has about $1.5 billion of lease-adjusted debt.
MASONITE INT'L: Kohlberg Kravis Buying Company for C$3.1 Billion
----------------------------------------------------------------
Masonite International Corporation (TSX and NYSE:MHM), entered
into a definitive agreement to be acquired by an affiliate of
Kohlberg Kravis Roberts & Co. -- KKR, a private equity firm, in an
all cash transaction pursuant to which Masonite's shareholders
will receive C$40.20 per share. The total value of the
transaction is approximately C$3.1 billion.
Masonite's board formed a special committee of independent
directors to consider the transaction. The committee's
independent financial adviser, Merrill Lynch, has provided an
opinion to the board of Masonite that the consideration offered in
the transaction is fair from a financial point of view to
Masonite's shareholders. The transaction is to be carried out by
way of a statutory plan of arrangement. The Company anticipates
mailing a proxy circular relating to the transaction in the third
week of January to shareholders of record on January 17, 2005 for
a meeting to be held on February 18, 2005. The transaction will
be subject to the approval of 66-2/3% of the votes cast by
Masonite shareholders at the meeting and also a simple majority of
the votes cast by shareholders other than members of senior
management of Masonite.
Masonite's management team will remain in place following the
completion of the transaction. At the time of completion,
Masonite's management will be required to invest in approximately
5% of the equity of Masonite at the same per share price as KKR is
paying for its equity in the proposed transaction. Closing is
subject to customary conditions, including regulatory and court
approvals. The Bank of Nova Scotia has committed to provide debt
financing for the transaction, which, together with the equity
infusion from funds managed by KKR, will provide sufficient
financing to complete the transaction. Scotia Capital acted as
the financial advisor to KKR.
Philip S. Orsino, President and CEO of Masonite said: "Our entire
management team will continue to focus on providing superior
service and products to our customers worldwide."
Paul E. Raether, a member of KKR, said, "Masonite is a well-
managed, well-positioned, innovative company with a global
customer base. We expect Masonite to continue its expansion as a
leading manufacturer of door products and look forward to working
with management on the next stage of the Company's development."
The combination agreement between Masonite and KKR contains
customary provisions prohibiting Masonite from soliciting any
other acquisition proposal but allowing termination of the
agreement in certain events, including in the event of an
unsolicited acquisition proposal from a third party that in the
exercise of its fiduciary duties the board of directors of
Masonite finds to be superior to the KKR transaction, upon payment
of a termination fee to KKR.
The proposed transaction, which has received the unanimous
approval of the board of directors of Masonite, is expected to
close in late February 2005.
KKR -- http://www.kkr.com/-- is one of the world's oldest and
most experienced private equity firms specializing in management
buyouts, with offices in New York, Menlo Park, California and
London, England. Over the past twenty-eight years, KKR has
invested in more than 115 transactions with a total value of
US$138 billion.
Masonite is a unique, integrated building products company with
its Corporate Headquarters in Mississauga, Ontario, Canada and its
International Administrative Offices in Tampa, Florida. Masonite
operates more than 70 facilities with over 12,000 employees
worldwide, spanning North America, South America, Europe, Asia,
and Africa. Masonite sells its products -- doors, components,
industrial products and entry systems -- to a wide variety of
customers in over 50 countries.
MASONITE INT'L: S&P Places Low-B Ratings on CreditWatch Negative
----------------------------------------------------------------
Standard & Poor's Ratings Services placed ratings on Mississauga,
Ontario-based Masonite International Corp., including its 'BB+'
long-term corporate credit rating on CreditWatch with negative
implications. The CreditWatch placement follows the announcement
that it is to be acquired by an affiliate of Kohlberg Kravis
Roberts & Co. -- KKR -- in a transaction valued at
C$3.1 billion.
"If the transaction is successful, leverage is expected to
increase significantly and the ratings would likely be lowered,"
said Standard & Poor's credit analyst Daniel Parker. The
CreditWatch placement will be resolved when the transaction and
financing plans are definitive. The possibility exits that
another bid for the company could emerge.
The current ratings on Masonite reflect the company's narrow
product focus in the production of doors and their related
components, and its exposure to the cyclical housing market.
These risks are offset by the company's leading market position in
the North American interior and exterior door market and adequate
profitability and cash flow generation at current debt levels.
With a market share of 35%-40%, the company is North America's
leading producer of both residential and commercial and interior
and exterior doors. The company is exposed to the cyclical
volatility of new construction and home renovation markets that,
while not identical, are both affected by general economic
conditions, interest rates, and consumer confidence levels.
Nevertheless, strong housing and home renovation demand over the
last several years has benefited Masonite, and the company credit
metrics are healthy for the ratings with trailing 12-month EBITDA
interest coverage of 6.7x and funds from operations to total
adjusted debt of 25%. The business is not capital intensive, and
Masonite's ability to generate free cash flow will allow steady
debt reduction.
MASTEC INC: Posts $46.1 Million Net Loss in First Quarter
---------------------------------------------------------
MasTec, Inc. (NYSE: MTZ) reported results for the first and second
quarters of 2004.
Revenues for the first quarter of 2004 were up 14.2% to
$200 million, compared with $175.2 million for the comparable
quarter of 2003. Net loss for the first quarter of 2004 was
$46.1 million compared with a loss of $1.8 million for the
comparable quarter of 2003. Total loss per share for the first
quarter of 2004 was $0.95 per share, comprised of a $0.54 loss per
share from continuing operations and a $0.41 loss per share from
discontinued operations.
In the first quarter of 2004, the Company shut down its operation
in Brazil and wrote off its Brazilian investment which resulted in
a $20 million loss. This loss is reflected in discontinued
operations. MasTec expects that there will be minimal future
impact regarding Brazil. Also, the Company incurred $9.9 million
in additional costs for insurance reserves compared to the first
quarter of 2003. MasTec incurred about $3.6 million in additional
audit fees, legal fees and settlements and consulting fees related
to ongoing litigation and costs associated with Sarbanes Oxley
compliance compared to last year's quarter.
Revenues for the second quarter of 2004 increased 14.9% to $231.3
million compared with $201.4 million for the comparable quarter of
2003. Net loss for the second quarter of 2004 was $740,000
compared with net income of $2.0 million for the comparable
quarter of 2003. Total loss for the second quarter of 2004 was
$0.02 per share, comprised of $0.01 loss per share from continuing
operations and $0.01 loss per share from discontinued operations.
The loss in the second quarter of 2004 was affected by one-time
charges. In the quarter, the Company had $3.0 million in
additional audit fees, legal fees and expenses related to ongoing
litigation and Sarbanes Oxley compliance efforts compared to the
second quarter of 2003.
MasTec's liquidity remains strong. At the end of the second
quarter and, also today, the Company had no outstanding draws on
its credit facility. The Company's cash balance at December 22,
2004 was approximately $21 million and the availability under its
credit facility was approximately $33 million. Letters of credit
issued under the credit facility are approximately $71 million
today as compared with $55 million at December 31, 2003.
The Company's first quarter increase in insurance reserves caused
the Company to not be in compliance with certain covenants in its
credit facility, beginning in the second quarter of 2004. The
Company is currently negotiating with the bank group for the
required covenant waiver. The Company expects the waiver to be
obtained before filing its third quarter 10-Q.
In general, the Company expects much improved results in 2005 and
believes that the number of one-time charges and other non-
recurring expenses will be greatly diminished in the future.
Additionally, improved performance in 2005 should result from the
combination of increased spending from some of our key customers
and improved controls, policies and procedures at the Company.
Austin J. Shanfelter, President and CEO stated, "No doubt, this
has been a challenging year for us. However, we have made
significant changes to enhance our personnel and financial
capabilities. We have appreciably upgraded our financial
reporting and internal audit capabilities. We also have added
high-quality board members and worked closely with all of our
financial partners to ensure continued availability of capital for
growth."
Mr. Shanfelter continued, "We have been involved in major multi-
state fiber deployment projects for customers during the second
half of the year. Customer fiber deployment budgets have been
significant, and we anticipate that this business should continue
to grow. Our satellite install-to-the-home business, which has
grown by about 100% for each of the last three years, continues to
expand."
C. Robert Campbell, the Company's newly appointed Executive Vice
President and Chief Financial Officer, noted that "MasTec has made
significant investment in its management information systems over
the last two years and is strengthening its finance organization.
MasTec has put substantially all of its businesses on a single
Oracle platform which represents improvement compared to managing
the business with over 20 disparate information technology
systems. Furthermore, MasTec is adding new data mining software
to further improve management information and financial reporting.
In addition to the recent appointments of a new CFO and Corporate
Controller, MasTec has added senior-level resources to its
corporate and field office finance organizations and expects to do
further strengthening in the near future."
Mr. Shanfelter concluded, "As part of our effort to generate
better financial performance, we are closely evaluating every
division, office and contract to see that Company policies,
procedures and financial expectations are met. This management
team and our board will have no patience with poorly performing
operations. Operations that do not meet our financial expectations
will be fixed, sold or closed."
MasTec -- http://www.mastec.com/-- is a leading communications,
broadband, intelligent traffic and energy infrastructure service
provider. The Company designs, builds, installs, maintains,
upgrades and monitors internal and external networks for leading
companies and government entities.
* * *
As reported in the Troubled Company Reporter on Aug. 25, 2004,
Standard & Poor's Ratings Services withdrew its corporate credit,
senior secured, and subordinated debt ratings on MasTec, Inc. The
ratings had been placed on CreditWatch negative on March 17, 2004.
At Dec. 31, 2003, MasTec had approximately $237 million of debt
outstanding.
"We believe that there currently is insufficient information
available to support a ratings opinion," said Standard & Poor's
credit analyst Heather Henyon.
MasTec has yet to file financial statements for the first or
second quarters of 2004 and has not announced any specific
timeline for that information to be made available.
As previously reported on May 13, 2004, Standard & Poor's Ratings
Services lowered its corporate credit rating on MasTec, Inc., to
'B' from 'BB-', its senior secured bank loan rating to 'B+' from
'BB', and its subordinated debt rating to 'CCC+' from 'B'. At the
same time, all ratings remain on CreditWatch with negative
implications, where they were placed on March 17, 2004.
Total debt (including present value of operating leases) was
$226 million at Sept. 30, 2003, for the Miami, Fla.-based provider
of infrastructure services.
The downgrade follows MasTec's announcement of a net loss for the
2004 first quarter that is significantly greater than the year-
earlier loss as well as a delay in its Form 10Q filing for the
first quarter because of an unfinished audit for full-year 2003.
market conditions in the specialty contractor industry are weak,
resulting in declining margins and higher leverage.
"We continue to be concerned about the breakdown of certain
financial controls and policies, the length of time it is taking
to complete the 2003 audit, and the liquidity profile, including
obtaining a waiver or amendment to bank covenants," said
Standard & Poor's credit analyst Heather Henyon.
MITCHELL WARD: Bankruptcy Court Approves Marten Settlement Pact
---------------------------------------------------------------
The United States Bankruptcy Court for the Eastern District of
Texas approved a settlement agreement between Marten Transport,
Ltd. (Nasdaq: MRTN) and the trustee of the bankruptcy estate of
Mitchell Ward Trucking, Inc., among others, with regard to a
lawsuit involving MW Logistics, LLC. Marten owns a 45 percent
equity interest in MW Logistics, LLC, a third-party provider of
logistics services to the transportation industry and a certified
minority owned business. In settlement of this matter, MWL will
make a one-time payment to the trustee of the bankruptcy estate of
Mitchell Ward Trucking, Inc. The settlement will have no material
impact on Marten.
Marten Transport, Ltd., specializes in transporting food and other
consumer packaged goods that require a temperature-sensitive or
insulated environment. Marten offers nationwide service,
concentrating on expedited movements for high-volume customers.
The company's common stock is traded on the Nasdaq National Market
under the symbol MRTN.
MOSLER INC: Has Until March 29 to Object to Proofs of Claim
-----------------------------------------------------------
MDIP Inc. f/k/a Mosler Inc. and its debtor-affiliates sought and
obtained from the U.S. Bankruptcy Court for the District of
Delaware an extension, until March 29, 2005, of their time to
object to proofs of claim filed against the Reorganized Debtors.
The Debtors need the extension to thoroughly evaluate and resolve
all claims filed against the reorganized estates. Without the
extension, the Debtors may imprudently classify and allow claims
in improper amounts.
MDIP Inc. fka Mosler, Incorporated, a leading integrator of
physical and electronic security systems, filed, along with its
debtor-affiliates for chapter 11 protection on August 6, 2001, in
the United States Bankruptcy Court for the District of Delaware
(Case No. 01-10055). Russell C. Silberglied, Esq., at Richards
Layton & Finger, and Robert Brady, Esq., at Young Conaway Stargatt
& Taylor, LLP, represent the Debtors in their restructuring
efforts. When the company filed for protection from its
creditors, it listed an estimated assets of $10 million to $50
million and estimated debts of more than $100 million. The
Debtors' Second Amended Joint Plan of Liquidation was confirmed by
the Honorable Gregory M. Sleet on June 30, 2003.
NAPSTER INC: Requests Final Decree Closing Bankruptcy Case
----------------------------------------------------------
Enco Recovery Corp. f/k/a Napspter, Inc., and its debtor-
affiliates ask the U.S. Bankruptcy Court for the District of
Delaware to enter a final decree and formally close their
bankruptcy cases pursuant to Section 350 of the Bankruptcy Code.
According to the Reorganized Debtors, the cases should be closed
since their First Amended Chapter 11 Liquidating Plan has been
substantially consummated, their estates fully administered, all
required fees have been paid and a final report was filed on
Dec. 23, 2004.
Napster, Inc., and its debtor-affiliates own and operate the
peer-to-peer music service known as Napster. The Napster service
has provided music enthusiasts with an easy-to-use, high quality
service for finding and discovering music and communicating their
interests with other members of the Napster community. The
Company along with its affiliates filed for chapter 11 protection
on June 6, 2002. Daniel J. DeFranceschi, Esq., Russell C.
Silberglied, Esq., at Richards, Layton & Finger and Richard M.
Cieri, Esq., Michelle Morgan Harner, Esq., at Jones, Day, Reavis &
Pogue represent the Debtors in their restructuring efforts. When
the Company filed for protection from its creditors, it listed
debts of more than $100 million. The Debtors chapter 11 plan of
liquidation was confirmed on
Apr. 20, 2004.
NATIONSLINK FUNDING: S&P Lifts Low-B Ratings on Four Cert. Classes
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on seven
classes of NationsLink Funding Corp.'s commercial mortgage pass-
through certificates series 1999-2. At the same time, ratings are
affirmed on six other classes from the same transaction.
The raised and affirmed ratings reflect credit enhancement levels
that provide adequate support through various stress scenarios.
They also reflect stable performance in the seasoned pool.
As of the Dec. 20, 2004, remittance report, the collateral pool
consisted of 241 loans with an aggregate principal balance of
$765.6 million, down from 330 loans totaling $1,115.2 million at
issuance or a 31% decline. The master and special servicer, ORIX
Capital Markets LLC, provided Dec. 31, 2003, net cash flow -- NCF
-- DSC figures for 96% of the pool. Based on this information,
Standard & Poor's calculated a current weighted average DSC of
1.52x, up from 1.38x at issuance. The trust has experienced no
losses, and seven loans totaling $10.4 million are defeased. All
of the loans in the pool are current.
The current top 10 loans have an aggregate outstanding balance of
$153.5 million (20%). The weighted average DSC for the top 10
loans increased slightly to 1.30x, up from 1.28x at issuance. he
increased DSC occurred despite significant performance declines
for the sixth- and seventh-largest loans, which are on ORIX's
watchlist. Standard & Poor's reviewed property inspections
provided by the master servicer for all of the assets underlying
the top 10 loans and all were characterized as "excellent" or
"good."
ORIX reported a watchlist of 61 loans ($159.3 million, 21%). The
sixth-largest loan ($11.7 million, 2%) is on the watchlist and is
secured by a 312-unit multifamily property in Tampa, Florida.
According to ORIX, the declining performance reflects an income
decline, increased operating costs, and increased competition in
the immediate area. Overbuilding in the Tampa area and new home
purchases also contributed to the performance decline since
issuance. ORIX reported a Dec. 31, 2003, DSC of 0.86x.
The seventh-largest loan ($10.9 million, 1%), the SLJ Realty
portfolio, is secured by four retail properties and one office
property in New York and New Jersey. Per ORIX, two of the
properties in the portfolio became vacant as of June 2003. Over
the past year, the borrower has leased both properties. ORIX
reported a Dec. 31, 2003 DSC of 1.02x.
The remaining loans are on the watchlist due to low occupancy
issues, lease expirations, and low DSC levels, all of which
reflect the pool's concentration in multifamily collateral.
There are two loans ($2.5 million) with the special servicer. A
56-bed skilled care nursing home in Bloomfield, New Jersey secures
a loan for $1.8 million.
The loan was transferred to the special servicer in July 2003 due
to low DSC of 0.73x for the trailing 12-month period ending
March 31, 2003. Increased labor and insurance costs have
contributed to the decreased DSC, while occupancy and revenue
fluctuate, but remain relatively stable. ORIX will continue to
monitor the property's performance.
A 49-unit multifamily property in Ham Lake, Minnesota secures the
other loan ($732,117) with the special servicer. The loan is
current and is pending a return to the master servicer.
The trust collateral is located across 30 states with only
California (32%) and Florida (10%) accounting for more than 10% of
the pool balance.
Property concentrations greater than 10% of the pool balance are
found in multifamily (33%), retail (30%), office (13%), and
industrial (12%) property types.
Standard & Poor's stressed various loans with credit issues as
part of its pool analysis. The resultant credit enhancement
levels support the revised ratings.
Ratings Raised
NationsLink Funding Corp.
Mortgage Pass-Through Certs Series 1999-2
Rating
Class To From Credit Enhancement (%)
----- -- ---- ----------------------
C AAA AA+ 26.38
D AA A 17.59
E A+ A- 15.39
F BBB BB+ 8.06
G BBB- BB 6.96
H BB- B 4.03
J B+ B- 3.66
Ratings Affirmed
NationsLink Funding Corp.
Mortgage Pass-Through Certs Series 1999-2
Class Rating Credit Enhancement (%)
----- ------ ----------------------
A-3 AAA 39.57
A-4 AAA 39.57
A-1C AAA 39.57
A-2C AAA 39.57
B AAA 32.25
X AAA N/A
N/A - Not applicable
NEXTEL PARTNERS: S&P Revises Outlook on Low-B Ratings to Positive
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
Nextel Partners, Inc., to positive from stable. Ratings on the
company, including the 'B+' corporate credit rating, were
affirmed.
"The outlook change reflects the potential exercise of Nextel
Partners' put rights to Nextel Communications Inc. (BB+/Watch
Pos/--) following Nextel Communications' announced merger with
Sprint Corp.," explained Standard & Poor's credit analyst
Rosemarie Kalinowski.
According to Nextel Partners' restated certificate of
incorporation, its class A stockholders can cause Nextel
Communications to purchase all of its shares at fair market value
(which includes a control premium) if a change of control occurs
at Nextel Communications. Nextel Communications currently owns
32% of Nextel Partners. Nextel Communications can satisfy this
obligation (the remaining 68%) with cash, Nextel Communications
shares, or a combination of both.
On Dec. 15, 2004, Standard & Poor's indicated that the merged
SprintNextel corporate credit rating could be either 'BBB-' or
'BBB'. Therefore, exercise of the Nextel Partners' put, which its
class A shareholders have the right to exercise up to 18 months
after the merger completion, could result in a higher corporate
credit rating for Nextel Partners, depending on further
transaction details. A higher corporate credit rating could
result from cash used to satisfy the put and pay down debt, or
from the potential 100% ownership by SprintNextel.
"Ratings on Kirkland, Washington-based wireless carrier Nextel
Partners reflect the company's still high leverage, which was
about 4.6x debt to annualized EBITDA (about 5.1x after adjusting
for operating leases) for the nine months ended Sept. 30, 2004,"
said Ms. Kalinowski. "This level of debt leverage is a legacy of
the company's use of substantial debt to finance the building of
its network and operating losses incurred in the early stages of
its business. However, Nextel Partners' good competitive
position, solid EBITDA, and potential growth in free cash flow
somewhat temper these concerns." Total debt was about
$1.6 billion (about $1.8 billion after adjusting for operating
leases) at Sept. 30, 2004.
