/raid1/www/Hosts/bankrupt/TCR_Public/050103.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, January 3, 2005, Vol. 9, No. 1
Headlines
ACCURIDE CORP: Moody's Retains Existing B2 Senior Implied Ratings
ALDERWOODS GROUP: Amends Credit Pact & Redeems 12-1/4% Sr. Notes
ALOHA AIRGROUP: Files for Chapter 11 Protection in Hawaii
ALOHA AIRGROUP: Case Summary & 24 Largest Unsecured Creditors
ALPHARMA INC: Declares $0.45 Per Share Quarterly Cash Dividend
ASSOCIATED ESTATES: S&P Junks $58 Million Preferred Stock Rating
ASSOCIATED INDUSTRIES: S&P Junks Credit & Fin'l. Strength Ratings
ATA AIRLINES: Gets $40M DIP Funding from Bank of Indiana
ATA AIRLINES: Repays $15.5 Million to Indiana, Indianapolis
BANC OF AMERICA: Fitch Puts Low-B Ratings on 3 Mortgage Certs.
BJ SERVICES: Reporting Delays Trigger Default under $400M Revolver
BOWNE & CO: Moody's Upgrades All Ratings & Says Outlook Positive
BROADBAND OFC: Selling 792,000 Shared of Broadsoft Common Stock
BUYER'S GROUP: Case Summary & 2 Largest Unsecured Creditors
CATHOLIC CHURCH: Portland Hires Mesirow Financial as Advisor
CBA COMMERCIAL: Fitch Puts 'BB' Rating on $770,000 2004-1 Cert.
CHESAPEAKE ENERGY: Accepts Tendered 8.375% Sr. Notes for Payment
DELTA AIR: Registers 9.8 Million Common Shares with SEC
DOBSON COMMS: Purchases RFB Cellular Assets in Northern Michigan
DURA OPERATING: Moody's Lowers Some Dura Automotive Ratings
EMISPHERE TECH: Secures $20 Million Equity Commitment
FEDERAL-MOGUL: Names A. Haughie as Controller & M. Widgren as CAO
FRANKLIN MORTGAGE: Fitch Rates $9.8 Mil. Private Class With 'BB'
FREEDOM MEDICAL: Case Summary & 20 Largest Unsecured Creditors
GREIF INC: Moody's Raises Senior Implied Ratings From Ba3 To Ba2
GUILFORD MILLS: Ends Donlin Recano's Engagement as Claims Agent
HEADWATERS INC: Moody's Assigns SGL-2 Liquidity Rating
HOLLINGER INT'L: Outside Auditor Completes 2003 Audit
INGLES MARKETS: Plans to Appeal Nasdaq Delisting Notice
INTERNATIONAL SHIPHOLDING: Prices $40 Million Pref. Stock Offering
INTERPOOL INC: Earns $15.8 Million of Net Income in 3rd Quarter
INTERSTATE BAKERIES: Files Preliminary Unaudited FY 2004 Report
JOHN Q. HAMMONS: Agrees to Exclusive Merger Talks with Barcelo
J.P. MORGAN: Fitch Puts Low-B Ratings on Six Mortgage Certs.
KEWL CORPORATION: Accolade Affiliate Discloses 14% Equity Stake
KMART CORP: Settles Disputes with Shanri Holdings for $3,500,000
KMART CORP: GE Capital Credit Agreement Terminates Today
MERRILL LYNCH: Fitch Assigns Low-B Ratings on Private Offerings
NOMURA CBO: Fitch Maintains Junk Rating on $40.8 Mil. Notes
NOMURA CBO: Fitch Holds Junk Ratings on Two 1997-2 Classes
NORCROSS SAFETY: Moody's Assigns Caa1 Ratings to Senior PIK Notes
NORTH OAKLAND: Moody's Lowers Long-Term Bond Rating To Ba2
NRG ENERGY: Agrees to Register Shares Covering Resales
OFFICEMAX INC: Moody's Raises Senior Implied Rating to Ba1
PRESIDION CORP: Sold 25,000 Pref. Shares to Mercator for $2.5-Mil
PROXIM CORP: Updates Fourth Quarter 2004 Financial Guidance
RAINBOW LANES: Case Summary & 2 Largest Unsecured Creditors
RESIDENTIAL ACCREDIT: Fitch Assigns Low-B Ratings on 4 Classes
RIVERAIR LLC: Section 341(a) Meeting Slated for February 11
RIVERAIR LLC: Look for Bankruptcy Schedules on Jan. 13
ROGERS COMMS: Unit Buys 20% Interest in Sportsnet for C$45 Million
SAFETY-KLEEN: Creditor Trust's Third Quarter 2004 Status Report
SGP ACQUISITION: Committee Taps Monzack & Monaco as Counsel
SGP ACQUISITION: U.S. Trustee Picks 5-Member Creditors Committee
SOVEREIGN SPECIALTY: Henkel Completes $575 Million Acquisition
TEREX CORP: Moody's Affirms Senior Implied Ratings at B1
VORNADO OPERATING: Paying $2.85 Per Share Liquidating Distribution
WIND RIVER: Moody's Assigns Ratings to Five Classes of Notes
WHITING PETROLEUM: Moody's Assigns B2 Ratings to Senior Sub. Notes
WOMEN FIRST: Judge Walrath Confirms Amended Plan of Liquidation
WORLDCOM INC: Mexican American Wants to File Late Proof of Claim
WORLDCOM INC: Wants to Fix Date to Object to AOL's $193.7 M Claim
YUKOS OIL: Rosneft Illegally Seizes Yuganskneftegas
* BOND PRICING: For the week of January 3 - January 7, 2005
*********
ACCURIDE CORP: Moody's Retains Existing B2 Senior Implied Ratings
-----------------------------------------------------------------
Moody's Investors Service has affirmed the existing B2 senior
implied ratings of both Accuride Corporation and Transportation
Technologies Industries, Inc. following the announcement by
Accuride of its plans to acquire Transportation Technologies.
Consideration for the transaction is expected to be in the form of
common shares of Accuride, and indebtedness of the new group is
not expected to be significantly greater than the combined debt of
the two existing companies.
Both Accuride and Transportation Technologies have current senior
implied ratings of B2, which, in part, reflect their current
favorable business trends, highly leveraged capital structures,
customer concentration, and participation in a highly cyclical
industry. By acquiring Transportation Technologies, Accuride will
strengthen its product offerings while gaining additional revenues
and cash flow, but will also assume, and will plan on refinancing,
substantial existing indebtedness of Transportation Technologies.
As a result of the proposed transaction, Moody's expects
Accuride's pro forma combined debt to pro forma combined trailing
twelve months ("ttm") EBITDA leverage will slightly increase, its
pro forma combined EBIT margins and pro forma combined
EBIT/interest coverage would be slightly diluted, but would still
remain consistent with a B2 senior implied rating. Until the
transaction would close, Transportation Technologies' metrics and
capital structure would not change as a result of the
announcement. As a result, its senior implied rating has also
been affirmed at the B2 level.
Upon close of the transaction, and complete refinancing of the
Transportation Technologies debt at the Accuride level, the
Transportation Technologies ratings will be withdrawn. Both
companies have been benefiting from the strong cyclical recovery
in 2004 in the production of heavy and medium duty trucks and
related products in North America. This recovery is expected to
continue into 2005 and 2006. As a result, the outlook for both
firms has been affirmed as stable.
The transaction currently contemplates that all of Transportation
Technologies' senior bank and subordinated debt as well as all of
Accuride's senior bank debt would be refinanced by new syndicated
bank facilities. At September 30, 2004, Accuride had
approximately $489 million of total debt and trailing twelve
months EBITDA of approximately $95 million. At the same date,
Transportation Technologies had $336 million of total debt,
excluding its preferred stock issues, and trailing twelve months
EBITDA of approximately $52 million. On a preliminary basis,
combining the two entities, and assuming some use of cash and
incremental debt for related fees and expenses, Accuride's pro
forma debt/ ttm EBITDA is more likely to rise from the low 5 times
to the mid-5 times range.
As Transportation Technologies currently has lower EBIT margins
and lower EBIT/interest coverage ratios than Accuride, un-adjusted
margins and coverage ratios for Accuride on a pro forma combined
basis would be slightly diluted. However, these and other credit
metrics are likely to remain consistent with a B2 senior implied
rating. Recent improvements in profitability and cash flows at
both firms are likely to continue and may facilitate enhanced
credit statistics.
Accuride would benefit from having a broader product offering,
including strongly positioned brands and market shares, through
the addition of Transportation Technologies' portfolio of
businesses. Further, it would add some diversification through
Transportation Technologies' higher segment percentage in the
aftermarket and other industrial areas, and its prospective size
and scope may facilitate greater efficiencies in SG&A, R&D, and
integration of products.
However, there are no apparent product overlaps which would
facilitate significant rationalization economies, and a key driver
of future profitability and cash flows will remain the production
levels of heavy and medium duty trucks and related trailer
manufacturing in North America. These will continue as cyclical
industries and be subject to general economic conditions,
regulatory impact and interest rate levels.
The rating affirmation assumes that the proposed transaction is
completed in a fashion consistent with the issuance of Accuride
common stock to acquire Transportation Technologies shares, and no
significant increase in total indebtedness of the combined group.
To the extent that the actual capital structure differs from this
expectation, Moody's would reassess its rating opinion. In
addition, the proposed transaction will involve a planned
refinancing of a significant portion of the existing debt of
Accuride and TTI.
While affirming the existing senior implied ratings of both firms,
Moody's notes that the new capital structure of the combined
entity could incorporate different allocations of senior secured,
unsecured or subordinated debt, and/or different structural
features of individual instruments. Moody's will assess the
details of Accuride's new capital structure, as information is
available and take appropriate rating actions relating to any debt
securities created as part of the refinancing.
Accuride Corp. is North America's largest manufacturer and
supplier of wheels for the heavy/medium duty trucks and trailers
and offers both steel and forged aluminum products. It also
produces wheels for buses, commercial light trucks, pick-up
trucks, SUVs and vans. Its operations are in Kentucky; Ohio;
Pennsylvania; Ontario, Canada; and Monterey, Mexico.
Transportation Technologies manufacturers truck components for the
North American heavy/medium duty truck industries as well as bus
and specialty vehicles. Its truck portfolio includes wheel-end
components and assemblies, truck body and chassis parts, and
seating assemblies. Its products are marketed under the Gunite,
Imperial, Bostrom, Fabco and Brillion brand names.
ALDERWOODS GROUP: Amends Credit Pact & Redeems 12-1/4% Sr. Notes
----------------------------------------------------------------
Alderwoods Group, Inc. (NASDAQ:AWGI) amended its senior secured
Term Loan B due in 2009. The Company also issued a notice to
fully redeem its 12-1/4% senior unsecured notes due 2009. The
applicable interest rate on the Company's Term Loan B due in 2009
has been reduced by 75 basis points (bps), from LIBOR + 275 bps to
LIBOR + 200 bps.
Additionally, the Company has issued a notice to effect the
redemption of the remaining principal amount of $4.5 million of
the Company's 12-1/4% senior unsecured notes due 2009, at a
premium of approximately $0.28 million, plus accrued interest.
The Company anticipates the redemption will be effective
January 3, 2005.
Paul Houston, President and CEO stated, "These activities
demonstrate our continued commitment to improving the Company's
balance sheet and ongoing financial performance by reducing and
refinancing our long-term debt."
Company Overview
Alderwoods Group is the second largest operator of funeral homes
and cemeteries in North America, based upon total revenue and
number of locations. As of October 9, 2004, the Company operated
683 funeral homes, 110 cemeteries and 61 combination funeral home
and cemetery locations throughout North America. Of the Company's
total locations, 41 funeral homes, 34 cemeteries and five
combination funeral home and cemetery locations were held for sale
as of October 9, 2004. The Company provides funeral and cemetery
services and products on both an at-need and pre-need basis. In
support of the pre-need business, the Company operates insurance
subsidiaries that provide customers with a funding mechanism for
the pre-arrangement of funerals.
* * *
The Amendment to the Credit Agreement is dated as of December 3,
2004, among Alderwoods Group, Inc., Bank of America, N.A., as
Administrative Agent, and the other banks, financial institutions
and other institutional lenders party thereto.
Bank of America and its affiliates have provided and may in the
future provide certain financial advisory and investment banking
services in the ordinary course of business for the Company, for
which they receive customary fees and expenses.
A full-text copy of Amendment No. 3 to the Credit Agreement is
available at no charge at:
http://sec.gov/Archives/edgar/data/927914/000104746904036401/a2148144zex-10_1.htm
About Alderwoods Group
Alderwoods Group is the second largest operator of funeral homes
and cemeteries in North America, based upon total revenue and
number of locations. As of June 19, 2004, the Company operated
716 funeral homes, 130 cemeteries and 61 combination funeral home
and cemetery locations throughout North America. Of the Company's
total locations, 59 funeral homes, 53 cemeteries and four
combination funeral home and cemetery locations were held for
sales as of June 19, 2004. The Company provides funeral and
cemetery services and products on both an at-need and pre-need
basis. In support of the pre-need business, the Company operates
insurance subsidiaries that provide customers with a funding
mechanism for the pre-arrangement of funerals.
* * *
As previously reported in the Troubled Company Reporter on
July 27, 2004, Standard & Poor's Ratings Services it affirmed its
'B+' corporate credit rating on the funeral home and cemetery
operator Alderwoods Group, Inc., and assigned its 'B' debt rating
to the company's proposed $200 million senior unsecured notes due
in 2012. At the same time, Standard & Poor's also assigned its
'BB-' senior secured bank loan rating and its '1' recovery rating
to Alderwoods' proposed $75 million revolving credit facility,
which matures in 2008, and to its proposed term loan B, which
matures in 2009. The existing term loan had $242 million
outstanding at March 27, 2004, but will be increased in size. The
bank loan ratings indicate that Standard & Poor's expects a full
recovery of principal in the event of a default, based on an
assessment of the loan collateral package and estimated asset
values in a distressed default scenario. The company is expected
to use the proceeds from the new financings to redeem $320 million
of 12.25% senior unsecured notes, repay a $25 million subordinated
loan, and fund transaction costs. As of March 27, 2004, the
company had $614 million of debt outstanding.
The ratings outlook has been revised to positive from stable to
indicate that, in time, the ratings could be raised if Alderwoods
can continue to demonstrate improved operating performance and if
it can sustainably deleverage. The decline in leverage would give
the company additional financial capacity to weather adverse
competitive factors, such as periodic weaknesses in death rates
and rising consumer preference for lower cost death-care services.
"The low-speculative-grade ratings on funeral and cemetery
services provider Alderwoods Group, Inc., reflect its highly
leveraged financial profile, uncertainties related to the longer
term success of a new business plan, and the company's
vulnerability to periods of business weakness," said Standard &
Poor's credit analyst Jill Unferth. "These factors are mitigated
by the relatively favorable long-term predictability of the
funeral home and cemetery business."
ALOHA AIRGROUP: Files for Chapter 11 Protection in Hawaii
---------------------------------------------------------
Aloha Airgroup, Inc. and its principal operating subsidiary, Aloha
Airlines, Inc., have filed voluntary petitions for reorganization
under Chapter 11 of the U.S. Bankruptcy Code.
"It will be business as usual as we move forward to complete the
restructuring of our Company," said David A. Banmiller, Aloha's
president and chief executive officer. Mr. Banmiller went on to
say Aloha hopes to emerge from Chapter 11 as expeditiously as
possible.
"Meanwhile, it is important for the traveling public to know that
reservations for future travel will continue to be taken, tickets
will be honored, and flights will continue to operate as
scheduled."
Mr. Banmiller said: "Despite actions already taken to cut
unprofitable routes and reduce senior management by 36 percent,
Aloha must continue to pursue cost-reduction initiatives necessary
to offset higher fuel and operating expenses in what has become a
fiercely competitive market environment. If Aloha is to
effectively compete, we must align our aircraft lease rates to
market levels and match our expenses to those of competitors who
have already benefited from bankruptcy protection.
"The decision to file Chapter 11 was not easy for Aloha -- a
company with a proud history etched by a conscientious desire to
be a good corporate citizen and deeply rooted in the communities
we serve."
Mr. Banmiller emphasized: "With our valued customers and loyal
employees in mind, Aloha is focused on successfully emerging to
become a bigger, stronger and more competitive player in the
industry, so that we can continue to optimize our route network
and provide our high-quality service at affordable fares to
travelers in the cities we serve in Hawaii and North America."
Chapter 11 of the U.S. Bankruptcy Code enables companies to
reorganize under court supervision while they continue to operate
and meet their customers' needs. Aloha's restructuring efforts
will be led by Mr. Banmiller, a veteran airline executive with an
accomplished background specializing in airline financings and
turnaround ventures for "financially-challenged" companies. Mr.
Banmiller has a proven record of successfully taking other airline
companies such as Sun Country Airlines and Pan Am through Chapter
11 reorganization. Also, Mr. Banmiller has retained Giuliani
Capital Advisors to assist Aloha in exploring all strategic
alternatives to maximize value through the Chapter 11 process.
This is the first time in Aloha's 58-year history that the
privately held Honolulu-based company has sought bankruptcy
protection. Another Hawaii-based carrier, publicly held Hawaiian
Airlines, came under Chapter 11 in 1993 and again in March 2003.
Since the attacks of September 11, 2001, the nation's airlines
have faced what has been described as "the perfect storm" of
financial hardships. A general economic slowdown and a skittish
world travel market stiffened competition, which brought air fares
down and reduced revenue at a time when the price of fuel,
insurance and other fixed costs were skyrocketing. In Hawaii, the
prolonged slump in visitor arrivals from Asia and the increase in
Mainland flights going direct to the Neighbor Islands had a
compounding economic impact on Aloha, the state's largest provider
of inter-island air services.
In 2002, when a merger attempt was called off between Aloha and
Hawaiian airlines, and private capital was unavailable, Aloha
Airlines sought and received a loan guarantee from the federal Air
Transportation Stabilization Board in 2002. The federally backed
$45 million loan program enabled Aloha to upgrade systems and
pursue expansion plans. To date, Aloha has repaid approximately
half of the loan.
Rapidly mounting fuel and other operational costs sapped the
company's financial strength in 2004. In spite of an 8 percent
increase in enplanements in the airline's transpacific service,
Aloha was unable to post a profit in the third quarter of 2004 due
to higher fuel cost and lower ticket prices. Through November
2004, Aloha has paid $24 million more in fuel than over the same
period in 2003 representing a 48% increase in fuel expenses year-
over- year.
In announcing the airline's restructuring, Mr. Banmiller
emphasized that:
-- Aloha's top priority will be to provide travelers with
safe and consistently reliable and high-quality service.
-- Aloha's inter-island and transpacific flights will
continue to operate according to schedule.
-- All Aloha tickets and coupons will be honored.
Reservations, ticketing and refunds will continue as
normal.
-- AlohaPass members will still be able to earn and redeem
mileage and Aloha will continue to offer frequent flyers
the option of earning United Mileage Plus miles on Aloha
flights.
-- Transactions made with the Aloha AirAwards Card will
continue to earn bonus miles.
-- Vendors will be paid in the ordinary course for goods and
services provided after the filing date.
-- Aloha will continue to operate its air-cargo freight
service.
-- Aloha will continue to provide contracted services to
those airlines with signed agreements.
-- Code-sharing agreements with partner airlines will not be
affected by the filing.
Aloha is among Hawaii's top employers with a workforce of over
3,600 and an annual payroll of $113 million. Aloha's fleet
consists of 13 Next Generation Boeing 737-700s, 10 B737-200s,
three dedicated B737-200 freighters and one B737-200 QC.
Headquartered in Honolulu, Hawaii, Aloha Airgroup, Inc., provides
Hawaii with critical airlift for passengers flying between the
five major airports throughout the Islands and carries 85 percent
of the state's inter-island air freight business. Aloha offers
approximately 620 interisland flights per week between Honolulu,
Kahului, Kona, Hilo and Lihue. The Company and its subsidiary,
Aloha Airlines, Inc., filed for chapter 11 protection on Dec. 30,
2004 (Bankr. D. Haw. Case No. 04-03063). Alika L. Piper, Esq.,
Don Jeffrey Gelber, Esq., and Simon Klevansky, Esq., at Gelber
Gelber Ingersoll & Klevansky represent the Debtors in their
restructuring efforts. When the Debtor filed for protection from
its creditors, it estimated between $10 million to $50 million in
total assets and debts.
ALOHA AIRGROUP: Case Summary & 24 Largest Unsecured Creditors
-------------------------------------------------------------
Lead Debtor: Aloha Airgroup, Inc.
P.O. Box 30028
Honolulu, Hawaii 96820
Bankruptcy Case No.: 04-03063
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Aloha Airlines, Inc. 04-03064
Type of Business: The Debtor is an airline that provides air
carrier service connecting the five major
airports in the State of Hawaii.
see http://www.alohaairlines.com/
Chapter 11 Petition Date: December 30, 2004
Court: District of Hawaii (Honolulu)
Judge: Robert J. Faris
Debtors' Counsel: Alika L. Piper, Esq.
Don Jeffrey Gelber, Esq.
Simon Klevansky, Esq.
Gelber Gelber Ingersoll & Klevansky
745 Fort Street, Suite 1400
Honolulu, HI 96813
Tel: 808-524-0155
Fax: 808-531-6963
Estimated Assets Estimated Debts
---------------- ---------------
Aloha Airgroup, Inc. $10 M to $50 M $10 M to $50 M
Aloha Airlines, Inc. More than $100 M More than $100 M
A. Aloha Airgroup, Inc.'s 4 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Air Transportation Loan (guarantor) $24,124,000
Stabilization Board
c/o Steven J. Reisman, Esq.
Curtis, Mallet-Prevost, Colt
& Mosie LLP
101 Park Avenue
New York, NY 10178
First Hawaiian Bank Line of Credit $12,966,000
c/o John F. Lezak, Esq. (guarantor)
Kobayashi, Sugita & Goda
First Hawaiian Center
999 Bishop Street, Ste. 2600
Honolulu, HI 96813
First Hawaiian Bank Term Loan $8,531,000
c/o John F. Lezak, Esq.
Kobayashi, Sugita & Goda
First Hawaiian Center
999 Bishop Street, Ste. 2600
Honolulu, HI 96813
Hawaii National Bank Loan $973,000
45 N. King Street
Honolulu, HI 96817
B. Aloha Airlines, Inc.'s 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
First Hawaiian Bank Trade Debt $42,832,029
P.O. Box 1959 (credit card)
Honolulu, HI 96805
American Express Trade Debt $13,339,440
677 Ala Moana Boulevard,
Suite 1025
Honolulu, HI 96813
ARC Trade Debt $12,155,932
1530 Wilson Boulevard,
Suite 800
Arlington, VA 22209
Milici Valenti Ng Pack Inc. Trade Debt $3,215,931
999 Bishop Stree, 24th Floor
Honolulu, HI 96813
BSP Canada Trade Debt $1,843,952
c/o IATA
800 Place Victoria
P.O. Box 113
Montreal, Quebec
Canada H4Z 1M1
Glenn Zander Severance $1,500,000
4351 Frey's Farm Lane
Kennesaw, GA 30152
BSP Japan Trade Debt $1,440,141
c/o IATA
4th Floor Aviation Building
18-1, Shinbashi 1-Chome,
Minato-ku, Tokyo 105-000
Japan
Discover Trade Debt $1,429,978
2500 Lake Cook Road (credit card)
Riverwoods, IL 60015
State of Hawaii Trade Debt $1,397,090
400 Rodgers Boulevard,
Suite 700
Honolulu, HI 96819
Bank of Hawaii Pension $1,260,881
P.O. Box 3170
Honolulu, HI 96802
Pratt & Whitney Trade Debt $958,987
Air New Zealand
P.O. Box 14005
Christchurch Airport
New Zealand
Marsh USA Inc - HNL Trade Debt $459,324
P.O. Box 31000
Honolulu, HI 96849
Diner's Trade Debt $426,352
16526 West 78 Street (credit card)
PMB 352
Eden Prairie, MN 55346
Hawaii Medical Trade Debt $402,379
Service Association
P.O. Box 4720
Honolulu, HI 96812-4720
Boeing Commercial Trade Debt $360,080
Airplane Co.
P.O. Box 3707
Seattle, WA 98124
Honeywell Trade debt $345,859
1944 E. Sky Harbor Circle
Phoenix, AZ 85034
Air Canada Trade debt $332,199
P.O. Box 637
Winnepeg, Manitoba R3C 2K5
Canada
SITA Trade debt $309,762
112 Avenue Charles De Gualle
92522 Neuilly-Sur Seine
Cedex, France
Gate Gourmet Inc. Trade debt $300,221
P.O. Box 415000
Nashville, TN 37241
American Automobile Trade debt $278,034
1000 AAA Drive
Heathrow, FL 32746
ALPHARMA INC: Declares $0.45 Per Share Quarterly Cash Dividend
--------------------------------------------------------------
Alpharma Inc.'s Board of Directors has declared a regular
quarterly cash dividend of $0.045 per common share. The dividend
is payable Jan. 28, 2005, to all shareholders on record as of
Jan. 14, 2005.
About the Company
Alpharma Inc. (NYSE: ALO) -- http://www.alpharma.com/-- is a
global generic pharmaceutical company with leadership positions in
products for humans and animals. Uniquely positioned to expand
internationally, Alpharma is presently active in more than 60
countries. Alpharma is a leading manufacturer of generic
pharmaceutical products in the U.S., offering solid, liquid and
topical pharmaceuticals. It is also one of the largest suppliers
of generic solid dose pharmaceuticals in Europe, with a growing
presence in Southeast Asia. Alpharma is among the worlds leading
producers of several important pharmaceutical-grade bulk
antibiotics and is internationally recognized as a leading
provider of pharmaceutical products for poultry, swine and cattle.
