/raid1/www/Hosts/bankrupt/TCR_Public/050112.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, January 12, 2005, Vol. 9, No. 9
Headlines
ACCEPTANCE INSURANCE: Hires Kutak Rock as Bankruptcy Counsel
ACCEPTANCE INSURANCE: Section 341(a) Meeting Slated for Feb. 11
ACCEPTANCE INSURANCE: 6 Creditors Appointed to Serve on Committee
ADELPHIA COMMS: Offers $300M to Settle SEC Action & DOJ Probe
AERO PLASTICS: Taps Lamberth Cifelli as Bankruptcy Counsel
AERO PLASTICS: Section 341(a) Meeting Slated for Feb. 17
AFC ENTERPRISES: Completes Sale of Church's Chicken to Crescent
AIR CANADA: WestJet Executives Added to $220 Million Lawsuit
AMES TRUE: Moody's Rates Proposed $150 Million Senior Notes at B3
ARGUS CORPORATION: Borrows $251K from Ravelston to Pay Dividends
ARTHUR ANDERSEN: U.S. Supreme Court Agrees to Review Conviction
ASSET BACKED: Moody's Assigns Ba1 Rating to Class M7 Certificates
ATA AIRLINES: Pilots Reject Tentative Pact on 15% Wage Cuts
ATHLETE'S FOOT: Section 341(a) Meeting Slated for Jan. 20
AVALON DIGITAL: Emerges from Bankruptcy Protection
BEVERLY ENTERPRISES: $215 Million Exchange Offer Expires Feb. 11
BODY MASTERS SPORTS: Case Summary & 19 Largest Unsecured Creditors
CATHOLIC CHURCH: Trustee Names Spokane Tort Claimants' Committee
CATHOLIC CHURCH: Spokane Wants to Hire Turner as General Counsel
CHARLESTOWNE AT CAVALIER MUTUAL: Voluntary Chapter 11 Case Summary
CONCORDE 1998 LTD: Case Summary & 24 Largest Unsecured Creditors
CSFB MORTGAGE: Moody's Junks Five Security Classes
DATATEC SYSTEMS: U.S. Trustee Picks 7-Member Creditors Committee
DATATEC SYSTEMS: Can Continue Hiring Ordinary Course Professionals
DEL LAB: Moody's Rates Planned $260M Senior Secured Debts at B1
DEL MONTE: Launching $300 Million Senior Debt Offering
ENRON: Wants Court Nod on Connecticut Resources Settlement Pact
FAIRPOINT COMMS: S&P Puts Low-B Ratings on CreditWatch Positive
FASTNET CORP: Files Joint Liquidation Plan in Pennsylvania
FEDERAL-MOGUL: Cooper Wants Voting Procedures Order Enforced
FINOVA GROUP: To Make Partial Prepayment on Notes on January 18
FOSTER WHEELER: Joint Venture with SNC-Lavalin Wins Bid for Goro
GLOBAL CROSSING: AGX Trustee Moves for First Interim Distribution
HD PARTNERS LLC: Case Summary & 16 Largest Unsecured Creditors
HEALTH & NUTRITION: Court Confirms Amended Plan of Reorganization
HOLLINGER: $39 Million Dividend Need Not be Lodged as Collateral
HOLLINGER CANADIAN: Distributes $0.005 Cash Dividend per Unit
HOMEBASE ACQUISITION: S&P Puts Low-B Ratings on CreditWatch Pos.
INDYMAC HOME: Fitch Places BB+ Rating on $7.50M Private Offering
INDUSTRIAL WHOLESALE: Judge Donovan Formally Closes Chap. 11 Case
INTEGRATED ELECTRICAL: S&P Junks Subordinated Debt
INTERSTATE BAKERIES: Walks Away from 50 Real Property Leases
KAISER ALUMINUM: PBGC Settlement Pact Draws Fire
LAIDLAW INT'L: Details 2003 Equity & Performance Incentive Plan
LESLIE'S POOLMART: Moody's Rates $170M Sr. Unsec. Notes at B2
LEVI STRAUSS: Prices New $450 Million 7% Notes Due 2006
LIBERATE TECH: Posts $8.1 Million Net Loss in Second Quarter
MADISON RIVER: S&P Puts Low-B Ratings on CreditWatch Positive
MAL FOODS INC: Case Summary & 9 Largest Unsecured Creditors
NATIONAL CENTURY: Trust Asks Court to Disallow L. Poulsen Claims
NATIONAL ENERGY: Wants Until Feb. 28 to Object to Claims
OMNICARE INC: Extends Offer for NeighborCare Shares Until Feb. 4
OPTIMAL GEOMATICS: Equity Deficit Widens to $17.3M at Oct. 31
OPTIMAL GEOMATICS: Receives Contracts Totaling Over $2.6 Million
OWENS CORNING: Has Until June 30 to Solicit Plan Acceptances
OXFORD AUTOMOTIVE: Section 341(a) Meeting Slated for Today
OXFORD AUTOMOTIVE: Creditors Must File Proofs of Claim by Jan. 18
PARKER COMMUNITY: Case Summary & Largest Unsecured Creditor
PARMALAT USA: Asks Court to Establish Solicitation Procedures
PG&E NATIONAL: Wants Court Nod on Seminole Canada Settlement Pact
PIERRE FOODS: Earns $2.1 Million of Net Income in Third Quarter
QUANTEGY INC: Case Summary & 62 Largest Unsecured Creditors
R.H. DONNELLEY: Plans $300 Million Senior Debt Private Offering
RICHTREE INC: Under CCAA Protection Until January 31
ROGERS COMMS: Reports Subscriber Results for 2004 Fourth Quarter
SECURITIZED ASSET: Moody's Places Ba1 Rating on Class B-4 Certs.