NRG ENERGY: Completes $950 Million Senior Debt Refinancing
----------------------------------------------------------
NRG Energy, Inc. (NYSE:NRG) amended and restated its $950 million
senior secured credit facility.
The amended and restated facility includes a $150 million
revolving credit facility and an $800 million term loan,
$350 million of which will be used to prefund a letter of credit
facility to support working capital needs. The interest rate on
the $800 million term loan will be LIBOR plus 1.875 percent going
forward, a reduction of 212.5 basis points from the prior
facility. Also, the covenants under the amended facility are less
restrictive, and in many respects match the covenants in NRG's
outstanding 8% high yield note indenture.
"We view our ability to restructure our senior debt facility on
such attractive terms as recognition by the financial community of
our strong operational performance and of the new NRG's
fundamental commitment to prudent balance sheet management," said
Robert Flexon, Chief Financial Officer. "This is a very positive
reflection on the outstanding work done by the entire NRG team
over the past year."
Credit Suisse First Boston and Goldman, Sachs & Co. arranged the
financing for NRG.
NRG Energy, Inc., owns and operates a diverse portfolio of power-
generating facilities, primarily in the United States. Its
operations include baseload, intermediate, peaking, and
cogeneration facilities, thermal energy production and energy
resource recovery facilities. The company, along with its
affiliates, filed for chapter 11 protection (Bankr. S.D.N.Y. Case
No. 03-13024) on May 14, 2003. The Company emerged from chapter
11 on December 5, 2003, under the terms of its confirmed Second
Amended Plan. James H.M. Sprayregen, Esq., Matthew A. Cantor,
Esq., and Robbin L. Itkin, Esq., at Kirkland & Ellis, represented
NRG Energy in its $10 billion restructuring.
* * *
As reported in the Troubled Company Reporter on Dec. 14, 2004,
Moody's Investors Service upgraded all of the debt ratings of NRG
Energy, Inc. (NRG: Senior Implied to B1 from B2). Moody's also
assigned a Ba3 senior secured rating to the company's proposed
$950 million secured revolving credit and term loan facility, a
B2 Issuer Rating, and a Speculative Grade Liquidity Rating of
SGL-1. This rating action concludes the review for possible
upgrade that was initiated on November 15, 2004. The rating
outlook is stable.
NRG ENERGY: Closes $420 Million Offering of Perpetual Pref. Stock
-----------------------------------------------------------------
NRG Energy, Inc. (NYSE:NRG) disclosed the closing of its sale of
$420 million of convertible perpetual preferred stock with a
dividend coupon rate of 4%. This transaction enabled the Company
to repurchase 13 million common shares from investment
partnerships managed by MatlinPatterson Global Advisers, LLC (MP)
at a purchase price of $31.16 per share. The cash proceeds from
the preferred stock issuance are expected to be used to redeem a
portion of the Company's existing debt while the 13 million shares
were repurchased using existing cash balances as depicted below:
Sources Amount--Net Uses Amount
-----------------------------------------------------------------
Convertible Redemption of 8% High
Preferred $406 million Yield Notes at 108 $406 million(1)
-----------------------------------------------------------------
Cash $405 million Repurchase of
Common Shares $405 million
-----------------------------------------------------------------
Total $811 million Total $811 million
-----------------------------------------------------------------
(1) Includes planned principal redemption of $373.6 million, a
redemption premium of $29.9 million, and accrued interest
payable of $2.9 million.
"We are pleased with the expeditious timing and completion of
these transactions and with the far-reaching positive implications
for our stakeholders," said David Crane, President and Chief
Executive Officer. "By contracting our share base, we increased
our remaining shareholders' stake in the Company's earnings
potential while, through the partial redemption of our 8% notes,
we will achieve a meaningful reduction in our highest cost debt."
Under certain conditions, shares of the preferred stock will be
convertible into NRG common stock at $40.00 per share, which is
approximately a 24.5% premium to the NRG stock closing price on
December 14, 2004. Holders of preferred stock will be entitled to
receive cash dividends at the rate of 4% per year, payable
quarterly. After five years, the preferred stock is callable at
par plus accrued and unpaid dividends. Proceeds from the sale of
the preferred securities are expected to be used to redeem certain
of the Company's 8% high yield notes at 108% of par in early 2005.
As previously announced, NRG's 13 million share repurchase from MP
reduced their share ownership in NRG to less than 10 percent from
the prior 21.5 percent. Even with this repurchase, MP remains the
Company's largest shareholder. Also, MP's registration rights
were terminated and the three directors affiliated with MP have
resigned from the Company's Board. The NRG Board's Governance and
Nominating Committee has begun the process of identifying
appropriate independent directors to fill the three vacancies.
About the Company
NRG Energy, Inc., owns and operates a diverse portfolio of power-
generating facilities, primarily in the United States. Its
operations include baseload, intermediate, peaking, and
cogeneration facilities, thermal energy production and energy
resource recovery facilities. The company, along with its
affiliates, filed for chapter 11 protection (Bankr. S.D.N.Y. Case
No. 03-13024) on May 14, 2003. The Company emerged from chapter
11 on December 5, 2003, under the terms of its confirmed Second
Amended Plan. James H.M. Sprayregen, Esq., Matthew A. Cantor,
Esq., and Robbin L. Itkin, Esq., at Kirkland & Ellis, represented
NRG Energy in its $10 billion restructuring.
* * *
As reported in the Troubled Company Reporter on Dec. 14, 2004,
Standard & Poor's Ratings Services assigned its 'CCC+' rating to
NRG Energy Inc.'s (NRG; B+/Stable/--) proposed $400 million
convertible perpetual preferred stock. The outlook is stable.
The proceeds of the preferred stock issuance will be used to
redeem a portion of NRG's outstanding second priority notes due
2013. In addition, NRG will repurchase 13 million shares of
common stock held by investment partnerships managed by
MatlinPatterson Global Advisors LLC using available cash.
NRG, previously a 100% owned subsidiary of Xcel Energy Inc.,
emerged from bankruptcy on Dec. 5, 2003, and has operated for one
year. It is engaged in the ownership and operation of power
generating facilities, primarily in the U.S. merchant power
market, thermal production and resource recovery facilities, and
various international independent power producers.
"NRG has benefited in the past year from high natural gas prices,
which have allowed it to maintain high gross margins," said credit
analyst Arleen Spangler. "There is little room for a ratings
upgrade in the near term based on the high business risk of
operating as predominantly a merchant generator where cash flows
may be volatile."
OWENS CORNING: Bondholders Say There is No "Bondholders Agreement"
------------------------------------------------------------------
On behalf of the bondholders of Owens Corning and its debtor-
affiliates, Richard W. Riley, Esq., at Duane Morris, LLP, in
Wilmington, Delaware, contends that the Debtors continue to
trumpet the so-called "Bondholders Agreement" reached between two
individual bondholders and the Plan Proponents. Although the
"Designated" bondholder members of the Unsecured Creditors
Committee executed that Bondholders Agreement, Mr. Riley clarifies
that it did not and does not have the support of the Bondholders
that hold over a third of the outstanding bonds. Moreover, since
signing the Bondholders Agreement, one of the two "Designated"
bondholders has sold its bonds and, on information and belief,
resigned its position on the Unsecured Creditors Committee. Thus,
the Bondholders Agreement that is purported to reflect the
agreement of the entire bondholder creditor class is actually
supported by a single bondholder that holds a miniscule amount of
bonds. The Bondholders Agreement is entirely illusory, Mr. Riley
says.
"That 'agreement' is meaningless with respect to the bondholder
class because the bonds are inadequately represented in an
'official' capacity by but a single, small holder. The true voice
of the bondholder class is that represented by the Bondholders [].
The pertinent fact is that the forthcoming Fifth Amended Plan of
Reorganization will be opposed and voted against by the
Bondholders," Mr. Riley asserts. Thus, Mr. Riley says, the
progress expressed by the Debtors in advancing a "successful plan"
is exaggerated.
As reported in the Troubled Company Reporter on Dec. 1, 2004, the
Debtors asked the U.S. Bankruptcy Court for the District of
Delaware to further extend their exclusive period to solicit plan
votes through and including June 30, 2005. The Debtors require
more time to complete the procedures necessary to gain approval
from the U.S. District Court for the District of Delaware of an
amended disclosure statement and solicit acceptances of an amended
plan of reorganization.
The Bondholders, namely:
-- King Street Capital Management, L.L.C.,
-- E. Shaw Laminar Portfolios, L.L.C,
-- Harbert Management Corporation,
-- Canyon Partners Inc., and
-- Lehman Brothers, Inc.,
do not oppose the Debtors' request for an extension of the
solicitation period in light of the current status of the Debtors'
cases -- the pending appeal by the Bank Debt Holders of the
District Court's substantive consolidation ruling, the Plan
Proponents' motion to dismiss that appeal, and the estimation
proceedings currently being litigated in the District Court.
The Bondholders simply want the Debtors and the other Plan
Proponents to recognize that they have yet to reach agreement on a
plan of reorganization with the bondholder constituency.
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)
PACIFIC GAS: Judge Montali Orders 4 Plaintiffs to Dismiss Lawsuit
-----------------------------------------------------------------
Siller Brothers, Inc., Neal Siller, Sharon Siller, the decedent
estate of Andrew Siller, and Jose Gonzales object to Pacific Gas
and Electric Company's request to enforce the Plan Confirmation
Order against the suit they initiated against PG&E.
The Sillers are in the business of growing and harvesting timber
in, among other place, the Tahoe National Forest in Yuba County,
California. On October 16, 1999, a wild land fire began and
burned for several days, destroying over 11,725 acres of land in
the vicinity of Camptonville in Yuba County. PG&E owns
electrical transmission and distribution lines on mountainous
forest, brush, and grasslands in the same vicinity.
The Pendola Fire destroyed or damaged the Sillers' real property,
including growing timber, and severely reduced the fair market
value of their property as well as destroying the value of
efforts to improve and develop the property. The fire also
necessitated the Sillers' efforts and expenses to repair and
mitigate post-fire damage and necessitates substantial
expenditures for reforestation, erosion and disease control, as
well as increased costs of maintenance and repairs in the future.
The total damages suffered by the Sillers is greatly in excess of
$1,000,000.
However, the Sillers did not have any information that would have
led them to believe that PG&E might have any responsibility for
the Pendola Fire until over one and one-half years after the
deadline for filing of proofs of claim, and several months after
confirmation of the Debtor's Plan of Reorganization.
On May 11, 2004, the Sillers commenced an action in the Yuba
County Superior Court to recover damages against PG&E and others.
PG&E appeared in the State Court Action in July 2003, by filing a
demurrer to Sillers' claim for inverse condemnation. PG&E also
filed a motion to strike the Sillers' claims for punitive
damages. Neither the demurrer nor the motion to strike raised an
assertion that the Sillers had failed to file a proof of claim in
PG&E's bankruptcy case or that the Sillers were barred by post-
confirmation discharge.
On October 6, 2004, PG&E answered the Sillers' complaint in the
State Court Action and, for the first time, raised an affirmative
defense alleging that the Sillers are barred for failure to file
a proof of claim in the Chapter 11 case.
The arguments raised by the Sillers and PG&E's responses to those
issues are:
Opposition Responses
---------- ---------
The Sillers' claim should not In May 2001, Robert L. Berger and
be bound by a claims bar date associates, LLC, as PG&E's Claims
or discharge under Chapter 11 and Noticing Agent, served the
because they were not given Sillers with notice of PG&E's
formal notice of the existence Chapter 11 case commencement and
of the Chapter 11 case and the the Court-approved deadline by
deadline for filing proofs of which proofs of claim of non-
claim. government entities were required
to be filed, at the Sillers' two
street addresses in Yuba City and
Anderson, California, and at
their post office box, P.O. Box
1585 in Yuba City.
In the context of a tort claim The Sillers' claim, if any,
arising from a fire, a claim against PG&E arising out the
arises when the claimant has Pendola Fire constitutes a
sufficient information to put prepetition claim, which was
it on notice that the debtor discharged by the Confirmation
might be responsible for the Order provisions.
damages incurred by the
claimant. Under Ninth Circuit law, a claim
"arises", for purposes of
bankruptcy, upon the occurrence
of the debtor's conduct which
forms the basis for the claim.
Although liability for the fire
had not been determined as of
that date -- and still has not
been determined -- the fact of
PG&E's potential involvement in
the fire was known or could have
been determined at that time.
Accordingly, the Sillers' Claim
constitutes a prepetition claim.
Even if the Court concludes The Sillers have failed to make
that the Sillers should be the requisite showing to justify
bound by the discharge under relief based on excusable
the Plan, they should be neglect. There is no doubt that
permitted to file a late there was neglect on the Sillers'
proof of claim and receive part. The Sillers, with the
the same treatment as is modicum of diligence, could have
afforded to other "Tort discovered their potential claim
Claims" under the Plan. The against PG&E much earlier than
Sillers acknowledge that they they did. Information was
would bear the burden of publicly and widely available
presenting facts demonstrating that PG&E was potentially
excusable neglect. Under the responsible for the fire and a
excusable neglect theory, the number of other parties had filed
Court considers various lawsuits and claims against PG&E.
factors, including:
Moreover, the length of the delay
A. Reason for Delay -- five years from the incident
itself and over three years from
The Sillers did not delay the Bar Date -- strongly
in presenting their claims. militates against allowing the
They proceeded immediately late filing based on excusable
in the Superior Court upon neglect.
learning that a claim
existed. The Sillers had It is well established that mail
the right to believe, at that is properly addressed,
that time they became stamped, and deposited into the
aware of their claim, that mails is presumed to be received
they were not bound by the by the addressee.
discharge in PG&E's Chapter
11 case because the case
was effectively completed.
B. Prejudice to Debtor
PG&E is hardly going to be
prejudiced by allowance of
the Siller claims. The
Plan already provides that
Tort Claims are not to be
discharged and parties
asserting them are entitled
to continue their actions
against PG&E. Additionally,
PG&E is already defending
several actions on the
basis on the same fire, may
of which are consolidated
in the State Court.
Permitting the Action to
proceed will not impose
material additional
burdens on PG&E to defend
one more action or prove
additional facts.
C. Effect on Judicial
Proceedings
Allowing the Action to
proceed will not unduly
burden the State Court
because it is already
hearing the several
consolidated cases. Also,
this is a distinct matter
and will not affect the
Chapter 11 case in any way.
If the Court permits the
Sillers to file a proof of
claim, the treatment is
already included in the
Plan; the claim is not
discharged and the Sillers
will be allowed to continue
their suit, just like the
many other holders of Tort
Claims in Class 8 under the
Plan.
D. Good Faith of the Sillers
The Sillers clearly did not
delay to secure any undue
advantage or for any
improper purpose. They have
handled this matter
professionally and
appropriately at all stages
based on the information
available to them at any
point in time.
The Sillers ask the Court to deny PG&E's request against it and
find that their claims against PG&E did not arise until after the
discharge granted in connection with the PG&E Plan and are not
bound by that discharge. In the alternative, the Sillers ask
Judge Montali to permit them to file a proof of claim in PG&E's
Chapter 11 case and hold that the claim will be allowed and
treated as a Class 8 Tort Claim under the Plan.
* * *
Judge Montali orders four plaintiffs to promptly dismiss their
lawsuits against PG&E, with prejudice:
Name Case
---- ----
City of Berkeley City of Berkeley v. PG&E -
(Cross-Complaint - Frazier v.
City of Berkeley [Main Case]) -
Alameda County Superior Court -
No. 819780-9
Edourdette Lalia Corey Edourdette Lalia Corey v. PG&E -
Alameda County Superior Court -
Case No. 822832
Danielle Nowlin Nowlin v. Pacific Gas and Electric
Company, et al., - Contra Costa
County Superior Court - No. MSC
04-01695
State Farm General State Farm General Insurance Co.
Insurance Co. v. PG&E - Yuba County Superior
Court - Civil No. 04-0000679
Headquartered in San Francisco, California, Pacific Gas and
Electric Company -- http://www.pge.com/-- a wholly owned
subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest
combination natural gas and electric utilities in the United
States. The Company filed for Chapter 11 protection on April 6,
2001 (Bankr. N.D. Calif. Case No. 01-30923). James L. Lopes,
Esq., William J. Lafferty, Esq., and Jeffrey L. Schaffer, Esq.,
at Howard, Rice, Nemerovski, Canady, Falk & Rabkin represent the
Debtors in their restructuring efforts. On June 30, 2001, the
Company listed $23,216,000,000 in assets and $22,152,000,000 in
debts. Pacific Gas and Electric emerged from chapter 11
protection on April 12, 2004, paying all creditors 100 cents-on-
the-dollar plus post-petition interest. (Pacific Gas Bankruptcy
News, Issue No. 88; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
PARMALAT: Financial Projections Underpinning Chapter 11 Plans
-------------------------------------------------------------
In connection with the confirmation of the Chapter 11 Plans filed
by Parmalat USA Corp., Farmland Dairies, LLC, and Farmland
Stremicks Sub, L.L.C. -- formerly known as Milk Products of
Alabama, L.L.C. -- the U.S. Bankruptcy Court for the Southern
District of New York will have to determine that the Plans are
feasible pursuant to Section 1129(a)(11) of the Bankruptcy Code,
which means that the Plan's confirmation is not likely to be
followed by the liquidation or the need for further financial
reorganization of the Debtors.
Since the Plans provide for the liquidation of Parmalat USA and
Milk Products, the Court will find that the Plan is feasible with
respect to the two U.S. Debtors if it determines that Parmalat USA
and Milk Products will be able to satisfy the conditions precedent
to the Effective Date and otherwise have sufficient funds to meet
their post-confirmation obligations to pay for the costs of
administering and fully consummating the Plan and closing Parmalat
USA's and Milk Products' Chapter 11 cases. Parmalat USA and Milk
Products believe that their Plans satisfy the financial
feasibility requirement imposed by the Bankruptcy Court.
To support its belief in the feasibility of the Plan, Farmland has
relied on pro forma financial projections covering Reorganized
Farmland's operations through December 31, 2008. The Projections
indicate that Reorganized Farmland should have sufficient cash
flow to pay and service its debt obligations, including the
Farmland Note and the Exit Facility, and to fund its operations as
contemplated by the Farmland business plan. Accordingly, Farmland
believes that the Plan complies with the financial feasibility
standard of Section 1129(a)(11) of the Bankruptcy Code.