* * *
As reported in the Troubled Company Reporter on Aug. 11, 2004,
Standard & Poor's Ratings Services lowered its corporate credit
and senior secured debt rating on generic drug company Alpharma
Inc. to 'B' from 'B+'. Standard & Poor's also lowered its senior
unsecured debt rating on Alpharma to 'B-' from 'B' and its
subordinated debt rating to 'CCC+' from 'B-'. The outlook remains
negative.
"The rating actions reflect the Fort Lee, N.J.-based Alpharma's
continued poor operating performance in its key U.S. generics
business, which has been exacerbated by ongoing FDA manufacturing
compliance issues and the company's reduced--but still
significant--debt load," said Standard & Poor's credit analyst
Arthur Wong. "These negative factors are only partially offset by
Alpharma's well-established positions in the human pharmaceutical
and animal health businesses."
ASSOCIATED ESTATES: S&P Junks $58 Million Preferred Stock Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC+' rating to
Associated Estates Realty Corp.'s recently issued $58 million 8.7%
class B preferred stock. At the same time, Standard & Poor's
affirmed its 'B+' corporate credit rating. The outlook remains
negative.
"AEC has made some meaningful strides improving its property level
operations and performance," said Standard & Poor's credit analyst
George Skoufis. "This has resulted in some stability at the
property level over the course of the year, evidenced by improved,
but still below-average, margins, at 52%, and more stable revenues
and physical occupancy at 92%. Despite some modest improvement,
AEC's markets remain soft, particularly its Ohio markets, which
make up roughly half of AEC's portfolio."
The ratings reflect a highly leveraged balance sheet with
historically weak cash flow coverage measures. The negative
outlook remains in place due to the uneven performance in the
company's markets, with particular weakness in its Midwest markets
where AEC is more heavily concentrated.
ASSOCIATED INDUSTRIES: S&P Junks Credit & Fin'l. Strength Ratings
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its counterparty credit
and financial strength ratings on Associated Industries Insurance
Co. (AIIC) to 'CCCpi' from 'Bpi'.
"The downgrade reflects AIIC's marginal capitalization,
significant liabilities growth without comparable asset growth,
weak operating performance, weak liquidity, and extremely high
geographical and product-line concentrations," explained Standard
& Poor's credit analyst Puiki Lok.
Based in Boca Raton, Florida, AIIC writes only workers'
compensation insurance and distributes its products primarily
through independent general agents. The company, which began
business in 1954, is licensed in Alabama, Florida, Georgia, and
Mississippi. The parent company of AIIC is Associated Industries
Insurance Services Inc.
The company is rated on a stand-alone basis.
Ratings with a 'pi' subscript are based on an analysis of an
insurer's published financial information and additional
information in the public domain. They do not reflect in-depth
meetings with an insurer's management and are therefore based on
less comprehensive information than ratings without a 'pi'
subscript. Ratings with a 'pi' subscript are reviewed annually
based on a new year's financial statements, but may be reviewed on
an interim basis if a major event that may affect the insurer's
financial security occurs. Ratings with a 'pi' subscript are not
subject to potential CreditWatch listings.
ATA AIRLINES: Gets $40M DIP Funding from Bank of Indiana
--------------------------------------------------------
As previously reported, ATA Holdings Corp. and ATA Airlines, Inc.,
ask the United States Bankruptcy Court for the Southern District
of Indiana for authority to obtain postpetition financing from the
National City Bank of Indiana in the form of a renewal or
extension of letters of credit issued by the Bank. The loan will
be governed by the terms of the parties' existing credit agreement
as amended, all related loan documents and a recent stipulation
the parties entered into.
* * *
Judge Lorch allows ATA Holdings Corp. and ATA Airlines, Inc., to
obtain postpetition financing from the National City Bank of
Indiana. The automatic stay imposed under Section 362 of the
Bankruptcy Code is lifted to permit the Debtors to (i) grant
security interests and liens contemplated by the Credit
Agreement, the Security Agreement and the Deposit Account Control
Agreement, and (ii) perform all of their obligations thereunder or
under the Loan Documents.
Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA
Holdings Corp. -- http://www.ata.com/-- is the nation's 10th
largest passenger carrier (based on revenue passenger miles) and
one of the nation's largest low-fare carriers. ATA has one of the
youngest, most fuel-efficient fleets among the major carriers,
featuring the new Boeing 737-800 and 757-300 aircraft. The
airline operates significant scheduled service from Chicago-
Midway, Hawaii, Indianapolis, New York and San Francisco to over
40 business and vacation destinations. Stock of parent company,
ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The
Company and its debtor-affiliates filed for chapter 11 protection
on Oct. 26, 2004 (Bankr. S.D. Ind. Case No. 04-19866, 04-19868
through 04-19874). Terry E. Hall, Esq., at Baker & Daniels,
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
$745,159,000 in total assets and $940,521,000 in total debts.
(ATA Airlines Bankruptcy News, Issue No. 10; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ATA AIRLINES: Repays $15.5 Million to Indiana, Indianapolis
-----------------------------------------------------------
ATA Airlines, Inc., the principal subsidiary of ATA Holdings Corp.
(OTC: ATAHQ.PK), repaid in full on Dec. 28, 2004, the
$15.5 million in financing provided by the Indiana Transportation
Finance Authority. The financing was granted with support from
the City of Indianapolis. ATA also repaid fees and expenses
incurred by the ITFA. Over $50 million in assets secured the
financing. The financing, which was secured by over $50 million
in assets, provided additional liquidity ensuring ATA could
continue normal business operations while it proceeded through its
restructuring.
"ATA Airlines and its employees are thankful to both Governor Joe
Kernan and Mayor Bart Peterson for their continued dedication and
financial backing to keep Indy's hometown airline flying.
Furthermore, ATA is grateful to Indiana residents around the state
who endorse our product every day by booking ATA's flights," said
George Mikelsons, ATA Holdings Corp. Chairman and Chief Executive
Officer.
"This funding helped us cross a critical threshold in the
restructuring process. With the help of Indianapolis and Indiana,
we were able to achieve the milestone of closing a comprehensive
financial transaction and code share agreement with Southwest
Airlines. ATA looks forward to continuing its relationship with
the City and State," said Gilbert Viets, Executive Vice President
and Chief Restructuring Officer.
Under the transaction, ATA sold property consisting primarily of
aircraft parts, free and clear of any liens to the ITFA. The ITFA
in turn leased that property to the Indianapolis Airport Authority
and the IAA subleased the property to ATA. ATA was obligated to
repurchase the property upon the earlier of the closing of a
transaction to transfer its Chicago-Midway Airport operations,
expected to take place in December of 2004, or February 15, 2005.
As part of the repurchase of the property, ATA reimbursed the ITFA
for interest on the funds it provided, as well as the ITFA's
expenses. Southwest Airlines recently provided replacement
debtor-in-possession financing to ATA in the form of a $40 million
loan.
Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA
Holdings Corp. -- http://www.ata.com/-- is the nation's 10th
largest passenger carrier (based on revenue passenger miles) and
one of the nation's largest low-fare carriers. ATA has one of the
youngest, most fuel-efficient fleets among the major carriers,
featuring the new Boeing 737-800 and 757-300 aircraft. The
airline operates significant scheduled service from Chicago-
Midway, Hawaii, Indianapolis, New York and San Francisco to over
40 business and vacation destinations. Stock of parent company,
ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The
Company and its debtor-affiliates filed for chapter 11 protection
on Oct. 26, 2004 (Bankr. S.D. Ind. Case No. 04-19866, 04-19868
through 04-19874). Terry E. Hall, Esq., at Baker & Daniels,
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
$745,159,000 in total assets and $940,521,000 in total debts.
BANC OF AMERICA: Fitch Puts Low-B Ratings on 3 Mortgage Certs.
-------------------------------------------------------------
Banc of America Mortgage Securities, Inc.'s mortgage
pass-through certificates, series 2004-11, are rated as:
Groups 1, 3, and 4 certificates:
-- $416,091,834 classes 1-A-1 through 1-A-16, 1-A-R, 1-A-
MR, 1-A-LR, 3-A-1, 20-IO, 4-A-1, 15-IO, and 15-PO
(groups 1, 3, and 4 senior certificates) 'AAA';
-- $7,311,000 class X-B-1 'AA';
-- $1,935,000 class X-B-2 'A';
-- $1,290,000 class X-B-3 'BBB';
-- $645,000 class X-B-4 'BB';
-- $645,000 class X-B-5 'B'.
Group 2 certificates:
-- $122,127,000 classes 2-A-1 and 2-A-2 (group 2 senior
certificates) 'AAA';
-- $449,000 class 2-B-3 'BBB';
-- $321,000 class 2-B-4 'BB';
Group 5 certificates:
-- $79,554,003 classes 5-A-1, 5-IO, and 5-PO (group 5
senior certificates) 'AAA';
Certificates of groups 1 and 2:
-- Class 30-IO (consisting of classes 1-30-IO and 2-30-IO
components) 'AAA';
Certificates of groups 1, 2, and 3:
-- $3,684,561 class X-PO (consisting of classes 1-X-PO, 2-
X-PO, and 3-X-PO components) 'AAA'.
The 'AAA' rating on the groups 1, 3, and 4 senior certificates
reflects the 2.90% subordination provided by:
* the 1.70% class X-B-1,
* the 0.45% class X-B-2,
* the 0.30% class X-B-3,
* the 0.15% privately offered class X-B-4,
* the 0.15% privately offered class X-B-5, and
* the 0.15% privately offered class X-B-6.
Classes rated based on their respective subordination:
-- X-B-1 'AA',
-- X-B-2 'A',
-- X-B-3 'BBB',
-- X-B-4 'BB', and
-- X-B-5 'B'.
Class X-B-6 is not rated by Fitch.
The 'AAA' rating on the group 2 senior certificates reflects the
3.10% subordination provided by:
* the 1.60% class 2-B-1,
* the 0.55% class 2-B-2,
* the 0.35% class 2-B-3 certificates,
* the privately offered 0.25% class 2-B-4,
* the privately offered 0.20% class 2-B-5, and
* the privately offered 0.15% class 2-B-6.
Classes rated based on their subordination:
-- 2-B-3 'BBB', and
-- 2-B-4 'BB'.
Classes 2-B-1, 2-B-2, 2-B-5, and 2-B-6 are not rated by Fitch.
The 'AAA' rating on the group 5 senior certificates reflects the
2.80% subordination provided by:
* the 1.70% class 5-B-1,
* the 0.40% class 5-B-2,
* the 0.25% class 5-B-3 certificates,
* the privately offered 0.15% class 5-B-4,
* the privately offered 0.20% class 5-B-5, and
* the privately offered 0.10% class 5-B-6.
Classes 5-B-1 through 5-B-6 are not rated by Fitch.
The ratings also reflect the quality of the underlying collateral,
the primary servicing capabilities of Bank of America Mortgage,
Inc., rated 'RPS1' by Fitch, and Fitch's confidence in the
integrity of the legal and financial structure of the transaction.
The transaction is secured by five pools of mortgage loans. Loan
groups 1, 3, and 4, respectively, collateralize the groups 1, 3
and 4 certificates. Loan group 2 respectively collateralizes the
group 2 certificates. Loan group 5 respectively collateralizes
the group 5 certificates.
The groups 1, 3, and 4 collateral consists of 800 recently
originated, conventional, fixed-rate, fully amortizing, first
lien, one- to four-family residential mortgage loans with original
terms to stated maturity -- WAM -- ranging from 120 to 360 months.
The weighted average original loan-to-value ratio (OLTV) for the
mortgage loans in the pool is approximately 68.89%. The average
balance of the mortgage loans is $537,466 and the weighted average
coupon -- WAC -- of the loans is 5.812%. The weighted average
FICO credit score for the group is 744. Second homes comprise
7.47% and there are no investor-occupied properties. Rate/Term
and cash-out refinances represent 36.06% and 20.77%, respectively,
of the groups 1, 3, and 4 mortgage loans.
The states that represent the largest geographic concentration of
mortgaged properties are:
* California (48.17%),
* Florida (6.51%), and
* Illinois (5.69%).
All other states comprise fewer than 5% of properties in the
group.
The group 2 collateral consists of 229 recently originated,
conventional, fixed-rate, fully amortizing, first lien, one- to
two-family residential mortgage loans with original WAM ranging
from 240 to 360 months. The weighted average OLTV for the
mortgage loans in the pool is approximately 67.12%. The average
balance of the mortgage loans is $560,622 and the WAC of the loans
is 5.965%. The weighted average FICO credit score for the group
is 748. Second homes comprise 4.52% and there are no investor-
occupied properties. Rate/Term and cash-out refinances represent
31.72% and 26.67%, respectively, of the group 2 mortgage loans.
All of the mortgaged properties in group 2 are located in the
state of California.
The group 5 collateral consists of 180 seasoned, conventional,
fixed-rate, fully amortizing, first lien, one- to four-family
residential mortgage loans with original WAM ranging from 120 to
360 months. The weighted average OLTV for the mortgage loans in
the pool is approximately 65.21%. The average balance of the
mortgage loans is $454,699 and the WAC of the loans is 6.713%. The
weighted average FICO credit score for the group is 733. Second
homes and investor-occupied properties comprise 14.01% and 1.44%,
respectively. Rate/Term and cash-out refinances represent 46.57%
and 23.19%, respectively.
The states that represent the largest geographic concentration of
mortgaged properties are:
* California (42.28%),
* Florida (14.13%),
* North Carolina (7.00%) and
* Texas (6.93%).
All other states comprise fewer than 5% of properties in the
group.
None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws. For additional information on
Fitch's rating criteria regarding predatory lending legislation,
please see the press release issued May 1, 2003, entitled 'Fitch
Revises Rating Criteria in Wake of Predatory Lending Legislation,'
available on the Fitch Ratings web site at
http://www.fitchratings.com/
Banc of America Mortgage Securities, Inc., deposited the loans in
the trust, which issued the certificates, representing undivided
beneficial ownership in the trust. For federal income tax
purposes, elections will be made to treat the trust as three
separate real estate mortgage investment conduits -- REMICs. Wells
Fargo Bank, National Association, will act as trustee.
BJ SERVICES: Reporting Delays Trigger Default under $400M Revolver
------------------------------------------------------------------
BJ Services Company (NYSE: BJS; PCX; CBOE) said it will continue
to delay the filing of its Annual Report on Form 10-K for the
fiscal year ended Sept. 30, 2004. The extended deadline for
filing the Form 10-K expired on Wednesday, Dec. 29, 2004.
Chairman, President and CEO Bill Stewart commented, "The Company
is conducting a review of accrued liabilities and certain other
balance sheet accounts for the Asia Pacific Region and a review of
certain tax records in the region and hopes to finish in time to
file our 2004 Report on Form 10-K by Jan. 28, 2005. At present we
do not expect material adjustments other than the $9.0 million
income referenced below. If we can meet that filing schedule, we
will hold our annual meeting of stockholders on March 24, 2005.
Today we have set a record date of February 7, 2005, for that
meeting."
As previously reported, in October 2004 the Company received a
report from a whistleblower alleging that its Asia Pacific Region
Controller had misappropriated Company funds in fiscal 2001. The
Company began an internal investigation into the misappropriation
and whether other inappropriate actions occurred in the Region.
The Region Controller admitted to multiple misappropriations
during a 30-month period ended April 2002. The misappropriations
identified to date total approximately $9.0 million and have been
repaid to the Company. The misappropriated funds were recorded as
an expense in the Consolidated Statement of Operations in prior
periods and, therefore, no restatement is required. As a result,
the Company expects to record $9.0 million as Other Income in the
Consolidated Condensed Statement of Operations for the quarter
ending December 31, 2004. The Company is conducting a review of
accrued liabilities and certain other balance sheet accounts for
the Asia Pacific Region and a review of certain tax records in the
region before filing its Form 10-K. As the Company continues its
investigation, further adjustments may be recorded in the
Consolidated Statement of Operations, but are not believed to be
material at this time.
The Company also received whistleblower allegations that illegal
payments to foreign officials were made in the Asia Pacific
Region. The Audit Committee of the Board of Directors engaged
independent counsel to conduct a separate investigation to
determine whether any such illegal payments were made. That
investigation, which is also continuing, has found information
indicating that illegal payments to government officials in the
Asia Pacific Region aggregating in excess of $1.5 million may have
been made over several years.
Additionally, the Company intends to give notice of default to the
lenders under its $400 million revolving credit facility for
failing to comply with its covenants to timely provide audited
financial statements. Similar default notices will be due to
other lenders on January 13, 2005 if the Form 10-K has not been
filed by that date. However, under the Company's debt
instruments, no Event of Default permitting acceleration of
indebtedness or termination of credit facilities by the lenders
could occur as a result of the delay in filing the Form 10-K
unless the default continues beyond January 28, 2005. The Company
has no borrowings under its $400 million Revolving Credit Facility
and has cash and cash equivalents and short-term investments in
excess of its other indebtedness.
About the Company
BJ Services Company is a leading provider of pressure pumping and
other oilfield services to the petroleum industry.
BOWNE & CO: Moody's Upgrades All Ratings & Says Outlook Positive
----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings for Bowne & Co.
Inc. Details of the rating action are:
-- $75 million Convertible Subordinated Debentures due 2033 --
to B2 from Caa1
-- Senior Implied Rating -- to Ba3 from B1
-- Issuer Rating -- to B1 from B2
-- Rating Outlook -- Stable
This action follows the company's announcement that it has sold
its document outsourcing business of Bowne Business Solutions or
"BBS" to Williams Lea Group Limited for cash consideration of $180
million. The ratings upgrade concludes the review for possible
upgrade, which was initiated by Moody's on October 8, 2004.
The upgrade reflects a meaningful reduction in Bowne's leverage
proforma for the asset sale and general improvement in the
company's operating performance and cash flow generation
(especially in the first half of 2004), which resulted in a
repayment of debt under its revolving credit facility. Additional
debt reduction, following the completion of its Private Placement
Notes redemption, is expected to result in further deleveraging
over the forward rating horizon.
The ratings continue to reflect Bowne's dependence upon the
financial printing services sector (especially the volatile
transactional financial print market), the limited growth
potential of its non-transactional financial print business and
low growth in its globalization businesses. However, the ratings
are supported by Bowne's low leverage, its excellent reputation,
strong customer retention and market share, and management's track
record of financial prudence.
After an estimated $30 million in taxes, Bowne received $150
million in net proceeds from the sale of BBS. Bowne has already
used a portion of the proceeds to repurchase approximately $40
million of its outstanding common shares. In addition the company
has announced a $35 million share repurchase program over the next
nine to twelve months. Finally Bowne has given notice of
redemption to holders of its $60 million Private Placement Notes,
which will additionally require payment of accrued interest and a
make-whole amount totaling approximately $10 million.
Pro forma for the proposed note redemption, Bowne's long-term debt
will decline to approximately $77 million ($60 million net of
cash) at the end of September 2004, versus $141 million at the end
of 2003. The reduction of debt is expected to reduce leverage to
approximately 1.4 times debt to EBITDA by the end of 2004, down
from approximately 4.0 times at the end of September 2003. Net of
cash (but excluding cash earmarked for the share repurchase
program), Moody's expects that pro forma leverage will decline to
0.8X times by year- end 2004.
The stable outlook reflects a stabilization in Bowne's operating
environment which has resulted from a broad recovery in capital
markets activity.
The two-notch upgrade of the convertible subordinated notes
reflects the significant reduction in senior debt (zero currently
outstanding under the revolver, and planned full redemption of the
Private Placement Notes) which virtually removes all debt that is
currently senior in ranking relative to the subordinated notes,
from Bowne's balance sheet.
A positive outlook and/or further ratings upgrade could follow
Bowne's prospective utilization of future free cash flow to make
additional permanent repayments of debt. Of note, ratings lift
from operational improvement is somewhat handicapped by the
vulnerability of Bowne's free cash flow to the vicissitudes of the
capital market activity. Conversely, ratings could be lowered or
the outlook could be revised to negative if Bowne experiences a
slump in transactional financial print business, similar to that
endured during the 2001-2003 time-frame.
Neither Bowne's $115 million senior secured bank credit facility
nor its $75 million privately placed senior unsecured notes are
rated by Moody's.
Bowne & Co., a global provider of document management solutions,
is headquartered in New York City. The company recorded sales of
approximately $1 billion in 2003.
BROADBAND OFC: Selling 792,000 Shared of Broadsoft Common Stock
---------------------------------------------------------------
Broadband Office, Inc., seeks authority from the U.S. Bankruptcy
Court for the District of Delaware to sell its 792,000 shares of
common stock at Broadsoft, Inc., free and clear of liens, claims
and encumbrances.
Broadsoft offered to repurchase all of the shares for $237,600.
The Debtor first offered the stock for sale to its creditor --
KPCB Holdings, Inc. -- which asserts a perfected first-priority
lien on the Broadsoft stock, but KPCB declined.
According to the Debtor, the sale of the Broadsoft shares
represents the estate's best opportunity to realize value for a
minority common stock interest in a privately-held company.
Headquartered in San Mateo, California, Broadband Office, Inc.,
filed for chapter 11 protection on May 9, 2001 (Bankr. D. Del.
Case No. 01-1720). BBO is now a non-operating company in the
process of liquidating its assets. Adam Hiller, Esq., and David
M. Fournier, Esq., at Pepper Hamilton LLP represent the company.
When the Company filed for protection from its creditors, it
listed $100 million in assets and debts.
BUYER'S GROUP: Case Summary & 2 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Buyer's Group, L.L.C.
8613 South 7th Avenue
Broken Arrow, Oklahoma 74011
Bankruptcy Case No.: 04-17401
Type of Business: The Debtor manages and operates companies which
acquire real estate.
Chapter 11 Petition Date: December 28, 2004
Court: Northern District of Oklahoma (Tulsa)
Judge: Terrence L. Michael
Debtor's Counsel: John William Cannon, Esq.
Jones, Givens, Gotcher & Bogan
15 East 5th Street, Suite 3800
Tulsa, OK 74103
Tel: 918-581-8200
Total Assets: $2,123,500
Total Debts: $2,913,000
Debtor's 2 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
James Pharr Mortgage $2,533,000
P.O. Box 1208 Value of Collateral:
Sapulpa OK 74067 $2,123,510
Net Unsecured:
$409,490
James Pharr Loan $380,000
P.O. Box 1208
Sapulpa OK 74067
CATHOLIC CHURCH: Portland Hires Mesirow Financial as Advisor
------------------------------------------------------------
As previously reported, the U.S. Bankruptcy Court for the
District of Oregon authorized the Archdiocese of Portland to
employ KPMG LLP to perform accounting, tax and financial advisory
services for the Archdiocese of Portland in Oregon on August 16,
2004. KPMG LLP undertook the responsibilities described in the
KPMG Retention Order and rendered financial advisory services as
requested by Portland within the scope of its engagement.
However, on September 16, 2004, KPMG LLP sold its Corporate
Recovery group to Mesirow Financial Consulting, LLC, a wholly
owned subsidiary of Mesirow Financial Holdings, Inc. MFC was
formed for the purpose of acquiring KPMG Corporate Recovery.
Effective as of the September 16, 2004, closing date, all of the
members of KPMG Corporate Recovery who have been providing
financial advisory services to Portland became employees of MFC
and have continued to provide those services to Portland.
To assure continuity in the rendition of financial advisory
services provided by those professionals at KPMG LLP prior to the
Closing Date and to obtain the requisite services, Portland asks
Judge Perris for permission to employ MFC, nunc pro tunc to
September 16, 2004.
Leonard Vuylsteke, Portland's Director of Financial Services,
explains that Portland elected to retain MFC as its financial
advisors because its professionals and staff have diverse
experience and extensive knowledge in the fields of bankruptcy and
restructuring. By virtue of their prior engagement while at
KPMG LLP, these professionals and staff are familiar with
Portland's business, books, records and financial information as
well as the events occurring in this case. Also, retaining MFC is
by far the most efficient and cost effective manner in which
Portland may obtain the requisite financial advisory services.
MFC will provide substantially the same financial advisory
services previously performed by KPMG LLP and authorized under the
KPMG Retention Order. This includes:
(a) Assisting in the preparation and review of reports or
filings as required by the Bankruptcy Court or the Office
of the United States Trustee, including, but not limited
to, schedules of assets and liabilities, statement of
financial affairs, and monthly operating reports;
(b) Reviewing of and assisting in the preparation of financial
information for distribution to creditors and other
parties-in-interest, including, but not limited to,
analyses of cash receipts and disbursements, financial
statement items and proposed or potential transactions for
which Bankruptcy Court approval is sought;
(c) Assisting with analysis, tracking and reporting regarding
cash collateral and DIP financing arrangements and
budgets;
(d) Assisting with implementation of bankruptcy accounting
procedures as required by the Bankruptcy Code and the
Generally Accepted Accounting Principles, including, but
not limited to, Statement of Position 907;
(e) Evaluating potential employee retention and severance
plans;
(f) Assisting with the identification and implementation of
potential cost containment opportunities;
(g) Assisting with the identification and implementation of
potential asset redeployment opportunities;
(h) Analyzing assumption and rejection issues regarding
executory contracts and leases;
(i) Assisting in the preparation of business plans and
analysis of Portland's financial condition;
(j) Assisting in the evaluation of reorganization strategy and
alternatives available to Portland;
(k) Reviewing and giving an opinion on Portland's financial
projections and assumptions;
(l) Assisting Portland in the development of enterprise, asset
and liquidation valuations;
(m) Assisting in the preparation of documents necessary for
confirmation, including, but not limited to, financial and
other information contained in the plan of reorganization
and disclosure statement;
(n) Advising and assisting Portland in negotiations and
meetings with bank lenders, creditors and any formal or
informal committees;
(o) Advising and assisting on the tax consequences of proposed
plans of reorganization;
(p) Assisting with claims resolution procedures, including,
but not limited to, analyses of creditors' claims by type
and entity and claims estimation procedures;
(q) Providing forensic investigation, litigation consulting
services and expert witness testimony regarding avoidance
actions or other matters; and
(r) Providing other functions as requested by Portland or its
counsel to assist it in its business and reorganization.