Forecasted Farmland Sources and Uses
at Emergence ($ 000s)
Beginning Cash Before Restructuring $2,000.0
Sources of Value:
Funding From AR and Inventory Revolver 10,000.0
Funding Term Loan 1st Lien 20,000.0
Funding Term Loan 2nd Lien 45,000.0
MPA Allowed Administrative Expense Claim 2,064.0
PUSA Allowed Administrative Expense Claim 1,500.0
Equity Recovery from MPA 8,511.6
---------
Total Sources of Value 87,075.6
Payments or Distributions to:
Refinance Post-Petition Financing (34,300.0)
Refinance Citibank Receivables Purchase Agreement (27,774.6)
Accrued Unpaid Professionals (6,406.1)
Cure Costs (1,500.0)
Farmland Class 1 Claims (199.2)
Farmland Class 2 Claims (40.5)
Initial Cash Payment to Farmland Class 3a Claims (3,000.0)
Initial Funding Amount and Litigation Trust Loan (600.0)
Allowed Administrative Expense Claims (8,798.9)
---------
Total Forecasted Uses of Value (82,619.3)
---------
Ending Cash December After Emergence $6,456.3
=========
Parmalat USA Projected Sources and
Uses of Recovery ($ 000s)
Beginning Forecasted Cash 12/31/2004 -
Projected Sources of Value:
Recovery from MPA Class 3 Claim $4,919
Recovery from Farmland Class 3a Claim 5,820
---------
Total Sources of Value 10,739
Payments and Distribution to:
Allowed Administrative Expense (1,533)
Priority Tax Claims (1,180)
PUSA Class 1 Claims-Priority Non-Tax
(estimated Allowed at $0) -
PUSA Class 2-Secured Claims
(estimated Allowed at $0) -
PUSA Class 3-General Unsecured Claims (8,026)
PUSA Class 4-Equity -
---------
Total Forecasted Uses of Value ($10,739)
---------
Ending Cash After Distributions -
=========
Forecasted Milk Products Sources/Uses
($ 000s)
Beginning Cash as of 10/15/2004 -
Sources of Value:
Cash received from sale (10/15/04) $19,429
Cash deposit related to sale 2,160
Collection of accounts receivable 2,827
Farmland Class 3a Claim 1,443
Farmland Administrative Expense Claim 8,715
---------
Total Sources of Value 34,574
Payments and Distributions:
Transaction costs (1,791)
Funding of Bank of New York escrow (2,827)
DIP loan paydown per Final DIP Order (10,000)
Estimated MPA Administrative Expense Claims (943)
Professional Fee Allocation Through Sale
per Final DIP Order (1,649)
Estimated Professional Fees Post Sale (415)
Priority tax claim (23)
MPA Class 1 Claims (estimated at $0) -
MPA Class 2 Claims (estimated at $0) -
MPA Class 3 Claims (6,286)
---------
Total Forecasted Uses of Value (23,934)
---------
Estimated Amount Available to Equity Interests
in MPA (Class 4) $10,640
=========
Farmland Dairies, LLC
Projected Balance Sheet
($ in thousands)
Stub Year Fresh Start/
2004 Restructuring
--------- -------------
ASSETS:
Current Assets
Cash and equivalents $2,000 $4,456
Accounts receivable 43,328 -
AR securitization (27,775) 27,775
Inventories 18,498 -
Prepaid expenses & other assets 27,962 8,354
--------- -------------
Total current assets 64,013 23,877
--------- -------------
Property plant and equipment 91,022 (37,612)
Receivables from Parmalat entities 90,030 (90,030)
Intangibles and other assets 265,034 (248,794)
--------- -------------
Total assets $420,068 ($262,529)
--------- -------------
LIABILITIES:
Current Liabilities
Accounts payable-trade 13,630 (83)
Accrued expense and other current
liabilities 25,543 (6,406)
Revolving line of credit AR and
Inventory - 10,000
DIP financing 32,300 (32,300)
--------- -------------
Total current liabilities 71,473 (28,789)
Long-term liabilities
First Lien Term Loan - 20,000
Second Lien Term Loan - 45,000
Farmland Note - 7,000
Due to Parmalat Group (82,069) 82,609
Capital lease obligations 43 -
Other liabilities 8,326 -
Prepetition liabilities subject to
compromise 361,077 (361,077)
Preferred Membership Interests - 34,486
Common Membership Interests 61,217 (61,217)
--------- -------------
Total Liabilities and Stockholder
Equity $420,068 ($262,529)
========= =============
Farmland Dairies, LLC
Projected Balance Sheet
($ in thousands)
2004 2005 2006
-------- -------- --------
ASSETS:
Current Assets
Cash and equivalents $6,456 $6,414 $5,707
Accounts receivable 43,328 28,442 27,896
AR securitization - - -
Inventories 18,498 11,229 10,877
Prepaid expenses and other
Assets 19,608 19,608 19,608
-------- -------- --------
Total current assets 87,890 65,693 64,088
-------- -------- --------
Property plant and equipment 53,410 47,485 46,816
Receivables from Parmalat entities - - -
Intangibles and other assets 16,240 15,193 14,446
-------- -------- --------
Total assets $157,540 $128,371 $125,349
======== ======== ========
LIABILITIES:
Current Liabilities
Accounts payable-trade 13,547 12,411 16,029
Accrued expense and other
current liabilities 19,137 14,233 13,918
Revolving line of credit AR and
inventory 10,000 - -
DIP financing - - -
-------- -------- --------
Total current liabilities 42,684 26,644 29,947
Long-term liabilities
First Lien Term Loan 20,000 16,667 13,333
Second Lien Term Loan 45,000 45,000 45,000
Farmland Note 7,000 7,430 7,875
Due to Parmalat Group - - -
Capital lease obligations 43 43 43
Other liabilities 8,326 6,829 5,942
Prepetition liabilities subject
to compromise - - -
Preferred Membership Interests 34,486 38,279 42,490
Common Membership Interests (0) (12,522) (19,282)
-------- -------- --------
Total Liabilities and
Stockholder Equity $157,540 $128,371 $125,349
======== ======== ========
Farmland Dairies, LLC
Projected Balance Sheet
($ in thousands)
2007 2008
-------- --------
ASSETS:
Current Assets
Cash and equivalents $3,500 $3,500
Accounts receivable 28,875 29,532
AR securitization - -
Inventories 11,236 11,468
Prepaid expenses and other
assets 19,608 19,608
-------- --------
Total current assets 63,219 64,107
-------- --------
Property plant and equipment 45,572 44,353
Receivables from Parmalat entities - -
Intangibles and other assets 13,699 12,952
-------- --------
Total assets $122,490 $121,412
======== ========
LIABILITIES:
Current Liabilities
Accounts payable-trade 16,559 16,901
Accrued expense and other
current liabilities 14,239 14,447
Revolving line of credit AR and
inventory 75 5,733
DIP financing - -
-------- --------
Total current liabilities 30,873 37,080
Long-term liabilities
First Lien Term Loan 10,000 6,667
Second Lien Term Loan 44,000 43,000
Farmland Note 8,112 7,300
Due to Parmalat Group - -
Capital lease obligations 43 43
Other liabilities 5,355 5,355
Prepetition liabilities subject
to compromise - -
Preferred Membership Interests 47,164 47,164
Common Membership Interests (23,058) (25,198)
-------- --------
Total Liabilities and
Stockholder Equity $122,490 $121,412
======== ========
Farmland Dairies, LLC
Projected Income Statement
($ in thousands)
Stub Year Fresh Start/
2004 Restructuring
--------- -------------
Net sales $128,469 -
Cost of goods sold 108,280 -
Operating expenses
Distribution 15,430 -
General and administrative 3,431 -
Selling and marketing 3,282 -
Amortization-goodwill and
trademarks 24 -
--------- -------------
Total operating expenses 22,167 -
--------- -------------
Income from operations (1,978) -
--------- -------------
Interest expense, net 1,299 -
Non-Recurring Costs (13,670) ($145,357)
--------- -------------
Income/loss before taxes 10,393 145,357
Income tax provision - -
--------- -------------
Net loss before reorg costs 10,393 145,357
--------- -------------
Reorganization costs 6,663 -
--------- -------------
Net loss after reorg costs $3,731 $145,357
========= =============
Note: EBITDA
Net loss before reorg costs 10,393 145,357
Depreciation 2,474 -
Interest expense, net 1,299 -
Taxes - -
Non-recurring costs (13,670) ($145,357)
--------- -------------
EBITDA $496 -
========= =============
Farmland Dairies, LLC
Projected Income Statement
($ in thousands)
2004 2005 2006
-------- -------- --------
Net sales $128,469 $289,738 $297,162
Cost of goods sold 108,280 234,360 238,726
Operating expenses
Distribution 15,430 30,749 30,660
General and administrative 3,431 10,834 10,834
Selling and marketing 3,282 12,817 12,819
Amortization-goodwill and
trademarks 24 747 747
-------- -------- --------
Total operating expenses 22,167 55,147 55,061
-------- -------- --------
Income from operations (1,978) 232 3,375
-------- -------- --------
Interest expense, net 1,299 10,478 9,757
Non-Recurring Costs (159,027) - -
-------- -------- --------
Income/loss before taxes 155,750 (10,246) (6,382)
Income tax provision 18 - 379
-------- -------- --------
Net loss before reorg costs 155,732 (10,246) (6,761)
-------- -------- --------
Reorganization costs 6,663 2,276 -
-------- -------- --------
Net loss after reorg costs $149,069 ($12,522) ($6,761)
======== ======== ========
Note: EBITDA
Net loss before reorg costs 155,732 (10,246) (6,761)
Depreciation 2,474 8,266 8,266
Interest expense, net 1,299 10,478 9,757
Taxes 18 - 379
Non-recurring costs (159,027) - -
-------- -------- --------
EBITDA $496 $8,498 $11,641
======== ======== ========
Farmland Dairies, LLC
Projected Income Statement
($ in thousands)
2007 2008
---------- ----------
Net sales $307,685 $314,745
Cost of goods sold 244,829 248,966
Operating expenses
Distribution 30,531 30,576
General and administrative 10,334 10,234
Selling and marketing 12,421 12,223
Amortization-goodwill and
trademarks 747 747
---------- ----------
Total operating expenses 54,034 53,781
---------- ----------
Income from operations 8,822 11,998
---------- ----------
Interest expense, net 10,000 10,533
Non-Recurring Costs - -
---------- ----------
Income/loss before taxes (1,178) 1,465
Income tax provision 2,598 3,605
---------- ----------
Net loss before reorg costs (3,776) (2,140)
---------- ----------
Reorganization costs - -
---------- ----------
Net loss after reorg costs ($3,776) ($2,140)
========== ==========
Note: EBITDA
Net loss before reorg costs (3,776) (2,140)
Depreciation 8,266 8,266
Interest expense, net 10,000 10,533
Taxes 2,598 3,605
Non-recurring costs - -
---------- ----------
EBITDA $17,088 $20,264
========== ==========
Farmland Dairies, LLC
Projected Cash Flows
($ in thousands)
Stub Year Fresh Start/
2004 Restructuring
--------- -------------
Net loss $3,731 $145,357
Adjustments to reconcile net loss
to cash provided by operations - -
Depreciation and amortization 2,474 -
Loss (Gain) on disposal of property,
plant, and equipment (15,988) (145,357)
Changes in operating assets and
liabilities - -
Accounts receivables (34) -
Inventories (2,370) -
Prepaid and other expenses (6,835) 8,354
Accounts payable (1,270) (83)
Accrued liabilities and other
expenses 462 (6,406)
--------- -------------
Total Adjustments (23,560) (143,492)
--------- -------------
Net cash provided by (used by)
operations 19,830 1,865
--------- -------------
Cash Flows from Investing Activities
Acquisition of property, plant and
equipment (1,853) -
Proceeds from disposal of property,
plant and equipment 24,589 -
--------- -------------
Net cash provided by (used by)
Investing activities 22,736 -
--------- -------------
Cash Flows from Financing Activities
Proceeds (repayment) of DIP financing) 422 (32,300)
Proceeds of revolving credit line - 10,000
Proceeds of first lien term loan - 20,000
Proceeds of second lien term loan - 45,000
Farmland Note - -
Advances to Litigation Trust and UCC - (600)
Settlement of liabilities subject to
compromise - (11,734)
Proceeds (repayment) of other debt - -
Proceeds of securitization facility (9,293) (27,775)
Repayment of capital lease obligation - -
Issue preferred stock - -
Change in other long-term payables - -
Due to Parmalat Group - -
--------- -------------
Net cash provided by (used by)
financing activities (8,871) 2,591
--------- -------------
Net increase (decrease) in cash
and cash equivalents (5,965) 4,456
Cash at beginning of period 7,965 2,000
--------- -------------
Cash at end of period $2,000 $6,456
========= =============
Farmland Dairies, LLC
Projected Cash Flows
($ in thousands)
2004 2005 2006
-------- -------- --------
Net loss $149,087 ($12,522) ($6,761)
Adjustments to reconcile net loss
to cash provided by operations - - -
Depreciation and amortization 2,474 8,266 8,266
Loss (Gain) on disposal of
property, plant, & equipment (161,345) - -
Changes in operating assets &
liabilities - - -
Accounts receivables (34) 14,886 546
Inventories (2,370) 5,565 352
Prepaid and other expenses 1,519 - -
Accounts payable (1,353) (1,136) 3,618
Accrued liabilities and other
expenses (5,944) (4,904) (315)
-------- -------- --------
Total Adjustments (167,052) 22,676 12,467
-------- -------- --------
Net cash provided by (used by)
operations (17,965) 10,155 5,706
-------- -------- --------
Cash Flows from Investing Activities
Acquisition of property, plant &
equipment (1,853) (6,703) (6,850)
Proceeds from disposal of property,
plant and equipment 24,589 6,814 -
-------- -------- --------
Net cash provided by (used by)
Investing activities 22,736 111 (6,850)
-------- -------- --------
Cash Flows from Financing Activities
Proceeds of DIP financing (31,878) - -
Proceeds of revolving credit line 10,000 (10,000) -
Proceeds of first lien term loan 20,000 (3,333) (3,333)
Proceeds of second lien term loan 45,000 - -
Farmland Note - 430 446
Advances to Litigation Trust and UCC (600) 300 -
Settlement of liabilities subject
to compromise (11,734) - -
Proceeds (repayment) of other debt - - -
Proceeds of securitization facility (37,068) - -
Repayment of capital lease
obligation - - -
Issue preferred stock - 3,793 4,211
Change in other long-term payables - (1,497) (887)
Due to Parmalat Group - - -
-------- -------- --------
Net cash provided by (used by)
financing activities (6,280) (10,307) 436
-------- -------- --------
Net increase (decrease) in cash
and cash equivalents (1,509) (42) (707)
Cash at beginning of period 7,965 6,456 6,414
-------- -------- --------
Cash at end of period $6,456 $6,414 $5,707
======== ======== ========
Farmland Dairies, LLC
Projected Cash Flows
($ in thousands)
2007 2008
---------- ----------
Net loss ($3,776) ($2,140)
Adjustments to reconcile net loss
to cash provided by operations - -
Depreciation and amortization 8,266 8,266
Loss (Gain) on disposal of property,
plant, and equipment - -
Changes in operating assets and
liabilities - -
Accounts receivables (979) (657)
Inventories (359) (232)
Prepaid and other expenses - -
Accounts payable 530 342
Accrued liabilities and other
expenses 322 207
---------- ----------
Total Adjustments 7,779 7,927
---------- ----------
Net cash provided by (used by)
operations 4,003 5,787
---------- ----------
Cash Flows from Investing Activities
Acquisition of property, plant and
equipment (6,275) (6,300)
Proceeds from disposal of property,
plant and equipment - -
---------- ----------
Net cash provided by (used by)
Investing activities (6,275) (6,300)
---------- ----------
Cash Flows from Financing Activities
Proceeds (repayment) of DIP financing - -
Proceeds of revolving credit line 75 5,658
Proceeds of first lien term loan (3,333) (3,333)
Proceeds of second lien term loan (1,000) (1,000)
Farmland Note 236 (811)
Advances to Litigation Trust and UCC - -
Settlement of liabilities subject
to compromise - -
Proceeds (repayment) of other debt - -
Proceeds of securitization facility - -
Repayment of capital lease
obligation - -
Issue preferred stock 4,674 -
Change in other long-term payables (587) -
Due to Parmalat Group - -
---------- ----------
Net cash provided by (used by)
financing activities 65 513
---------- ----------
Net increase (decrease) in cash
and cash equivalents (2,207) (0)
Cash at beginning of period 5,707 3,500
---------- ----------
Cash at end of period $3,500 $3,500
========== ==========
Headquartered in Wallington, New Jersey, Parmalat USA Corporation
-- http://www.parmalatusa.com/-- generates more than 7 billion
euros in annual revenue. The Parmalat Group's 40-some brand
product line includes milk, yogurt, cheese, butter, cakes and
cookies, breads, pizza, snack foods and vegetable sauces, soups
and juices and employs over 36,000 workers in 139 plants located
in 31 countries on six continents. The Company filed for chapter
11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No.
04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at
Weil, Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts. On June 30, 2003, the Debtors listed
EUR2,001,818,912 in assets and EUR1,061,786,417 in debts.
(Parmalat Bankruptcy News, Issue No. 38; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
PILGRIM CLO: Fitch Affirms $10 Million Debt Rating at 'BB-'
-----------------------------------------------------------
Fitch upgrades the rating of two classes of notes and affirms the
rating of one class of notes issued by Pilgrim CLO 1999-1
Ltd./Corp., which closed Nov. 30, 1999. These rating actions are
effective immediately:
-- $176,235,619 class A notes upgraded to 'AAA' from 'AA+';
-- $60,000,000 class B notes upgraded to 'BBB+' from 'BBB-';
-- $10,000,000 class C notes affirmed at 'BB-'.
Pilgrim CLO 1999-1 is a collateralized loan obligation -- CLO --
managed by ING Investments Management Co. The collateral of
Pilgrim CLO 1999-1 is composed almost entirely of senior secured
bank loans. Payments are made quarterly and the reinvestment
period ends in November 2004. The deal is currently amortizing
the class A notes, which improves the credit enhancement of the
transaction. In addition, the credit quality of the portfolio has
improved since the last review.
According to the Dec. 2, 2004, trustee report, the portfolio
includes $3.45 million (1.46%) defaulted assets. The class A
overcollateralization -- OC -- test is currently passing at
145.82%, with a trigger of 115%. The class B OC test is currently
passing at 108.49%, with a trigger of 104.5%. The class C OC test
is currently passing at 104%, with a trigger of 102.5%.
The rating of the class A notes addresses the likelihood that
investors will receive full and timely payments of interest, as
per the governing documents, as well as the aggregate outstanding
amount of principal by the stated maturity date. The rating of
the class B and C notes addresses the ultimate payment of interest
and initial principal amount by the legal final maturity date.
Fitch will continue to monitor Pilgrim CLO 1999-1 closely to
ensure accurate ratings. Deal information and historical data on
Pilgrim CLO 1999-1 is available on the Fitch Ratings web site at
http://www.fitchratings.com/
PINNACLE CBO: Fitch Holds Junk Rating on $78 Mil. Sr. Notes
-----------------------------------------------------------
Fitch Ratings affirms one class of notes issued by Pinnacle CBO,
Ltd. The affirmation is the result of Fitch's review process and
is effective immediately:
-- $49,059,784 senior notes affirmed at 'BBB';
-- $78,506,476 second priority senior notes remain at 'C'.
Pinnacle is collateralized debt obligation -- CDO -- managed by
Morgan Stanley Investment Management which closed Nov. 20, 1997.
Pinnacle is composed of primarily sovereign and emerging market
debt securities. Included in this review, Fitch discussed the
current state of the portfolio with the asset manager and their
portfolio management strategy going forward.
Since the last rating action, the collateral has improved. The
weighted average rating has improved from 'CCC+/B-' to 'B-'. The
senior par value test overcollateralization -- OC -- has increased
from 105.8% as of the Nov. 20, 2003, trustee report to 114% as of
the most recent trustee report dated Nov. 19, 2004. As of the
most recent trustee report available, Pinnacle's defaulted assets
represented 18.8% of the $70 million of total collateral debt
securities. Assets rated 'CCC+' or below represented
approximately 19.3% of the aggregate collateral balance.
Despite improvement in OC levels and collateral credit, Pinnacle
owns collateral which has $7.5 million of scheduled principal
distributions after Pinnacle's legal final maturity on Nov. 27,
2009. Excluding equity, defaulted assets, and principal
collections (which were deployed to pay the senior noteholders on
the last payment date), the long dated distributions account for
approximately 13% of the $56.8 million performing portfolio. The
collateral manager does have the ability to sell these assets, and
Fitch will continue to monitor this exposure. Also of concern,
Pinnacle owns approximate $3.4 million of Nigerian sovereign debt
which is not publicly rated and subject to political and economic
instability. These risk factors detract from the improving OC and
collateral rating profile.
Of structural significance, Pinnacle bears the full weight of
interest rate risk. There is no interest rate swap, and the
liabilities are fixed and as of the last trustee report 43.5% of
the collateral is floating. If interest rates continue to rise,
the senior notes will benefit from additional interest revenue
generated by the floating portion of the collateral. On the last
payment date, $149,147 of interest proceeds was applied to redeem
the principal of the senior notes. This is an improvement from
subsequent payment dates when principal proceeds had to be
diverted to cover the interest due on the senior notes.
As of the last payment date, the second priority notes have
deferred interest of approximately $22.56 million. The original
note balance of the second priority notes was $56 million.