MFC will also assist Portland in obtaining exit or other
financing.
Mr. Vuylsteke clarifies that Portland will continue to employ
KPMG LLP to provide accounting and tax advisory services. MFC
will coordinate any services performed at Portland's request with
the services of KPMG LLP, as appropriate, to avoid duplication of
effort.
MFC's compensation for professional services will be based on
hours actually expended by each assigned staff member multiplied
by the applicable hourly billing rate. Portland agrees to
compensate MFC for professional services rendered at its normal
and customary hourly rates, less a 30% discount.
The normal and customary hourly rates for the services to be
rendered by MFC are:
Senior Managing Directors/Managing Directors $590 - $650
Senior Vice Presidents $480 - $570
Vice Presidents $390 - $450
Senior Associates $300 - $360
Associates $l90 - $270
Paraprofessionals $140
Judge Perris has ordered that KPMG LLP's fees will not exceed
$50,000 without further Court order prior to the time as the
services are provided. Given that MFC is a separate and distinct
entity from KPMG LLP, Mr. Vuylsteke says MFC assumes that it is
not subject to the $50,000 cap established for KPMG LLP's fees.
MFC currently anticipates performing discrete projects for
Portland, as requested. Mr. Vuylsteke assures Judge Perris that
the Court and all parties-in-interest will have an opportunity to
review the reasonableness of MFC's fees given that MFC will be
filing appropriate applications with the Court. MFC has not
received a retainer from Portland.
Melissa Kibler Knoll, Senior Managing Director at MFC, attests
that MFC is a "disinterested person" as that term is defined in
Section 101(14) of the Bankruptcy Code, as modified by Section
1107(b). MFC does not hold or represent an interest adverse to
Portland's estate that would impair MFC's ability to objectively
perform professional services.
* * *
Judge Perris authorizes Portland to employ Mesirow Financial
Consulting, LLC, as financial advisors, nunc pro tunc to
September 16, 2004. Judge Perris rules that the total
compensation for MFC is subject to the limitations set forth on
the KPMG Employment Order, including the total compensation
limitation of $50,000.
The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.
Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman
Shank LLP, represent the Portland Archdiocese in its restructuring
efforts. In its Schedules of Assets and Liabilities filed with
the Court on July 30, 2004, the Portland Archdiocese reports
$19,251,558 in assets and $373,015,566 in liabilities.
The Roman Catholic Church of the Diocese of Tucson filed for
chapter 11 protection (Bankr. D. Ariz. Case No. 04-04721) on
September 20, 2004, and delivered a plan of reorganization to the
Court on the same day. Susan G. Boswell, Esq., and Kasey C. Nye,
Esq., at Quarles & Brady Streich Lang LLP, represent the Tucson
Diocese.
The Roman Catholic Church of the Diocese of Spokane filed for
chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on
Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen,
Coffin, Brooke & Miller, LLP, represents the Spokane Archdiocese
in its restructuring efforts. When the Debtor filed for
protection from its creditors, it listed $11,162,938 in total
assets and $81,364,055 in total debts. (Catholic Church Bankruptcy
News, Issue No. 13; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
CBA COMMERCIAL: Fitch Puts 'BB' Rating on $770,000 2004-1 Cert.
---------------------------------------------------------------
Fitch Ratings assigns these ratings to the CBA Commercial, series
2004-1, commercial mortgage pass-through certificates:
-- $50,000,000 class A-1, 'AAA';
-- $21,850,000 class A-2, 'AAA';
-- $11,810,000 class A-3, 'AAA';
-- $102,025,949 class IO*, 'AAA';
-- $2,930,000 class M-1, 'AA';
-- $3,570,000 class M-2, 'A';
-- $3,700,000 class M-3, 'BBB';
-- $3,190,000 class M-4 'NR' (Not Rated);
-- $770,000 class M-5, 'BB';
-- $2,930,000 class M-6, 'NR';
-- $890,000 class M-7, 'NR';
-- $385,949 class M-8, 'NR'.
*Notional Amount and Interest only.
All classes are privately placed pursuant to rule 144A of the
Securities Act of 1933. The certificates represent beneficial
ownership interest in the trust, primary assets of which are 265
fixed- and adjustable-rate loans having an aggregate principal
balance of approximately $102,025,949, as of the cutoff date.
For a detailed description of Fitch's rating analysis, please see
the report titled 'CBA Commercial, Series 2004-1' dated Dec. 17,
2004, available on Fitch's web site at
http://www.fitchratings.com/
CHESAPEAKE ENERGY: Accepts Tendered 8.375% Sr. Notes for Payment
----------------------------------------------------------------
Chesapeake Energy Corporation (NYSE: CHK) has completed its cash
tender offer and consent solicitation for any and all of its
$209,815,000 aggregate principal amount of 8.375% Senior Notes due
2008. The Offer expired at 12:00 midnight EST on Tuesday, Dec.
28, 2004. As of the Expiration Date, $190,825,000 aggregate
principal amount of Notes were tendered which represented
approximately 91% of the outstanding aggregate principal amount of
the Notes.
The Company has accepted for payment and paid for all Notes
validly tendered on or prior to the Expiration Date, including all
Notes tendered on or prior to the Dec. 13, 2004 consent date. In
connection with the Offer, the Company received the required
consents from holders of the Notes to approve proposed amendments
to the indenture governing the Notes to eliminate substantially
all of the restrictive covenants of the indenture. Adoption of
the Proposed Amendments required the consent of holders of at
least a majority of the aggregate principal amount of the
outstanding Notes.
The terms of the Offer are described in the Company's Offer to
Purchase and Consent Solicitation Statement dated November 30,
2004, copies of which may be obtained from MacKenzie Partners,
Inc., the information agent for the Offer, at (800) 322-2885 (US
toll free) and (212) 929-5500 (collect).
The Company engaged Deutsche Bank Securities Inc. to act as dealer
manager and solicitation agent in connection with the Offer.
Questions regarding the Offer may be directed to Deutsche Bank
Securities Inc., High Yield Capital Markets, at (800) 553-2826 (US
toll-free) and (212) 250-7466 (collect).
About the Company
Chesapeake Energy Corporation -- http://www.chkenergy.com/-- is
the sixth largest independent producer of natural gas in the U.S.
Headquartered in Oklahoma City, the company's operations are
focused on exploratory and developmental drilling and producing
property acquisitions in the Mid-Continent, Permian Basin, South
Texas, Texas Gulf Coast and Ark-La-Tex regions of the United
States.
* * *
As reported in the Troubled Company Reporter on Dec. 3, 2004,
Moody's assigned a Ba3 rating to Chesapeake Energy's $600 million
of 10-year senior unsecured notes, affirmed its Ba3 senior
unsecured note, Ba3 senior implied, and SGL-2 liquidity ratings,
and moved the outlook to positive from stable.
DELTA AIR: Registers 9.8 Million Common Shares with SEC
-------------------------------------------------------
Delta Air Lines, Inc. (NYSE: DAL) has filed a registration
statement on Form S-1 with the Securities and Exchange Commission
relating to its outstanding 8.00% Senior Notes due 2007 and
9,842,778 shares of its common stock, which were originally issued
in private placements in November 2004. This notice is being
issued pursuant to the registration rights agreements entered into
in connection with the private placements to provide holders of
such securities the opportunity to have their notes or shares
included in the registration statement.
When the SEC declares the registration statement effective, the
holders of the notes will be able to resell the notes and the
common shares issuable upon conversion of those notes. The
company will not receive any of the proceeds from any resale of
the notes or the underlying common stock.
The registration statement relating to these securities has been
filed with the SEC but has not yet become effective. These
securities may not be sold nor may offers to buy be accepted prior
to the time the registration statement becomes effective. This
press release shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of
these securities in any state in which the solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws in such state.
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.
DOBSON COMMS: Purchases RFB Cellular Assets in Northern Michigan
----------------------------------------------------------------
Dobson Communications Corporation (Nasdaq:DCEL), through its
operating subsidiary, Dobson Cellular Systems, Inc., has acquired
the non-license wireless assets of RFB Cellular, Inc., and certain
affiliates in Michigan in a sale pursuant to Bankruptcy Code
sections 363 and 365.
Dobson will operate under a spectrum lease with RFB pending
regulatory approval of the license assignments for the 850 MHz
cellular licenses in Michigan 2 and 4 Rural Service Areas (RSAs)
and the 1900 MHz PCS licenses in Basic Trading Areas for Alpena,
Escanaba, Mt. Pleasant, Petoskey, Saginaw, Sault Suite Marie, and
Traverse City. Dobson's acquisition of the licenses covering the
leased spectrum is expected to close in 2005, after FCC approval.
The total purchase price for all acquired assets, including FCC
licenses, was $29.3 million.
The newly acquired RSAs cover a total population (POPs) of
approximately 256,000. Excluding overlap with markets already
served by Dobson, the RFB assets add an incremental 185,000 POPs
to Dobson service areas in northern Michigan. These markets
include Mackinac Island, Interstate 75 from the Straits of
Mackinac to the Canadian border, and the cities of Sault Suite
Marie, Escanaba and Manistique. Dobson already served all or
portions of Michigan 1, 3, 4, 5, 6, 7 and 10 RSAs, as well as the
Muskegon Metropolitan Service Area.
RFB operated both CDMA and analog technologies. Dobson plans to
upgrade the RFB network with GSM/GPRS/EDGE technology.
Dobson Cellular Systems will market its products and services
throughout northern Michigan under the Cellular One(r) brand.
Dobson acquired approximately 25,900 subscribers, of which more
than 90 percent are on postpaid calling plans. Dobson also
acquired seven retail stores and 78 cell site locations, of which
40 are leased and 38 are owned.
"This represents further progress in increasing our strategic
coverage footprint in Michigan. The acquisition enhances the
value of calling plans that we sell in the state and enables us to
reduce roaming expenses statewide," said Everett Dobson, chief
executive officer and president.
Dobson plans to fund the purchase primarily with cash raised from
the recent senior secured notes offering.
About Dobson Communications
Dobson Communications -- http://www.dobson.net/-- is a leading
provider of wireless phone services to rural markets in the United
States. Headquartered in Oklahoma City, the Company owns wireless
operations in 16 states, with markets covering a population of
11.4 million. The Company serves 1.6 million customers.
* * *
As reported in the Troubled Company Reporter on Oct. 22, 2004,
Moody's Investors Service assigned a B2 rating to the proposed
first priority senior secured notes due 2011 and a B3 to the
second priority notes due 2012 being issued by Dobson Cellular
Systems, Inc., a subsidiary of Dobson Communications Corp. In
addition, Moody's downgraded Dobson Communications' senior implied
rating to Caa1 and its senior unsecured rating to Ca, among other
ratings actions which are summarized below. The ratings outlook
remains negative.
Dobson Communications Corporation
-- Senior implied rating downgraded to Caa1 from B2
-- Issuer rating downgraded to Ca from Caa1
-- $300 million 10.875% Senior Notes due 2010 downgraded to Ca
from Caa1
-- $594.5 million 8.875% Senior Notes due 2013 downgraded to Ca
from Caa1
-- 12.25% Senior Exchangeable Preferred Stock due 2008
downgraded to C from Caa3
-- 13% Senior Exchangeable Preferred Stock due 2009 downgraded
to C from Caa3
American Cellular Corporation, (f.k.a. ACC Escrow Corp.)
-- $900 million 10% Senior Notes due 2011 downgraded to Caa1
from B3
Dobson Cellular Systems, Inc.
-- $75 million (reduced from $150 million) senior secured
revolving credit facility due 2008 affirmed at B1
-- $550 million senior secured term loan due 2010 rating
withdrawn
-- $250 million (assumed proceeds) First Priority Fixed Rate
Senior Secured Notes due 2011 assigned B2
-- $250 million (assumed proceeds) First Priority Floating Rate
Senior Secured Notes due 2011 assigned B2
-- $200 million (assumed proceeds) Second Priority Senior
Secured Notes due 2012 assigned B3
The downgrade of the senior implied rating to Caa1 reflects the
much weaker than expected cash flow in 2004 and beyond for the
Dobson Communications family and the resulting negative
consolidated free cash flows of the company. Further, the
downgrade reflects the expectation that, absent material
improvement in cash flow generation from the Dobson Cellular
subsidiary, Dobson Communications' capital structure is
unsustainable.
DURA OPERATING: Moody's Lowers Some Dura Automotive Ratings
-----------------------------------------------------------
Moody's Investors Service downgraded certain ratings for Dura
Operating Corp., its direct parent Dura Automotive Systems, Inc.,
and subsidiary Dura Automotive Systems Capital Trust. The outlook
following these rating actions was changed to stable from
negative.
The rating actions were driven by Dura Automotive's persistently
high leverage, which Moody's determined to be inconsistent with
peers at the Ba3 senior implied level, together with the company's
inability to realize material debt reduction over the past year
and its weakening effective liquidity, margin compression, and
long lead times necessary to realize organic net new business
growth.
The specific rating actions implemented for Dura Holdings and Dura
Operating are:
-- Affirmation of the Ba3 rating assigned for Dura Operating's
approximately $322 million of guaranteed senior secured
credit facilities, consisting of:
-- $175 million revolving credit facility due October 2008;
-- $146.6 million remaining term loan C due December 2008;
-- Downgrade to B2, from B1, of the ratings for Dura's existing
$400 million of 8.625% guaranteed senior unsecured notes due
April 2012 (consisting of $350 million and $50 million
tranches, respectively);
-- Downgrade to B3, from B2, of the ratings of Dura's $456
million of 9% guaranteed senior subordinated notes due May
2009;
-- Downgrade to B3, from B2, of the rating for Dura's Euro 100
million of 9% guaranteed senior subordinated notes due May
2009;
-- Downgrade to Caa1, from B3, of the rating for Dura
Automotive Systems Capital Trust's $55.25 million of 7.5%
convertible trust preferred securities due 2028;
-- Downgrade to B1, from Ba3, of the senior implied rating for
Dura Holdings;
-- Affirmation of the B2 senior unsecured issuer rating for
Dura Holdings;
-- Downgrade to SGL-3, from SGL-2 of Dura Holdings' speculative
grade liquidity rating.
The rating downgrades reflect that Dura Automotive was
unsuccessful at achieving meaningful debt or leverage reduction
over the past year, despite successful implementation of several
actions directed at improving the company's near-term cost
structure and future revenue and margin base.
Had all things been held equal versus the prior year, Dura
Automotive would have achieved meaningful performance improvements
exceeding annual customer price-downs, which typically range
between 1% and 3% of revenues per annum.
However, the incremental savings that were realized ended up being
absorbed by unanticipated industry developments including
unprecedented cost increases for raw steel, steel components, and
certain other commodities that Dura Automotive was only partially
successful at passing on to its customers, as well as the material
slide in North American production volumes during the latter half
of 2004 which negatively impacted both revenues and the rate of
fixed cost absorption. Additional year-over-year North American
production declines are anticipated during 2005 (most notably by
GM and Ford) due to growing dealer inventories.
Dura Automotive continues to operate within a highly competitive
environment, and must replace an average $400 million of business
each year in order to just maintain revenues. Since the company's
content per vehicle is currently below $100 and annual revenues
per program average less than $10 million, Dura Automotive must
win a high volume of awards each year in order to generate organic
revenue growth. One of the company's biggest challenges is to
develop more complex and unique modules and systems that contain
more significant electronics content.
The long lead times between new program awards and the launch of
production are also expected to push out the timing of meaningful
revenue improvement for Dura Automotive until 2007 at the
earliest. In addition, Dura Automotive's margins and debt levels
were unfavorably impacted by foreign exchange fluctuations, since
the value of the Euro escalated versus the US dollar and the
company's growing European sales base typically carries lower
margins than its North American sales. However, most of the
foreign exchange variances were due to translation adjustments
which are reversible, as opposed to more permanent transactional
events.
The downgrades of Dura Automotive's long-term debt ratings -- and
most particularly the downgrade of the company's speculative grade
liquidity rating to SGL-3 (adequate), from SGL-2 (good) --
additionally reflect that leverage did not improve as planned
during 2004.
This $2.5 billion revenue company will therefore have very limited
debt cushion (estimated below $50 million) once the total net
leverage covenant under the senior credit agreement tightens to
5.0x (from 5.5x) on December 31, 2004. The total net leverage
covenant then steps down again to 4.75x on December 31, 2005.
While the company has been maintaining a significant cash
balance that approximated $175 million at the end of the third
quarter of 2004, use of this cash for any purposes other than debt
reduction or acquisitions of operations with accretive EBITDA
levels would have a direct negative impact on the calculation of
the leverage ratio.
Moody's additionally notes that the majority of Dura Automotive's
cash is presently located at non-US subsidiaries and may not be
readily accessible. Dura Automotive will furthermore have to
absorb the approximately $30 million remaining balance of accounts
receivable heretofore discounted under OEM fast-pay programs which
are all in the process of being discontinued. About $15 million
of this balance is tied to the Ford program which will be the
earliest to terminate on December 31, 2004.
While the company has the ability to enter into an accounts
receivable securitization arrangement for up to $75 million
without requirements for lender approvals, the company is not
presently pursuing a new program since the advances associated
with such a facility would count as debt under the covenant
definitions and would therefore not generate additional debt
cushion.
Moody's believes it is likely that Dura Automotive would have the
ability to refinance the existing credit agreement or amend
financial covenants in order to obtain incremental effective
availability, given that outstandings under the senior secured
credit facilities represent less than 1.0x EBITDA, that the
company has not borrowed any amounts under its revolving credit
facility in about three years, and that the lenders are well
secured and essentially fully cash collateralized. It is Moody's
opinion that the enhancement of Dura Automotive's ongoing
effective liquidity should be a priority objective for management.
Moody's notably did not downgrade the Ba3 ratings of Dura's
guaranteed senior secured credit facilities given the very low
leverage through these facilities, the strong collateral and
guarantee protection afforded to the lenders, and the fact that
outstandings are low versus the total commitment amounts since the
revolver has not been utilized at any time since 2001.
The ratings more favorably acknowledge that while Dura
Automotive's credit protection measures have not improved as
anticipated, they have in fact remained quite stable over the past
few years. During 2004, management took a series of positive
steps to focus Dura Automotive on technology and new product
development, corresponding generation of value-added new business
generation, realizing improved capacity utilization, increasing
manufacturing efficiency (especially within the company's European
operations), controlling commodity price inflation, and prudent
spending on capital equipment and working capital. These efforts
were effective and did preclude Dura Automotive's credit
protection measures from meaningfully deteriorating.
Dura Automotive's annual purchases of steel and steel components
notably remain below $200 million, even after accounting for price
inflation over the past year. The company estimates that it
sustained less than $25 million of net incremental steel-related
pricing during 2004, after working closely with suppliers,
substituting some raw materials, and realizing pass-throughs to
certain customers.
Dura Automotive's customer base is becoming increasingly
diversified, with more than 40% of the company's revenues now
generated outside North America and the concentration with the Big
3 reduced to about 50%. The unusually broad number of platforms
on which Dura Automotive has content provides additional
protection against unfavorable developments affecting specific
platforms or customers. The safety focus of many of Dura
Automotive's product lines provides additional protection against
customer market testing, which in many cases would require a new
round of costly crash testing.
Dura Automotive has more recently been awarded several large new
programs for more sophisticated and complex product offerings with
a greater focus on electronics, and management is working to
market the company better to generate larger volumes of new
business for its traditional product lines. While revenue growth
is expected to run within the 0%-2% range during 2005 and 2006,
management expects this rate to increase to 6%-8% as new programs
launch during 2007.
Dura Automotive's increased focus on the recreational vehicle and
mobile home market, as evidenced by the company's acquisition of
The Creation Group in late 2003, is currently benefiting the
company's revenue and margin performance. While this business
line serves to diversify Dura Automotive a bit from the automotive
OEM's and is presently realizing good returns, it has historically
been even more cyclical and could prove to be a drain on future
results.
Future events that could potentially drive Dura Automotive's
ratings lower include rising debt and leverage, diminishing
liquidity, the announcement of a material acquisition not funded
by equity, continued margin compression due to an inability to
offset customer price-downs and other escalating cost factors, a
failure to generate both improved levels of organic growth and a
reduced reliance upon the Big 3, and/or evidence of reduced
competitiveness attributable to an inability to generate
commercially attractive new technologies with an increased
electronic focus at a fast enough pace.
Future events that could likely improve Dura Automotive's ratings
or outlook include significant debt and leverage reduction brought
about from improved operating cash flow metrics and/or proceeds
from asset sales or the sale of equity, substantial new business
awards for value-added products, continued broadening of the
customer and geographic base, evidence of a clear ability to
continue offsetting customer price-downs with internally-generated
cost savings, and/or a material reduction in leverage.
For the twelve months ended September 30, 2004, Dura Automotive's
total debt/EBITDAR and net debt/ EBITDAR leverage (including the
company's trust preferred stock and present value of operating
leases, and letters of credit as debt) was approximately 5.6x and
4.9x, respectively. Total debt-to-revenue remained high at almost
48%. EBIT coverage of cash interest and preferred dividends was
about 1.5x, and the EBIT return on total assets was about 6.3%.
Dura Automotive, headquartered in Rochester Hills, Michigan,
designs and manufactures components and systems primarily for the
global automotive industry including driver control systems,
structural door modules, glass systems, seating control systems,
exterior trim systems, and mobile products. Dura Automotive is a
public company whose predecessor was initially formed in November
1990. Annual revenues approximate $2.5 billion.
EMISPHERE TECH: Secures $20 Million Equity Commitment
-----------------------------------------------------
Emisphere Technologies, Inc. (Nasdaq: EMIS) has entered into an
agreement with Kingsbridge Capital Limited, whereby Kingsbridge
has committed to purchase up to $20 million of Emisphere's common
stock over a two-year period.
Under the terms of the commitment, Emisphere may draw funds from
Kingsbridge, at its discretion, in amounts up to 3% of the
Company's market capitalization at the time of the draw. In
exchange for each draw, Emisphere will sell to Kingsbridge newly
issued shares of common stock priced at a discount of between
8-12% of the average trading price of the Company's stock during
the financing period, with the reduced discount applying if the
price of the common stock is equal to or greater than $8.50.
Emisphere will control the minimum acceptable purchase price of
any shares to be issued to Kingsbridge during the term of the
agreement. Emisphere's right to begin drawing funds will commence
upon the Securities and Exchange Commission declaring effective a
registration statement to be filed by the Company.
Emisphere is under no obligation to access any of the capital
available under this commitment. Also, Emisphere can participate
in other debt or equity financings without restriction, provided
that such financings do not use any floating or other post-
issuance adjustable discount to the market price of Emisphere's
common stock. Kingsbridge is precluded from short selling any of
Emisphere's shares during the term of the agreement. In return
for the commitment, Emisphere issued to Kingsbridge a warrant to
purchase 250,000 shares of common stock at a premium to the
current market price.
"This financing vehicle provides added flexibility as we determine
our capital needs, taking into account existing cash reserves,
anticipated milestone payments, and other financing strategies
available to us," commented Elliot Maza, CFO of Emisphere
Technologies.
About Emisphere Technologies, Inc.
Emisphere Technologies, Inc. -- http://www.emisphere.com/-- is a
biopharmaceutical company pioneering the oral delivery of
otherwise injectable drugs. Emisphere's business strategy is to
develop oral forms of injectable drugs, either alone or with
corporate partners, by applying its proprietary eligen(R)
technology to those drugs or licensing its eligen(R) technology to
partners who typically apply it directly to their marketed drugs.
Emisphere's eligenr technology has enabled the oral delivery of
proteins, peptides, macromolecules and charged organics.
Emisphere and its partners have advanced oral formulations or
prototypes of salmon calcitonin, heparin, insulin, parathyroid
hormone, human growth hormone and cromolyn sodium into clinical
trials. Emisphere has strategic alliances with world-leading
pharmaceutical companies.
At Sept. 30, 2004, Emisphere Technologies' balance sheet showed a
$4,105,000 stockholders' deficit, compared to a $22,807,000
deficit at Dec. 31, 2003.
FEDERAL-MOGUL: Names A. Haughie as Controller & M. Widgren as CAO
-----------------------------------------------------------------
G. Michael Lynch, executive vice president and chief financial
officer of Federal-Mogul Corporation, announces the appointment of
Alan Haughie to the position of vice president and controller,
effective Jan. 1, 2005. As a direct report to Mr. Lynch, Mr.
Haughie's responsibilities will include company-wide financial
reporting and analysis, financial closing and consolidation, best
practices in accounting, SEC reporting, and global shared
services. Mr. Haughie is replacing Bill Quigley, who has resigned
to take a lead financial role in a major auto parts supplier.
"Alan's extensive international and financial-related experience,
combined with his knowledge of operations finance and strategic
business planning processes during his time in the controller's
office, will allow him to make a smooth transition into this lead
controlling role," said Mr. Lynch.
Mr. Haughie joined the company in 1994 and came to Federal-
Mogul through the acquisition of T&N, where he was employed as the
controller for the aftermarket. Previous to this he was employed
with Ernst & Young in the UK in various audit roles. Mr. Haughie
is currently the director of corporate finance in the controller's
office, responsible for directing the company's financial planning
process, internal reporting, and business analysis. An internal
search for Mr. Haughie's successor is currently in process. He is
a chartered accountant, and has a bachelor's of science in
mathematics from the University of Manchester, United Kingdom.
Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is one of the world's largest
automotive parts companies with worldwide revenue of some
$6 billion. The Company filed for chapter 11 protection on
October 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J.
Nyhan, Esq., James F. Conlan, Esq., and Kevin T. Lantry, Esq., at
Sidley Austin Brown & Wood, and Laura Davis Jones, Esq., at
Pachulski, Stang, Ziehl, Young, Jones & Weintraub, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $10.15 billion in
assets and $8.86 billion in liabilities. (Federal-Mogul
Bankruptcy News, Issue No. 69; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
FRANKLIN MORTGAGE: Fitch Rates $9.8 Mil. Private Class With 'BB'
----------------------------------------------------------------
First Franklin Mortgage Loan Trust's asset-backed certificates,
series 2004-FFH4, are rated:
-- $544,751,100 classes I-A1, II-A1 and II-A3 (senior
certificates) 'AAA';
-- $37,317,000 class M-1 certificates 'AA+';
-- $31,463,000 class M-2 certificates 'AA';
-- $9,146,000 class M-3 certificates 'AA-';
-- $14,268,000 class M-4 certificates 'A+';
-- $11,341,000 class M-5 certificates 'A';
-- $9,878,000 class M-6 certificates 'A-';
-- $11,707,000 class M-7 certificates 'BBB+';
-- $8,780,000 class M-8 certificates 'BBB+';
-- $8,780,000 class M-9 certificates 'BBB';
-- $10,244,000 class M-10 certificates 'BBB';
-- $5,122,000 class M-11 certificates 'BBB-;
-- $9,878,000 privately offered class B-1 certificates
'BB'.
Fitch does not rate the $7,317,000 privately offered class B-2
certificates.
The 'AAA' rating on the senior certificates reflects the 25.55%
total credit enhancement provided by:
* the 5.10% class M-1,
* the 4.30% class M-2,
* the 1.25% class M-3,
* the 1.95% class M-4,
* the 1.55% class M-5,
* the 1.35% class M-6,
* the 1.60% class M-7,
* the 1.20% class M-8,
* the 1.20% class M-9,
* the 1.40% class M-10,
* the 0.70% class M-11,
* the 1.35% privately offered class B-1,
* the 1% privately offered class B-2 not rated by
Fitch, and the 1.60% initial overcollateralization.
All certificates have the benefit of monthly excess cash flow to
absorb losses. In addition, the ratings reflect the quality of
the loans, the integrity of the transaction's legal structure, as
well as the primary servicing capabilities of Select Portfolio
Servicing, Inc., and Deutsche Bank National Trust Company, as
Trustee.
As of the cut-off date, Dec. 1, 2004, the mortgage loans have an
aggregate balance of $401,999,674. The weighted average loan rate
is approximately 7.515%. The weighted average remaining term to
maturity -- WAM -- is 358 months. The average outstanding
principal balance of the mortgage loans is approximately $175,087.
The weighted average original loan-to-value ratio -- OLTV -- is
99.73% and the weighted average Fair, Isaac & Co. -- FICO -- score
was 665.
The properties are primarily located in:
* California (25.32%),
* Ohio (6.90%) and
* Illinois (5.96%).
The mortgage pool will be divided into two loan groups.
Group I will consist of fixed-rate and adjustable-rate
mortgage loans with principal balances that conform to
Fannie Mae and Freddie Mac loan limits.
Group II will consist of fixed-rate and adjustable-rate
mortgage loans with principal balances that may not conform
to Fannie Mae and Freddie Mac loan limits.
On the closing date, the depositor will deposit approximately
$329,700,326 into a pre-funding account. The amount in this
account will be used to purchase subsequent mortgage loans after
the closing date and on or prior to March 28, 2005.
FREEDOM MEDICAL: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Freedom Medical, Inc.
219 Welsh Pool Road
Exton, Pennsylvania 19341
Bankruptcy Case No.: 04-37092
Type of Business: The Debtor sells electronic medical equipment
and related services to hospitals, alternate
site healthcare providers, and EMS transport
organizations.
See http://www.freedommedical.com/
Chapter 11 Petition Date: December 29, 2004
Court: Eastern District of Pennsylvania (Philadelphia)
Debtor's Counsel: Barry D. Kleban, Esq.
Adelman Lavin Gold and Levin
Four Penn Center, Suite 900
Philadelphia, PA 19103
Tel: 215-568-7515
Estimated Assets: $10 Million to $50 Million
Estimated Debts: $10 Million to $50 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Med One Capital, Inc. $216,359
6965 Union Park Center, Ste. 400
Midvale, UT 84047
Klehr Harrison Harvey Branzburg $91,392
260 South Broad St., Ste. 400
Philadelphia, PA 19102
MD Dept. of Assessments & Taxation $46,901
301 West Preston Street, Rm. 801
Baltimore, MD 21201
RBC Capital Markets $45,418
Enterprise Fleet Services $29,891
Texas Comptroller of Public $23,080
Mike Elfenbein $20,000
Novatek Medical $17,700
PPI $16,965
Federal Express $13,998
Context Advisors $13,070
Eizen Fineburg & McCarthy $8,900
Med E Quip Liquidators $8,212
Argavest, Inc. $7,272
Respironics $6,862
Mislay Associates $6,224
Medex, Inc. $5,081
R & D Batteries $4,442
Baxter Healthcare $3,031
Drager Medical $2,438
GREIF INC: Moody's Raises Senior Implied Ratings From Ba3 To Ba2
----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of Greif, Inc.,
a leading global provider of industrial packaging products and
services.
The rating upgraded:
-- Senior implied rating, to Ba2 from Ba3,
-- Issuer rating, to Ba3 from B1,
-- $240 million senior secured revolving credit facility due
2006, to Ba2 from Ba3,
-- $250 million senior secured term loan due 2009, to Ba2 from
Ba3,
-- $250 million 8.875% senior subordinated notes due 2012 to B1
from B2
In addition, the company has been assigned a speculative-grade
liquidity rating of SGL-1.
The rating upgrade reflects the strong cash flow generation and
sizable debt reduction that Greif has accomplished over the past
year and as a result, the significant improvement in the company's
financial performance and credit profile. The ratings also
reflect the company's leading market position as the world's
largest producer of industrial shipping containers, as well as the
meaningful financial flexibility provided by its holdings of a
large amount of unencumbered timber assets.
On the other hand, the ratings continue to be constrained by the
cyclicality in the company's industrial shipping container and
paper packaging businesses, its modest profit margins due to the
mostly commodity nature of its products, and considerable exposure
to volatile raw material prices.
After the upgrade, the rating outlook is positive. Factors that
could potentially have favorable impact on the ratings include:
1. sustained improvement in the credit profile, through margin
expansion and cash flow generation,
2. demonstrated commitment to a more conservative capital
structure and financial policy, as well as
3. structural shifts in industry dynamics that increase pricing
power and reduce cyclicality.
On the other hand, factors that could potentially have a negative
impact on the ratings include higher-than-expected increase in raw
material costs that could substantially affect profit margins and
large debt-financed acquisitions that could considerably increase
integration risks and debt leverage.
Moody's believes that Greif is a global leader in industrial
packaging products and services, with No.1 position in steel and
fibre containers, No. 2 position in plastic containers, and No. 4
position in intermediate bulk containers. In addition, the
company produces containerboard and corrugated products for niche
markets in North America, and owns and operates 318,000 acres of
timberland, which represent a substantial alternative financial
resource. The March 2001 acquisition of the Netherlands-based Van
Leer has significantly expanded the company's scale, product
offering and global reach.
Despite its scale and geographic diversification, the company's
industrial packaging and paper packaging businesses operate in
highly cyclical end-markets. In the latest manufacturing
recession, Greif Inc. faced a very difficult operating environment
as demand for its shipping containers and containerboard products
experienced a sharp decline. The challenging business condition
prompted an extensive restructuring effort that started in March
2003.
Over the past 18 months, the restructuring has resulted in a
reduced cost structure and improved efficiency, particularly in
the areas of SG&A expenses and working capital management. As
demand gradually recovered over the past year, financial
performance has experienced substantial improvement, despite
rising raw material and other operational costs.
For the fiscal year ended October 31, 2004, Greif reduced its debt
by nearly $200 million to approximately $469 million, as a result
of both higher earnings and strong working capital reduction. As
a result, debt/EBITDA ratio improved to 1.8 times (before
restructuring charges) from 3.2 times in fiscal 2003. LTM EBITDA
minus capex covered interest expense 4.4 times. LTM free cash low
(cash from operations minus capex and dividends) accounted for 35%
of total debt. Operating margins improved to 7% (before
restructuring charges) from 6.1% in fiscal year 2003 despite
higher raw material costs. In fiscal 2004, Greif was able to pass
through substantially all raw material cost increases to its
customers, thanks to its strong market position and ability to
provide value-added services.
Greif has been assigned a speculative-grade liquidity rating of
SGL-1, which indicates very good liquidity and reflects Moody's
expectation that the company's operating cash flow, together with
its cash balance and availability under its committed revolver and
A/R securitization facility, should be more than sufficient to
cover its capital spending and other operational needs over the
next 12 months.
For the fiscal year ended October 31, 2004, Greif generated $166
million of free cash flow (cash from operations minus capex and
dividends) as a result of improving earnings and more efficient
working capital management. For fiscal year 2005, Moody's expects
free cash flow generation to remain robust as the company widens
its transformation initiatives and the end-market condition
remains supportive. Greif's liquidity position is further
enhanced by its $38 million of cash balance at fiscal yearend
2004, as well as availability under its revolver and A/R
securitization facility which totaled approximately $230 million
as of October 31, 2004. Moody's expects the company to remain
comfortably in compliance with its three financial covenants in
the credit agreement over the next 12 months.
The company's timber assets, which are significantly undervalued
at a book value of $127 million, are unencumbered under both the
credit agreement and the note indenture. As such, they represent
a significant source of alternate liquidity should such a need
arise.
The Ba2 rating for the senior secured credit facility reflects its
seniority in the capital structure as well as the benefits of the
security package, which consists of a first-priority lien on all
company assets and those of its domestic subsidiary (excluding the
timber assets), as well as the capital stock of its foreign
subsidiaries. The credit facility is guaranteed on a senior
secured basis by the company's domestic subsidiaries.
The B1 rating for the senior subordinated notes reflects their
unsecured nature and contractual and effective subordination to
senior secured debt, including outstandings under the revolving
credit facility. The senior notes are guaranteed on a senior
subordinated basis by all domestic subsidiaries but not by its
foreign subsidiaries. Soterra, the domestic subsidiary that owns
and operates the company's timber assets, is an unrestricted
subsidiary under the note indenture.
Greif, Inc., headquartered in Delaware, Ohio, is a world leader in
industrial packaging products and services. The Company provides
extensive expertise in steel, plastic, fibre, corrugated and
multiwall containers for a wide range of industries. Greif also
produces containerboard and manages timber properties in the
United States. For fiscal year 2004 (ended October 31, 2004), the
company generated approximately $2.2 billion in net sales and $253
million in adjusted EBITDA (before restructuring charges).
GUILFORD MILLS: Ends Donlin Recano's Engagement as Claims Agent
---------------------------------------------------------------
Guilford Mills, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York for
permission to terminate the services of Donlin, Recano & Company,
Inc., as their claims and noticing agent.
According to the Debtors, there is no further need for them to
engage Donlin since their estates are already fully administered.
Headquartered in Greensboro, North Carolina, Guilford Mills, Inc.,
is a worldwide produce and seller of warp knit, circular knit,
flat-woven and woven velour fabric. Guilford sells its finished
fabrics to customers who manufacture a broad range of apparel,
automotive, home fashions and specialty products. Guilford also
cuts and sews fabrics into finished home fashions and manufactures
specialty yarns for both internal uses and sale to customers. The
Company along with its debtor-affiliates filed for chapter 11
protection on March 13, 2002(Bankr. S.D.N.Y Case No. 02-40667).
Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the
Debtors in their restructuring efforts. When the Debtor filed for
protection from its creditors, it listed $551,064,000 in total
assets and $409,555,000 in total debts. The Debtors emerged from
bankruptcy in October 2002.
HEADWATERS INC: Moody's Assigns SGL-2 Liquidity Rating
------------------------------------------------------
Moody's Investors Service assigned an SGL-2 speculative grade
liquidity rating to Headwaters, Inc., indicating that the company
has "good" liquidity. Headwaters should generate solid operating
and free cash flow over the next 12 months, which will allow it
to steadily reduce the debt taken on in conjunction with its
September 2004 acquisition of Tapco.
Headwaters has nearly full access to its new $60 million revolving
credit facility. However, the credit agreement's leverage
covenants are set at levels that allow for little slippage from
anticipated pro forma EBITDA and that encourage debt retirement.
Until the passage of time verifies the earnings power of
Headwaters' recent acquisitions, Moody's SGL rating will be
conservatively shaded to reflect the credit agreement's tight
covenants.
Moody's expects Headwaters to generate sufficient operating cash
flow to cover its operating needs, capex, and minimum debt
amortization over the next 12 months. In fact, the company repaid
$24 million of term loans in October 2004, and another $26 million
in December 2004, thereby satisfying the first year's scheduled
principal payments of $12 million per quarter.
The credit agreement has an excess cash flow sweep provision and
Moody's expects the company will retire debt ahead of schedule.
Over time, this may expand the cushion under the credit
agreement's two leverage covenants (total leverage to EBITDA and
senior leverage to EBITDA). However, these two covenants reduce
every six months, so EBITDA also needs to grow to ensure covenant
compliance and ongoing access to the revolver.
As of September 30, 2004, Headwaters' revolver was only being used
to support $2.1 million in letters of credit. The entire facility
was available. Historically, Headwaters had little need for
external liquidity. However, sales are seasonal in its Headwaters
Resources segment and there is uncertainty regarding Tapco's cash
needs, so the revolver could be used on a periodic basis over the
next year.
Moody's has a B1 senior implied rating for Headwaters. The B1
rating reflects high leverage, relatively few tangible assets
(approximately $300 million), the challenges of integrating and
managing the growth potential of the many diverse businesses that
the company has acquired since September 2002, and the possibility
of further acquisitions.
Moody's ratings give little long-term weight to the company's
Energy Services business due to the uncertainty associated with
Section 29 tax credits and their scheduled expiry after 2007. The
ratings also consider a high degree of customer concentration at
Tapco, exposure to cyclical and seasonal construction markets, and
coal combustion product (CCP) transportation cost pressures due to
high fuel costs.
However, the ratings are supported by the organic growth potential
and strong market positions held by Headwaters Resources and
Tapco, the stability of the construction markets these operations
serve, and modest capex requirements. Earnings stability is
enhanced by long-term CCP management contracts and by Tapco's low-
cost manufacturing capabilities, leading market share for vinyl
shutters, and the breadth of its offerings of exterior residential
building products.
Headwaters Incorporated is headquartered in South Jordan, Utah.
HOLLINGER INT'L: Outside Auditor Completes 2003 Audit
-----------------------------------------------------
Hollinger International Inc. (NYSE: HLR) disclosed that its
outside auditor is conducting its final review of the Company's
Annual Report on Form 10-K for the year ended December 31, 2003,
and it expects to file the Report with the Securities and Exchange
Commission no later than mid-January, 2005. The Company also
expects to become current on its quarterly reports for 2004 within
approximately two months following the filing of its 2003 Annual
Report on Form 10-K.
The Company stated that it has been providing regular updates to
the New York Stock Exchange concerning its expected timetable
regarding the filing of its 2003 Annual Report on Form 10-K and
its quarterly reports for 2004. The NYSE had advised the Company
that the Report needed to be filed by December 30, 2004, in
accordance with NYSE practices with respect to late Annual Report
filers. The NYSE may, in its discretion, grant the Company up to
an additional three months to file its 2003 Annual Report, which
the Company has requested. In exercising its discretion relating
to the additional three-month period, the NYSE's procedures
provide that the NYSE would consider, among other things, the
likelihood of the 2003 Form 10-K being filed during such period as
well as the Company's financial status. If the extension is
denied, the NYSE will commence suspension and delisting procedures
by a notice to the Company. In such case, the Company would have
the right to appeal to the NYSE Board. The Company intends to
appeal if the extension is not granted, in which case the trading
on the NYSE would not continue during the appeal period and the
Company would seek alternate arrangements.
About the Company
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.
INGLES MARKETS: Plans to Appeal Nasdaq Delisting Notice
-------------------------------------------------------
Ingles Markets, Incorporated (NASDAQ: IMKTA) received a notice
from the staff of The NASDAQ Stock Market indicating that the
Company is not in compliance with NASDAQ's requirements for the
continued listing of its Class A Common Stock due to the failure
to timely file its Form 10-K for the period ended Sept. 25, 2004,
as required under Market Place Rule 4310(c)(14). Therefore, the
Company's Class A Common Stock is subject to potential delisting
from The NASDAQ Stock Market. Receipt of the notice does not
result in immediate delisting of the Class A Common Stock.
The Company expects to make a timely request for a hearing with
the NASDAQ Listing Qualifications Panel to appeal the NASDAQ
staff's determination. This request will stay the delisting
pending the hearing and a determination by the NASDAQ Listing
Qualifications Panel. There can be no assurance that the Panel
will grant the Company's request for continued listing.
The Form 10-K, for the period ended Sept. 25, 2004, has been
delayed pending completion of a previously disclosed internal
investigation and any related restatement of the Company's
financial statements related to fiscal years 2001 through 2004.
The Company expects the investigation will be completed shortly
and is working diligently to complete the Form 10-K and any
related filings. Management believes that the Company may restate
its financial statements for certain of the periods under review
primarily to move recognition of certain vendor payments from
earlier to later periods. Management does not believe that the
restatements will have any impact on cash flow and does not
currently expect the restatements will have a negative effect on
the Company's results for fiscal 2004. The Company currently
expects to file its Form 10-K mid January, 2005. Accordingly, as
previously disclosed, the referenced financial statements should
not be relied upon until such time as the Company files its
restatements.
About the Company
Ingles Markets, Incorporated -- http://www.ingles-markets.com/--
is a leading supermarket chain with operations in six southeastern
states. Headquartered in Asheville, North Carolina, the Company
operates 197 supermarkets. In conjunction with its supermarket
operations, the Company also operates 74 neighborhood shopping
centers, all but 17 of which contain an Ingles supermarket. The
Company's Class A Common Stock is traded on The NASDAQ Stock
Market's National Market under the symbol IMKTA.
* * *
As reported in the Troubled Company Reporter on Dec. 09, 2004,
Standard Poor's Ratings Services placed its ratings for Ingles
Markets Inc., including the 'BB' corporate credit rating, on
CreditWatch with negative implications. Ingles had $611 million
of debt as of June 26, 2004.
"The CreditWatch placement reflects the announcement that Ingles
is the subject of an informal inquiry by the SEC and will be
filing its 10-K late," explained Standard & Poor's credit analyst
Stella Kapur. The inquiry is related to the accounting for a
vendor contract that Ingles entered into in 2002. The audit
committee of Ingles' board of directors has initiated a review of
the accounting issues and has retained independent legal counsel.
The company has identified certain revenue and expense items that
were incorrectly recorded and may restate its financial statements
for certain periods between 2002 and 2004. In addition, the
completion of the internal inquiry is a condition to the
completion of Ernst & Young's audit for fiscal 2004 and Ingles'
10-K. As a result, Ingles will not meet its 10-K filing deadline
of Dec. 9, 2004.
INTERNATIONAL SHIPHOLDING: Prices $40 Million Pref. Stock Offering
------------------------------------------------------------------
International Shipholding Corporation (NYSE:ISH) disclosed the
pricing of its public offering of $40.0 million of Convertible
Exchangeable Preferred Stock. The preferred stock, which will
have a liquidation preference of $50 per share, will pay
cumulative quarterly cash dividends from the date of issuance at a
rate of 6% per annum.
The preferred stock will be convertible into two million shares of
ISH common stock, equivalent to a conversion price of $20.00 per
share of ISH common stock and reflecting a 34% conversion premium
to the $14.90 per share closing price of ISH's common stock on the
New York Stock Exchange on Dec. 29, 2004.
The underwriter for the offering is Ferris, Baker Watts,
Incorporated. ISH has granted the underwriter an option to
purchase up to an additional $4.0 million of the preferred stock
to cover over-allotments, if any. All shares of the preferred
stock, which is a new series of ISH's capital stock, will be sold
by ISH.
The preferred stock will be listed on the NYSE under the symbol
"ISH Pr." ISH expects that trading in the preferred stock will
commence no sooner than the date of closing of the offering and,
in any event, no later than thirty days following the closing of
the offering. The offering is expected to close on Thurs., Jan.
6, 2005.
Erik F. Johnsen, Chairman of International Shipholding
Corporation, stated, "We are very pleased at the market support
given this issue, particularly during this holiday season. The
proceeds of this issue will enable the company to successfully
conclude a number of projects going forward."
A registration statement relating to these securities has been
filed with the Securities and Exchange Commission and has become
effective. This press release does not constitute an offer to
sell or the solicitation of an offer to buy these securities, nor
shall there be any sale of these securities in any jurisdiction in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any
such jurisdiction.
About the Company
International Shipholding Corporation operates a diversified fleet
of United States and foreign flag vessels that provide
international and domestic maritime transportation services to
commercial and governmental customers primarily under medium- to
long-term charters or contracts through its subsidiaries
* * *
As reported in the Troubled Company Reporter on Aug. 04, 2004,
Standard & Poor's Ratings Services lowered its corporate credit
rating on International Shipholding Corp. to 'B+' from 'BB-' and
senior unsecured rating to 'B-' from 'B'. The outlook is stable.
"The rating action reflects concerns that International
Shipholding Corp.'s financial profile, while improving gradually,
will remain below previous expectations and at levels more
consistent with the revised rating," said Standard & Poor's credit
analyst Kenneth L. Farer. The New Orleans, Louisiana-based
shipping company has about $300 million of lease-adjusted debt.
Ratings on International Shipholding Corp. reflect an aggressive
financial profile (characterized by significant debt leverage and
somewhat constrained liquidity), participation in the competitive
and capital-intensive shipping industry, and modest size of the
company. Positive credit factors include the company's stable,
intermediate- to long-term ship charter agreements, which provide
a steady stream of revenue and cash flow, and its well-established
operations in niche segments of the shipping industry. The
company provides specialized ocean transportation services using
U.S. and foreign flag vessels, ship charter brokerage, and ship
agency services. International Shipholding's assets consist of 35
ocean-going vessels, 917 LASH (lighter aboard ship; combination
shipping/barge units) barges for use with its LASH vessels, and
various related handling facilities.
Until the second quarter of 2004, year-over-year revenues and
operating income had improved in each of the last five quarters,
and total debt levels have been reduced by approximately $40
million due to scheduled repayments and repurchase of a portion of
the company's unsecured notes at a discount. However, these
modest improvements have had only a small positive affect on the
company's credit measures. Although second-quarter financial
statements have not been released, reported revenues and earnings
for the second quarter of 2004 were below the comparable 2003
figures, due to an increase in the number of out-of-service days
and additional maintenance expenses.
For a given period, the company's revenues and expenses may
fluctuate substantially, depending on the mix of the charters and
contracts. However, the contract nature of the company's business
segments results in revenues, earnings, and cash flow that are
fairly stable for an ocean shipping company. Credit measures
continue to be depressed due to a fairly high debt burden and
associated interest expense. For the 12 months ending March 31,
2004, funds from operations to debt was 17.6%, compared with
11.7% for 2002. At March 31, 2004, lease-adjusted debt to capital
was 70.1%. These measures are not expected to have changed
materially during the second quarter. Standard & Poor's expects
International Shipholding's credit ratios to improve modestly over
the near-to-intermediate term with increasing freight volumes and
continued cost control, but remain overall fairly weak.
International Shipholding's credit ratios are expected to improve
modestly over the near-to-intermediate term with increasing
freight volumes and continued cost control. However, upside
ratings potential is limited by the nature of the company's fixed-
rate charter contracts, participation in the capital-intensive and
competitive shipping industry, and aggressive financial profile.
INTERPOOL INC: Earns $15.8 Million of Net Income in 3rd Quarter
---------------------------------------------------------------
Interpool, Inc. (IPLI.PK) filed its Form 10-Q report for the
quarter ended September 30, 2004, with the Securities and Exchange
Commission on December 27, 2004. With this filing, Interpool has
filed all required reports with the SEC.
Interpool reported revenues of $98.8 million for the three months
ended September 30, 2004, compared to restated revenues of $95.8
million for the same period of 2003. Net income was $15.8 million
for the third quarter of 2004, versus restated net income of $6.5
million for the corresponding quarter of 2003. For the nine
months ended September 30, 2004, revenues were $290.4 million
compared to restated revenues of $277.2 million for the first nine
months of 2003. Net income was $46.6 million for the nine month
period, including a gain of $6.3 million ($5.2 million after
taxes) associated with the previously announced settlement of an
insurance claim related to the bankruptcy of a lessee, versus
$30.7 million for the same period last year.