The rating of the senior notes addresses the likelihood that
investors will receive full and timely payments of interest, as
per the governing documents, as well as the stated balance of
principal by the legal final maturity date. The ratings of the
second priority notes address the likelihood that investors will
receive ultimate and compensating interest payments, as per the
governing documents, as well as the stated balance of principal by
the legal final maturity date.
As a result of this analysis, Fitch has determined that the
current ratings assigned to the senior notes still reflect the
current risk to noteholders.
Fitch will continue to monitor and review this transaction for
future rating adjustments. Additional deal information and
historical data are available on the Fitch Ratings web site at
http://www.fitchratings.com/ For more information on the Fitch
VECTOR Model, see 'Global Rating Criteria for Collateralised Debt
Obligations,' dated Sept. 13, 2004.
POPE & TALBOT: Acquiring Fort St. James Sawmill for $32 Million
---------------------------------------------------------------
Pope & Talbot, Inc., (NYSE:POP) entered into an agreement to
acquire the Fort St. James sawmill, including timber tenures with
640,000 cubic meters of annual allowable cut, from Canfor
Corporation for approximately Canadian $39 million or
approximately US $32 million, plus the value of certain inventory
which will be determined at closing. The transaction is expected
to close on March 1, 2005, and is subject to normal course
regulatory filings and other customary conditions.
The Fort St. James sawmill, located in the Northern Interior of
British Columbia, has an annual capacity of 250 million board feet
of spruce, pine, fir -- SPF -- lumber production. The Fort St.
James sawmill was constructed in 1969 with its last major rebuild
in 1999.
"The acquisition of the Fort St. James mill is a great strategic
fit for Pope & Talbot," stated Michael Flannery, Chairman and
Chief Executive Officer. "The mill's production is complementary
to Pope & Talbot's existing lumber mills, it's geographic location
in the northern interior of British Columbia diversifies the
Company's resource base, and the associated timber tenures
significantly increases our timber base. With the addition of
Fort St. James, Pope & Talbot's total lumber production capacity
is planned to exceed one billion board feet annually at five mills
and will expand the company's capability to meet our customer
needs with a deeper, more diverse product mix."
Pope & Talbot, Inc., is a pulp and wood products company, founded
in 1849, with headquarters in Portland, Oregon. The Company's
primary operations are located in Oregon, South Dakota and British
Columbia, Canada. Its primary products are pulp and softwood
lumber. The Company's common stock trades on the New York and
Pacific stock exchanges under the symbol POP.
* * *
As reported in the Troubled Company Reporter on September 30,
Moody's Investors Service affirmed the Ba2 senior implied, Ba3
issuer and Ba3 senior unsecured ratings of Pope & Talbot, Inc.
The rating outlook continues to be stable. The affirmation of the
company's ratings and outlook acknowledges its sequentially
improving financial performance resulting from the ongoing
commodity price recovery. The financial performance reverses a
trend that included periodic negative cash flow and, as well,
reduces pressure from potentially increased capital and pension
spending and the uncertainties concerning the magnitude and
sustainability of the commodity price recovery.
Ratings Affirmed:
* Ba3 for the US$75 million of 8.375% debentures and
US$50.8 million of 8.375% senior notes, both due
June 1, 2013,
* Ba2 for Pope & Talbot's senior implied rating, and
* Ba3 for its senior unsecured issuer rating.
As reported in the Troubled Company Reporter on July 15, Standard
& Poor's Ratings Services revised its outlook on pulp and lumber
producer, Pope & Talbot Inc. to stable from negative. The
corporate credit and senior unsecured debt ratings are affirmed at
'BB'.
"The outlook revision reflects expectations that Pope & Talbot's
credit measures will strengthen significantly during 2004 to
levels more appropriate for the ratings because of favorable pulp
and lumber market conditions," said Standard & Poor's credit
analyst Pamela Rice.
PROTOCALL TECH: Funding Uncertainties Trigger Going Concern Doubt
-----------------------------------------------------------------
Protocall Technologies, Inc., incurred net losses for the nine
months ended September 30, 2004, and 2003 of $5,263,617 and
$3,014,537, respectively, and had working capital, total
stockholders' equity and an accumulated deficit of $1,689,398,
$1,773,412 and $31,287,439, respectively, at September 30, 2004.
Significantly contributing to the accumulated deficit during the
current year was the cost associated with the expansion of the
Company's electronic software distribution system's capabilities
to distribute additional digitally stored products as well as
significant interest expense related to the Company's notes
payable, which were converted to equity upon the consummation of
the closing of the Reverse Merger on July 22, 2004. Through
July 2004, the Company has been dependent upon borrowings through
private placements of convertible and non-convertible debt from
related and non-related parties to finance its business
operations.
On July 22, 2004 the Company simultaneously consummated a Reverse
Merger with a public company, raised approximately $6,400,000,
including $1,825,000 from the convertible bridge notes that were
issued in April 2004 (net of costs) in a private placement and
converted approximately $9,359,000 of liabilities as of
July 22, 2004 to equity. In addition, a major shareholder forgave
approximately $1,100,000 in accrued interest in connection with
the conversion of his notes into equity. The forgiven accrued
interest was treated as a capital contribution. Management of the
Company believes that these transactions will enable it to
continue its business plan through at least the second quarter of
2005, although there can be no assurances that this will be the
case. It is unlikely that the cash proceeds from the
July 22, 2004 private placement will be sufficient to meet the
Company's long-term liquidity requirements. Therefore, the
Company will likely seek additional financing to meet its
long-term liquidity requirements.
If the Company fails to develop adequate revenues from sales to
generate adequate funding to support its operating expenses or
fails to obtain additional financing through a capital transaction
or other type of financing, the Company will be required to
substantially reduce its operating expenses. The Company is
currently having discussions with investment banking firms to seek
additional funding for the Company. The Company has no
commitments for additional funding. The uncertainties regarding
the availability of continued financing and commencement of
adequate commercial revenues raise substantial doubt about the
Company's ability to continue as a going concern, which
contemplates the realization of assets and satisfaction of
liabilities in the normal course of business.
Until such time as the Company can rely on revenues generated from
operations, it will continue to seek additional sources of
financing including both public and private offerings. Management
believes that the Company has enough cash to continue as a going
concern until June 2005. There can be no guarantees that the
Company will be successful in obtaining additional financing.
Protocall Technologies, Inc., recently focused all of its time and
resources on its SoftwareToGo(R) product in its PSD subsidiary.
PSD was founded in 1998 to develop and commercialize a proprietary
system that enables software retailers to produce fully packaged
software CDs, on demand, at their stores and at their web site
fulfillment centers. SoftwareToGo(R) is a software display,
storage and production system, similar in size to an ATM cash
machine. The System is designed to complement physical inventory
systems and enable traditional resellers to create "on demand"
inventory at point of sale for walk-in as well as Internet
customers. The Company intends to market and distribute its
System to major retailers.
RCN CORP: Agrees to Settle CAC Dispute for $2.15 Million
--------------------------------------------------------
As previously reported, RCN Cable TV of Chicago, Inc., was
authorized to construct, install, maintain, and operate a cable
television system in Areas 1, 2, 3 and 4 of Chicago, pursuant to
four, separate non-exclusive franchise agreements with the City
of Chicago. The Franchise Agreements for Areas 2, 3 and 4
require RCN Chicago to make capital payments to Chicago Access
Corporation, an entity authorized by the Chicago Cable Ordinance
to operate public access cable channels in the City of Chicago.
RCN Chicago also entered into agreements with CAC for each of
Franchise Area 1, Franchise Area 2, Franchise Area 3 and
Franchise Area 4. Under the Contracts, RCN Chicago is obligated
to pay CAC an annual flat rate fee of $215,000 per franchise area
for Franchise Areas 2, 3 and 4.
Due to a decline in the telecommunications industry, RCN Chicago
petitioned the Chicago Cable Commission for modifications to the
Franchise Agreements and related CAC Agreements. RCN Chicago
sought to eliminate any additional construction or build out
requirements, reduce the Surety Bond requirements and certain
public, education and governmental capital cost payments to CAC
for Franchise Area 2, and eliminate the construction requirements
and all related obligations for Franchise Areas 3 and 4.
The City, however, insisted that RCN Chicago comply with the
Areas 2, 3 and 4 Franchise Agreements and the CAC Agreements,
even though RCN Chicago's financial condition made that
impracticable. Despite the pending Modification Petition, the
City purported to impose multi-million dollar fines on RCN
Chicago for its alleged non-compliance. The City also made
demand on surety bonds for Areas 2, 3 and 4, and drew down on
letters of credit in connection with Areas 2, 3 and 4.
In August 2004, RCN Chicago and RCN Corporation initiated an
adversary complaint against the City seeking:
(a) injunctive relief preventing the City from taking any
further actions to collect from or assess against RCN
Corp. or RCN Chicago any amounts in connection with the
Franchise Agreements;
(b) approval of the Modification Petition; and
(c) damages for the City's alleged violations of federal law,
including but not limited to Section 525 of the Bankruptcy
Code.
The Debtors' confirmed plan of reorganization provides that RCN
Chicago's own turnaround plan cannot go effective until the
"Claims of Chicago Access Corporation and the City of Chicago
shall have been resolved by way of litigation or otherwise."
After negotiating a series of standstill agreements, the City and
the Debtors recently resolved their disputes. On December 8,
2004, RCN Corp. and RCN Chicago obtained Court approval of their
settlement agreement with the City.
The Modification Petition sought to modify certain contracts
between RCN Chicago and Chicago Access Corporation. Prior to and
after the filing of RCN Chicago's bankruptcy case, the Debtors
and CAC engaged in extensive, arm's-length negotiations to
resolve their various claims and disputes with respect to the
modifications.
On December 7, 2004, RCN Chicago and CAC settled all of the
issues and executed an agreement. The CAC Settlement Agreement,
in conjunction with the City of Chicago Settlement Agreement,
allows RCN Chicago to continue to operate in Chicago and support
CAC's efforts, but under improved and more realistic economic
terms. The CAC Settlement Agreement creates substantial value
for the Debtors and their estates. The Agreement avoids the risk
and expense of litigation with CAC.
The CAC Settlement Agreement, among other things, resolves:
-- all present and future disputes between the Debtors and CAC
with respect to the Areas 2, 3 and 4 CAC Contracts; and
-- Claim No. 2062, filed by CAC in RCN Chicago's bankruptcy
case on September 30, 2004.
The salient terms of the CAC Settlement Agreement are:
1. The Debtors will pay CAC $2,150,000;
2. The Areas 3 and 4 CAC Contracts will be rejected and all of
RCN Chicago's rights and obligations under the Contracts
will be extinguished. Any and all claims arising from or
concerning the Areas 3 and 4 CAC Contracts that CAC has or
may have after the Effective Date, will be released;
3. The Areas 1 and 2 CAC Contracts will be assumed by RCN
Chicago and any and all Area 2 cure costs associated with
the assumption will be deemed satisfied by the payment of
the Settlement Amount;
4. CAC will withdraw its Claim; and
5. Subject to the occurrence of the Effective Date, the
parties will be granted releases as set forth in the
Agreement.
Consequently, Judge Drain authorizes the Debtors to enter into
and perform under the CAC Settlement Agreement.
Headquartered in Princeton, New Jersey, RCN Corporation --
http://www.rcn.com/-- provides bundled Telecommunications
services. The Company, along with its affiliates, filed for
chapter 11 protection (Bankr. S.D.N.Y. Case No. 04-13638) on
May 27, 2004. Frederick D. Morris, Esq., and Jay M. Goffman,
Esq., at Skadden Arps Slate Meagher & Flom LLP, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $1,486,782,000 in
assets and $1,820,323,000 in liabilities. (RCN Corp. Bankruptcy
News, Issue No. 18; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
RCN CORP: Hires Friedman LLP to Replace PwC as Accountant
---------------------------------------------------------
Deborah M. Royster, Senior Vice-President, General Counsel and
Corporate Secretary of RCN Corporation, discloses in a regulatory
filing with the Securities and Exchange Commission that on
November 29, 2004, the Audit Committee of the Board of Directors
of RCN Corporation dismissed PricewaterhouseCoopers, LLP, as the
company's independent public accounting firm. The Committee
engaged Friedman, LLP, to replace PwC.
RCN Corp. on November 22, 2004, verbally informed PwC of its
intention to have the firm replaced. On November 29, RCN Corp.
communicated in writing the decision of the Audit Committee to
dismiss PwC effective that day.
Friedman LLP, headquartered in New York City, is a regional
accounting firm with over 200 personnel, and provides accounting,
tax, and consulting services to public and privately held
companies in a broad range of industries. Friedman LLP was
founded in 1924 and is a member of DFK International with
affiliated offices worldwide.
Friedman LLP also replaces PwC as the independent registered
public accounting firm, which audits the financial statements of
the RCN Savings & Stock Ownership Plan.
According to Ms. Royster, PwC's report on RCN Corp.'s financial
statements as of and for the fiscal year ended December 31, 2002,
did not contain an adverse opinion or a disclaimer of opinion,
nor was the report qualified or modified as to uncertainty, audit
scope or accounting principles. PwC's report contained an
explanatory paragraph discussing significant doubt about RCN
Corp.'s ability to continue as a going concern. It did not
contain any other indications of an adverse opinion, disclaimer
of opinion, and was not further qualified or modified as to
uncertainty, audit scope or accounting principle.
During the fiscal years ended December 31, 2003 and 2002, and
through November 29, 2004, Ms. Royster says there were no
disagreements with PwC on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or
procedures which disagreements, if not resolved to PwC's
satisfaction, would have caused them to make reference thereto in
their reports on RCN Corp.'s consolidated financial statements
for those fiscal years.
Headquartered in Princeton, New Jersey, RCN Corporation --
http://www.rcn.com/-- provides bundled Telecommunications
services. The Company, along with its affiliates, filed for
chapter 11 protection (Bankr. S.D.N.Y. Case No. 04-13638) on
May 27, 2004. Frederick D. Morris, Esq., and Jay M. Goffman,
Esq., at Skadden Arps Slate Meagher & Flom LLP, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $1,486,782,000 in
assets and $1,820,323,000 in liabilities. (RCN Corp. Bankruptcy
News, Issue No. 18; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
RESIDENTIAL ACCREDIT: Fitch Junks Rating on 1999-QS2 Certificates
-----------------------------------------------------------------
Fitch has taken action on Residential Accredit Loan, Inc. -- RALI
-- mortgage-pass through certificates:
RALI mortgage asset-backed pass-through certificates, series 1996-
QS5:
-- Classes A-I-10, A-II-2, A-P affirmed at 'AAA';
-- Class M-1 affirmed at 'AAA';
-- Class M-2 affirmed at 'AAA';
-- Class M-3 affirmed at 'AA+';
-- Class B-1 affirmed at 'BB';
-- Class B-2 affirmed at 'B'.
RALI mortgage asset-backed pass-through certificates, series 1998-
QS4:
-- Classes A-II, A-I-5 affirmed at 'AAA';
-- Class M-1 affirmed at 'AAA';
-- Class M-2 affirmed at 'AAA';
-- Class M-3 upgraded to 'AA' from 'AA-';
-- Class B-1 upgraded to 'A' from 'BBB';
-- Class B-2 affirmed at 'B'.
RALI mortgage asset-backed pass-through certificates, series 1998-
QS5:
-- Classes A-5 affirmed at 'AAA';
-- Class M-1 affirmed at 'AAA';
-- Class M-2 affirmed at 'AAA';
-- Class M-3 upgraded at 'AA+' from 'AA';
-- Class B-1 upgraded to 'BBB+' from 'BB';
-- Class B-2 affirmed at 'B'.
RALI mortgage asset-backed pass-through certificates, series 1999-
QS2:
-- Classes A-1, A-P affirmed at 'AAA';
-- Class M-1 affirmed at 'AAA';
-- Class M-2 affirmed at 'AAA';
-- Class M-3 upgraded to 'A+' from 'A-';
-- Class B-1 affirmed at 'BB';
-- Class B-2 downgraded to 'CCC' from 'B'.
RALI mortgage asset-backed pass-through certificates, series 1999-
QS3:
-- Classes A-8, A-P affirmed at 'AAA';
-- Class M-1 affirmed at 'AAA';
-- Class M-2 affirmed at 'AAA';
-- Class M-3 affirmed at 'AA';
-- Class B-1 affirmed at 'BB+';
-- Class B-2 affirmed at 'B'.
RALI mortgage asset-backed pass-through certificates, series 2000
-QS1:
-- Classes CB, A-P affirmed at 'AAA';
-- Class M-1 affirmed at 'AAA';
-- Class M-2 affirmed at 'AAA';
-- Class M-3 affirmed at 'BBB';
-- Class B-1 affirmed at 'B-';
RALI mortgage asset-backed pass-through certificates, series 2001-
QS6:
-- Classes CB, A-P affirmed at 'AAA';
-- Class M-1 affirmed at 'AAA';
-- Class M-2 affirmed at 'AA';
-- Class M-3 affirmed at 'A';
-- Class B-1 affirmed at 'BB';
-- Class B-2 affirmed at 'B'.
RALI mortgage asset-backed pass-through certificates, series 2001-
QS7:
-- Classes A-8 affirmed at 'AAA';
-- Class M-1 affirmed at 'AAA';
-- Class M-2 upgraded to 'AAA' from 'A+';
-- Class M-3 upgraded to 'AA' from 'BBB';
-- Class B-1 upgraded to 'A-' from 'BB';
-- Class B-2 affirmed at 'B'.
RALI mortgage asset-backed pass-through certificates, series 2001-
QS8:
-- Classes CB, A-P affirmed at 'AAA';
-- Class M-1 affirmed at 'AAA';
-- Class M-2 upgraded to 'AA+' from 'A+';
-- Class M-3 upgraded to 'A' from 'BBB';
-- Class B-1 upgraded to 'BBB' from 'BB';
-- Class B-2 affirmed at 'B'.
RALI mortgage asset-backed pass-through certificates, series 2001-
QS11:
-- Classes A3 through A-7, A-P affirmed at 'AAA';
-- Class M-1 affirmed at 'AAA';
-- Class M-2 upgraded to 'AAA' from 'A+';
-- Class M-3 upgraded to 'AA' from 'BBB+';
-- Class B-1 upgraded to 'A-' from 'BB';
-- Class B-2 affirmed at 'B'.
RALI mortgage asset-backed pass-through certificates, series 2001-
QS15:
-- Classes A-6, A-P affirmed at 'AAA';
-- Class M-1 affirmed at 'AAA';
-- Class M-2 upgraded to 'AAA' from 'AA';
-- Class M-3 upgraded to 'A' from 'BBB';
-- Class B-1 upgraded to 'BB+' from 'BB';
-- Class B-2 affirmed at 'B'.
RALI mortgage asset-backed pass-through certificates, series 2001-
QS16:
-- Classes A-1, A-2, A-7, A-P affirmed at 'AAA';
-- Class M-1 affirmed at 'AAA';
-- Class M-2 upgraded to 'AA' from 'AA-';
-- Class M-3 upgraded to 'A' from 'A-';
-- Class B-1 upgraded to 'BBB' from 'BB';
-- Class B-2 affirmed at 'B'.
RALI mortgage asset-backed pass-through certificates, series 2001-
QS17:
-- Classes A-11, A-P affirmed at 'AAA';
-- Class M-1 upgraded to 'AAA' from 'AA+';
-- Class M-2 upgraded to 'AA' from 'A';
-- Class M-3 upgraded to 'A' from 'BBB';
-- Class B-1 upgraded to 'BBB' from 'BB';
-- Class B-2 affirmed at 'B'.
RALI mortgage asset-backed pass-through certificates, series 2002-
QS13:
-- Classes A-1, A-2, A-7, A-7A, A-P affirmed at 'AAA';
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class M-3 affirmed at 'BBB';
-- Class B-1 affirmed at 'BB';
-- Class B-2 affirmed at 'B'.
RALI mortgage asset-backed pass-through certificates, series 2002-
QS15:
-- Classes CB, NB-1, NB-2, A-P affirmed at 'AAA';
RALI mortgage asset-backed pass-through certificates, series 2002-
QS16:
-- Classes A-1, A-2, A-3, A-P affirmed at 'AAA';
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class M-3 affirmed at 'BBB';
-- Class B-1 affirmed at 'BB';
-- Class B-2 affirmed at 'B'.