Martin Tuchman, Chairman and Chief Executive Officer, said, "We
continue to be pleased with the strong performance of our
industry. Utilization rates remain high, for us and for our
competitors, and demand for our products remains strong."
Interpool disclosed that, now that Interpool has made all required
SEC financial filings, its management is diligently seeking a
listing of the Company's common stock and, in that connection, has
requested clearance to re-apply to the New York Stock Exchange,
where Interpool's common stock was previously traded.
Interpool also reported that, due to the enactment on Dec. 20,
2004, of a protocol to the income tax treaty between the United
States and Barbados, Interpool's operating subsidiary Interpool
Limited will not be entitled to rely on this tax treaty to
eliminate current U.S. income tax on its container rental and
container sales income, beginning on January 1, 2005, and
continuing until such time, if any, as Interpool is able to
satisfy the new stricter eligibility requirements set forth in the
protocol. Under the new protocol, after January 1, 2005,
eligibility for the benefits of the tax treaty would depend, among
other things, on whether Interpool Inc.'s common stock becomes
listed on a recognized stock exchange on which the common stock is
primarily and regularly traded. While there can be no assurance,
management is optimistic that Interpool will be able to satisfy
the new eligibility requirements early in 2005.
In its 10-Q report, Interpool stated that, due to the recent
enactment of the protocol, Interpool will record an increase in
its net deferred tax liability during the fourth quarter of 2004
to reflect a tax rate beginning January 1, 2005, higher than the
3% rate currently used. This increase, while not resulting in any
current cash outflow, will result in a substantial deferred tax
expense accrual, which will have a material adverse effect on
Interpool's reported net income for the fourth quarter of 2004 and
the year ending December 31, 2004, as well as a material adverse
effect on Interpool's reported retained earnings.
Interpool stated that as soon as it is able to determine the
amount of the deferred tax expense to be recorded as a result of
the enactment of the Barbados protocol and its impact on
Interpool's 2004 net income and retained earnings, Interpool will
publicly disclose this information by filing a Form 8-K report
with the SEC.
Interpool explained, however, that, if and when the Company
satisfies the new eligibility requirements under the treaty, its
net deferred tax liability would then be reduced at that time to
reflect the lower tax rate of approximately 3%. This would likely
result in a substantial deferred tax benefit that would increase
Interpool's reported net income and retained earnings during the
quarter and year in which the Company satisfies the new
eligibility requirements by an amount comparable to the deferred
tax expense recorded in the fourth quarter of 2004, as adjusted
for any changes during the period of non-eligibility.
Mr. Tuchman commented, "While we will have a charge in the fourth
quarter of 2004 to reflect this amendment to the U.S.-Barbados tax
treaty, this is a tax accounting charge only, with no cash impact,
and no effect on our ongoing business, our revenues or our pre-tax
income. We are hopeful that this change in our tax status will
last only a few months, since we believe we will again become
eligible for the tax treaty next year if our common stock becomes
listed."
The Company will hold a conference call on Wednesday, January 5,
2005 at 11:30 AM Eastern Standard Time. Interested investors
should call 888-560-1989 ten minutes prior to the time of the
conference call. Callers from outside North America should call
973-582-2830 and hold for a live operator. Identify yourself and
your company and inform the operator that you are participating in
the Interpool Third Quarter 2004 Earnings Conference Call.
If you are unable to access the Conference Call at 11:30 AM,
please call 973-341-3080 to access the taped digital replay. To
access the replay, please call and enter the digital pin #5554498.
This replay will first be available at 1:30 PM on January 5, 2005,
and will be available until 11:59 PM on January 12, 2005.
The call will also be available through the company's web site --
http://www.interpool.com/ To listen to the live call via the
Internet, go to the web site at least fifteen minutes early to
register and to download and install any necessary audio software.
For those who cannot listen to the live webcast, a replay will be
available two hours after the call is completed and will remain
available for one month.
About the Company
Interpool is one of the world's leading suppliers of equipment and
services to the transportation industry. The company is the
world's largest lessor of intermodal container chassis and a
world-leading lessor of cargo containers used in international
trade.
* * *
As reported in the Troubled Company Reporter on Dec. 21, 2004,
Moody's placed the ratings of Interpool, Inc., under review for
possible upgrade, citing the company's improved liquidity,
measures it has taken to strengthen internal control processes,
and its progress in filing delinquent financial statements with
the SEC.
Noting the pace at which Interpool's credit profile has improved,
Moody's indicated that its review could result in a several notch
increase in Interpool's ratings in the near-term, with the
possibility that a subsequent ratings review could result in a
further upgrade - pending the company achieving several
milestones.
Moody's stated that it appears that Interpool has made substantial
progress in addressing the issues that Moody's has previously
highlighted as rating drivers. During its review, Moody's will
further analyze:
(a) Interpool's operating results and financial outlook,
including its pending third quarter 2004 financial
statements,
(b) the impact of recent debt refinancing on the firm's
liquidity profile, including a more detailed review of
the terms and conditions of Interpool's financing
arrangements to determine the implications for the
ratings of its various classes of rated obligations, and
(c) the progress Interpool has made in strengthening its
internal control infrastructure.
Any potential subsequent review of Interpool's ratings would focus
on:
(a) the company's ability to file its 2004 Form 10-K in a
timely manner,
(b) Interpool's operating results and its outlook as
reflected in such Form10-K, and
(c) the firm's success in meeting the milestones for
implementing systems improvements, as outlined in its
financing arrangements.
These milestones, in Moody's view, require a relatively aggressive
pace of execution.
Moody's current ratings are:
-- Interpool, Inc.:
* Senior implied at Caa2
* 7.2% senior unsecured notes due 2007 at Caa3
* 7.35% senior unsecured notes due 2007 at Caa3
-- Interpool Capital Trust:
* Guaranteed Preferred Stock at Ca
INTERSTATE BAKERIES: Files Preliminary Unaudited FY 2004 Report
---------------------------------------------------------------
Interstate Bakeries Corporation (OTC: IBCIQ.PK), the nation's
largest wholesale baker and distributor of fresh baked bread and
sweet goods, filed a Form 8-K with the Securities and Exchange
Commission containing business and preliminary unaudited financial
information for the year ended May 29, 2004. IBC is currently
unable to file a fully compliant Annual Report on Form 10-K due to
a review being undertaken in light of newly identified information
with respect to the proper accounting treatment for a defined
benefit pension plan to which the Company contributes on behalf of
approximately 900 of its approximately 32,000 employees. The
Company remains uncertain if and when it will file its delayed
Annual Report on Form 10-K.
Also, IBC announced certain preliminary unaudited financial
information for the fiscal 2005 first quarter ended August 21,
2004. This preliminary unaudited information does not reflect
significant asset impairment charges the Company expects to
recognize when the financial results for the quarter are finalized
or any impact of a potential change to the accounting treatment
for the defined benefit pension plan discussed above.
Preliminary Unaudited Fiscal 2004
Financial Information
While IBC believes that the fiscal 2004 report furnished with the
SEC has been prepared in accordance with accounting principles
generally accepted in the United States, except for the
uncertainties related to the defined benefit pension plan
discussed above, it can give no assurances that all other
adjustments are final and that all other adjustments necessary to
present its financial information in accordance with GAAP have
been identified. No independent auditors have expressed any
opinion or any other form of assurance on such information or its
accuracy. For these reasons, the financial information contained
in the report furnished today may not be indicative of the
Company's financial condition or operating results.
Consistent with preliminary unaudited information released
in the Company's August 9, 2004, press release, for the full
fiscal year ended May 29, 2004, the Company announced the
following unaudited financial information before the potential
adjustments described herein:
* Net sales of $3,467,562,000, a 1.7 percent decrease in
comparison to the prior year's $3,525,780,000.
* An operating loss of ($6,679,000) compared to the previous
year's operating income of $83,268,000. Included in fiscal
2004 and 2003 results were restructuring and other
charges of $12,066,000 and $13,501,000, respectively.
* A net loss of ($25,678,000) compared to the previous
year's net income of $27,450,000.
Consistent with preliminary information released in the Company's
August 9, 2004 press release, for the twelve weeks ended May 29,
2004, the Company announced the following unaudited financial
information before the potential adjustments described herein:
* Adjusted EBITDA of $101,427,000 compared to the previous
year's $191,946,000.
* Net sales of $803,038,000, a 1.8 percent decrease in
comparison to the prior year's $818,019,000.
* An operating loss of ($10,245,000) compared to the
previous year's operating income of $2,433,000. Included
in fourth quarter fiscal 2004 and 2003 results were
restructuring charges of $7,911,000 and $3,460,000,
respectively.
* A net loss of ($12,388,000) compared to the previous
year's net loss of ($4,568,000).
* Adjusted EBITDA of $18,555,000 compared to the previous
year's $28,249,000.
Preliminary Fiscal 2005 First Quarter
Financial Information
IBC has delayed filing its Quarterly Report on Form 10-Q for the
fiscal quarter ended August 21, 2004, due to, among other causes,
the need to complete the analysis necessary to determine
appropriate significant asset impairment charges related to its
bankruptcy filing and in response to its fiscal 2005 financial
performance. The Company's review of the accounting treatment
for one of its defined benefit pension plans, more fully
described above, has also contributed to the Company's inability
to file this Quarterly Report on Form 10-Q. The Company remains
uncertain if and when it will file this delayed report.
IBC also announced today preliminary financial information for the
first quarter ended August 21, 2004, based on a review of
information available under its financial reporting system. The
Company anticipates that actual first quarter results, once
finalized, will include asset impairment charges related to the
Company's evaluation of the carrying value of its assets because
of its bankruptcy filing and in response to its fiscal 2005
financial performance. Final first quarter results also may
include the impact of a change in the accounting treatment for
the defined pension benefit plan discussed above if the manner in
which the Company has historically accounted for the plan is
changed. The Company cannot predict with certainty the amount of
the impairment charges or the impact of any potential change in
accounting treatment with respect to the defined benefit pension
plan, but expects that the combined effect on operating loss and
net loss as announced today will be significant. While the
Company believes that the preliminary financial information
announced today has been prepared in accordance with accounting
principles generally accepted in the United States except for the
absence of the asset impairment charges discussed above and the
uncertainties related to the above-noted defined benefit pension
plan, it can give no assurances that all other adjustments are
final and that all other adjustments necessary to present its
financial information in accordance with GAAP have been
identified. In addition, no independent auditors have examined,
compiled or performed any procedures with respect to the
Company's preliminary financial information, nor have they
expressed any opinion or any other form of assurance on such
information or its accuracy. For the reasons discussed above,
the financial information for the first quarter of fiscal 2005
announced today is merely preliminary.
For the twelve weeks ended August 21, 2004, the Company
announced the following preliminary unaudited financial
information before the potential adjustments described herein:
* Net sales of $812,002,000, a 2.3 percent decrease in
comparison to the prior year's $831,015,000.
* Operating loss of ($18,211,000), compared to the previous
year's operating income of $26,507,000.
* Net loss of ($16,877,000), compared to the previous year's
net income of $11,190,000.
* Adjusted EBITDA of $11,408,000,
compared to the previous year's $48,381,000.
Net sales decreased in the first quarter due primarily to a
4.5% decline in unit volume. Most notable were unit declines in
both branded and private label white bread and individual snack
cake items. While the Company also experienced some unit price
decline related to its branded white bread, price increases for
its private label bread and sweet goods, along with sales of its
new super premium Baker's Inn products, favorably impacted net
sales compared to the prior year.
The Company's preliminary operating loss of $18,211,000 as
reported does not reflect anticipated significant asset impairment
charges related to the Company's evaluation of the carrying value
of its assets because of its bankruptcy filing and in response to
its fiscal 2005 financial performance or any impact of a change in
the accounting treatment for the defined benefit pension plan
discussed above. Preliminary operating loss for the first quarter
includes restructuring charges of $8,162,000 principally related
to bakery, bakery outlet and depot closings, including non-cash
impairment charges of approximately $3,600,000. Preliminary
operating loss also reflects the impact of the high fixed cost
structure and normal inflationary cost increases associated with
production and delivery against a lower net sales base, higher
workers' compensation costs and increased advertising charges
related to the promotion of the new Baker's Inn bread line.
The Company's preliminary net loss of ($16,877,000) as reported
also does not reflect the significant asset impairment charges the
Company expects to recognize or any impact of a change in the
accounting treatment for the defined benefit pension plan
discussed above.
Non-GAAP Financial Measures
EBITDA is the measure of the Company's earnings before interest,
taxes, depreciation and amortization; the Company uses the term
"Adjusted EBITDA" to reflect that its financial measure also
excludes other income, restructuring charges and other charges.
Adjusted EBITDA is not a GAAP measurement, but is commonly used as
a measure of a company's performance. The Company has provided
preliminary Adjusted EBITDA for the fiscal year ended May 29,
2004, for the twelve weeks ended May 29, 2004 and for the
first quarter of fiscal 2005 as supplemental disclosure to
provide information with respect to its ability to meet capital
expenditures and working capital requirements, to monitor its
compliance with certain financial covenants and to assess its
performance relative to its competitors and its own performance
in prior periods. IBC's debtor-in-possession credit facility
contains covenants that, among other things, will require the
Company to satisfy certain Adjusted EBITDA targets as a measure
of its operating performance.
The Company's preliminary Adjusted EBITDA should not be considered
as an alternative to any measures of performance as promulgated
under GAAP, such as income from operations as an indicator of
operating performance or as an alternative to cash flows from
operating activities as a measure of liquidity as determined in
accordance with GAAP. The Company's calculation of preliminary
Adjusted EBITDA may be different from calculations used by other
companies and therefore may not be comparable to Adjusted EBITDA
as reported by other companies.
The following schedule reconciles preliminary Adjusted
EBITDA for the fifty-two weeks ended May 29, 2004 and May 31,
2003, respectively, to net income (loss), which the Company
believes is the most directly comparable GAAP measure:
(preliminary unaudited)
Fifty-Two Weeks Ended
(in thousands)
---------------------
05/29/04 05/31/03
-------- --------
Net income (loss) ($25,678) 27,450
Other income (33) (87)
Interest expense 36,583 40,262
Income tax expense (benefit) (17,551) 15,643
Depreciation and amortization 96,040 95,177
Restructuring charges 12,066 9,910
Other charges 0 3,591
-------- --------
Adjusted EBITDA $101,427 $191,946
======== ========
The following schedule reconciles preliminary Adjusted
EBITDA for the twelve weeks ended May 29, 2004 and May 31, 2003,
respectively, to net income (loss), which the Company believes is
the most directly comparable GAAP measure:
(preliminary unaudited)
Twelve Weeks Ended
(in thousands)
---------------------
05/29/04 05/31/03
-------- --------
Net loss ($12,388) (4,568)
Other income (7) (9)
Interest expense 8,385 10,090
Income tax benefit (6,235) (3,080)
Depreciation and amortization 20,889 22,356
Restructuring charges 7,911 3,460
-------- --------
Adjusted EBITDA $18,555 $28,249
======== ========
The following schedule reconciles preliminary Adjusted
EBITDA for the twelve weeks ended August 21, 2004 and August 23,
2003, respectively, to net income (loss), which the Company
believes is the most directly comparable GAAP measure:
(preliminary unaudited)
Twelve Weeks Ended
(in thousands)
---------------------
08/21/04 08/23/03
-------- --------
Net income (loss) ($16,877) 11,190
Other income (149) (8)
Interest expense 8,770 8,865
Income tax expense (benefit) (9,955) 6,460
Depreciation and amortization 21,457 21,242
Restructuring charges 8,162 632
-------- --------
Adjusted EBITDA $11,408 $48,381
======== ========
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S.
The Company and seven of its debtor-affiliates filed for chapter
11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, 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 $1,626,425,000 in
total assets and $1,321,713,000 (excluding the $100,000,000 issue
of 6.0% senior subordinated convertible notes due August 15, 2014,
on August 12, 2004) in total debts.
A full-text copy of Interstate's Report of Business and
Preliminary Unaudited Financial Information for the year ended
May 29, 2004, is available for free at:
http://sec.gov/Archives/edgar/data/829499/000119312504211211/0001193125-04-211211-index.htm
JOHN Q. HAMMONS: Agrees to Exclusive Merger Talks with Barcelo
--------------------------------------------------------------
John Q. Hammons Hotels, Inc.'s (AMEX:JQH) Board of Directors has
agreed to negotiate exclusively with Barcelo Crestline Corporation
through January 31, 2005, with regard to a possible merger
transaction. The Company's principal stockholder, Mr. John Q.
Hammons, has agreed to negotiate exclusively with Barcelo
Crestline through Jan. 31, 2005.
The Company's Board of Directors agreed to grant this limited
exclusivity to Barcelo Crestline upon the recommendation of a
special committee of independent directors after Barcelo Crestline
increased its offer to acquire the Company's Class A shares from
its previously announced offer of $13.00 per share to $21.00 per
share. Barcelo Crestline also has agreed that, if the Special
Committee so requests, any merger with the Company will require
the approval of the holders of a majority of the Class A shares
voting on the matter, other than those Class A shares held by Mr.
Hammons and his affiliates, in addition to the approval of a
majority of the voting power of all Class A and Class B shares,
voting as a single class.
Commenting on the Company's action, the Chairman of the Special
Committee, David Sullivan, said, "We are pleased to reach this
point in the negotiations with Barcelo Crestline. We also are
mindful that there are a number of items that remain to be
negotiated, including the terms of a merger agreement and the
relationship between Barcelo Crestline and Mr. Hammons, before we
would have a transaction to present to our stockholders."
About John Q. Hammons Hotels, Inc.
John Q. Hammons Hotels, Inc. -- http://www.jqh.com/-- is a
leading independent owner and manager of affordable upscale, full
service hotels located primarily in key secondary markets. The
Company owns 46 hotels located in 20 states, containing 11,370
guest rooms or suites, and manages 14 additional hotels located in
seven states containing 3,158 guest rooms or suites. The majority
of these 60 hotels operate under the Embassy Suites, Holiday Inn
and Marriott trade names. Most of the hotels are located near a
state capitol, university, convention center, corporate
headquarters, office park or other stable demand generator.
* * *
As reported in the Troubled Company Reporter on Oct. 21, 2004,
Moody's Investors Service placed the rating of John Q. Hammons
Hotels, L.P., on review for possible downgrade:
* Senior implied rated B2
* Senior unsecured issuer rating rated B3
* US$510 million 8.875% first mortgage notes, due May 15, 2012,
rated B2
The rating action was prompted by the recent announcement that
Barcelo Crestline Corporation (Barcelo) has made an offer to
acquire all of the Class A common stock of John Q. Hammons Hotels,
Inc., for $13 per share or approximately $63.5 million. Barcelo
also announced that it reached an agreement with Mr. John Q.
Hammons, the majority shareholder of John Q. Hammons Hotels, Inc.,
and John Q. Hammons Hotels, L.P., in which Mr. Hammons will
exchange all of his ownership interests in John Q. Hammons Hotels,
Inc., and John Q. Hammons Hotels, L.P., for a preferred ownership
interest in Barcelo. It is Moody's understanding that the Board
of Directors of John Q. Hammons Hotels, Inc., is currently
evaluating the proposed acquisition offer.
Mr. Hammons and his affiliates directly, or indirectly, own
269,100 Class A common shares of John Q. Hammons Hotels, Inc., and
294,000 Class B shares of John Q. Hammons Hotels, L.P., which in
aggregate result in an effective ownership of 76% of the combined
equity interests in John Q Hammons Hotels, Inc. and John Q Hammons
Hotels, L.P., and 77% of the voting power of John Q. Hammons
Hotels, Inc.
Moody's review will focus on the ultimate decision of the Board of
Directors of John Q. Hammons Hotels, Inc., in regards to the
proposed acquisition, in addition to the progress and consummation
of the proposed acquisition, as well as the ultimate capital
structure, and the rating on the 8.875% first mortgage notes.
The 8.875% first mortgage notes are secured by a first mortgage
lien on 30 hotels. Additionally, under the partnership agreement
governing John Q. Hammons, Hotels, L.P., Mr. Hammons, the limited
partner, has agreed to contribute up to $195 million to the
partnership in the event that proceeds from the sale of collateral
are not enough to satisfy the new first mortgage note obligations.
The notes also have a change of control provision as outlined in
the note indenture at 101% of principle, plus accrued and unpaid
interest and liquidated damages.
J.P. MORGAN: Fitch Puts Low-B Ratings on Six Mortgage Certs.
------------------------------------------------------------
J.P. Morgan Chase Commercial Mortgage Securities Corp., series
2004-C3, commercial mortgage pass-through certificates are rated:
-- $56,228,000 class A-1 'AAA';
-- $179,635,000 class A-1A 'AAA';
-- $154,670,000 class A-2 'AAA';
-- $235,827,000 class A-3 'AAA';
-- $166,135,000 class A-4 'AAA';
-- $421,433,000 class A-5 'AAA';
-- $87,251,000 class A-J 'AAA';
-- $1,517,410,464 class X-1* 'AAA';
-- $1,475,976,000 class X-2* 'AAA';
-- $43,626,000 class B 'AA';
-- $13,277,000 class C 'AA-';
-- $13,277,000 class D 'A+';
-- $15,174,000 class E 'A';
-- $15,174,000 class F 'A-';
-- $18,968,000 class G 'BBB+';
-- $15,174,000 class H 'BBB';
-- $20,865,000 class J 'BBB-';
-- $7,587,000 class K 'BB+';
-- $5,690,000 class L 'BB';
-- $9,484,000 class M 'BB-';
-- $3,793,000 class N 'B+';
-- $5,691,000 class P 'B';
-- $5,690,000 class Q 'B-';
-- $22,761,464 class NR 'NR';
* Notional Amount and Interest Only.
Class NR is not rated by Fitch Ratings. Classes A-1, A-2, A-3, A-
4, A-5, A-J, X-2, B, C, D, and E are offered publicly, while
classes A-1A, X-1, F, G, H, J, K, L, M, N, P, Q, and NR are
privately placed pursuant to rule 144A of the Securities Act of
1933.
The certificates represent beneficial ownership interest in the
trust, primary assets of which are 149 fixed-rate loans having an
aggregate principal balance of approximately $1,517,410,464, as of
the cutoff date.
For a detailed description of Fitch's rating analysis, please see
the Report titled 'J.P. Morgan Chase Commercial Mortgage
Securities Corp., Series 2004-C3' dated December 7, 2004,
available on the Fitch Ratings web site at
http://www.fitchratings.com/
KEWL CORPORATION: Accolade Affiliate Discloses 14% Equity Stake
---------------------------------------------------------------
Kewl Corporation (TSX Venture Exchange: KL), disclosed that
1422575 Ontario Inc., an affiliate of the Accolade Group, a
leading global supplier of embellished apparel and wearable
accessories has acquired 500,000 common shares in the capital of
Kewl. The common shares acquired by Accolade were issued from
treasury at a price of $0.10 per share (the maximum discount
permitted by the TSX Venture Exchange). The common shares
acquired by Accolade represent approximately 14% of the issued and
outstanding shares of Kewl and make Accolade Kewl's largest
shareholder.
This acquisition is part of the previously announced restructuring
of Kewl. Pursuant to the restructuring Kewl will hold a special
meeting of shareholders on Jan. 28, 2004, to approve a
consolidation of Kewl's shares based on a ratio that will ensure
that Accolade will be the only shareholder holding at least one
common share of Kewl following the consolidation. Shareholders of
Kewl holding less than one common share following the
consolidation will be entitled to receive a cash payment for their
pre-consolidation shares in the amount of $0.01 per share. Kewl
has obtained a valuation and fairness opinion from Toll Cross
Securities Inc. which indicates that the proposed consideration is
fair to the holders of Kewl common shares. The materials for the
special meeting, including the valuation, will be mailed to
shareholders on or about Jan. 7, 2005.
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 has now
issued approximately 2.2 million common shares pursuant to this
exchange and the bankruptcy proposal has been substantially
completed.
Accolade's principal office is located at 388 Carlaw Ave, Suite
202, Toronto, Ontario M4M 2T4.
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.
KMART CORP: Settles Disputes with Shanri Holdings for $3,500,000
----------------------------------------------------------------
In 1997, Shanri Holdings Corporation filed a complaint against,
among others, Kmart Corporation before the Superior Court of the
State of Rhode Island, seeking Kmart's compliance of a guaranty
agreement. The Parties to the State Court Suit ultimately reached
a global resolution.
Kmart was required to make monthly payments of $20,416 to Shanri
until the later of February 1, 2006, or the date Shanri provided
proof that a certain Release Condition had occurred. Kmart also
agreed to make a $900,000 one-time payment on the effective date
of the settlement and a $3,500,000 payment on the date the
Release Condition was satisfied.
Kmart's obligation to make the $3,500,000 payment was secured by a
letter of credit issued by The Chase Manhattan Bank, now known as
JPMorgan Chase. The L/C was made drawable by Shanri only upon
delivery of a certificate signed by both Kmart and Shanri that
certain conditions had occurred.
Following the Petition Date, Kmart ceased making the Monthly
Payments. As a result, Shanri requested Kmart to execute the
Certificate. Kmart refused.
In June 2002, Shanri commenced an adversary proceeding against
Kmart to force Kmart to execute the Certificate as well as pay
monetary damages.
Shanri filed Claim No. 34186 for "not less than $122,500,"
representing amounts owed by Kmart as a result of Kmart's failure
to make certain monthly payments. On June 20, 2003, Shanri filed
Claim No. 53959 for $3,847,083 in Kmart's Chapter 11 cases,
representing its asserted money damages arising from Kmart's
refusal to execute the Certificate.