RALI mortgage asset-backed pass-through certificates, series 2002-
QS18:
-- Classes A-1, A-P affirmed at 'AAA';
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class M-3 affirmed at 'BBB';
-- Class B-1 affirmed at 'BB';
-- Class B-2 affirmed at 'B'.
RALI mortgage asset-backed pass-through certificates, series 2003-
QS3:
-- Classes A-1, A-2, A-4, A-5, A-7, A-P affirmed at 'AAA';
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class M-3 affirmed at 'BBB';
-- Class B-1 affirmed at 'BB';
-- Class B-2 affirmed at 'B'.
RALI mortgage asset-backed pass-through certificates, series 2003-
QS7:
-- Classes A-2, A-3, A-5, A-P affirmed at 'AAA';
RALI mortgage asset-backed pass-through certificates, series 2003-
QS8:
-- Classes A-1 through A-5, A-6, A-7, A-P affirmed at 'AAA'.
RALI mortgage asset-backed pass-through certificates, series 2003-
QS12:
-- Classes A-1, A-2, A-3, A-4, A-P affirmed at 'AAA';
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class M-3 affirmed at 'BBB';
-- Class B-1 affirmed at 'BB';
-- Class B-2 affirmed at 'B'.
RALI mortgage asset-backed pass-through certificates, series 2003-
QS14:
-- Classes A-1, A-P affirmed at 'AAA';
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class M-3 affirmed at 'BBB';
-- Class B-1 affirmed at 'BB';
-- Class B-2 affirmed at 'B'.
RALI mortgage asset-backed pass-through certificates, series 2003-
QS18:
-- Classes A-1, A-P affirmed at 'AAA';
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class M-3 affirmed at 'BBB';
-- Class B-1 affirmed at 'BB';
-- Class B-2 affirmed at 'B'.
RALI mortgage asset-backed pass-through certificates, series 2003-
QS20:
-- Classes A-1, A-P, CB affirmed at 'AAA';
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class M-3 affirmed at 'BBB';
-- Class B-1 affirmed at 'BB';
-- Class B-2 affirmed at 'B'.
RALI mortgage asset-backed pass-through certificates, series 2003-
QS22:
-- Classes A-1 through A-6, A-8, A-9, A-11, A-13, A-14, A-P
affirmed at 'AAA'.
RALI mortgage asset-backed pass-through certificates, series 2003-
QS23:
-- Classes A-1, A-P affirmed at 'AAA';
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'A';
-- Class M-3 affirmed at 'BBB';
-- Class B-1 affirmed at 'BB';
-- Class B-2 affirmed at 'B'.
The upgrades, affecting a little over $39 million 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 $785 billion of certificates, are
due to stable collateral performance and small to moderate growth
in credit enhancement -- CE.
The negative rating actions taken to class B2 (series 1999-QS2),
affecting $815,349, is due to high delinquencies and losses. The
future loss expectancy with regard to loans currently in
foreclosure and real estate owned -- REO -- is estimated to be
just over $76,000. This anticipated loss will potentially leave
the B2 class with no subordination remaining.
While credit enhancement has grown over four-fold for the A
through B-1 classes, delinquencies total 1.29%, of which .90%
represent loans in foreclosures and REO. Concerns regarding these
high levels are mitigated somewhat because the one loan in REO has
mortgage insurance. The pool factor (current mortgage loan
principal outstanding as a percentage of the initial pool) is
0.10%.
RESIDENTIAL ACCREDIT: S&P Puts Low-B Ratings on 33 Cert. Classes
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on
20 classes from eight series of Residential Accredit Loans, Inc.,
certificates. Additionally, ratings are affirmed in 605 classes
of 69 series from the same issuer.
The raised ratings reflect actual and projected credit support
percentages that adequately support the higher ratings. The
higher credit support percentages resulted from significant
principal prepayments and the shifting interest structure of the
transactions. As of the November 2004 remittance date, the credit
support multiple for the raised classes had increased to an
average of 3.18x its original credit support level. Moreover,
credit support for the raised classes had increased to an average
of 2.16x the original credit support level. Moreover, credit
support for the raised classes had increased to an average of
2.16x the original credit support for the new rating levels.
The affirmations are based on current credit support percentages
that are sufficient to support the certificates at their current
ratings. The predominant form of credit support protecting the
raised and affirmed certificates from losses is subordination;
some series, such as 2003-QA1, have overcollateralization as
additional credit support.
The overall performance of the RALI pools has been very positive,
with historically low realized loss levels. Cumulative realized
losses in currently range from 0 to 44 basis points -- bps -- of
their original pool balances. The age of the pool seems to be
positively correlated to the level of cumulative losses. For
pools with less than three years of seasoning, cumulative losses
ranged between 0 and 8 bps.
In addition to the low loss levels, the RALI transactions also
have low-to-moderate levels of severely delinquent loans. The
average 90-day delinquency level in the raised transactions was
2.66%, ranging from 1.23% for the 2002-QS7 series to 5.94% for the
2002-QS10 series. For the affirmed classes, the average 90-day
delinquency level was 2.672%, ranging from less than 0.50% for
three of the series to 10.47% for the 2000-QS01 series.
The underlying collateral for these transactions is mostly fixed-
rate, first-lien, 15- to 30-year mortgage loans on one- to four-
family homes.
The RALI shelf is part of Residential Funding Mortgage Securities'
expanded criteria mortgage program. This program is designed for
borrowers applying for mortgages who generally would not qualify
for other first-mortgage purchase programs. Examples include
mortgage loans secured by non-owner occupied properties, mortgage
loans made to borrowers whose income was not required to be
verified, mortgage loans with higher loan-to-value ratios, or
loans made to borrowers whose debt-to-income ratios are higher
then normal.
Ratings Raised
Residential Accredit Loans, Inc.
Rating
Series Class To From
------ ----- -- ----
2002-QS3 M-1 AAA AA
2002-QS3 M-2 AA A
2002-QS3 M-3 A- BBB
2002-QS7 M-1 AAA AA
2002-QS7 M-2 AA+ A
2002-QS7 M-3 A BBB
2002-QS7 B-1 BBB- BB
2002-QS9 M-1 AA+ AA
2002-QS9 M-2 AA A
2002-QS10 M-1 AAA AA
2002-QS10 M-2 AA A
2002-QS10 M-3 A- BBB
2002-QS11 M-1 AA+ AA
2002-QS11 M-2 A+ A
2002-QS12 M-1 AA+ AA
2002-QS12 M-2 A+ A
2002-QS14 M-1 AA+ AA
2002-QS14 M-2 A+ A
2002-QS15 M-1 AA+ AA
2002-QS15 M-2 A+ A
Ratings Affirmed
Residential Accredit Loans, Inc.
Series Class Rating
RALI 1996-QS3 A-I-10, A-I-11, A-II, A-P AAA
RALI 1996-QS4 A-P AAA
RALI 1996-QS5 A-I-10, A-II-2, A-P AAA
RALI 1996-QS7 A-I-11, A-I-12, A-II, A-P AAA
RALI 1996-QS8 A-14 AAA
RALI 1997-QS2 A-8, A-9 AAA
RALI 1997-QS3 A-9 AAA
RALI 1997-QS4 A-7, A-8 AAA
RALI 1997-QS5 A-8, A-9, A-10, A-11 AAA
RALI 1997-QS7 A-8, A-9 AAA
RALI 1997-QS8 A-10, A-12 AAA
RALI 1997-QS9 A-8, A-9 AAA
RALI 1997-QS10 A-4, A-5, A-6 AAA
RALI 1997-QS12 A-7, A-8 AAA
RALI 1997-QS13 A-7, A-11, A-12, A-14, A-17, A-18 AAA
RALI 1998-QS1 A-5, A-6 AAA
RALI 1998-QS2 A-7, A-8, A-9 AAA
RALI 1998-QS3 A-1, A-3 AAA
RALI 1998-QS4 A-I-5, A-II, A-V AAA
RALI 1998-QS5 A-5, A-6 AAA
RALI 1998-QS6 A-V, CB-3 AAA
RALI 1998-QS8 A-P, A-V, CB, NB AAA
RALI 1998-QS13 AP, AV, CB, NB AAA
RALI 1999-QS2 A-9, A-P, A-V AAA
RALI 1999-QS3 A-8, A-P, A-V AAA
RALI 1999-QS4 A-1, A-P, A-V AAA
RALI 1999-QS8 A-1, A-P, A-V AAA
RALI 1999-QS10 A-3, A-P, A-V AAA
RALI 1999-QS12 A-P, A-V, CB AAA
RALI 2000-QS1 A-P, A-V, CB AAA
RALI 2001-QS4 A-4, A-P, A-V AAA
RALI 2001-QS6 A-P, A-V, CB AAA
RALI 2001-QS7 A-8, A-P, A-V AAA
RALI 2001-QS11 A-3, A-4, A-5, A-5A, A-6 AAA
RALI 2001-QS11 A-7, A-P, A-V AAA
RALI 2001-QS15 A-6, A-P, A-V AAA
RALI 2001-QS16 A-1, A-2, A-7, A-7A, A-P, A-V AAA
RALI 2001-QS17 A-11, A-P, A-V AAA
RALI 2002-QS3 A-2, A-3, A-4, A-5 AAA
RALI 2002-QS3 A-10, A-12, A-P, A-V AAA
RALI 2002-QS4 A-1, A-2, A-3, A-4, A-P, A-V AAA
RALI 2002-QS6 A-3, A-4, A-5, A-6, A-7 AAA
RALI 2002-QS6 A-8, A-9, A-10 AAA
RALI 2002-QS6 A-11, A-12, A-13, A-P, A-V AAA
RALI 2002-QS7 A-1, A-2, A-3, A-7, A-8 AAA
RALI 2002-QS7 A-14, A-15, A-16, A-P, A-V AAA
RALI 2002-QS7 B-2 B
RALI 2002-QS8 A-1, A-2, A-3, A-5, A-6, A-P, A-V AAA
RALI 2002-QS9 A-1, A-2, A-3, A-4, A-5, A-6, A-7 AAA
RALI 2002-QS9 A-8, A-9, A-10, A-P, A-V AAA
RALI 2002-QS9 M-3 BBB
RALI 2002-QS9 B-1 BB
RALI 2002-QS9 B-2 B
RALI 2002-QS10 A-4, A-5, A-6, A-7 AAA
RALI 2002-QS10 A-8, A-P, A-V AAA
RALI 2002-QS11 A-3, A-4, A-5, A-6, A-7 AAA
RALI 2002-QS11 A-8, A-P, A-V AAA
RALI 2002-QS11 M-3 BBB
RALI 2002-QS12 A-1, A-2, A-3, A-4, A-5, A-6 AAA
RALI 2002-SQ12 A-7, A-8, A-9 AAA
RALI 2002-QS12 A-10, A-P, A-V AAA
RALI 2002-QS12 M-3 BBB
RALI 2002-QS14 A-5, A-6, A-7, A-8, A-9 AAA
RALI 2002-QS14 A-10, A-11, A-12, A-P, A-V AAA
RALI 2002-QS14 M-3 BBB
RALI 2002-QS15 CB, NB-1, NB-2, NB-3, A-P, A-V AAA
RALI 2002-QS15 M-3 BBB
RALI 2002-QS17 CB-1, CB-2, NB-1, NB-2, A-P, A-V AAA
RALI 2002-QS17 M-1 AA
RALI 2002-QS17 M-2 A
RALI 2002-QS17 M-3 BBB
RALI 2002-QS17 B-1 BB
RALI 2002-QS17 B-2 B
RALI 2002-QS19 A-1, A-2, A-3, A-4, A-5, A-6, A-7 AAA
RALI 2002-QS19 A-8, A-P, A-V AAA
RALI 2002-QS19 M-1 AA
RALI 2002-QS19 M-2 A
RALI 2002-QS19 M-3 BBB
RALI 2003-QA1 A-1, A-II AAA
RALI 2003-QA1 M-1 AA
RALI 2003-QA1 M-2 A
RALI 2003-QA1 M-3 BBB
RALI 2003-QR19 CB-1, CB-2, CB-3, CB-4 AAA
RALI 2003-QR24 A-1, A-2, A-3, A-4, A-5, A-6, A-7 AAA
RALI 2003-QS1 A-1, A-2, A-3, A-4, A-5, A-6 AAA
RALI 2003-QS1 A-8, A-9, A-10, A-13, A-14, A-P, A-V AAA
RALI 2003-QS1 M-1 AA
RALI 2003-QS1 M-2 A
RALI 2003-QS1 M-3 BBB
RALI 2003-QS1 B-1 BB
RALI 2003-QS1 B-2 B
RALI 2003-QS2 A-1, A-2, A-3, A-4, A-5, A-6 AAA
RALI 2003-QS2 A-7, A-P, A-V AAA
RALI 2003-QS2 M-1 AA
RALI 2003-QS2 M-2 A
RALI 2003-QS2 M-3 BBB
RALI 2003-QS2 B-1 BB
RALI 2003-QS2 B-2 B
RALI 2003-QS3 A-1, A-2, A-3, A-4, A-5, A-7 AAA
RALI 2003-QS3 A-8, A-P, A-V AAA
RALI 2003-QS4 A-1, A-2, A-3, A-4, A-5, A-6 AAA
RALI 2003-QS4 A-P, A-V AAA
RALI 2003-QS4 M-1 AA
RALI 2003-QS4 M-2 A
RALI 2003-QS4 M-3 BBB
RALI 2003-QS4 B-1 BB
RALI 2003-QS4 B-2 B
RALI 2003-QS5 A-1,A-2,A-3,A-4,A-5,A-6,A-P,A-V AAA
RALI 2003-QS5 A-V AAA
RALI 2003-QS6 A-1,A-4,A-5,A-6,A-7,A-8, A-13, A-14 AAA
RALI 2003-QS6 A-15, A-P, A-V AAA
RALI 2003-QS6 M-1 AA
RALI 2003-QS6 M-2 A
RALI 2003-QS6 M-3 BBB
RALI 2003-QS6 B-1 BB
RALI 2003-QS6 B-2 B
RALI 2003-QS7 A-1,A-2,A-3,A-4,A-5,A-P,A-V AAA
RALI 2003-QS7 M-1 AA
RALI 2003-QS7 M-2 A
RALI 2003-QS7 M-3 BBB
RALI 2003-QS7 B-1 BB
RALI 2003-QS7 B-2 B
RALI 2003-QS8 A-1, A-2, A-3 A-4, A-5, A-6, A-7 AAA
RALI 2003-QS8 A-P, A-V AAA
RALI 2003-QS8 A-3 AAA
RALI 2003-QS8 M-1 AA
RALI 2003-QS8 M-2 A
RALI 2003-QS8 M-3 BBB
RALI 2003-QS8 B-1 BB
RALI 2003-QS8 B-2 B
RALI 2003-QS10 A-1,A-2,A-3,A-4,A-5,A-6,A-7,A-8,A-9 AAA
RALI 2003-QS10 A-10, A-11, A-12, A-13, A-14, A-15 AAA
RALI 2003-QS10 A-16, A-P, A-V AAA
RALI 2003-QS10 M-1 AA
RALI 2003-QS10 M-2 A
RALI 2003-QS10 M-3 BBB
RALI 2003-QS10 B-1 BB
RALI 2003-QS10 B-2 B
RALI 2003-QS11 A-1,A-2,A-4,A-5,A-6,A-8,A-9 AAA
RALI 2003-QS11 A-10, A-11, A-12, A-13, A-14 AAA
RALI 2003-QS11 A-P, A-V AAA
RALI 2003-QS11 M-1 AA
RALI 2003-QS11 M-2 A
RALI 2003-QS11 M-3 BBB
RALI 2003-QS11 B-1 BB
RALI 2003-QS11 B-2 B
RALI 2003-QS13 A-V, A-1, A-P, A-10, A-8, A-9 AAA
RALI 2003-QS13 A-7,A-6, A-5, A-3, A-2 AAA
RALI 2003-QS13 M-1 AA
RALI 2003-QS13 M-2 A
RALI 2003-QS13 M-3 BBB
RALI 2003-QS13 B-1 BB
RALI 2003-QS13 B-2 B
RALI 2003-QS15 A-V, A-1,A-P,A-8,A-7,A-6 AAA
RALI 2003-QS15 A-5,A-4, A-3, A-2, A-1 AAA
RALI 2003-QS15 M-1 AA
RALI 2003-QS15 M-2 A
RALI 2003-QS15 M-3 BBB
RALI 2003-QS15 B-1 BB
RALI 2003-QS15 B-2 B
RALI 2003-QS17 A-I-1,NB-2,NB-1,CB-7,CB-6 AAA
RALI 2003-QS17 CB-5, CB-4,CB-3, CB-2, A-V AAA
RALI 2003-QS17 A-P,NB-4,NB-3, CB-1, A-I-2 AAA
RALI 2003-QS17 M-1 AA
RALI 2003-QS17 M-2 A
RALI 2003-QS17 M-3 BBB
RALI 2003-QS17 B-1 BB
RALI 2003-QS17 B-2 B
RALI 2003-QS19 A-1,CB,NB-1,NB-2,NB-3,NB-4 AAA
RALI 2003-QS19 NB-5, NB-6,NB-7, A-P, A-V AAA
RALI 2003-QS19 M-1 AA
RALI 2003-QS19 M-2 A
RALI 2003-QS19 M-3 BBB
RALI 2003-QS19 B-1 BB
RALI 2003-QS19 B-2 B
RALI 2003-QS21 A-1,A-2,A-3,A-4,A-5,A-6,A-P,A-V AAA
RALI 2003-QS21 M-1 AA
RALI 2003-QS21 M-2 A
RALI 2003-QS21 M-3 BBB
RALI 2003-QS21 B-1 BB
RALI 2003-QS21 B-2 B
RALI 2003-QS22 A-1,A-2,A-3,A-4,A-5,A-6,A-7, A-8 AAA
RALI 2003-QS22 A-9,A-11,A-12,A-13,A-14, A-P, A-V AAA
RALI 2003-QS22 M-1 AA
RALI 2003-QS22 M-2 A
RALI 2003-QS22 M-3 BBB
RALI 2003-QS22 B-1 BB
RALI 2003-QS22 B-2 B
RIVERSIDE FOREST: Loaning CDN$60 Million from Tolko Affiliate
-------------------------------------------------------------
Riverside Forest Products Limited entered into a cash management
arrangement with its parent company, Tolko Industries Ltd. and its
affiliates for the purpose of optimizing cash balances and
minimizing interest expense within the Tolko Group. Under the
arrangement, Riverside has made loans to an affiliate of Tolko in
order to increase the return Riverside is earning on its cash
balances. The loans aggregate CDN$60 million, are payable on
demand and bear interest at market rates. All transactions under
the cash management arrangement are subject to the approval of the
independent directors of the Company.
Riverside has also entered into a management agreement with Tolko
under which Tolko has agreed to provide the services of
Riverside's four senior officer positions, which includes Al
Thorlakson as President and Chief Executive Officer, Trevor Jahnig
as Chief Financial Officer, John Thorlakson as Vice-President and
Brad Thorlakson as Vice-President.
Riverside Forest Products Limited is the fourth largest lumber
producer in British Columbia with over 1.0 Bbf of annual capacity
and an annual allowable cut of 3.1 million cubic metres. The
company is also the second largest plywood and veneer producer in
Canada.
* * *
As reported in the Troubled Company Reporter on Oct. 8, 2004,
Moody's Investors Service affirmed Riverside Forest Products
Limited's B2 senior unsecured rating and changed the outlook to
developing. The rating action follows the announcement that
Riverside has signed a definitive agreement with International
Forest Products Limited -- Interfor -- pursuant to which Interfor
will make an offer to acquire up to 100 percent, but a minimum of
51%, of Riverside. The offer is for $39 in cash and Interfor
Class A shares, to a maximum of $184 million in cash, or $35 in
cash and shares plus a Contingent Value Right to receive any U.S.
softwood duty refunds received by Riverside on or before
December 31, 2007. If successful, the transaction will close by
year-end.