Kmart asked the Bankruptcy Court to dismiss the Complaint.
Subsequently, both Parties requested summary judgment. On
November 19, 2002, the Bankruptcy Court granted Kmart's motion to
dismiss Shanri's complaint.
On December 6, 2002, Shanri filed its notice of appeal of the
Bankruptcy Court's initial ruling. The U.S. District Court for
the Northern District of Illinois remanded the matter to the
Bankruptcy Court for consideration of certain issues.
Before the L/C expiration on November 28, 2003, Chase Manhattan
Bank advised the Parties that it would not renew the L/C.
On October 29, 2003, the Bankruptcy Court approved a stipulation
between Kmart and Shanri regarding depositing funds with the
Court. Pursuant to the Stipulation:
(a) Chase Manhattan Bank deposited $3,500,000 with the clerk
of the Bankruptcy Court; and
(b) the Parties agreed that the Funds would remain in the
Court registry until a final, non-appealable order was
entered by the Bankruptcy Court or another court of
competent jurisdiction adjudicating the Parties' rights to
the Funds.
On March 10, 2004, the Bankruptcy Court reversed its initial
ruling and granted judgment in favor of Shanri. On March 19,
2004, Kmart filed a notice of appeal of the Bankruptcy Court's
remand ruling.
On August 25, 2004, the District Court affirmed the Bankruptcy
Court's remand ruling. On September 23, 2004, Kmart filed a
notice of appeal of the District Court's remand affirmance to the
U.S. Court of Appeals for the Seventh Circuit.
Kmart and Shanri have agreed to consensually resolve their
disputes. In a stipulation approved by Judge Sonderby, the
Parties agree that:
(a) the October 29, 2003, Stipulation is amended solely with
respect to the "final, non-appealable" nature of an
Adjudication Order, and both Kmart and Shanri agree to
waive any requirement that the Adjudication Order be
"final and non-appealable;"
(b) the Stipulation will constitute the Adjudication Order
with respect to disposition of the Funds held in the
registry of the Court pursuant to the October 29, 2003,
Stipulation; and
(c) the Clerk of Court is authorized and directed to pay:
-- exactly $2,872,166 of the Funds to Shanri Holdings; and
-- Kmart all of the remaining Funds held in the registry
of the Court;
(d) the Shanri Claims will be assigned to Kmart, without the
need for any further filings or assignment documents being
completed by the Parties;
(e) nothing will affect either Parties' rights with respect to
Shanri's lease rejection claim for the Kmart locations
formerly located in Lake City, Florida, and Destin,
Florida -- the Unaffected Lease Rejection Claims;
(f) Kmart will take all reasonable and necessary steps to
effectuate the prompt release of the Funds;
(g) the Parties mutually release each other from all claims
asserted against each other before November 4, 2004.
Nothing contained in the global and mutual release
provision will release:
-- either Party's rights relating to the Unaffected Lease
Rejection Claims; or
-- claims by one Party against the other for breach of
these stipulation terms.
* * *
In a separate Order, Judge Sonderby directs the Clerk of the
Court to immediately disburse the $3,500,000 deposited in the
registry of the Court under the October 29, 2003, Stipulation.
Specifically, Judge Sonderby orders the Clerk of the Court to
disburse by check:
(a) $2,872,166 of the Fund to Shanri, which will not be
increased or decreased for interest or fees. The check
will be released to Shanri in accordance with instructions
received from David Neff, Esq., at Piper Rudnick, LLP, in
Chicago, Illinois; and
(b) the entire remaining Fund to Kmart Corporation, including
all interest earned on the fund. The Court's fee will be
deducted from the payments to be made to Kmart. The check
will be released to Kmart in accordance with instructions
received from William J. Barrett, Esq., at Barack
Ferrazzano Kirschbaum Perlman & Nagelberg, LLP, in
Chicago, Illinois.
The Clerk may rely on written instructions signed jointly by Mr.
Neff and Mr. Barrett in implementing the Adjudication Order.
Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART
Holding Corporation) -- http://www.bluelight.com/-- is the
nation's second largest discount retailer and the third largest
merchandise retailer. Kmart Corporation currently operates
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam. The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474). Kmart emerged from chapter 11 protection on May 6,
2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts. The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection. (Kmart Bankruptcy News, Issue No. 87; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
KMART CORP: GE Capital Credit Agreement Terminates Today
--------------------------------------------------------
On December 23, 2004, Kmart Corporation delivered to General
Electric Capital Corporation a notice of its election to
permanently terminate the Credit Agreement dated as of May 6,
2003, as amended, among Kmart, General Electric Capital
Corporation, as administrative agent, co-collateral agent and
lender, and the other credit parties and lenders party thereto.
The termination will be effective January 3, 2005.
"In light of the Company's strong balance sheet and liquidity
position and after undertaking an analysis of the estimated
working capital requirements, the Company determined that it was
no longer cost effective to maintain the Credit Facility," James
F. Gooch, Vice-President and Controller of Kmart Holding
Corporation, said in a regulatory filing with the Securities and
Exchange Commission on December 29, 2004.
Prior to its termination, the Credit Facility was a secured $800
million revolving credit facility with an equivalent letter of
credit sub-limit. The Facility was guaranteed by Kmart Corp.,
Kmart Management Corporation, Kmart Services Corporation and
Kmart's direct and indirect domestic subsidiaries.
Mr. Gooch said Kmart has only used the Credit Facility to support
outstanding letters of credit. The Credit Facility was terminated
without penalty.
According to Mr. Gooch, some of the lenders or their affiliates
from time to time have provided in the past, and may provide in
the future, investment banking, commercial lending and financial
advisory services to the Company and its affiliates.
Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART
Holding Corporation) -- http://www.bluelight.com/-- is the
nation's second largest discount retailer and the third largest
merchandise retailer. Kmart Corporation currently operates
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam. The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474). Kmart emerged from chapter 11 protection on May 6,
2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts. The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection. (Kmart Bankruptcy News, Issue No. 87; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
MERRILL LYNCH: Fitch Assigns Low-B Ratings on Private Offerings
---------------------------------------------------------------
Fitch Ratings rates Merrill Lynch Mortgage Investors, Inc. --
MLMI -- $483.3 million mortgage pass-through certificates, series
MLCC 2004-G:
-- $470 million class A-1, A-2, A-R, X-A, and the privately
offered classes X-B certificates (senior certificates)
'AAA';
-- $5.1 million class B-1 certificates 'AA';
-- $3.9 million class B-2 certificates 'A+';
-- $2.2 million class B-3 certificates 'BBB';
-- $1.2 million privately offered class B-4 certificates
'BB+';
-- $1 million privately offered class B-5 certificates
'B+'.
Fitch does not rate the privately offered class B-6 certificates.
The 'AAA' rating on the senior certificates reflects the 3.10%
subordination provided by:
* the 1.05% class B-1,
* the 0.80% class B-2,
* the 0.45% class B-3,
* the 0.25% privately offered class B-4,
* the 0.20% privately offered class B-5, and
* the 0.35% privately offered class B-6 certificates.
Classes rated based on their subordination:
-- B-1 'AA',
-- B-2 'A+',
-- B-3 'BBB',
-- B-4 'BB+' and
-- B-5 'B+'.
Fitch believes the above credit enhancement will be adequate to
cover credit losses. In addition, the ratings also reflect the
quality of the underlying mortgage collateral, strength of the
legal and financial structures, and the primary servicing
capabilities of Cendant Mortgage Corporation, which is rated
'RPS1' by Fitch.
Generally, with certain limited exceptions, distributions to the
class A-1 and A-R certificates (and to the component of the class
X-A certificates related to Pool 1) will be solely derived from
collections on the Pool 1 mortgage loans, and distributions to the
class A-2 certificates (and to the component of the class X-A
certificates related to Pool 2) will be solely derived from
collections on the Pool 2 mortgage loans. Aggregate collections
from both pools of mortgage loans will be available to make
distributions on the class X-B and B certificates. When a pool
experiences either rapid prepayments or disproportionately high
realized losses, principal and interest collections from one pool
may be applied to pay principal or interest, or both, to the
senior certificates of the other pool.
The aggregate trust consists of 1,284 conventional, fully
amortizing, primarily 25-year adjustable-rate mortgage loans
secured by first liens on one- to four-family residential
properties with an aggregate principal balance of $485,000,698 as
of the cut-off date, Dec. 1, 2004. Group 1 consists of 790 loans
with an aggregate principal balance of $316,375,982 as of the cut-
off date. Each of the mortgage loans is indexed off the one-month
LIBOR or six-month LIBOR, and all of the loans pay interest only
for a period of 10 years following the origination of the mortgage
loan. The average unpaid principal balance as of the cut-off-date
is $400,476. The weighted average original loan-to-value ratio --
OLTV -- is 70.73%. The weighted average effective LTV is 66.15%.
The weighted average FICO is 735. Cash-out refinance loans
represent 46.05% of the loan pool.
The three states that represent the largest portions of the
mortgage loans are:
* California (21.43%),
* Florida (11.31%), and
* New York (5.55%).
Group 2 consists of 494 loans with an aggregate principal balance
of $168,624,716 as of the cut-off date. Each of the mortgage
loans is indexed off the six-month LIBOR, and all of the loans pay
interest only for a period of 10 years following the origination
of the mortgage loan. The average unpaid principal balance as of
the cut-off-date is $341,346. The weighted average OLTV ratio is
68.58%. The weighted average effective LTV is 64.54%. The
weighted average FICO is 728. Cash-out refinance loans represent
38.99% of the loan pool.
The three states that represent the largest portions of the
mortgage loans are:
* California (20.30%),
* Florida (8.48%), and
* New Jersey (8.78%).
All of the mortgage loans were either originated by Merrill Lynch
Credit Corporation -- MLCC -- pursuant to a private-label
relationship with Cendant Mortgage Corporation or acquired by MLCC
in the course of its correspondent lending activities and
underwritten in accordance with MLCC underwriting guidelines. Any
mortgage loan with an OLTV in excess of 80% is required to have a
primary mortgage insurance policy. 'Additional collateral loans'
included in the trust are secured by a security interest in the
borrower's assets, which does not exceed 30% of the loan amount.
Ambac Assurance Corporation provides a limited purpose surety bond
that covers any losses in proceeds realized from the liquidation
of the additional collateral.
None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws. For additional information on
Fitch's rating criteria regarding predatory lending legislation,
please see the press release issued May 1, 2003, entitled 'Fitch
Revises Rating Criteria in Wake of Predatory Lending Legislation,'
available on the Fitch Ratings web site at
http://www.fitchratings.com/
MLMI, the depositor, will assign all its interest in the mortgage
loans to the trustee for the benefit of certificateholders. For
federal income tax purposes, an election will be made to treat the
trust fund as multiple real estate mortgage investment conduits --
REMICS. Wells Fargo Bank Minnesota, National Association, will
act as trustee.
NOMURA CBO: Fitch Maintains Junk Rating on $40.8 Mil. Notes
-----------------------------------------------------------
Fitch Ratings upgrades one class of notes issued by Nomura CBO
1997-1. This upgrade is the result of Fitch's review process and
is effective immediately:
-- $92,879,072 class A-2 notes upgraded to 'BB-' from 'B';
-- $40,800,000 class B notes remain at 'CC'.
Nomura CBO 1997-1 is a collateralized debt obligation -- CDO --
managed by Nomura Corp. Research and Asset Management Inc. which
closed April 29, 1997. Nomura CBO 1997-1 is composed of mainly
high yield bonds. Included in this review, Fitch discussed the
current state of the portfolio with the asset manager and their
portfolio management strategy going forward. In addition, Fitch
conducted cash flow modeling utilizing various default timing and
interest rate scenarios to measure the breakeven default rates
going forward relative to the minimum cumulative default rates
required for the rated liabilities.
Since Dec. 17, 2003, the collateral has slightly deteriorated. The
credit enhancement has significantly increased with respect to the
most senior class of notes. As stated in the Nomura CBO 1997-1
Nov. 2, 2004, trustee report, the notional amount of the
collateral is $129.4 million including $18.7 million of defaulted
securities. Although the deal is failing its coverage tests the
Class A-2 overcollateralization -- OC -- test has improved since
the last review.
The rating of the class A-2 notes addresses the likelihood that
investors will receive full and timely payments of interest, as
per the governing documents, as well as the stated balance of
principal by the legal final maturity date. The rating of the
class B notes addresses 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 rating assigned to the class A-2 notes no longer reflects
the current risk to note holders, while the rating assigned to the
class B notes is reflective of such risk.
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/
NOMURA CBO: Fitch Holds Junk Ratings on Two 1997-2 Classes
----------------------------------------------------------
Fitch Ratings upgrades one class of notes issued by Nomura CBO
1997-2. This upgrade is the result of Fitch's review process and
is effective immediately:
-- $56,384,266 class A-2 notes upgraded to 'AAA' from 'AA-';
-- $105,300,000 class A-3 notes remain at 'CC';
-- $36,300,000 class B notes remain at 'C'.
Nomura CBO 1997-2 is a collateralized debt obligation -- CDO --
managed by Nomura Corp. Research and Asset Management Inc. which
closed Oct. 1, 1997. Nomura CBO 1997-2 is composed of mainly high
yield bonds. Included in this review, Fitch discussed the current
state of the portfolio with the asset manager and their portfolio
management strategy going forward. In addition, Fitch conducted
cash flow modeling utilizing various default timing and interest
rate scenarios to measure the breakeven default rates going
forward relative to the minimum cumulative default rates required
for the rated liabilities.
Since Dec. 17, 2003, the collateral has slightly deteriorated. The
credit enhancement has significantly increased with respect to the
most senior class of notes. As stated in the Nomura CBO 1997-2
Nov. 2, 2004, trustee report, the notional amount of the
collateral is $188.5 million including $56.9 million of defaulted
securities. Although the deal is failing its coverage tests the
percentage of securities rated 'CCC+' or below (excluding
defaulted securities) has decreased from 54.7% in 2003 to 46.9%.
The rating of the class A-2 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
class A-3 and B 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 rating assigned to the class A-2 notes no longer reflects
the current risk to note holders , while the ratings assigned to
the class A-3 and B notes are reflective of such risk.
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/
NORCROSS SAFETY: Moody's Assigns Caa1 Ratings to Senior PIK Notes
-----------------------------------------------------------------
Moody's Investors Service has affirmed the existing ratings of
Norcross Safety Products L.L.C., and assigned a Caa1 rating to the
new $92 million senior pay in kind notes due 2012 jointly issued
by NSP Holdings L.L.C. & NSP Holdings Capital Corp. The ratings
outlook is stable.
The ratings affirmed:
-- B1 for the US $30 million senior secured revolving credit
facility, due 2008,
-- B1 for the Canadian $10 million senior secured revolving
credit facility, due 2008,
-- B1 for the US $130 million senior secured term loan, due
2009,
-- B3 for the US $150 million senior subordinated notes, due
2011,
-- B1 senior implied rating, and
-- B2 senior unsecured issuer rating
The ratings reflect Norcross Safety's significant financial
leverage, weak balance sheet, modest free cash flow generation,
and acquisitive growth strategy. At the same time, the ratings are
supported by the company's strong position in the personal
protection equipment market, a stable revenue base supported by
established brands and customer loyalty, favorable industry
trends, and a track record of improving financial performance.
The stable rating outlook reflects Moody's expectation of further
improvement in financial performance at Norcross Safety, offset by
on-going acquisition and integration risks. Factors that could
have negative rating implications include deteriorating financial
performance and large acquisitions that increase debt leverage.
Factors that could have positive rating implications include
substantially reduced debt leverage and considerable improvement
in cash flow generation.
The Caa1 rating on the $92 million senior pay in kind notes issued
by NSP Holdings L.L.C. and NSP Holdings Capital reflects their
unsecured nature, structural and effective subordination to senior
debt, including those at Norcross Safety (OpCo). The two NSP
Holdings notes are not guaranteed and will PIK at 11.75% payable
semi-annually for the first five years. Proceeds from the NSP
Holdings notes and concurrent issuance of $8 million of notes to
CIVIC Partners Fund L.P. and its affiliates will be used to redeem
$60 million of preferred stock, make a $2.5 million distribution
to the management, pay fees and expenses of $5 million, with the
remaining $32.5 million held as cash.
Norcross Safety Products L.L.C., headquartered in Oak Brook,
Illinois, is a leading manufacturer of personal protection
equipment for the general industrial, fire service and
utility/high voltage markets.
NORTH OAKLAND: Moody's Lowers Long-Term Bond Rating To Ba2
----------------------------------------------------------
Moody's Investors Service has downgraded North Oakland Medical
Center's long-term bond rating to Ba2 from Ba1. North Oakland
rating remains on Watchlist for possible further downgrade. This
action affects approximately $40 million of outstanding Series
1993 bonds. The rating downgrade is based on:
-- Review of nine-month interim fiscal year (FY) 2004 financial
statements that reflect a continuation of operating losses;
-- Continued decline in aggregate liquidity to $12.8 million as
of September 30, 2004 from $15.0 million at fiscal year end
(FYE) 2002 leading to weakening of already thin balance sheet
measures, including days cash on hand falling to 39.3 days
compared to 50.1 days at FYE 2002 and cash-to-debt dropping
to 23.2% from 25.4%;
-- Lack of receipt of FY 2003 audited financial statements,
which is due in part to the investigation and resolution of
a nearly $1.5 million embezzlement from North Oakland; and
-- Our concerns with operating and fiscal oversight in light of
the recent departure of the Chief Financial Officer (CFO).
In an effort to improve oversight, NOMC has completed a national
search for a new CFO who is expected to join NOMC in January 2005.
In addition to hiring a new CFO, NOMC senior management is in the
process of implementing other steps to address the liquidity
issues. Moody's will continue to monitor the situation at NOMC
and we anticipate rendering a rating decision on the Watchlist
within the next 90 days.
NRG ENERGY: Agrees to Register Shares Covering Resales
------------------------------------------------------
On December 21, 2004, NRG Energy, Inc., entered into a
Registration Rights Agreement for the benefit of the holders of
the Preferred Stock and the common stock issuable upon conversion
of the Preferred Stock.
Pursuant to the terms of the Registration Rights Agreement, the
Company has agreed that it will, on or prior to April 19, 2005,
file a shelf registration statement with the Securities and
Exchange Commission covering resales of the Preferred Stock and
the common stock issuable upon conversion of the Preferred Stock.
The Company has also agreed to use commercially reasonable
efforts to cause the shelf registration statement to be declared
effective under the Securities Act of 1933, as amended, no later
than July 18, 2005.
In the event that the Company fails to comply with certain of its
obligations under the Registration Rights Agreement, the Company
could become obligated to pay liquidated damages to holders of
the Preferred Stock and to holders of any shares of common stock
issued upon conversion of the Preferred Stock.
A full-text copy of the Registration Rights Agreement dated
December 21, 2004, by and among NRG Energy, Inc., Citigroup
Global Markets, Inc., and Deutsche Bank Securities, Inc., is
available at no charge at:
http://sec.gov/Archives/edgar/data/1013871/000095012304015251/y04068exv4w1.htm
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."
OFFICEMAX INC: Moody's Raises Senior Implied Rating to Ba1
----------------------------------------------------------
Moody's Investors Service upgraded the senior implied rating of
OfficeMax Incorporated to Ba1, upgraded the rating on the 7%
senior notes due November 2013 to Baa2, and assigned a speculative
grade liquidity rating of SGL-2. The outlook is stable. This
concludes the review for upgrade initiated on July 14, 2004.
The ratings upgraded:
-- Senior implied rating to Ba1 from Ba2;
-- Senior unsecured $560 million bank facility to Ba1from Ba2;
-- Senior notes due 2013 to Baa2 from Ba2;
-- Adjustable Conversion-Rate Equity Units to Ba1 from Ba2;
-- Issuer rating to Ba1 from Ba2;
-- Senior unsecured shelf to (P) Ba1 from (P) Ba2, and
-- Preferred shelf to (P) Ba3 from (P) B1.
The upgrade considers the improvement in debt protection measures
following the de-levering as a result of the distribution of
proceeds from OfficeMax's sale of its forest products division,
balanced by the risks of becoming a 100% retail and wholesale
office products company.
Since the closing of the sale of its forest products division,
OfficeMax has reduced its funded debt by approximately $1.6
billion to roughly $900 million, with a stated goal of reducing
further to $300 million in the near term. The new ratings also
consider that these now solid metrics are balanced by a management
team that is somewhat new to retail, a competitive operating
environment that places OfficeMax as the number 3 competitor
behind Staples and Office Depot, and lease-adjusted leverage
that is healthy for the new rating category.
The two-notch upgrade to Baa2 of the 2013 senior notes reflects
the superior collateralization as a result of the pledging as
collateral solely to this issue of a weighted-average Aa2 rated
corporate bond portfolio with a value of at all times equal to or
greater than 106% of the principal balance outstanding of the
notes in question.
The stable outlook considers OfficeMax's solid position as the
number 3 retailer in the segment, its progress thus far in
achieving synergies from the integration of marketing and
rationalization of distribution, and the fact that it now has
relatively minor integration issues to resolve.
While upward rating pressure is minimal at this point, positive
rating momentum would be generated if adjusted debt to EBITDAR
reduces to less than 3.5x, if free cash flow to adjusted debt
demonstrates sustainability above 10%, and if operating
performance and the company's competitive position continues to
improve as evidenced by continued generation of positive
comparable store sales and higher operating margins.
Conversely, downward pressure would result if adjusted debt to
EBITDAR increases above 4.75x, or if integration missteps were to
occur, if financial policy were to liberalize, or if the company
begins to experience erosion of its operating performance and
market position as evidenced by falling margins and weakening
comparable store sales.
The SGL-2 speculative grade liquidity rating represents good
liquidity, and reflects OfficeMax's approximately $1.5 billion
cash position, which even after significant share repurchases and
optional debt reductions should enable it to largely self-fund its
peak working capital needs over the next twelve months.
The rating also considers the company's ability to generate
significant levels of free cash flow, and the additional comfort
of good availability on its $560 million unsecured bank credit
facility (which matures in June 2005). Office Max is well within
covenant compliance ranges for its credit facility, and Moody's
expects it to comfortably comply with all covenants. With
significant levels of unencumbered accounts receivable and
inventory, OfficeMax maintains alternate sources of liquidity.
OfficeMax Incorporated, headquartered in Itasca, Illinois, is a
major retailer and wholesaler of office supplies.
PRESIDION CORP: Sold 25,000 Pref. Shares to Mercator for $2.5-Mil
-----------------------------------------------------------------
Presidion Corporation (OTC Bulletin Board: PSDI), a leading
provider of human resources management services to small and mid-
sized companies, had sold 25,000 shares of its Series B
Convertible Preferred Stock to Mercator Advisory Group LLC of Los
Angeles, California and its three designated funds:
-- Mercator Momentum Fund, LP
-- Mercator Momentum Fund III, LP and
-- Monarch Pointe Fund Ltd.
Presidion received $2.5 million in cash in the transaction.
Presidion also issued warrants to the group for the purchase of up
to 25 million shares of its common stock. Presidion has agreed to
file a registration statement for the underlying common stock with
the Securities and Exchange Commission by April 1, 2005. The new
equity will be used to retire debt and fund working capital. In
2003, Mercator purchased $2.0 million in convertible debentures
from Presidion.
Craig A. Vanderburg, President and CEO of Presidion, said the
transaction is an important element of Presidion's financial
strategy. "Mercator has been a good partner for Presidion and we
are very pleased to have executed this agreement, which
contributes to our ability to pursue our growth strategy and
deliver value for our shareholders," Mr. Vanderburg said.
David Firestone, Managing Partner of Mercator Advisory Group,
said, "Presidion has the attributes of the companies in which
Mercator seeks to invest. The Professional Employer Organization
(PEO) market is strong and growing, and Presidion is very well
positioned to take advantage of market opportunities. We're
confident in the management team and the steps it has taken to
prepare the company for future growth."
About Mercator Advisory Group
Mercator Advisory Group LLC, through its designated managed equity
funds, specializes in direct equity investments in public
companies. Mercator's strategy is to make investments into micro
cap companies that show strong potential for near- and long-term
appreciation. Mercator incorporates strict selection criteria for
its portfolio companies including a company's liquidity,
fundamental analysis within its own space and the ability of the
company's management to show a path toward growth.
About Presidion Corporation
Presidion Corporation is one of the largest Professional Employer
Organizations (PEO) in the United States. With more than 1,900
client companies, Presidion provides human resources, regulatory
compliance and employee benefits management services to
approximately 29,000 worksite employees. The Company's operations
are headquartered in Jupiter, Fla. and supported by sales and
services offices throughout its market area of Florida, Georgia,
South Carolina and Michigan. For more information, visit
http://www.presidion.com/
At Sept. 30, 2004, Presidion Corp.'s balance sheet showed a
$5,384,671 stockholders' deficit, compared to a $514,035 deficit
at Dec. 31, 2003.
PROXIM CORP: Updates Fourth Quarter 2004 Financial Guidance
-----------------------------------------------------------
Proxim Corporation (Nasdaq: PROX), a global leader in wireless
networking equipment for Wi-Fi and wide area networks, updated its
financial guidance for the fourth fiscal quarter of 2004. Proxim
now expects fourth quarter 2004 revenue will be in the range of
$22 million to $24 million, compared to the $32 million to $35
million target previously provided in October 2004. Based on
revenue in this range, Proxim expects to report a non-GAAP or
operating pro-forma loss per share in the range of ($.34) to
($.29) for the fourth fiscal quarter of 2004, which compares to
the target range previously provided for the quarter of ($.14) to
($.09). At this time, Proxim is unable to provide guidance on its
projected GAAP loss per share results.