As reported in the Troubled Company Reporter on August 27, 2004,
Standard & Poor's Ratings Services placed its 'B+' long-term
corporate credit and senior unsecured debt ratings on Kelowna,
B.C.-based Riverside Forest Products Ltd. on CreditWatch with
developing implications following the company's announcement that
it would reject an unsolicited takeover offer from privately held
Tolko Industries Ltd.
SCIENTIFIC GAMES: Completes Refinancing Transactions
----------------------------------------------------
Scientific Games Corporation (Nasdaq: SGMS) successfully completed
its previously announced refinancing transactions, including
entering into a new $250 million senior secured revolving credit
facility and a new $100 million senior secured term loan credit
facility. Under the terms of the new credit facilities,
Scientific Games also has the ability to enter into incremental
senior secured term loan credit facilities for an aggregate amount
of up to $100 million at later dates for certain purposes.
Scientific Games also consummated:
(i) its tender offer and consent solicitation for its
12-1/2% Senior Subordinated Notes due 2010, with
approximately $57.9 million aggregate principal amount of
the 12-1/2% Notes (or 88.34% of the total outstanding),
validly tendered prior to 5:00 p.m., New York City time,
on Dec. 22, 2004 and
(ii) its private offerings of $200 million aggregate principal
amount of 6.25% Senior Subordinated Notes due 2012 and
$250 million aggregate principal amount of 0.75%
Convertible Senior Subordinated Debentures due 2024. The
initial purchasers of the Debentures have notified
Scientific Games that they are exercising their option to
purchase an additional $25 million aggregate principal
amount of Debentures.
Scientific Games indicated that all of the net proceeds from its
offering of the Debentures, a portion of its borrowings under the
new credit facilities and a portion of the net proceeds from its
offering of the New Notes were used to pay in full the term loan
outstanding under its previously existing senior credit
facilities. Scientific Games also said that a portion of the net
proceeds from its offering of the New Notes was used to pay for
all of the 12-1/2% Notes tendered.
Scientific Games indicated that, upon purchase of the tendered
12-1/2% Notes, the supplemental indenture entered into in
connection with the consent solicitation, amending the indenture
governing the 12-1/2% Notes, became operative. Accordingly,
substantially all of the restrictive covenants and certain related
event of default provisions previously contained in that indenture
have been eliminated. After giving effect to the purchase of the
tendered 12-1/2% Notes, approximately $7.6 million aggregate
principal amount of the 12-1/2% Notes remain outstanding.
Scientific Games has also entered into convertible bond hedge
transactions with affiliates of the initial purchasers of the
Debentures which are expected to reduce the potential dilution
upon conversion of the Debentures.
This announcement is neither an offer to purchase, a solicitation
of an offer to sell nor a solicitation of consents relating to the
12-1/2% Notes. This announcement is neither an offer to sell nor
a solicitation of an offer to buy the Debentures, the common stock
issuable upon conversion of the Debentures, or the New Notes. The
Debentures, the common stock issuable upon conversion of the
Debentures and the New Notes have not been registered under the
Securities Act of 1933, as amended, or applicable state securities
laws. Unless so registered, the Debentures, the common stock
issuable upon conversion of the Debentures and the New Notes may
not be offered or sold in the United States except pursuant to an
applicable exemption from the registration requirements of the
Securities Act and applicable state securities laws.
About Scientific Games
Scientific Games Corporation -- http://www.scientificgames.com/
-- is a leading integrated supplier of instant tickets, systems
and services to lotteries, and a leading supplier of wagering
systems and services to pari-mutuel operators. It is also a
licensed pari- mutuel gaming operator in Connecticut and the
Netherlands and is a leading supplier of prepaid phone cards to
telephone companies. Scientific Games' customers are in the United
States and more than 60 other countries.
* * *
As reported in the Troubled Company Reporter on Dec. 9, 2004,
Moody's Investors Service raised the existing ratings of
Scientific Games Corporation -- SGC. The company's senior implied
rating is now at Ba2. Moody's also assigned a B1 rating to the
company's new $200 million senior subordinated notes due 2012 and
a Ba2 rating to its new senior secured bank facility. The new
senior secured bank facility is comprised of a $200 million 5-year
revolver and a $100 million 5-year term loan. The rating outlook
is stable.
SHILOH INDUSTRIES: S&P Ups Rating to BB- Due to Strong Performance
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Shiloh Industries, Inc., to 'BB-' from 'B+'. The
outlook is stable.
"We upgraded the company because of its strong financial
performance and improved credit statistics," said Standard &
Poor's credit analyst Nancy Messer. "Further upside rating
potential is limited by the competitive and cyclical character of
the industry in which Shiloh competes and by the company's modest
scale and the narrow scope of its product offering. Downside
rating movement is limited by our expectation that improved
financial condition is sustainable and that acquisitions will be
financed in a manner commensurate with the existing rating."
The Cleveland, Ohio-based company is a manufacturer of steel
blanks and stamped components for the automotive industry. Shiloh
had total balance-sheet debt of about $117 million at its fiscal
year-end Oct. 31, 2004.
Shiloh's business profile has improved incrementally in the past
three years, reflecting operational efficiencies and enhanced
product quality that Standard & Poor's expects can be sustained.
Shiloh's products range from simple blanks, which are commodity in
nature, to engineered laser-welded blanks, which require a higher
degree of technological expertise. The company expects to expand
its laser-welded blanks segment, where Shiloh holds a leading
market share, through new business awards. The company's
long-term revenue expansion will likely be a combination of
internal growth and opportunistic acquisitions.
Shiloh operates as a stand-alone entity, although the company is
60%-owned by MTD Products, Inc. (unrated), a private company that
is also a Shiloh customer. The rating reflects Shiloh's financial
and business profile on a stand-alone basis because of its lack of
strategic importance to MTD, the arm's-length relationship between
the two companies, Shiloh's independent capitalization, and
separate bank agreements.
SOUTH STREET: Fitch Maintains Junk Ratings on Six Classes
---------------------------------------------------------
Fitch Ratings has upgraded the ratings on two class of notes
issued by South Street CBO 1999-1, Ltd., a collateralized bond
obligation -- CBO -- backed by high yield bonds. The ratings on
six classes of notes remain unchanged.
This class has been paid in full:
-- Class A-1LA notes PIF;
These classes have been upgraded:
-- $7,752,102 class A-1LB notes upgraded to 'BBB-' from 'BB';
-- $42,636,559 class A-1 notes upgraded to 'BBB-' from 'BB';
These classes remain unchanged:
-- $24,000,000 class A-2L notes remain at 'CC';
-- $36,000,000 class A-2 notes remain at 'CC';
-- $45,500,000 class A-3 notes remain at 'C';
-- $7,000,000 class B-1A notes remain at 'C';
-- $8,000,000 class B-1B notes remain at 'C';
-- $12,000,000 class B-2 notes remain at 'C'.
The upgrade of the class A-1LB and class A-1 notes reflects the
continued paydown of those classes. Since the last rating action
on Aug. 22, 2003, the class A-1LB and A-1 notes have paid down
$14.6 million or 22.5%. In addition, Fitch has reviewed the
results of cash flow model runs, incorporating several different
default and interest rate stress scenarios. Also, Fitch discussed
with Colonial Management Associates, Inc., the investment advisor,
their expectations and opinions of the portfolio.
According to its Nov. 17, 2004, trustee report, the South Street
CBO portfolio collateral includes a par amount of $47.3 million of
defaulted assets, representing 36.9% of aggregate collateral
principal balance. The class A overcollateralization -- OC --
test is failing at 63.4% versus a trigger of 115%, however, this
includes classes A-1LB, A-1, A-2L, A-2 and A-3. The class B OC
test is failing at 53.5%, versus a trigger of 104%.
SPHERIS INC: Current Management Team to Lead Avicis Merger
----------------------------------------------------------
Spheris Inc., a leading medical transcription technology and
outsourcing services company, has acquired Avicis Inc., formerly
known as HealthScribe Inc.
Avicis/HealthScribe, founded in 1993, currently serves more than
150 healthcare facilities with a transcription workforce of over
1,800 medical transcriptionists and a wholly owned international
transcription operation. As the industry's second largest medical
transcription company, Spheris provides a broad choice of
technology and services to many of the country's largest and most
prestigious acute-care hospitals and group medical practices.
With the acquisition of Avicis/HealthScribe, currently the
nation's third largest medical transcription outsource provider,
Spheris is now positioned to more rapidly expand its product and
service offering of complete medical transcription technology and
outsourcing services to healthcare providers throughout the U.S.
and Canada. Terms of the transaction were not disclosed.
Steven E. Simpson, Spheris' president and CEO, along with the
current Spheris management team, will continue to lead the
combined company. Michael King, CEO and chairman of
Avicis/HealthScribe, will join the combined company's Board of
Directors and David Ehrhardt, Avicis/HealthScribe president and
COO, will join the Spheris senior management team as Chief
Operating Officer. Antoine Abdallah, who previously served as
Spheris COO, is assuming a newly created role as Spheris' Chief
Technology Officer in order to more strongly position the company
to execute on its strategy of technology advancement. In his new
role, Mr. Abdallah will apply his extensive experience with
healthcare information systems to rapidly accelerate Spheris'
technology development and deployment.
"The healthcare industry has a responsibility to move rapidly
forward to paperless, digitized medical records," stated Steven E.
Simpson, Spheris president and CEO. "Companies of scale, such as
Spheris, with extended workforce coverage and a clear strategy to
convert healthcare provider voice and handwriting to digital
medical information are critical to achieving a paperless
environment. To accelerate this effort, the combination of two
leading North American-based transcription workforces, along with
global resource capabilities, makes sound strategic sense." Mr.
Simpson continued, "I am very pleased to welcome Mike King as a
member of our Board of Directors, and Dave Ehrhardt and the rest
of the Avicis/HealthScribe employees to Spheris. Our new,
combined company is strongly positioned to advance the cause
toward a more clinically effective and economically efficient
healthcare industry."
"Combined with Spheris' 3,200 medical transcriptionists, Avicis'
1,800-plus MTs will greatly increase our ability to deliver
industry leading turnaround, quality and service," stated David
Ehrhardt, Avicis/HealthScribe former president and COO and now
Spheris COO. "I look forward to joining the Spheris team and
working to expeditiously integrate the combined companies. Our
goal is to provide the combined companies' operational excellence
for the benefit of our customers and prospects as quickly as
possible."
Mr. Simpson sees the business combination as an opportunity to
respond to customer demand for increased choice. "In addition to
listening to our customers and prospects, Spheris conducted formal
market research this year that affirmed the demand for more
innovative approaches to medical record documentation." Mr.
Simpson explained, "Avicis/HealthScribe has established proven
business practices at their international medical transcription
facility with a secure, controlled-access environment that
achieved ISO 9001:2000 certification in 2003. With
Avicis/HealthScribe, Spheris is now positioned to offer health
systems, hospitals and group practices additional choices with our
global offering through increased medical transcription capacity,
around-the-clock, 'after hours' service for faster turnaround and
the ability to integrate with virtually every hospital information
and electronic health record system in a seamless manner."
Spheris, Inc., headquartered in Franklin, Tennessee, is a leading
national provider of medical transcription services to health
systems, hospitals and physician practices.
* * *
As reported in the Troubled Company Reporter on Dec. 16, 2004,
Moody's Investors Service assigned new ratings to Spheris, Inc., a
leading provider of transcription services to health systems,
hospitals and physician practices. This is the first time Moody's
has rated the company. These ratings were assigned:
* $25 million senior secured revolving credit facility due
2009, rated B2
* $75 million senior secured term loan B due 2010, rated B2
* $125 million senior subordinated notes due 2012, rated Caa2
* Senior Implied Rating, rated B3
* Senior Unsecured Issuer Rating, rated Caa1
The outlook for the company is stable.
The rating assignment reflects:
(1) the company's high leverage,
(2) its small size and limited resources (in general, but not
relative to competitors),
(3) the company's single business line focus, and
(4) the limited track record of the company, which was formed
only in June 2003 through the combination of two medical
transcription services providers, Total eMed and EDiX.
The ratings also reflect:
(1) the high level of competition in the fragmented industry,
(2) limited pricing power of transcription services providers,
and
(3) Moody's concern that the shortages in medical
transcriptionists may lead to pressure on wages and
benefits expenses.
Positive factors recognized by the ratings include:
(1) Spheris' strong financial performance since its formation,
(2) favorable performance trends at HealthScribe,
(3) good industry growth trends, and
(4) the combined entity's strong leadership position.
Moody's also considered:
(1) the high historical contract retention rates at both
Spheris and HealthScribe,
(2) the good visibility into near term revenues driven by the
retention rates and the multi-year terms of the customer
contracts,
(3) the diversified customer base,
(4) the company's success in generating $19 million in
synergies from the combination of Total eMed and EDiX, and
(5) the potential for $6 million in synergies and further
margin expansion resulting from the acquisition of
HealthScribe.
STRATUS SERVICES: Auditors Raise Going Concern Doubt in Form 10-K
-----------------------------------------------------------------
Stratus Services Group, Inc. (OTCBB:SSVG), the SMARTSolutions(tm)
Company, released its financial results for its fiscal year ended
Sept. 30, 2004.
In Fiscal 2004, revenues from continuing operations were $110.5
million, a 44% increase over $76.6 million for Fiscal 2003.
Revenues for the quarter ended September 30, 2004, as compared to
the same period for 2003, increased 55%.
As noted in the Company's September 30, 2004 financials, the
operating loss from continuing operations decreased from
($2,656,294) in Fiscal 2003 to ($654,912) in Fiscal 2004.
Operating income for the quarter ended September 30, 2004 was
$389,145 compared to a loss of ($818,423) for the quarter ended
September 30, 2003.
Joseph J. Raymond, Sr., President and CEO, commented, "Our gross
revenues for the year ended September 30, 2004 reflect a
substantial increase over last year's gross revenues, and the
gross revenues for the quarter ended September 30, 2004 reached
record levels of in excess of $33 million. This revenue increase,
a result of internal growth, is expected to continue for fiscal
2005.
"I am extremely pleased that the Company is finally reaping the
benefits of its philosophy of buying assets of other staffing
companies in a down market.
"The economy is improving, particularly for the staffing industry,
and, as a result, the Company has turned the corner and its long-
term plan is coming to fruition.
"The Company completed its continuous offering in August 2004,
which, together with the Company's Exchange Offer, has
restructured the Company's Preferred Stock to eliminate potential
toxic convertible provisions which, in turn, hopefully will
increase the Company's stock price. The Company has also
increased sales to record levels, and has implemented its cost-
cutting plan. Also, the Company has successfully stabilized its
payroll burden, including worker's compensation costs, and, as a
result, its branch offices are actively growing sales such that
the Company's backlog of work is continuing to increase. The
Company projects that this increase in backlog of work will
continue into the future, as will revenues."
About the Company
Stratus Services Group, Inc., is a national provider of business
productivity consulting and staffing services through a network of
30 offices in 7 states. Through its SMARTSolutions(tm)
technology, Stratus provides a structured program to monitor and
reduce the cost of a customer's labor resources. Through its
Stratus Technology Services, LLC joint venture, the Company
provides a broad range of information technology staffing and
project consulting.
* * *
Going Concern Doubt
In its Form 10-K for the fiscal year ended Sept. 30, 2004, filed
with the Securities and Exchange Commission, Stratus Services'
auditors raised substantial doubt about the Company's ability to
continue as a going concern due to its $11,001,305 working capital
deficit, which is primarily the result of losses incurred during
the last four years.
TENET HEALTHCARE: Completes Sale of Two St. Louis Hospitals
-----------------------------------------------------------
Tenet Healthcare Corporation (NYSE:THC) reported that several of
its subsidiaries have completed the sale of two acute care
hospitals in St. Louis to Argilla Healthcare, Inc. The hospitals
are:
-- Forest Park Hospital, a 450-bed acute care hospital; and
-- St. Alexius Hospital, consisting of:
* St. Alexius Hospital - Broadway Campus, a 203-bed acute
care hospital, and
* St. Alexius Hospital - Jefferson Campus, a 408-bed
specialty facility.
Net after-tax proceeds, including a $6 million note from Argilla
Healthcare, Inc. and the liquidation of working capital, are
estimated to be approximately $45 million. The company expects to
use the proceeds of the sale for general corporate purposes.
The two St. Louis hospitals are among 27 hospitals Tenet announced
it was divesting on Jan. 28, 2004. With this announcement, Tenet
has completed the divestiture of 13 of the 27 facilities and has
entered into definitive agreements to divest an additional nine
hospitals. Discussions and negotiations with potential buyers for
the remaining five hospitals slated for divestiture are ongoing.
Tenet Healthcare Corporation -- http://www.tenethealth.com/--
through its subsidiaries, owns and operates acute care hospitals
and related health care services. Tenet's hospitals aim to provide
the best possible care to every patient who comes through their
doors, with a clear focus on quality and service.
* * *
As reported in the Troubled Company Reporter on Dec. 09, 2004,
Moody's Investors Service assigned an SGL-4 speculative grade
liquidity rating to Tenet Healthcare Corporation. At the same
time, Moody's affirmed Tenet's existing long-term debt ratings
(senior implied at B2) and assigned a B3 rating to Tenet
Healthcare's $1 billion 9.875% senior unsecured note offering,
which was issued in June of this year. The rating outlook is
negative.
Ratings assigned:
* Tenet Healthcare Corporation:
-- SGL-4 speculative grade liquidity rating;
-- B3, 9.875% senior unsecured notes.
Ratings affirmed:
* Tenet Healthcare Corporation:
-- B2 senior implied;
-- B3 issuer rating;
-- B3 senior unsecured note ratings.
TROPICAL SPORTSWEAR: Taps Akerman Senterfitt as Bankruptcy Counsel
------------------------------------------------------------------
Tropical Sportswear Int'l Corporation and its debtor-affiliates
ask the U.S. Bankruptcy Court for the Middle District of Florida
for permission to employ Akerman Senterfitt as their general
bankruptcy counsel.
Akerman Senterfitt is expected to:
a) advise the Debtors with respect to their powers, rights,
duties and obligations in their chapter 11 cases in relation
to their business operations;
b) advise the Debtors with respect to their responsibilities in
complying with the U.S. Trustee's Operation Guideline and
Reporting Requirements and with the rule of the Bankruptcy
Court;
c) prepare motions, pleadings, orders, applications, adversary
proceedings, and other legal documents necessary in the
administration of the Debtors' chapter 11 cases;
d) protect the interests of the Debtors in all matters pending
before the Court; and
e) represent the Debtors in negotiations with their creditors
in connection with the proposed sale of substantially all of
their assets and the preparation of a plan of
reorganization.
W. Glenn Jensen, Esq., a Shareholder at Akerman Senterfitt,
discloses that the Firm received a $701,451.00 retainer. Mr.
Jensen will bill the Debtors $255 per hour.
Mr. Jensen reports Akerman Senterfitt's professionals bill:
Professional Designation Hourly Rate
------------ ----------- -----------
Denise D. Dell-Powell Counsel $400
Erik P. Kimball Counsel 400
Mike Horan Counsel 375
Mr. Jensen reports Akerman Senterfitt's other professionals bill:
Designation Hourly Rate
----------- -----------
Associates $170 - 220
Paralegals 114 - 145
Akerman Senterfitt assures the Court that it does not represent
any interest adverse to the Debtors or their estate.
Headquartered in Tampa, Florida, Tropical Sportswear Int'l Corp.
-- http://www.savane.com/-- designs, produces and markets branded
branded apparel products that are sold to major retailers in all
levels and channels of distribution. The Company and its debtor-
affiliates filed for chapter 11 protection on December 16, 2004
(Bankr. M.D. Fla. Case No. 04-24134). When the Debtor filed for
protection from its creditors, it listed total assets of
$247,129,867 and total debts of $142,082,756.