Factors contributing to the revised financial guidance for the
fourth quarter revenue include:
-- Lower than expected wireless carrier revenue due to
continued carrier consolidation and delayed deployments;
-- Lower than expected Wi-Fi product revenue due to:
* An unforeseen Wi-Fi pricing action from Cisco Systems,
Inc. and resulting pricing pressure; and
* Delayed transitions from the ORiNOCO AP-2000 platform
to the ORiNOCO AP-4000 platform within key OEM
accounts; and
-- Unexpected Tsunami MP.11 Model 5054R product availability
issues that have prevented product shipments on several
transactions.
About the Company
Proxim Corporation provides enterprise and service provider
customers with wireless solutions for the mobile enterprise,
security and surveillance, last mile access, voice and data
backhaul, public hot spots, and metropolitan area networks.
Product families include the Award-winning ORiNOCO Wi-Fi products,
Tsunami Ethernet bridges, and Lynx point-to-point digital radios.
Proxim is a principal member of the WiMAX Forum(TM) and a member
of the Wi-Fi Alliance. The company is publicly traded on the
NASDAQ under the symbol PROX and is on the Web at
http://www.proxim.com/
At Oct. 1, 2004, Proxim Corp.'s balance sheet showed a $111,284,00
stockholders' deficit, compared to a $79,088,000 deficit at
Dec. 31, 2003.
RAINBOW LANES: Case Summary & 2 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Rainbow Lanes, Inc.
aka Rainbow Lanes Lounge
1225 South Highland Avenue
Clearwater, Florida 33756
Bankruptcy Case No.: 04-24666
Type of Business: The Debtor operates a bowling center.
Chapter 11 Petition Date: December 27, 2004
Court: Middle District of Florida (Tampa)
Judge: Chief Paul M. Glenn
Debtor's Counsel: R. Eric Rubio, Esq.
Law Office of R. Eric Rubio LLC
619 Stone Drive
Brandon, FL 33510
Tel: 813-681-5453
Fax: 813-661-9368
Total Assets: $1,987,920
Total Debts: $2,700,350
Debtor's 2 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Florida Dept. of Revenue $31,000
5050 W. Tennessee St.
Tallahasse, FL 32399
Various $2,350
[address not provided]
RESIDENTIAL ACCREDIT: Fitch Assigns Low-B Ratings on 4 Classes
--------------------------------------------------------------
Fitch rates Residential Accredit Loans, Inc.'s mortgage pass-
through certificates, series 2004-QS16:
-- $510,169,433 classes I-A-1 - I-A-5, II-A-1, I-A-P, II-A-
P, I-A-V, II-A-V, R-I, R-II and R-III senior
certificates 'AAA';
-- $9,691,700 class I-M-1 'AA';
-- $2,496,200 class II-M-1 'AA';
-- $3,876,400 class I-M-2 'A';
-- $208,000 class II-M-2 'A';
-- $2,153,600 class I-M-3 'BBB';
-- $312,000 class II-M-3 'BBB';
-- $2,153,500 privately offered class I-B-1 'BB';
-- $156,000 privately offered class II-B-1 'BB';
-- $1,292,100 privately offered class I-B-2 'B';
-- privately offered class II-B-2 $104,000 'B'.
Fitch does not rate the privately offered $1,938,288 class I-B-3
nor $156,061 class II-B-3 certificates.
The mortgage pool consists of two groups of mortgage loans
referred to as the group I and the group II loans.
Loan group I consists of mortgage loans with terms to
maturity of generally not more than 30 years and will be
supported by the I-M-1, I-M-2, I-M-3, I-B-1, I-B-2 and I-B-
3 certificates.
Loan group II consists of mortgage loans with terms to
maturity of generally not more than 15 years and will be
supported by the II-M-1, II-M-2, II-M-3, II-B-1, II-B-2 and
II-B-3 certificates.
The 'AAA' rating on the group I senior certificates reflects the
4.90% subordination provided by:
* the 2.25% class I-M-1,
* the 0.90% class I-M-2,
* the 0.50% class I-M-3,
* the 0.50% privately offered class I-B-1,
* the 0.30% privately offered class I-B-2 and
* the 0.45% privately offered class I-B-3.
The 'AAA' rating on the group II senior certificates reflects the
3.30% subordination provided by:
* the 2.40% class II-M-1,
* the 0.20% class II-M-2,
* the 0.30% class II-M-3,
* the 0.15% privately offered class II-B-1,
* the 0.10% privately offered class II-B-2 and
* the 0.15% privately offered class II-B-3.
Fitch believes the above credit enhancement will be adequate to
support mortgagor defaults as well as bankruptcy, fraud and
special hazard losses in limited amounts. In addition, the
ratings reflect the quality of the mortgage collateral, strength
of the legal and financial structures, and Residential Funding
Corp.'s -- RFC -- master servicing capabilities, rated 'RMS1' by
Fitch.
As of the cut-off date, Dec. 1, 2004, the mortgage pool consists
of 3,397 conventional, fully amortizing, fixed-rate mortgage loans
secured by first liens on one- to four- family residential
properties with an aggregate principal balance of approximately
$534,707,282. The group I mortgage pool consists of 2,650
mortgage loans with an aggregate principal balance of
$430,708,800. The mortgage pool has a weighted average original
loan-to-value ratio -- OLTV -- of 77.16%.
The weighted-average FICO score of the loans in the pool is 723
and approximately 52.15% and 4.55% of the mortgage loans possess
FICO scores greater than or equal to 720 and less than 660,
respectively. Loans originated under a reduced loan documentation
program account for approximately 43.26% of the pool, equity
refinance loans account for 30.82%, and second homes account for
1.54%. The average loan balance of the loans in the pool is
approximately $162,532.
The three states that represent the largest portion of the loans
in the pool are:
* California (16.18%),
* Texas (12.59%) and
* Florida (6.90%).
The group II mortgage pool consists of 747 mortgage loans with an
aggregate principal balance of approximately $103,998,482. The
mortgage pool has a weighted average OLTV of 68.74%. The
weighted-average FICO score of the loans in the pool is 724 and
approximately 50.87% and 4.58% of the mortgage loans possess FICO
scores greater than or equal to 720 and less than 660,
respectively. Loans originated under a reduced loan documentation
program account for approximately 65.81% of the pool, equity
refinance loans account for 51.74%, and second homes account for
4.03%. The average loan balance of the loans in the pool is
approximately $139,222.
The three states that represent the largest portion of the loans
in the pool are:
* California (18.61%),
* Texas (14.59%) and
* Florida (6.05%).
All of the group I mortgage loans were purchased by the depositor
through its affiliate, Residential Funding, from unaffiliated
sellers except in the case of 27.5% of the mortgage loans, which
were purchased by the depositor through its affiliate, Residential
Funding, from HomeComings Financial Network, Inc., a wholly-owned
subsidiary of the master servicer. Approximately 41.1% of the
group I loans were purchased from National City Mortgage Company.
Except as described in the preceding sentence, no unaffiliated
seller sold more than approximately 4.2% of the mortgage loans to
Residential Funding. Approximately 58% of the mortgage loans are
being subserviced by HomeComings Financial Network, Inc., rated
'RPS1' by Fitch, as primary servicer.
All of the group II mortgage loans were purchased by the depositor
through its affiliate, Residential Funding, from unaffiliated
sellers except in the case of 39.6% of the mortgage loans, which
were purchased by the depositor through its affiliate, Residential
Funding, from HomeComings Financial Network, Inc., a wholly-owned
subsidiary of the master servicer. Approximately 20.8% of the
group II mortgage loans were purchased from National City Mortgage
Company. Except as described in the preceding sentence, no
unaffiliated seller sold more than approximately 3% of the
mortgage loans to Residential Funding. Approximately 76.1% of the
mortgage loans are being subserviced by HomeComings Financial
Network, Inc.
None of the mortgage loans were subject to the Home Ownership and
Equity Protection Act of 1994. Furthermore, none of the mortgage
loans are loans that, under applicable state or local law in
effect at the time of origination of the loan are referred to as:
(1) 'high-cost' or 'covered' loans or
(2) any other similar designation if the law imposes
greater restrictions or additional legal liability for
residential mortgage loans with high interest rates,
points and/or fees.
For additional information on Fitch's rating criteria regarding
predatory lending legislation, please see the press release issued
May 1, 2003, entitled 'Fitch Revises Rating Criteria in Wake of
Predatory Lending Legislation,' available on the Fitch Ratings web
site at http://www.fitchratings.com/
The mortgage loans were originated under GMAC-RFC's Expanded
Criteria Mortgage Program (Alt-A program). Alt-A program loans
are often marked by one or more of these attributes:
(1) a non-owner-occupied property;
(2) the absence of income verification; or
(3) a loan-to-value ratio or debt service/income ratio that
is higher than other guidelines permit.
In analyzing the collateral pool, Fitch adjusted its frequency of
foreclosure and loss assumptions to account for the presence of
these attributes.
Deutsche Bank Trust Company Americas will serve as trustee. RALI,
a special purpose corporation, deposited the loans in the trust,
which issued the certificates. For federal income tax purposes,
an election will be made to treat the trust fund as three real
estate mortgage investment conduits -- REMICs.
RIVERAIR LLC: Section 341(a) Meeting Slated for February 11
-----------------------------------------------------------
The U.S. Trustee for Region 2 will convene a meeting of RiverAir
LLC and its debtor-affiliates' creditors at 1:30 p.m., on Feb. 11,
2005, at Office of the U.S. Trustee, 80 Broad Street, 2nd Floor,
New York, New York 10004-1408. 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 New York, New York, RiverAir LLC and its debtor-
affiliates' business is the development and building of a 45-unit
luxury residential condominium building -- RiverAir Condominiums
-- over the Young Israel Synagogue located at 210 West 91st Street
in New York City. The Debtors filed for chapter 11 protection on
November 29, 2004 (Bankr. S.D.N.Y. Case No. 04-17586). Dennis J.
Drebsky, Esq., at Nixon Peabody represents the Debtors in their
restructuring efforts. When the Debtors filed for protection
against their creditors, each of the Debtors estimated assets of
more than $10 million and debts of more than $1 million.
RIVERAIR LLC: Look for Bankruptcy Schedules on Jan. 13
------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave RiverAir LLC and its debtor-affiliates, more time to file
their schedules of assets and liabilities, statement of financial
affairs, schedules of executory contracts and unexpired leases,
and list of equity security holders. The Debtor has until Jan.
13, 2005, to file its schedules and statements.
The Debtors give the Court four reasons on why their bankruptcy
schedules should be extended:
a) the size and scope of the Debtors' business and the
complexity of their financial affairs;
b) the limited staffing available for the Debtors for them to
perform the required review of their businesses;
c) the press of numerous matters incident to the commencement
of the Debtors' chapter 11 cases; and
d) the recent appointment of new management for the Debtors and
the apparent disarray of records maintained by the prior
management.
The Debtors tell the Court that the extension will give them more
time to accurately prepare and complete the required Schedules and
Statement on or before the extension deadline.
Headquartered in New York, New York, RiverAir LLC and its debtor-
affiliates' business is the development and building of a 45-unit
luxury residential condominium building -- RiverAir Condominiums
-- over the Young Israel Synagogue located at 210 West 91st Street
in New York City. The Debtors filed for chapter 11 protection on
November 29, 2004 (Bankr. S.D.N.Y. Case No. 04-17586). Dennis J.
Drebsky, Esq., at Nixon Peabody represents the Debtors in their
restructuring efforts. When the Debtors filed for protection
against their creditors, each of the Debtors estimated assets of
more than $10 million and debts of more than $1 million.
ROGERS COMMS: Unit Buys 20% Interest in Sportsnet for C$45 Million
------------------------------------------------------------------
Rogers Media Inc., a division of Rogers Communications Inc., has
acquired the 20% interest in Rogers Sportsnet Inc. held by Fox
Sports Net Canada Holdings LLC, an affiliate of Fox Cable Networks
of Los Angeles, California for C$45 million.
Rogers Sportsnet Inc. operates four distinct all-sports channels:
Rogers Sportsnet Pacific, West, Ontario and East, plus Rogers
Sportsnet HD, all of which are carried by cable and satellite
television across Canada. Each channel combines "home-town"
sports events and news aimed at a specific region of Canada with
other high-demand sports programming. Rogers Sportsnet HD is the
leader in Canadian high-definition broadcasting, producing more HD
events than any other Canadian broadcaster, specialty or over-the-
air station. Sportsnet has 7.3 million subscribers and annual
revenues in excess of C$100 million.
Sportsnet was developed and launched in 1998 by Rogers, CTV and
Fox. In 2001, Rogers increased its ownership position in
Sportsnet to 80% when it purchased CTV's 40% ownership interest in
the rapidly growing regional sports network. With the acquisition
of the 20% interest in Sportsnet from Fox, Rogers now owns 100% of
Rogers Sportsnet.
About the Company
Rogers Media Inc., a division of Rogers Communications Inc.,
operates Rogers Broadcasting and Rogers Publishing. Rogers
Broadcasting has 43 AM and FM radio stations across Canada.
Television properties include Toronto multicultural television
broadcasters OMNI.1 and OMNI.2, the national televised and
electronic shopping service the Shopping Channel, the five
nationally-available Rogers Sportsnet channels including Rogers
Sportsnet HD, and the management of three digital television
services. Rogers Publishing produces many well-known consumer
magazines such as Maclean's, Chatelaine, Flare, L'actualite and
Canadian Business, and is the leading publisher of a number of
trade publications. Most media properties are integrated with
their own popular web sites.
Rogers Communications Inc. (TSX: RCI; NYSE: RG) --
http://www.rogers.com/-- is a diversified Canadian communications
and media company. It is engaged in cable television, high-speed
Internet access and video retailing through Canada's largest cable
television provider, Rogers Cable Inc.; in wireless voice and data
communications services through Rogers Wireless Communications
Inc., Canada's largest wireless provider and the country's only
provider operating on the GSM/GPRS world standard technology
platform; and in radio, television broadcasting, televised
shopping and publishing businesses through Rogers Media Inc.
* * *
As reported in the Troubled Company Reporter on Nov. 10, 2004,
Standard & Poor's Ratings Services lowered its long-term corporate
credit ratings on Rogers Communications, Inc. -- RCI, Rogers Cable
Inc., and Rogers Wireless Inc. -- RWI -- to 'BB' from 'BB+'
following RWI's successful tender for various equity securities of
Microcell Telecommunications, Inc. Given the success of the
offer, and lack of any other material conditions RWI is expected
to complete the acquisition of Microcell in the near term. The
outlook is currently stable.
SAFETY-KLEEN: Creditor Trust's Third Quarter 2004 Status Report
---------------------------------------------------------------
Oolenoy Valley Consulting, LLC, as trustee of the Safety-Kleen
Creditor Trust, present to the United States Bankruptcy Court for
the District of Delaware its quarterly status report for the
period commencing July 1, 2004, through September 30, 2004.
Laidlaw Distribution and Cash
Component Distribution
There were no distributions from the Laidlaw Distribution and Cash
Component Distribution during the Reporting Period. However, on
November 18, 2004, the Trustee made an Initial Distribution from
the Class 4 and 5 Distributions of $24,897,453 to holders of
allowed claims in classes 4 and 5. The remainder of the Class 4
and 5 Distributions are being held in constructive trust, together
with any amounts retained or received in connection therewith, for
the benefit of holders of Allowed Claims in Classes 4 and 5, and
will be distributed in accordance with the terms of the Plan
following completion of the claims reconciliation process.
PwC Litigation Distribution
As of the end of the Reporting Period, the PwC Litigation Claim
and Lenders' PwC Litigation Claim remained pending. However, in
October 2004, the parties reached an agreement to settle both
actions. Although the terms of the settlement are confidential,
counsel for the Reorganized Debtors has advised the Trustee that
the collective net proceeds from the settlement of those actions
do not exceed $200 million. As a result, there will be no
recovery by the Trust on account of the settlement of the Claims.
Report on Avoidance Claims
During the Reporting Period, the Trustee recovered $1,950,327 from
the settlement of various Avoidance Actions, and a number of
additional actions were settled in principle for which settlement
proceeds of approximately $78,312 remained outstanding as of
September 30, 2004. The Trustee, through its counsel, is
continuing to negotiate with the defendants in the Avoidance
Actions in an effort to resolve those claims in an expeditious and
cost effective manner.
Report on Claims Reconciliation
As of July 1, 2004, there were approximately:
-- 400 claims and scheduled liabilities in Class 4 totaling
$290,000,000; and
-- 18,300 claims and scheduled liabilities in Class 7
totaling $555,000,000.
As a result of the Trustee's success in prosecuting claims
objections and, in many cases, obtaining voluntary withdrawals of
claims, as of September 30, 2004, approximately:
-- 140 Class 4 claims and scheduled liabilities remained
with a dollar value of $190,000,000; and
-- 17,825 Class 7 claims and scheduled liabilities remained
with a dollar value of $590,000,000 (the increase in the
dollar value of the Class 7 claims is due primarily to
the movement of claims from Class 4 to Class 7).
The Trustee is working diligently to reconcile the remaining
claims in Classes 4 through 7. On November 4, 2004, the Trustee
filed a joint motion with the Reorganized Debtors seeking to
extend the deadline by which they may object to proofs of claim
through June 16, 2005. The Court approved the joint motion on
November 19, 2004.
Distributions by the Trust
Safety-Kleen Creditor Trust
Statement of Cash Receipts and Disbursements
For the three months ended September 30, 2004
Class 4 & 5 Class 6 & 7
Claims Claims Total
------------ ------------ -----------
Cash receipts:
Initial funding -- -- --
Preference collections -- $1,950,327 $1,950,327
------------ ------------ -----------
-- $1,950,327 $1,950,327
Cash receipts from
investing activities:
Interest income $49,902 4,046 53,948
Cash disbursements
from trust operations:
Distributions -- -- --
Trust expenses -- 645,749 645,749
------------ ------------ -----------
-- 645,749 645,749
Net increase in cash 49,902 1,308,624 1,358,526
Cash, beginning of period 28,437,676 1,752,487 30,190,163
------------ ------------ -----------
Cash, end of period $28,487,578 $3,061,111 $31,548,689
============ ============ ===========
Headquartered in Delaware, Safety-Kleen Corporation --
http://www.safety-kleen.com/-- provides specialty services such
as parts cleaning, site remediation, soil decontamination, and
wastewater services. The Company, along with its affiliates,
filed for chapter 11 protection (Bankr. D. Del. Case No. 00-02303)
on June 9, 2000. Gregg M. Galardi, Esq., at Skadden, Arps, Slate,
Meagher, represents the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $3,031,304,000 in assets and $3,333,745,000 in liabilities.
(Safety-Kleen Bankruptcy News, Issue No. 84; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
SGP ACQUISITION: Committee Taps Monzack & Monaco as Counsel
-----------------------------------------------------------
The Official Committee of Unsecured Creditors of SGP Acquisition,
LLC, asks the U.S. Bankruptcy Court for the District of Delaware
for permission to employ Monzack and Monaco, P.A., as its counsel.
Monzack and Monaco is expected to:
a) provide the Committee with legal advice with respect to it
powers and duties in the Debtor's chapter 11 case;
b) provide legal advice to the Committee with respect to any
proposed disclosure statement and plan of reorganization and
with respect to the powers of approving or disapproving a
disclosure statement and confirming or denying a proposed
plan;
c) prepare on behalf of the Committee necessary applications,
motions, complaints, answers, orders, agreements and other
legal papers;
d) appear in Court to present necessary motions, applications
and pleadings and to protect the interests of the Committee;
and
e) perform all other legal services to the Committee that may
be necessary and proper in the Debtor's chapter 11 case.
Francis A. Monaco, Jr., Esq., a Director at Monzack and Monaco, is
the lead attorney for the Committee. Mr. Monaco will charge at
$425 per hour.
Mr. Monaco reports Monzack and Monaco's professionals bill:
Professional Designation Hourly Rate
------------ ----------- -----------
Joseph J. Bodnar Counsel $325
Kevin J. Mangan Counsel 295
Heidi Sasso Paralegal 140
Monzack and Monaco assures the Court that it does not represent
any interest adverse to the Debtor or its estate.
Headquartered in Greenville, South Carolina, SGP Acquisition, LLC,
-- http://www.slazengergolf.com/-- markets a wide array of
premium golf apparel, golf balls, and related accessories. The
Company filed for chapter 11 protection on November 30, 2004
(Bankr. D. Del. Case No. 04-13382). Frederick B. Rosner, Esq., at
Jaspan Schlesinger Hoffman represent the Debtor in its
restructuring. When the Debtor filed for protection from its
creditors, it listed estimated assets and debts of $10 million to
$50 million.
SGP ACQUISITION: U.S. Trustee Picks 5-Member Creditors Committee
----------------------------------------------------------------
The United States Trustee for Region 2 appointed five creditors
to serve on the Official Committee of Unsecured Creditors of
SGP Acquisition, LLC's chapter 11 case:
1. Sherwood Packaging Corporation
Attn: Robert M La Salvia
350 Wireless Blvd, Suite 1
Hauppage, New York 11788
Phone: 631-232-9500 Ext. 5504, Fax: 631-582-1234
2. Chung Kong Knitwear Ltd.
Attn: Steven Hin Ming
Unit A, 4th Floor
Fast Industrial Bldg., 658 Castle Peak Road
Kowloon, Hong Kong
Phone: 852-2783-7623, Fax: 852-2371-3180
3. Unimilo Knitwear Co., Ltd
Attn: Lin Sun Ping Anthony
6th Floor, Milo's Industrial Bldg,
2-10 Tai Yuen Street, Kwai Chung
N.T., Hong Kong
Phone: 852-2420-6029, Fax: 852-2481-0952
4. Shui King Knitting & Garment Factory, LTD.
Attn: Lee Ka Kui Edmund
10th Floor, Unimix Industrial Center
2NG Fong St, San Po Kong
Kowloon, Hong Kong
Phone: 852-2329-7795, Fax: 852-2522-7006 or 852-2329-7795
5. VR Link Corporation
Attn: Mark D. Barrett
P.O. Box 90, 10033 Sawglass Drive
West Point Vedra, Florida 32004
Phone: 904-285-3434, Fax: 904-395-0058
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 Greenville, South Carolina, SGP Acquisition, LLC,
-- http://www.slazengergolf.com/-- markets a wide array of
premium golf apparel, golf balls, and related accessories. The
Company filed for chapter 11 protection on November 30, 2004
(Bankr. D. Del. Case No. 04-13382). Frederick B. Rosner, Esq., at
Jaspan Schlesinger Hoffman represent the Debtor in its
restructuring. When the Debtor filed for protection from its
creditors, it listed estimated assets and debts of $10 million to
$50 million.
SOVEREIGN SPECIALTY: Henkel Completes $575 Million Acquisition
--------------------------------------------------------------
Henkel Corporation, a U.S. affiliate of Henkel KGaA -- Dusseldorf,
Germany, successfully completed the acquisition of the U.S.
adhesives company Sovereign Specialty Chemicals, Inc. on Dec. 27,
2004. The transaction value of the acquisition is approximately
$575 million.
"The acquisition of Sovereign Specialty Chemicals provides Henkel
in North America with a substantial and growing business in the
craftsmen and DIY adhesives and sealants market and complements
the industrial segment in an ideal way. We now hold a strong
number two position in both segments in the U.S. market," says
Ulrich Lehner, Chairman of the Management Board of Henkel KGaA.
"With the successful completion of all acquisitions made in 2004,
the Henkel Group will generate about 25 percent of its sales in
the USA."
The Henkel Group operates in three strategic business areas --
Home Care, Personal Care, and Adhesives, Seal-ants and Surface
Treatment. In fiscal 2003 the Henkel Group generated sales of
9.436 billion euros and an operating profit (EBIT) of 706 million
euros. More than 50,000 employees work for the Henkel Group
worldwide. People in 125 countries around the world trust in
brands and technologies from Henkel.
Sovereign Specialty Chemicals, Inc., headquartered in Chicago,
Illinois, produces adhesives, sealants and coatings primarily for
the commercial and construction markets. Revenues were roughly
$400 million for the LTM ended September 30, 2004.
Sovereign Specialty Chemicals employs about 900 people worldwide
and realized sales of $391 million from July 1, 2003, through
June 30, 2004. The product range encompasses technologically
sophisticated adhesives, sealants and coating materials for
various industrial applications as well as for the craftsmen and
DIY market segment.
* * *
As reported in the Troubled Company Reporter on Nov. 15, 2004,
Moody's Investors Service placed the ratings of Sovereign
Specialty Chemicals, Inc.'s under review for possible upgrade due
to the pending acquisition of Sovereign by Henkel Corporation for
approximately $575 million. This transaction is expected to close
by year-end 2004.
Ratings placed under review for possible upgrade:
* Sovereign Specialty Chemicals, Inc.
-- Guaranteed Senior Secured Revolving Credit Facility: B1
-- Guaranteed Senior Secured Term Loan A: B1
-- Guaranteed Senior Secured Term Loan B: B1
-- Senior Subordinated Notes: Caa1
-- Senior Implied: B2
-- Issuer Rating: B3
TEREX CORP: Moody's Affirms Senior Implied Ratings at B1
--------------------------------------------------------
Moody's Investors Service affirmed the debt ratings of Terex
Corporation, senior implied at B1 with a stable rating outlook,
and lowered the company's speculative grade liquidity rating to
SGL-2 from SGL-1. The rating affirmation reflects the company's
strengthened market position in a number of key end-markets,
increasing scale and diversification of product offerings and
geographic presence, and continued favorable operating
performance, balanced against the continued cyclical nature of its
core businesses.
The SGL-2 rating reflects the company's ongoing good liquidity
profile with significant balance sheet cash and strong operating
cash flows. Nevertheless, because of an ongoing effort to resolve
an imbalance in certain intercompany accounts, the company has not
yet published its third quarter 10Q with the SEC. While this has
not impaired the company's access to its bank credit facilities,
any protracted delays in filing financial statements could
necessitate obtaining bank waivers in the future. While it is
likely that such waivers could be obtained, the current
uncertainty as to the resolution of the imbalances and the timing
of filing financial statements has the potential to diminish the
company's financial flexibility if not resolved in a timely
manner.
The company has indicated that the net imbalance involved is $11
million, but the ultimate resolution could have impacts greater or
lesser than the $11 million on individual line items of any
affected financial statements.
Notwithstanding the ongoing resolution process, Moody's notes that
Terex Corp.'s current liquidity is strong. Moreover, the company's
earning performance, cash generation and credit metrics are
improving due to the recovery in the domestic construction
equipment market.
Despite liquidity that is currently sound and the company's strong
operating fundamentals, Moody's believes that the current
uncertainty is inconsistent with an SGL-1 speculative grade
liquidity rating. Moody's expects that a satisfactory resolution
of the imbalance and a subsequent filing of Terex's financial
reports would likely result in an upgrade of the Speculative Grade
Liquidity Rating to SGL-1.
Terex Corp.'s liquidity is currently supported by approximately
$235 million available under its $300 million committed revolving
credit facility that matures July 2007. Moody's believes that the
company has ample headroom under the facility's financial
covenants. In addition, at the end of 3Q04, the company had a
significant cash position of $393 million. Liquidity is further
enhanced by the likelihood of continuing strong operating cash
flow generation over the next 12 months, which should adequately
cover its payment obligations, capital spending and other
operational needs over the same period.
Operationally, Terex Corp. continues to benefit from the recovery
in the domestic construction equipment market with higher levels
of capital spending. Sales have increased by 26% through 3Q04
ended September 30, 2004, on a year-over year basis. Rising steel
prices are modestly impacting the company's operating results.
Nevertheless, gross cash flow should continue to adequately fund
working capital requirements as well as required capital
expenditures resulting in free cash flow generation.
Terex Corporation, headquartered in Westport, Connecticut, is a
diversified global manufacturer of construction, infrastructure
and surface mining equipment. Terex's LTM (September 2004)
revenues were approximately $4.6 billion.
VORNADO OPERATING: Paying $2.85 Per Share Liquidating Distribution
------------------------------------------------------------------
Vornado Operating Company (OTC BB: VOOC) filed its Certificate of
Dissolution to dissolve, and has closed its stock transfer books.
VOOC previously disclosed that it expected to pay a liquidating
cash distribution of approximately $2.85 per share upon approval
of the settlement of a litigation in Delaware. That distribution
was expected to consist of approximately $2.00 per share from the
assets of VOOC and approximately $0.85 per share as a result of
the settlement. The settlement hearing took place last Tuesday,
Dec. 28, at which the judge determined to postpone his decision
until mid-January of 2005. Accordingly, VOOC's exchange agent
will pay a liquidating cash distribution of $2.00 per share to
stockholders upon surrender of their stock certificates and
delivery to the exchange agent of any other required
documentation. The exchange agent is mailing instructions for
surrendering certificates to stockholders and recommends they take
no action until they have received and read those instructions.
If the settlement is approved in mid-January, VOOC expects to
distribute the settlement proceeds less the then applicable
litigation expenses promptly thereafter.
At Sept. 30, 2004, Vornado Operating's balance sheet showed a
$25,214,482 stockholders' deficit, compared to a $24,217,550
deficit at Dec. 31, 2003.
WIND RIVER: Moody's Assigns Ratings to Five Classes of Notes
------------------------------------------------------------
Moody's Investors Service announced that it had assigned ratings
to five classes of notes issued by Wind River CLO I
Ltd. (the Issuer):
(1) Aaa to the U.S. $365,000,000 Class A-1 Senior Secured
Floating Rate Notes Due 2016;
(2) Aa2 to the U.S. $23,000,000 Class A-2 Senior Secured
Floating Rate Notes Due 2016;
(3) A2 to the U.S. $25,000,000 Class B-1 Senior Secured
Deferrable Floating Rate Notes Due 2016 and U.S. $7,000,000
Class B-2 Senior Secured Deferrable Fixed Rate Notes Due
2016;
(4) Baa2 to the U.S. $15,000,000 Class C-1 Senior Secured
Deferrable Floating Rate Notes Due 2016 and U.S.
$12,000,000 Class C-2 Senior Secured Deferrable Fixed Rate
Notes Due 2016; and
(5) Ba1 to the U.S. $9,000,000 Class D Secured Deferrable Fixed
Rate Notes Due 2016.
Moody's did not assign ratings to the Issuer's U.S. $8,000,000
Class C-3 Senior Secured Zero Coupon Notes Due 2016 or its U.S.
$47,500,000 Subordinated Notes Due 2016. The collateral pool
consists of U.S. Dollar denominated senior secured loans and high
yield debt securities. The Collateral Manager is McDonnell
Investment Management, LLC.
According to Moody's, these ratings are based primarily on the
expected loss posed to noteholders relative to the promise of
receiving the present value of such payments. Moody's also
analyzed the risk of diminishment of cashflows from the underlying
portfolio of corporate debt due to defaults, the characteristics
of these assets and the safety of the transaction's legal
structure.
WHITING PETROLEUM: Moody's Assigns B2 Ratings to Senior Sub. Notes
------------------------------------------------------------------
Moody's Investors Service confirmed Whiting Petroleum's B2 senior
subordinated note and Ba3 senior implied ratings with a stable
rating outlook. Whiting has completed a year of major transforming
acquisitions, totaling $516 million, and funded that activity with
sufficient internal and common equity capital to adequately share
with debt and equity the acquisition risk and prepare the balance
sheet for further acquisitions.
Moody's also assigned a first time Speculative Grade Liquidity
rating of SGL-2, indicating good combined cash flow, back-up
liquidity, and covenant coverage relative to currently budgeted
outlays and a planned reasonable level of acquisition activity
over the next four quarters.
On a much larger scale and diversification of reserves after its
major transforming acquisition activity this year, Whiting
subsequently and substantially reduced its acquisition debt by
executing a $240 million common equity offering and further
reducing debt with free cash flow.
Unless Whiting incurs material revisions to its October 31, 2004
proven reserve estimates after third party engineering is
completed for year-end 2004, year-end total proven reserves would
be in the range of 144.5 mmboe and proven developed (PD) reserves
would approximate 101.1 mmboe.
Accordingly, year-end 2004 leverage on PD reserves appears to be
in the range of $3.25/boe, quite sound relative to Whiting's
ratings and scale and supportive of its expected continuing
acquisitive nature.
In two sensitized price cases, including a $37.50/barrel West
Texas Intermediate oil price and $5.75/mcf Henry Hub natural gas
price case and a $30 WTI oil price and $5/mcf Henry Hub natural
gas price case, Whiting demonstrates solid cash flow and back-up
liquidity coverage of expected 2005 interest expense ($17
million), capital spending ($150 million), debt maturities (none),
common dividends (none), cash taxes (minimal), and working capital
growth (minimal).
A caveat to both the SGL-2 liquidity rating and fundamental debt
ratings is that Whiting is understandably likely to continue being
quite acquisitive. The direction of Whiting's SGL and debt ratings
will be influenced by the quality and unit cost of its
acquisitions and the degree to which Whiting mitigates the
associated business and leverage risk with an adequate funding mix
of internal cash flow and common equity.
After transforming its property base this year, Whiting's rating
strength will also be a function of its actual resulting unit
operating and unit reserve replacement costs for its new portfolio
mix. For example, approximately $345 million out of $516 million
of total 2004 acquisitions was made in the Permian basin, a
producing region that typically incurs high unit production costs.
In the meantime, to date this year, Whiting has been incurring
$9/boe of production expense, an average of $2.82/boe in G&A
expenses, would incur roughly $1.55/boe of unit interest expense
after fourth quarter 2004 debt reduction and, pending our review
of its year-end 2004 FAS 69 data, appears to have incurred three-
year average unit reserve replacement costs in the range of
$7.50/boe after all 2004 acquisitions. Thus, Whiting's leveraged
unit full-cycle costs approximate $20.87/boe (including production
expense and severance tax, gross G&A expense, gross interest
expense, and reserve replacement costs).
At recent high realized prices, and after deducing all expenses
except reserve replacement costs, unit cash margins after interest
expense have been in the $18/boe range. This indicates fairly
robust up-cycle internal funding of approximately 235% of pro-
forma unit reserve replacement costs. This may diminish materially
when prices moderate and, as Moody's anticipates, reserve
replacement costs rise.
Moody's expects Whiting's reserve replacement costs to rise over
time, as Whiting develops a substantial proportion of acquired
proven undeveloped (PUD) reserves, incurs rising drilling and
oilfield services cost inflation and, in line with sector trends,
contends with smaller reserve additions per well.
Whiting appears to face the future from a competitive base of
cash-on-cash returns (leveraged unit cash flow divided by unit
reserve replacement costs). Though not a precise measure of
Whiting's internal funding of sustaining reserve replacement
costs, it does indicate strong interest expense coverage and a
strong propensity for pre-capex unit margins to comfortably cover
Whiting's pattern of sustaining reserve replacement spending,
leaving good internal funding for growth spending and/or debt
reduction.
Overall, the ratings confirmation reflects substantially reduced
debt after Whiting's $240 million common equity offering and
anticipates:
1. a substantially increased and more diversified funded PD
reserve base after a series of 2004 acquisitions;
2. adequately competitive and total full-cycle costs;
3. adequately competitive 2004 and 2004 three year average all-
sources reserve replacement costs; satisfactory production
trends;
4. a supportive price outlook; and an expectation that Whiting
will continue to satisfactorily fund future acquisitions
with internal cash flow and common equity.
Moody's estimates that Whiting will end 2004 with roughly $180
million of secured bank debt (down from a $445 million 2004 peak),
$330 million of total debt (down from a $600 million 2004 peak),
and negligible outstanding letters of credit. Expected year-end
bank debt and nil letters of credit indicate approximately $300
million of borrowing capacity under its secured $480 million
borrowing base revolver.
During 2004, Whiting completed $516 million of acquisitions and
approximately $83 million of capital spending. This was
reasonably 29% funded by debt (approximately $150 million year-to-
year debt increase), $240 million of new common equity, $42
million of equity issued in exchange for Equity Oil common stock,
and approximately $167 million of free cash flow. This follows a
historically conservative financial strategy long employed by
Whiting's management team. Future financing strategy will be a
factor impacting the degree to which the current ratings and
outlook strengthen or weaken.
Whiting's ratings are:
-- B2 rating on $150 million of 8-year senior subordinated
guaranteed notes.
-- Ba3 Senior Implied Rating.
-- SGL-2 liquidity Rating.
-- B1 Senior Unsecured Issuer rating.
Whiting Petroleum Corp. is headquartered in Denver, Colorado.
WOMEN FIRST: Judge Walrath Confirms Amended Plan of Liquidation
---------------------------------------------------------------
The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for
the District of Delaware confirmed the Second Amended Liquidating
Plan of Reorganization filed by Women First Healthcare, Inc., on
December 28, 2004.
Women First filed its Second Amended Plan on December 21, 2004.
The Debtor first filed its Amended Disclosure Statement
accompanying the First Amended Plan on August 19, 2004. The Court
approved the Amended Disclosure Statement on August 20, 2004.
The Plan provides for the appointment of a Liquidating Trustee
pursuant to the terms of the Liquidating Trust Agreement. Under
the Plan, the Liquidating Trustee will be authorized to collect,
sell, liquidate or dispose of the Liquidating Trust Assets and
transfer them to the Liquidating Trust. The Trustee will
distribute the net proceeds of the dispositions to the Liquidating
Trust Beneficiaries.
The Plan groups claims and interest into seven classes and
provided these recoveries:
a) Class 1 unimpaired claims consisting of Senior Secured Noted
Claims, the Elan Claims, and the Wyeth Claims will be paid
in full prior to the Effective Date;
b) Class 2 unimpaired claims consisting of Allowed Other
Secured Claims will be paid in full on the Effective Date;
c) Class 3 unimpaired claims consisting of Unsecured Priority
Non-Tax Claims will be paid in full after the Effective
Date;
d) Class 4 impaired claims consisting of Allowed Unsecured
Claims will receive a Pro Rata share of the Cash and Assets
held in the Liquidating Trust to be given in one or more
distributions to be determined by the Liquidating Trust
Committee;
e) Class 5 impaired claims consisting of Senior Convertible
Redeemable Preferred Stock Rights that are valid and
enforceable will receive payments, but those claim holders
with unperfected, invalid or enforceable claims will not
receive any cash or property under the Plan;
f) Class 6 impaired claims consisting of the WFHC Common Stock
and Securities Claims will not receive any cash or property
under the Plan on account of their claims or interests; and
g) Class 7 impaired claims consisting of all Claims arising out
of the WFHC Stock Right will not receive ant cash or
property under the Plan on account of their claims or
interest.
Full text copies of the Amended Disclosure Statement and Amended
Plan are available for a fee at:
http://www.researcharchives.com/download?id=040812020022
Headquartered in San Diego, California, Women First HealthCare,
Inc. -- http://www.womenfirst.com/-- is a specialty
pharmaceutical company dedicated to improve the health and
well-being of midlife women. The Company filed for chapter 11
protection on April 29, 2004 (Bankr. Del. Case No. 04-11278).
Robert A. Klyman, Esq., at Latham & Watkins LLP, and Michael R.
Nestor, Esq., and Sean Matthew Beach, Esq., at Young Conaway
Stargatt & Taylor, represent the Debtor in its restructuring
efforts. Kirt F. Gwynne, Esq., at Reed Smith LLP, represents the
Official Committee of Unsecured Creditors. When the Company filed
for protection from its creditors, it listed $49,089,000 in total
assets and $73,590,000 in total debts.
WORLDCOM INC: Mexican American Wants to File Late Proof of Claim
----------------------------------------------------------------
Jill R. Jacoway, Trustee for the Estate of Mexican American
Tobacco Company, Inc., doing business as MANA Corp., seeks the
United States Bankruptcy Court for the Southern District of New
York's permission to file a late proof of claim in the WorldCom,
Inc. and its debtor-affiliates' cases.
Kim G. Meyer, Esq., in Atlanta, Georgia, relates that MANA did not
receive the Proof of Claim form and instructions from
WorldCom, Inc., until February 14, 2003 -- after the January 23,
2003, deadline to file a Proof of Claim -- because WorldCom
provided its third party document provider, Bankruptcy Services,
LLC, with an incorrect address for MANA.
WorldCom listed MANA's address as "Suite 960, Galleria Parkway,
Atlanta, GA 30339." The correct address for MANA was "300
Galleria Parkway, Suite 960, Atlanta, GA 30339."
As a result, WorldCom's failure to provide Bankruptcy Services,
LLC, with MANA's correct physical address, caused MANA to file its
Proof of Claim tardy. MANA filed its Proof of Claim on
February 26, 2003.
Ms. Meyer contends that MANA is entitled to relief under the
excusable neglect prong of Rule 9024(b) of the Federal Rules of
Bankruptcy Procedure.
Ms. Meyer points out that WorldCom will not suffer any cognizable
prejudice from permitting MANA to file its late claim. The length
of delay is extremely short. Moreover, WorldCom was the cause for
MANA's tardy filing as MANA did not receive the Proof of Claim
form or bar date notification because of WorldCom's clerical error
in providing an incorrect address for MANA. Thus, ample cause
exists for the Court to invoke its equitable power, finding
"excusable neglect" by MANA, and allowing MANA's previously filed
Proof of Claim to stand as timely filed.
Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com/-- is a pre-eminent global
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts. The Bankruptcy Court confirmed WorldCom's Plan on October
31, 2003, and on April 20, 2004, the company formally emerged from
U.S. Chapter 11 protection as MCI, Inc. (Worldcom Bankruptcy News,
Issue No. 68; Bankruptcy Creditors' Service, Inc., 215/945-7000)
WORLDCOM INC: Wants to Fix Date to Object to AOL's $193.7 M Claim
-----------------------------------------------------------------
AOL Time Warner, Inc., filed Claim No. 16115 for $193,776,465 in
connection with the WorldCom, Inc. and its debtor-affiliates'
rejection of an AOL contract. Buckmaster de Wolf, Esq., at Howrey
Simon Arnold & White, LLP, in San Francisco, California, tells the
United States Bankruptcy Court for the Southern District of New
York that AOL's claim contains no explanation or breakdown.
Through a clerical error, AOL's claim was not included on the list
of claims distributed to the Debtors' counsel responsible for
preparing objections. Hence, the Debtors ask the Court to fix a
date for them to file an objection to AOL's claim, or in the
alternative, seek the Court's permission to file their objection
to AOL's claim.
Mr. de Wolf explains that the timing of the Debtors' filing was
not the result of a conscious disregard of the 180-day period
after the Effective Date. The Debtors faced a Herculean task in
reviewing and analyzing over 38,000 claims, and preparing
objections to those claims. It would be remarkable if no errors
occurred during that effort.
Permitting the Debtors to file their objection to AOL's claim will
not unfairly prejudice AOL, Mr. de Wolf maintains. Furthermore,
the filing of an objection now does not place AOL in any different
position that it would have been in had the objection been filed
within 180 days of the Effective Date. The Debtors promptly
notified AOL after their oversight was discovered.
In contrast, the Debtors and their creditors will suffer prejudice
due to the potential dilutitive impact of the allowance of AOL's
claim for more than $193 million without the intended judicial
review. AOL's claim is substantial and is well in excess of AOL's
actual damages resulting from the rejection of the Promotional
Agreement and improperly seeks administrative priority.
Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com/-- is a pre-eminent global
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts. The Bankruptcy Court confirmed WorldCom's Plan on October
31, 2003, and on April 20, 2004, the company formally emerged from
U.S. Chapter 11 protection as MCI, Inc. (Worldcom Bankruptcy News,
Issue No. 68; Bankruptcy Creditors' Service, Inc., 215/945-7000)
YUKOS OIL: Rosneft Illegally Seizes Yuganskneftegas
---------------------------------------------------
Yukos Oil Company said that the Russian Federation chose to ignore
the rule of law, both in Russia and internationally, by
facilitating Rosneft's illegal seizure of Yuganskneftegas. After
claiming to have paid the approximately $9 billion purchase price
for the common stock of Yuganskneftegas, state-owned Rosneft,
accompanied by the Court Bailiffs, installed their own management
and took control of the production unit headquarters in
Nefteyugansk.
Yukos has obtained a United States Bankruptcy Court Order making
clear that the sale of the Yuganskneftegas stock is a violation of
the automatic stay in its Chapter 11 Bankruptcy case. This is
another step in the illegal conduct of the Russian authorities.
"Rosneft, which is 100 percent owned by the Russian Federation,
continued down a path to expropriate Yukos Oil Company assets
without abiding by Russian law and in violation of all
international legal and business norms of fair and decent
conduct," said Yukos Oil Company CEO Steven Theede. "These
actions have violated Russian law as well as the automatic stay on
Yukos' Chapter 11 case and Yukos will pursue all legal and
commercial actions in appropriate forums to recover damages caused
by this expropriation."
As reported in the Troubled Company Reporter on Dec. 20, 2004, the
Russian Federal Property Fund auctioned Yukos' 76.8% equity stake
in Yuganskneftegas at 4:00 p.m. Sunday afternoon in Moscow. The
bidding started at $8.6 billion and ended with OOO
Baikalfinansgroup presenting the winning $9.35 billion bid
(RUR260.75 billion).
Nobody knows who OOO Baikalfinansgroup is or who's financed its
bid. Baikal is the name of a lake in Siberia; Baikalfins' home
office is located in Tver in western Russia. Some people
speculate, because of the large amount of money involved, that
OAO Surgutneftegaz is Baikalfins' financier. Lukoil said Sunday
that it didn't participate in the auction. Gazprom participated
in the auction despite the temporary restraining order entered
by the U.S. Bankruptcy Court in Houston prohibiting it from
doing so. Hugh Ray, Esq., at Andrews Kurth LLP, representing
Gazprom's lending consortium, says the banks subject to the TRO
halted all financing talks with Gazprom last week.
As reported in the Troubled Company Reporter on Dec. 29, 2004,
United States law gives the U.S. Bankruptcy Court for the Southern
District of Texas in Houston exclusive jurisdiction over the
property of Yukos' Chapter 11 estate "wherever located." Under
the law, an automatic stay went into immediate effect when the
company filed for bankruptcy on Dec. 14, 2004. The automatic stay
protects the company's assets through the bankruptcy process. It
prevents creditors from collecting claims (including tax claims)
that arose prior to the bankruptcy filing or from taking
"possession" or "control" of Yukos property covered under the
filing.
The automatic stay and the Court's December 16 Temporary
Restraining Order barring the auction was violated when
Gazpromneft and Baikal Finance Group participated in the auction
on December 19. Even though the TRO expired last Sunday, the
automatic stay remains in force indefinitely through the
bankruptcy process and until lifted or amended by the Court.
Though Baikal Finance Group, a previously unknown company, emerged
as the winning bidder in the auction, days later its shares were
transferred to or purchased by Rosneft, a government-owned oil
company, itself set to be acquired by Gazprom.
Headquartered in Houston, Texas, Yukos Oil Company --
http://www.yukos.com/-- is an open joint stock company existing
under the laws of the Russian Federation. Yukos is involved in
the energy industry substantially through its ownership of its
various subsidiaries, which own or are otherwise entitled to enjoy
certain rights to oil and gas production, refining and marketing
assets. The Company filed for chapter 11 protection on Dec. 14,
2004 (Bankr. S.D. Tex. Case No. 04-47742). Zack A. Clement, Esq.,
C. Mark Baker, Esq., Evelyn H. Biery, Esq., John A. Barrett, Esq.,
Johnathan C. Bolton, Esq., R. Andrew Black, Esq., Fulbright &
Jaworski, LLP, represent the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, it listed
$12,276,000,000 in total assets and $30,790,000,000 in total
debts.
* BOND PRICING: For the week of January 3 - January 7, 2005
-----------------------------------------------------------
Issuer Coupon Maturity Price
------ ------ -------- -----
Adelphia Comm. 3.250% 05/01/21 21
Adelphia Comm. 6.000% 02/15/06 22
AMR Corp. 4.500% 02/15/24 75
Applied Extrusion 10.750% 07/01/11 57
Armstrong World 6.350% 08/15/03 73
Bank New England 8.750% 04/01/99 21
Burlington Northern 3.200% 01/01/45 59
Calpine Corp. 8.500% 02/15/11 74
Comcast Corp. 2.000% 10/15/29 45
Delta Air Lines 7.900% 12/15/09 60
Delta Air Lines 8.000% 06/03/23 60
Delta Air Lines 8.300% 12/15/29 47
Delta Air Lines 9.000% 05/15/16 56
Delta Air Lines 9.250% 03/15/22 48
Delta Air Lines 9.750% 05/15/21 50
Delta Air Lines 10.125% 05/15/10 61
Delta Air Lines 10.375% 02/01/11 58
Dobson Comm. Corp. 8.875% 10/01/13 71
Falcon Products 11.375% 06/15/09 40
Federal-Mogul Co. 7.500% 01/15/09 29
Finova Group 7.500% 11/15/09 48
Iridium LLC/CAP 14.000% 07/15/05 16
Inland Fiber 9.625% 11/15/07 44
Kaiser Aluminum & Chem. 12.750% 02/01/03 19
Lehmann Bros. Hldg. 6.000% 05/25/05 64
Lehmann Bros. Hldg. 21.680% 02/07/05 65
Level 3 Comm. Inc. 2.875% 07/15/10 68
Level 3 Comm. Inc. 6.000% 09/15/09 61
Level 3 Comm. Inc. 6.000% 03/15/10 60
Liberty Media 3.750% 02/15/30 67
Liberty Media 4.000% 11/15/29 72
Mirant Corp. 2.500% 06/15/21 72
Mirant Corp. 5.750% 07/15/07 71
Mississippi Chem. 7.250% 11/15/17 75
Northern Pacific Railway 3.000% 01/01/47 57
NRG Energy Inc. 6.500% 05/16/06 0
Nutritional Src. 10.125% 08/01/09 66
Oglebay Norton 10.000% 02/01/09 74
O'Sullivan Ind. 13.375% 10/15/09 34
Pegasus Satellite 12.375% 08/01/06 65
Pegasus Satellite 13.500% 03/01/07 1
Pen Holdings Inc. 9.875% 06/15/08 54
Primus Telecom 3.750% 09/15/10 73
Reliance Group Holdings 9.000% 11/15/00 27
Salton Inc. 12.250% 04/15/08 73
Syratech Corp. 11.000% 04/15/07 43
Trico Marine Service 8.875% 05/15/12 67
Tower Automotive 5.750% 05/15/24 69
United Air Lines 9.125% 01/15/12 9
United Air Lines 10.670% 05/01/04 8
Univ. Health Services 0.426% 06/23/20 58
Westpoint Stevens 7.875% 06/15/08 1
Zurich Reinsurance 7.125% 10/15/23 67
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
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, Dylan Carlo Gallegos and Peter A.
Chapman, Editors.
Copyright 2005. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $675 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher Beard
at 240/629-3300.
*** End of Transmission ***