TROPICAL SPORTSWEAR: Section 341(a) Meeting Slated for Jan. 24
--------------------------------------------------------------
The U.S. Trustee for Region 21 will convene a meeting of Tropical
Sportswear Int'l Corp. and its debtor-affiliates' creditors at
1:30 p.m., on January 24, 2005, at the Office of the U.S. Trustee,
501 East Polk St., Timberlake Annex, Room 110-C, Tampa, Florida.
This is the first meeting of creditors required under U.S.C. Sec
341(a) in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Tampa, Florida, Tropical Sportswear Int'l Corp.
-- http://www.savane.com/-- designs, produces and markets branded
branded apparel products that are sold to major retailers in all
levels and channels of distribution. The Company and its debtor-
affiliates filed for chapter 11 protection on December 16, 2004
(Bankr. M.D. Fla. Case No. 04-24134). David E. Bane, Esq., and
Denise D. Dell-Powell, Esq., at Akerman Senterfitt represent the
Debtors' restructuring. When the Debtor filed for protection from
its creditors, it listed total assets of $247,129,867 and total
debts of $142,082,756.
TROPICAL SPORTSWEAR: Nasdaq Will Halt Stock Trading on Friday
-------------------------------------------------------------
Tropical Sportswear Int'l Corporation (Nasdaq:TSIC) had received
notice from the staff of the NASDAQ Stock Market stating that the
Company's securities will be delisted from the NASDAQ Stock Market
at the opening of business on Friday, Dec. 31, 2004, in accordance
with Marketplace Rules 4300 and 4450(f).
On Dec. 16, 2004, TSI and certain of its domestic subsidiaries
filed voluntary petitions for relief under Chapter 11 of the
United States Bankruptcy Code in the United States Bankruptcy
Court for the Middle District of Florida. As a result of these
proceedings, the Company has elected not to appeal the NASDAQ's
decision, and as such, anticipates that the NASDAQ will promptly
file an application with the Securities and Exchange Commission to
remove the Company's stock from listing and registration.
Headquartered in Tampa, Florida, Tropical Sportswear Int'l Corp.
-- http://savane.com/-- designs, produces and markets high-
quality branded and retailer private branded apparel products that
are sold to major retailers in all levels and channels of
distribution. The Company and its debtor-affiliates filed for
chapter 11 protection on Dec. 16, 2004 (Bankr. M.D. Fla. Case No.
04-24134). David E. Bane, Esq., Denise D. Dell-Powell, Esq., and
Jill E. Kelso, Esq., at Akerman Senterfitt represent the Debtors
in their chapter 11 cases. When the Debtor filed for protection
from its creditors, it listed $247,129,867 in total assets and
$142,082,756 in total debts.
TRUMP HOTELS: Transfers Management of Trump 29 Casino to Tribe
--------------------------------------------------------------
Trump Hotels & Casino Resorts, Inc. (OTCBB:DJTCQ.OB) has reached
an agreement with the Twenty-Nine Palms Band of Luiseno Mission
Indians of California -- the Tribe -- to transfer the Company's
management agreement to the Tribe. Pursuant to the Management
Agreement, the Company has managed the day-to-day operations of
the Tribe's casino in Coachella, California under the "Trump 29
Casino" name. The Tribe has agreed to pay the Company a transfer
fee of $6.0 million dollars. The transfer agreement is subject to
certain court and regulatory approvals.
Since the commencement of the Management Agreement in April 2002,
the Tribe's casino has shown significant increases in its
operating performance. The Tribe and the Company have mutually
agreed to transfer the Management Agreement to the Tribe based on
their belief in the Tribe's ability to manage the property on its
own. Donald J. Trump, the Chairman and Chief Executive Officer of
the Company, commented on the transfer, "Our development and
operating expertise has made Trump 29 Casino a great gaming
destination in the Palm Springs area. We are proud of what we
have done together with the Tribe, starting with the financing and
development of the property and culminating in the record breaking
results. It's now time for the Tribe to assume management
responsibility. The goals set by the National Indian Gaming
Commission have certainly been met. I wish Chairman Dean Mike and
the entire Tribe continued success with the casino."
Chairman Dean Mike of the Tribe added, "The Tribe is grateful to
Mr. Trump and his management team for their role in bringing our
casino to its current operating level. We have a good foundation
for our operations and the Tribe looks forward to growing the
business."
Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino
Resorts, Inc., through its subsidiaries, owns and operates four
properties and manages one property under the Trump brand name.
The Company and its debtor-affiliates filed for chapter 11
protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898
through 04-46925). Robert A. Klymman, Esq., Mark A. Broude, Esq.,
John W. Weiss, Esq., at Latham & Watkins, LLP, and Charles
Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N. Stahl,
Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano, P.A.,
represent the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
more than $500 million in total assets and more than $1 billion in
total debts.
USG CORP: Asbestos PD Committee Asks for Case Management Order
--------------------------------------------------------------
The Official Committee of Asbestos Property Damage Claimants
appointed in the chapter 11 cases of USG Corporation and its
debtor-affiliates asks the U.S. District Court for the District of
Delaware to enter a Case Management Order with respect to all
asbestos issues.
Neil B. Glassman, Esq., at The Bayard Firm, in Wilmington,
Delaware, states that after more than years, little progress has
been made in respect of the Debtors' reorganization. Admittedly,
the delay does not necessarily warrant criticism of the Debtors.
The various motions for the recusal of the former presiding
District Court Judge and related proceeding resulted in a stay of
the District Court's consideration of critical asbestos personal
injury issues. Making matters worse, even after the recusal of
Judge Wolin, for unknown reasons, the Third Circuit failed to
reassign the Debtors' bankruptcy cases to another District Court
Judge until September 2004. In addition, the Debtors prevailed on
the Bankruptcy Court to authorize formal mediation of a consensual
plan and to therefore defer from imposing any deadlines for the
filing of a plan of reorganization or terminating exclusivity.
The requested Case Management Order is premised on fundamental
principles of judicial efficiency, consistency and equality of
treatment, and is intended to maximize the prospects of a
consensual reorganization plan. Integral to the resolution of the
Debtors' Chapter 11 cases -- whether consensually or by cramdown
-- is the determination of the extent of the Debtors' asbestos
liabilities, including both asbestos property damage claims and
asbestos personal injury claims. Despite the lack of a formal
withdrawal of the reference to the Bankruptcy Court, the
determination of the Debtors' asbestos liabilities has been
functionally bifurcated between the Bankruptcy Court and the
District Court. The Bankruptcy Court, commencing with orders
entered by Judge Newsome, has embarked on a course to determine
the extent of the Debtors' PD Claims liability. However, at this
stage, despite the Debtors' repeated efforts, with the support of
the PD Committee and the Official Committee of Unsecured
Creditors, the determination of the Debtors' PI Claims liability
has not even reached a nascent state. The PD Committee believes
that the determination of the Debtors' asbestos liabilities ought
to be in the same forum, under the same rules of engagement, be it
in the Bankruptcy Court or the District Court.
While the Debtors' public stance is that the most critical aspect
of their reorganization is the resolution of their asbestos PI
liabilities, the fact remains that these particular Debtors also
have substantial asbestos PD liabilities. In contrast, strikingly
little progress has been made in respect of the determination of
the Debtors' PI liabilities.
According to Mr. Glassman, there is no sensible justification for
a distinction between determining the magnitude of the Debtors'
PI Claims and PD Claims as all of their asbestos liabilities
result from the defective and unreasonably harmful asbestos-
containing products manufactured by the Debtors. The uniform and
consistent adjudication of these claims mandates that the
allowance and determination of PI Claims and PD Claims be made in
the same forum.
Obviously an immense gulf exists between the PI Committee's and
the Futures Representative's views of the Debtors' PI liabilities,
on the one hand, and the Debtors' views of these liabilities, on
the other, making it difficult, if not impossible, for the parties
to forge a consensual reorganization plan. In these
circumstances, a contested confirmation process, including a
challenge as to the bona fides of the PI Claims, is inevitable.
Thus, it is especially disquieting that the judicial determination
of the magnitude of the Debtors' asbestos liabilities is heading
down divergent paths at differing speeds in different forums. The
risk of further inordinate delay in fashioning a plan is palpable
and processes should be put in place at this point to prevent that
from happening.
The Debtors have already signaled to the Bankruptcy Court and the
PD Committee that they are prepared to begin the process of formal
objections to PD Claims in the Bankruptcy Court. In contrast,
holders of PI claims have not even been required to file proofs of
claim, Mr. Glassman notes. Thus, while the PI Committee too has
been heard to complain about the Debtors' apparent failure to move
their cases closer to reorganization, PI Claimholders have enjoyed
three years of not having a bar date, not being required to file
proofs of claim and vicarious pleasure from the PI Committee's oft
repeated but unsubstantiated bravado that the magnitude of the PI
Claims alone swamps the interests of equity holders. This glaring
disparity in approach to the determination of asbestos liabilities
not only unjustifiably fortifies PI Claimholders, it also
undermines any prospect for a fully informed resolution of the
Debtors' cases, Mr. Glassman notes.
Mr. Glassman says that if a contested plan confirmation develops,
the quantification of PI Claims will be at issue. In that
context, the PI Committee will no doubt advocate that the ultimate
allowance and payment of PI Claims should be made by a 524(g)
trust pursuant to approved trust distribution procedures. Given
the sheer number of PI Claims that may be asserted, there is some
practical sense to that position. The PD Committee likewise
maintains that it makes practical sense for PD Claims to be
determined by a post-confirmation trust facility as well.
However, Mr. Glassman notes, the "devil is in the detail" and if
the TDPs provide for payment on account of PI Claims without
product identification or medical and exposure criterion, the
supposed enormity of PI Claims becomes a self-fulfilling prophesy.
There is a huge difference between determining how much of a fund
should be set aside for the PI claimants under a plan and the
processing of PI Claims for ratable payments from this fund.
Thus, processes need to be out in place that level the field for
all asbestos claims and create a uniform set of rules, as well as
maximize the prospects for consensual resolution of the Debtors'
cases. Notions of efficiency and consistency dictate that these
processes emanate from but one court.
Bankruptcy Court and District Court
Have Jurisdiction to Establish PI Claim Procedures
The PD Committee is not suggesting which of the Bankruptcy Court
or the District Court should take jurisdiction over all asbestos-
related issues. The PD Committee merely asks that one or the
other do so and the Committee believes that either Court is
jurisdictionally empowered to do so. Presumably, when Judge Wolin
decided to preside over the PI-related issues, he was being
mindful of the fact that Section 1411 of the Judicial Procedures
Code preserves the right to a jury trial in bankruptcy with regard
to a personal injury or tort claim and that Section 157(b)(2)(B)
of the Judicial Procedures Code excludes from "core" matters
reserved to the bankruptcy court "the liquidation or estimation of
contingent or unliquidated personal injury tort or wrongful death
claims against the estate for purposes of distribution in a case
under title 11." There is, however, a wide difference between the
liquidation of claims and the estimation of claims in bankruptcy,
and a bankruptcy court is not without portfolio to consider
personal injury claims.
Thus, it is by no means a foregone conclusion that the District
Court has exclusive jurisdiction to deal with all PI-related
issues. The Bankruptcy Court, likewise, has jurisdiction to
handle every aspect of those PI-related issues, which the PD
Committee urges should be dealt with promptly to facilitate the
Debtors' reorganization.
More specifically, the Bankruptcy Court can establish a bar date
for PI Claims and approve a specialized proof of claim form to be
filed by the PI Claimants by that bar date. The PD Committee says
that it is unaware of a single instance where those functions were
exercised by a district court in an asbestos bankruptcy case. It
may be particularly fitting for the Bankruptcy Court presently
presiding over the Debtors' cases to supervise those matters as it
has already done so in respect of PD Claims and is therefore well
acquainted with the nature of information that a proof of claim
should include, the demographics of a constitutionally sound bar
date notice program and the time that claimants will generally
require to complete the proof of claim form. In some respects,
these issues are easier to tackle in respect of PI Claims since it
is well-known that the sheer majority of PI Claimants are
represented by a mere handful of plaintiff lawyers who have become
adept at filing proofs of claims on their clients' behalf.
Moreover, the Bankruptcy Court can estimate the aggregate amount
of PI Claims based on, inter alia, the information obtained from
the proofs of claim filed, as opposed to liquidating or estimating
individual PI Claims for purposes of distributions to the holders
of those claims under a reorganization plan. This estimation
process does not implicate the constitutional right to a jury
trial. The PD Committee is unaware of a single instance in which
it was determined that a claimant had a right to a jury trial in
the context of an estimation proceeding for the obvious reason
that estimation by jury trial is antithetical to the whole purpose
of estimation.
Given the numerous instances in which bankruptcy courts have
performed similar estimations in asbestos cases, it can hardly be
said that anything about the Debtors' cases is rare or unusual
implicating the need to estimate PI Claims before a jury.
The PD Committee asks the District Court to enter an order
eliminating the functional bifurcation of asbestos issues and
placing all asbestos issues, regardless of whether they relate to
PI Claims or PD Claims, in the same forum.
Headquartered in Chicago, Illinois, USG Corporation
-- http://www.usg.com/-- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes. The Company filed
for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No.
01-02094). David G. Heiman, Esq., and Paul E. Harner, Esq., at
Jones Day represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $3,252,000,000 in assets and $2,739,000,000 in debts.
(USG Bankruptcy News, Issue No. 77; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
VENTAS INC: Sells 2 Hospitals to Kindred Healthcare for $21.1-Mil
-----------------------------------------------------------------
Ventas, Inc. (NYSE: VTR) has sold two hospitals to its primary
tenant, Kindred Healthcare, Inc. (NYSE: KND), for a purchase price
of $21.1 million. Kindred leased those facilities from Ventas
prior to the transaction.
"We are delighted to cooperate with our primary tenant, Kindred
Healthcare, as it rationalizes its hospital operations," Ventas
Chairman, President and CEO Debra A. Cafaro said. "This sale
improves our portfolio and generates proceeds that we can re-
deploy accretively in our strategic growth and diversification
program."
Ventas expects to record a gain on the sale of approximately
$19.4 million in the fourth quarter. The gain will be excluded
from Funds From Operations (FFO) in accordance with the NAREIT
definition of FFO. The Company does not expect to incur any taxes
or additional 2004 dividend requirements in connection with the
sale. The Company has also received from Kindred a $0.5 million
lease termination fee on the sold facilities.
The two hospitals disposed of in the transaction are located in
LaGrange, Indiana and Menlo Park, California and contain 78 beds.
About the Company
Ventas, Inc. -- http://www.ventasreit.com/-- is a leading
healthcare real estate investment trust that owns and invests in
healthcare and senior housing assets in 39 states. Its properties
include hospitals, skilled nursing facilities and assisted and
independent living facilities.
* * *
As reported in the Troubled Company Reporter on June 30, 2004,
Standard & Poor's Ratings Services raised its corporate credit
ratings on Ventas Inc., its operating partnership Ventas Realty
L.P., and Ventas Capital Corp. to 'BB' from 'BB-'. In addition,
ratings are raised on the company's senior unsecured debt, which
totals $366 million. Concurrently, the outlook is revised to
stable from positive.
"The upgrades acknowledge the company's steady improvement in both
its business and financial profiles," said Standard & Poor's
credit analyst George Skoufis. "Recent acquisitions have targeted
improving Ventas' diversification, foremost its concentration with
its primary tenant Kindred Healthcare Inc. Growing cash flow and
profits, and lower leverage have contributed to stronger debt
protection measures. Credit weaknesses remain, however, including
Ventas' continued reliance on un-rated Kindred, the risk of future
changes to government reimbursement, and constrained, but
improved, financial flexibility."
VOICEIQ: Closes Plan of Arrangement Transaction After Court Okay
----------------------------------------------------------------
VoiceIQ, Inc., (TSXV: VIQ) received the approval of the Alberta
Court of Queen's Bench pursuant to the Companies Creditors
Arrangement Act (Canada) as well as the approval of the Ontario
Superior Court of Justice pursuant to the Business Corporations
Act (Ontario), to the previously announced Plan of Arrangement
between the Company, Yoho Resources Investment Partnership, VIQ
Solutions, Inc., and the Company's shareholders and creditors. In
addition, the Company now closed the Plan of Arrangement
transaction.
Details of the Arrangement
Pursuant to the Arrangement, all of the Company's voice capture,
digitization and compression assets and business have been
transferred to VIQ Solutions, Inc., in exchange for shares of VIQ
Solutions. The Company has also acquired oil and natural gas
properties producing approximately 750 barrels of oil equivalent
per day, changed its name to "Yoho Resources, Inc." and
transformed itself into an oil and gas exploration, development
and marketing company. The consideration paid for these oil and
gas assets consists of 5,082,383 non-voting common shares of the
Company (at $2.00 per share) and $4,500,000 in secured debt, due
December 31, 2004. The Company has appointed a new board of
directors consisting of Gary Perron, Kevin Olson, Sharon Macleod
and Bruce Allford, which board of directors will be recruiting a
permanent management team to focus on the Company's development as
a successful oil and gas exploration, production and marketing
company.
Also pursuant to the Arrangement:
-- A new class of voting common shares and a new class of non-
voting common shares of the Company have been created.
-- The Company has effected a settlement with its creditors
pursuant to the CCAA whereby creditors who are owed up to
$2,000 by VoiceIQ shall receive 100% of their claim value in
cash out of a distribution fund of $500,000 -- the Creditor
Fund. Creditors owed more than $2,000 shall receive the
first $2,000 of their claim value in cash out of the
Creditor Fund, plus a pro rata share of a basket of cash and
shares made up of the remainder of the Creditor Fund,
156,250 common shares of the Company and 2,000,000 common
shares of VIQ Solutions. An additional claim of an
unsecured creditor was settled in consideration of 1,333,333
shares of VIQ Solutions.
-- The Company has raised $7 million in new capital investment
(comprised of $4 million of common shares at $2.00 per
share and $3 million of "flow-through" shares at $2.40 per
share), which funds will be expended on the Company's oil
and gas exploration and development activities.
-- The Company has been continued under the laws of the
Province of Alberta.
The Company has agreed with the shareholder of one of the private
companies who was to have received a "performance warrant" of the
Company in connection with to the acquisition of one of the oil
and natural gas properties by the Company that such performance
warrant will not be issued and the shareholder will receive an
incremental cash payment in an amount to be finalized but expected
to be less than $200,000.
At the shareholder meeting held on December 20, 2004, shareholders
of VIQ Solutions appointed a new board of directors consisting of:
* Cyril Maclean,
* Norman Inkster,
* Lawrence Davis,
* Chris Carmichael,
* Gary Perron, and
* David Outhwaite.
The management team of VIQ Solutions consists of David Outhwaite,
President and CEO, Malcolm Macallum, CTO and Karen Hersh, CFO.
VIQ Solutions expects to be in a position to close equity and
convertible debt private placements, for gross proceeds of at
least $3.2 million, within the next 30 days. VIQ Solutions will
therefore be funded with an estimated $2.2 million of working
capital (net of the repayment of the "debtor-in-possession"
financing related to the CCAA process and the transaction costs of
the Arrangement) to implement its business plan.
Note to Shareholders
Respecting the Operation of the Arrangement
Pursuant to the Arrangement, each VoiceIQ share that was
outstanding as at 11:59 p.m. (Calgary time) on December 23, 2004
-- the Effective Time -- now represents only the entitlement to
receive one common share of VIQ Solutions, Inc., and 0.012877 of a
"new" common share of the Company for each outstanding VoiceIQ
share. Pursuant to the Letter of Transmittal mailed to VoiceIQ's
shareholders on or about November 23, 2004, the distribution to
the registered holders of the VoiceIQ shares will occur upon
registered holders following the instructions set forth in the
Letter of Transmittal and tendering their share certificates in
VoiceIQ, together with the Letter of Transmittal, to Equity
Transfer Services, Inc., being VoiceIQ's Depositary under the
Arrangement. Accordingly, if you are a beneficial holder of
VoiceIQ shares (ie. you hold your VoiceIQ shares through a
brokerage account), your broker will be responsible for
distributing to you the appropriate number of "new" common shares
of the Corporation (in the name of "Yoho Resources Inc.") and
shares of VIQ Solutions.
Note to Creditors
Respecting the Operation of the Arrangement
The consideration to which the creditors of the Company are
entitled under the Arrangement shall be distributed by the Company
directly to the creditors, over the course of the next several
business days.
Stock Exchange Listings
Trading of VoiceIQ's shares has been halted on the TSX Venture
Exchange pending the Company recruiting a permanent management
team for its oil and gas business and meeting the other conditions
of the TSXV. The Company intends on seeking a lift of the trading
halt as soon as reasonably possible, however there can be no
assurance that the Company will be successful in meeting the
conditions to be imposed by the TSXV related to the lifting of the
trading halt, or as to when that may occur.
VIQ Solutions has applied to have its shares listed on the TSXV.
Conditional listing approval has not been received from the TSXV
for this application. VIQ Solutions will be filing documentation
shortly with the TSXV as part of its listing application process
and will announce further details as to the status of its listing
application as available.
VTEX ENERGY: Raising Cash as Auditors Raise Going Concern Doubt
---------------------------------------------------------------
For the year ended April 30, 2004, VTEX Energy Inc.'s independent
registered public accounting firm issued a going concern opinion.
The Company has historically incurred net losses from operations
and has incurred net losses of approximately $642,000 and $704,000
for the six months ended October 31, 2004 and 2003, respectively,
and losses are expected to be incurred in the near term. Current
liabilities exceeded current assets by approximately $6,235,000
and $5,222,000 at October 31, 2004 and April 30, 2004,
respectively, and the accumulated deficit is approximately
$20,950,000 at October 31, 2004. Amounts outstanding and payable
to creditors are in arrears and the Company is in negotiations
with creditors to obtain extensions and settlements of outstanding
amounts.
Management anticipates that significant additional expenditures
will be necessary to develop the Company's properties, which
consist primarily of proved reserves that are non-producing,
before significant positive operating cash flows will be achieved.
Without outside investment from the sale of equity securities or
debt financing the Company's ability to execute its business plan
will be limited. These factors are an indication that the Company
may be unable to continue in existence.
Management's plans to alleviate these conditions include:
-- the renegotiation of certain trade payables,
-- settlements of debt amounts with stock,
-- deferral of certain scheduled payments, and
-- sales of non core properties, as considered necessary by
management.
Also, management is pursuing business partnering arrangements for
the acquisition and development of additional properties, as well
as debt and equity funding through private placements
The Company has been dependent on existing stockholders and new
investors to provide the cash resources to sustain its operations.
The Company's continuing negative operating results have produced
a working capital deficit of $6,235,231 at October 31, 2004.
Again, these factors raise substantial doubt about the Company's
ability to continue as a going concern. The Company's long-term
viability as a going concern is dependent upon the Company's
ability to obtain sources of outside financing to support near
term operations and to allow the Company to make strategic
investments in new oil and natural gas prospects which will
provide the Company the ability to increase profitability and
sustain a cash flow level that will ensure support for continuing
operations.
For the past six months, the Company's oil and natural gas
revenues have been sufficient to satisfy its oil and natural gas
operating expenses and general and administrative expenses. The
Company has funded the development of its oil and natural gas
properties through additional borrowings under its line of credit
and through short-term investor notes. Additional equity funding
will be required in the near term to meet the capital needs of the
Company. The Company is evaluating various financing alternatives
such as the issuance of debt, private placements of its common and
preferred stock and joint ventures with industry partners. There
is no guarantee that the Company will be successful in obtaining
such financing, or that the terms of any financing which may be
obtained will be on terms favorable to the Company. Any inability
of the Company to raise additional capital will limit the
development of most of its oil and natural gas properties and may
prevent the Company from meeting its cash requirements. If the
wells which are currently being brought into production through
development and workovers perform as expected additional cash
flows may be available; however, there is no assurance that such
cash flows will in fact be available or that the wells will, in
fact, perform as expected. In the absence of such well
performance or financing, the Company will not be able to meet its
financial obligations.
VTEX is currently negotiating with many of the vendors for which
accounts payable were assumed in prior asset acquisition
transactions, and believes that a significant portion of these
payables can be satisfied through the issuance of common stock.
The Company has a $10 million revolving credit line with an entity
controlled by the brother of the Company's president. However,
the borrowing base under the revolving credit line is $1,839,143
at October 31, 2004, which is equal to the outstanding balance.
This principal balance plus unpaid interest is due at maturity on
January 31, 2005. The borrowing base cannot be increased without
the consent of the lender. The Company also has a $250,000 line
of credit with a bank. The outstanding balance under this line of
credit is $246,537 at October 31, 2004, and is due upon demand.
VTEX has outstanding production payments in the amount of
$1,188,518 at October 31, 2004. The holders of such production
payments have agreed to a temporary forbearance of the Company's
obligation. If such forbearance is not continued, the Company
will be required to remit the revenue from a substantial portion
of the Company's production.
From time to time the Company incurs notes payable to settle
outstanding accounts payable and other liabilities, finance
expenditures and generate working capital. The balances of such
notes payable were $894,658 and $306,092 at October 31, 2004 and
April 30, 2004, respectively.
VTEX Energy, Inc., a Nevada corporation, is an independent oil and
natural gas company engaged in acquiring, exploiting, developing
and operating oil and natural gas properties, with a focus on
Texas and Louisiana. The Company has one wholly owned subsidiary,
Vector Exploration, Inc., and is headquartered in Houston, Texas.
W.R. GRACE: Asks Court to Appoint Raymond Thieme as ADR Mediator
----------------------------------------------------------------
W.R. Grace & Co., and its debtor-affiliates ask Judge Fitzgerald
of the U.S. Bankruptcy Court for the District of Delaware to
appoint Raymond G. Thieme, Jr., as the mediator for their Court-
approved Alternate Dispute Resolution Program, which will be
applied to liquidate certain prepetition non-asbestos claims.
The Debtors have determined that Judge Thieme is qualified to
serve as the Mediator in their ADR Program and to efficiently
facilitate the fair and equitable settlement of the ADR Claims.
Judge Thieme served as a judge in various Maryland state courts
for 27 years. In 2000, he retired from his then-current position
as judge with the Court of Special Appeals, 5th Appellate Circuit.
He currently serves as the chairman of a Maryland medical task
force concerning medical malpractice, and, for the past four
years, he has served as a part-time mediator and arbitrator.
Judge Thieme has been involved in many high-profile assignments,
including serving as chairman of Governor Ehrlich's committee on
medical malpractice reform.
Judge Thieme attests that he is a "disinterested person" within
the meaning of Section 101(14) of the Bankruptcy Code, as required
by Section 327(a) and referenced by Section 328(c). Judge Thieme
holds no interest adverse to the Debtors or their estates for the
matters for which he would be employed. Judge Thieme also has no
connection with the Debtors, their creditors, or their related
parties.
For each mediation, Judge Thieme will be paid equally by the
Debtors and the ADR Claimant, who will be jointly and severally
liable for amounts owed on account of the mediation. Judge Thieme
charges $300 per hour for his services. He will seek
reimbursement for out-of-pocket expenses incurred.
Judge Thieme will not be liable for any damages, or any
obligations other than as prescribed by Court orders, provided,
however, that he may be liable for damage caused by his willful
misconduct or gross negligence. Judge Thieme will not be liable
to any person as a result of any of his action or omission taken
or made in good faith. The Debtors and the ADR Claimant will
equally indemnify, defend, and hold Judge Thieme harmless from any
claims by any party against him arising out of or relating to the
performance of his duties as mediator, provided that he will not
have these indemnification rights if a court of competent
jurisdiction determines pursuant to a final and non-appealable
order that he is liable for as a result of willful misconduct or
gross negligence.
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)
WEIRTON STEEL: Last Day to File Objections to Claims is Feb. 11
---------------------------------------------------------------
The Honorable L. Edward Friend, II for the United States
Bankruptcy Court Northern District of West Virginia extends:
(a) the Claim Objection Deadline for administrative claims to
February 11, 2005; and
(b) the Claim Objection Deadline for prepetition claims to
March 13, 2005.
Headquartered in Weirton, West Virginia, Weirton Steel Corporation
was a major integrated producer of flat rolled carbon steel with
principal product lines consisting of tin mill products and sheet
products. The company was the second largest domestic producer of
tin mill products with approximately 25% of the domestic market
share. The Company filed for chapter 11 protection on May 19,
2003 (Bankr. N.D. W. Va. Case No. 03-01802). Judge L. Edward
Friend, II administers the Debtors cases. Robert G. Sable, Esq.,
Mark E. Freedlander, Esq., David I. Swan, Esq., James H. Joseph,
Esq., at McGuireWoods LLP represent the Debtors in their
liquidation. Weirton sold substantially all of its assets to
Wilbur Ross' International Steel Group. Weirton's confirmed Plan
of Liquidation became effective on Sept. 8, 2004. (Weirton
Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
WINDSOR WOODMONT: Completes Mountain High Casino Acquisition
------------------------------------------------------------
Ameristar Casinos, Inc. (Nasdaq: ASCA) has completed the
acquisition of Mountain High Casino in Black Hawk, Colorado. The
transaction adds the largest casino in Colorado to Ameristar's
portfolio and increases the company's geographic diversification.
Ameristar acquired the property from Windsor Woodmont Black Hawk
Resort Corp., which was operating as debtor-in-possession in a
Chapter 11 case before the United States Bankruptcy Court for the
District of Colorado. The purchase price was approximately
$117 million in cash, plus the issuance of 58,943 shares of
Ameristar's common stock valued at $2.5 million.
Ameristar intends to invest approximately $90 million in capital
expenditures to improve the competitiveness of the property. The
capital improvements include:
-- reconfiguring and expanding the gaming area;
-- introducing cashless slot technology and other gaming
equipment upgrades;
-- constructing a 300-room AAA Four Diamond-quality hotel and
additional covered parking;
-- upgrading the food and beverage outlets; and
-- adding a casual dining restaurant.
All of these improvements are expected to be completed during
2005, with the exception of the hotel, which is expected to be
completed by early 2007.
The company plans to rebrand the property as Ameristar Black Hawk
once the first phase of enhancements is complete. As with all
Ameristar properties, Ameristar Black Hawk will offer a state-of-
the-art gaming floor, a wide range of high-quality dining and
entertainment venues and outstanding guest service.
"We are excited to complete the acquisition of Mountain High
Casino," said Craig H. Neilsen, Chairman and CEO of Ameristar.
"Mountain High is a high-quality property with an excellent
location in one of the major gaming markets in the United States.
We are eager to begin our enhancement and expansion plans for the
property immediately. The acquisition will not impact our ability
to continue our cash dividend policy or to pursue other
development opportunities."
About Mountain High Casino
Mountain High Casino is an upscale gaming and entertainment
facility located in the center of the Black Hawk gaming district,
approximately 40 miles west of Denver. The 425,000 square-foot
facility includes a 57,000 square-foot casino with approximately
1,000 slot machines and 24 table games (including poker). In
addition, the property features a steak and seafood restaurant, a
buffet and food court, a 5,000 square-foot entertainment showroom
that seats approximately 500 people and a parking garage with
space for approximately 800 vehicles, among other amenities.
About Windsor Woodmont
Windsor Woodmont Black Hawk Resort Corporation, owner and
developer of Black Hawk Casino by Hyatt Casino in Black Hawk,
Colorado, filed for chapter 11 protection on November 7, 2002
(Bankr. Colo. Case No. 02-28089). Jeffrey M. Reisner, Esq., at
Irell & Manella LLP, represents the Debtor in its restructuring
efforts. When the Company filed for protection from its
creditors, it listed $139,414,132 in total assets and $152,546,656
in total debts.
WISE METALS: S&P Slices Rating on $150M Senior Sec. Notes to 'B-'
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on Wise
Metals Group LLC's (co-issued with Wise Alloys Finance Corp.)
$150 million senior secured notes due 2012 to 'B-' from 'B'. At
the same time, Standard & Poor's affirmed its 'B' corporate credit
rating on Wise Metals Group. The outlook is stable. The
Linthicum, Maryland-based manufacturer of aluminum can sheet had
about $217 million in total debt at Sept. 30,2004.
"The rating was lowered due to the senior secured notes'
disadvantaged position in the capital structure as a result of an
increase in priority bank debt borrowings," said Standard & Poor's
credit analyst Paul Vastola. Due to a meaningful increase in its
working capital levels, borrowings under the company's senior
secured revolving credit facility have increased beyond Standard &
Poor's previous expectations and although borrowings will decline,
they are expected to remain at levels that continue to
disadvantage the secured notes. The increase in working capital
stems from an extension in its receivable terms with a major
customer, rising metal prices, and management's decision to build
inventory levels in anticipation of increased demand from
customers in 2005.
The affirmation of Wise Metals' corporate credit rating reflects
expectation that working capital levels will contract over the
next several quarters, resulting in improved liquidity levels. In
addition, the quality issue and increased transportation costs,
which occurred in the third quarter and impacted profitability,
have been rectified. Despite higher natural gas and energy costs
in 2005, Standard & Poor's expects Wise will realize improved
profitability levels, given higher contracted volumes and
efficiency measures.
The ratings on Wise Metals reflect the company's lack of operating
diversity, customer concentration risk, very weak margins, limited
liquidity levels, and aggressive capital structure. These factors
more than offset the recession-resistant end-use demand of its
products, currently favorable market fundamentals, and some margin
over metal protection provided through contractual arrangements.
WISE WOOD: Shareholders Approve Diamond Tree Acquisition
--------------------------------------------------------
Wise Wood Corporation (TSX VENTURE:WWX) reported that at the
Special Meeting of its shareholders held on Tuesday,
December 21, 2004, its shareholders approved, on a "majority of
the minority" basis the offer, dated November 22, 2004, made by
the Corporation to purchase all of the issued and outstanding
common shares of Diamond Tree Resources Ltd. The Offer provides
the acquisition by WWC of all of the outstanding DTRL shares on
the basis of 4 WWC Shares for each one 1 DTRL Share, and also
contemplates that each outstanding DTRL option may be exchanged
for 4 replacement options to purchase WWC Shares. The Offer was
made to the DTRL Shareholders on November 24, 2004, and is open
for acceptance until 4:00pm (Calgary time) on Thursday, Dec. 30,
2004, unless withdrawn or extended by WWC.
If at least 90 percent of the issued and outstanding DTRL Shares
have been tendered to the Offer, WWC intends to acquire all
remaining DTRL Shares pursuant to the compulsory acquisition
provisions of the Business Corporations Act (Alberta).
At the December 21, 2004 Special Meeting, WWC Shareholders also
approved these resolutions:
(a) the consolidation of the WWC Shares on a
10 to 1 basis;
(b) the change of the name of WWC to "Diamond Tree Energy
Ltd.";
(c) the proposed placement by WWC of up to 1 million Units, at
a sale price of $2.50 per Unit (each Unit consisting of one
common share and 2.5 performance warrants issued on a post
consolidation basis), for aggregate gross proceeds of up to
$2.5 million; and
(d) the election of three additional persons to the board of
directors of WWC (Kelly Ogle, Charles Berard and Thomas
Alford).
Following the resignation of Rafi Tahmazian as a director, the
Corporation's Board now consists of 7 members, namely:
* Don Copeland,
* Fred Moore,
* Gary Unrau,
* Tom Alford,
* Kelly Ogle,
* Charles Berard, and
* Howard Dixon.
Wise Wood Corporation provides oil and gas companies with de-
coking and de-scaling services through its Joint Venture
operations with Innovative Coke Expulsion, Inc. In its most
recent financial statements dated June 30, 2004, Wise Wood
generated revenue of $5.23 million and net income of
$0.24 million.
The Company is incorporated under the Alberta Business
Corporations Act. The Company became a public company on
Dec. 2, 2001, and was then classified as a Capital Pool Company --
CPC -- as defined in Policy 2.4 of the TSX Venture Exchange.
Effective with its Qualifying Transaction on May 3, 2002, the
Company ceased to be a CPC.
On May 20, 2003, the Company changed its name from Wise Wood
Energy Ltd. to Wise Wood Corporation.
* * *
Wise Wood Corporation's June 30, 2004, financial report indicated
that the Company incurred substantial losses since its inception
and, despite an improvement in cash flows during fiscal 2004, had
a substantial working capital deficiency at June 30, 2004, and was
in violation of certain of its financial covenants with its
banker. These factors called the Company's ability to continue as
a going concern into question.
* Large Companies with Insolvent Balance Sheets
-----------------------------------------------
Total
Shareholders Total Working
Equity Assets Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------------ ------- --------
Airgate PCS Inc. CSA (80) 267 24
Akamai Tech. AKAM (144) 189 63
Alaska Comm. Syst. ALSK (29) 642 73
Alliance Imaging AIQ (41) 654 36
Amazon.com AMZN (721) 2,109 642
Ampex Corp-A AEXCA (140) 33 12
AMR Corp. AMR (314) 29,261 (1,824)
Amylin Pharm. Inc. AMLN (42) 402 325
Arbinet-Thexchan. ARBX (1) 70 11
Atherogenics Inc. AGIX (19) 93 77
Blount International BLT (283) 423 103
CableVision System CVC (1,669) 11,795 223
CCC Information CCCG (131) 80 (8)
Cell Therapeutic CTIC (52) 174 87
Centennial Comm CYCL (538) 1,532 152
Choice Hotels CHH (175) 271 (16)
Cincinnati Bell CBB (600) 1,987 (20)
Compass Minerals CMP (109) 642 99
Conjuchem Inc. CJC (16) 24 19
Cotherix Inc. CTRX (44) 25 20
Cubist Pharmacy CBST (75) 155 (6)
Delta Air Lines DAL (3,297) 23,526 (2,614)
Deluxe Corp DLX (214) 1,561 (344)
Denny's Corporation DNYY (246) 730 (80)
Domino Pizza DPZ (575) 421 (16)
Eagle Hospitality EHP (26) 177 N.A.
Echostar Comm-A DISH (1,711) 6,170 (503)
Empire Resorts NYNY (13) 61 7
Foster Wheeler FWHLF (441) 2,268 (212)
Foxhollow Tech. FOXH (60) 28 16
Graftech International GTI (44) 1,036 284
Hawaiian Holding HA (160) 236 (60)
Hercules Inc. HPC (40) 2,658 362
IMAX Corp IMX (49) 222 9
IMAX Corp. IMAX (49) 222 9
Indevus Pharm. IDEV (63) 174 131
Int'l Wire Group ITWG (80) 410 97
Isis Pharm. ISIS (18) 255 116
Kinetic Concepts KCI (29) 638 214
Level 3 Comm Inc. LVLT (159) 7,395 157
Lodgenet Entertainment LNET (68) 301 20
Lucent Tech. Inc. LU (1,379) 16,963 3,765
Maxxam Inc. MXM (649) 1,017 72
McDermott Int'l MDR (338) 1,245 (33)
McMoran Exploration MMR (85) 156 29
Northwest Airline NWAC (2,166) 14,450 (431)
Northwestern Corp. NWEC (603) 2,445 (692)
ON Semiconductor ONNN (298) 1,221 270
Owens Corning OWENQ (4,132) 7,567 1,118
Per-se Tech. Inc. PSTI (25) 169 31
Phosphate Res. PLP (439) 316 5
Pinnacle Airline PNCL (18) 147 26
Primedia Inc. PRM (1,163) 1,577 (203)
Primus Telecomm PRTL (113) 735 (23)
Qwest Communication Q (2,477) 24,926 (509)
Riviera Holdings RIV (31) 224 1
SBA Comm. Corp. SBAC (27) 915 11
Sepracor Inc. SEPR (380) 974 600
St. John Knits Inc SJKI (57) 206 77
Syntroleum Corp. SYNM (8) 48 11
Triton PCS Holding A TPC (254) 1,443 62
US Unwired Inc. UNWR (234) 709 (280)
U-Store-It Trust YSI (34) 536 N.A.
Valence Tech. VLNC (48) 16 2
Vector Group Ltd. VGR (48) 528 110
Vertrue Inc. VTRU (44) 445 0
WR Grace & Co. GRA (118) 3,087 774
Young Broadcasting YBTVA (12) 798 85
*********
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.
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Each Friday's edition of the TCR includes a review about a book of
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available at your local bookstore or through Amazon.com. Go to
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For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,
USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L.
Metzler, Emi Rose S.R. Parcon, 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.
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