SOLUTIA: CPFilms Wants to Enter into 3M Global Supply Agreement
STATE VOLUNTEER: S&P Cuts Credit & Fin'l Strength Ratings to BBpi
SUNRISE SENIOR: Raises $24.6 Million in Trust Units Offering
TEXAS DOCKS: Wants to Employ Harrell Browning as Counsel
THORNBURG MORTGAGE: Moody's Rates Classes B-4 & B-5 at Low-B
TORCH OFFSHORE: Taps King & Spalding as Bankruptcy Co-Counsel
TORCH OFFSHORE: Wants Until Feb. 21 to File Bankruptcy Schedules
UAL CORP: Asks Court to Bless Deal with Flight Controllers Union
UAL CORPORATION: Wells Fargo Holds Allowed $4.1 Million Claim
ULTIMATE ELECTRONICS: Files for Chapter 11 Protection in Delaware
ULTIMATE ELECTRONICS: Case Summary & Largest Unsecured Creditors
US AIRWAYS: Galileo Wants $4 Million Administrative Expense Paid
USGEN: Judge Mannes Approves Skadden Employment as Special Counsel
VALOR TELECOM: S&P Puts Low-B Ratings on CreditWatch Positive
VERITAS DGC: Questerre Files Statement of Claim in Alberta
W.R. GRACE: United States Trustee Objects to Disclosure Statement
WESTERN WIRELESS: S&P Places B- Ratings on CreditWatch Positive
WESTPOINT STEVENS: Wants to Enter into Mariana & Columbia Leases
WISTON XIV: U.S. Trustee Will Meet Creditors on February 4
YUKOS OIL: Fulbright & Jaworski Files Supplemental Disclosure
* Navigant Adds Senior Level Professionals to National Practice
* Sen. Lawrence Borst Joins Baker & Daniels as Policy Consultant
* Cadwalader Welcomes Peter Clark as New Litigation Partner
* Dewey Ballantine Inks 15-Year Lease for New Washington Office
* Upcoming Meetings, Conferences and Seminars
*********
ACCEPTANCE INSURANCE: Hires Kutak Rock as Bankruptcy Counsel
------------------------------------------------------------
Acceptance Insurance Companies, Inc., seeks authority from the
U.S. Bankruptcy Court for the District of Nebraska to retain Kutak
Rock LLP as its counsel in its bankruptcy proceedings.
Kutak Rock is familiar with the Debtor's capital structure and
business affairs as a result of the Firm's prepetition services.
Specifically, Kutak Rock will:
a) give the Debtor advice with respect to its powers and
duties as debtor-in-possession in the continued management
of its business and property;
b) attend meetings and negotiate with representatives of
creditors and other parties-in-interest, advise and
consult on the conduct of this case, including all of the
legal and administrative requirements of operating under
chapter 11;
c) take all necessary action to protect and preserve the
Debtor's estate, including the prosecution of actions on
its behalf, the defense of any actions commenced against
them, negotiations concerning all litigation involving the
Debtor, and objections to claims filed against the estate;
d) prepare on behalf of the Debtor, all motions,
applications, answers, orders, reports, and papers
necessary to the administration of the estate;
e) negotiate and prepare or revise on the Debtor's behalf,
plans of reorganization, disclosure statement and all
related agreements and documents;
f) give the Debtor advice in connection with any sale of
assets;
g) appear before the Court and the U.S. Trustee to protect
the interests of the Debtor and its estate; and
h) perform all other necessary legal services and provide all
other necessary legal advice.
John J. Jolley Jr., Esq., a member of Kutak Rock, discloses that
the Debtor paid the Firm a $60,000 retainer.
The current hourly rates of professionals at Kutak Rock:
Designation Rate
----------- ----
Partners/Of counsel $200 - $325
Associates 130 - 195
Legal Assistants 75 - 120
To the best of the Debtor's knowledge, Kutak Rock is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Headquartered in Council Bluffs, Iowa, Acceptance Insurance
Companies Inc. -- http://www.aicins.com/-- owns, either directly
or indirectly, several companies, one of which is an insurance
company that accounts for substantially all of the business
operations and assets of the corporate groups. The Company filed
for chapter 11 protection on Jan. 7, 2005 (Bankr. D. Neb. Case No.
05-80059). The Debtor's affiliates -- Acceptance Insurance
Services, Inc., and American Agrisurance, Inc. -- filed chapter 7
petitions (Bankr. D. Neb. Case Nos. 05-80056 & 05-80058). When
the Debtor filed for protection from its creditors, it listed
$33,069,446 in total assets and $137,120,541 in total debts.
ACCEPTANCE INSURANCE: Section 341(a) Meeting Slated for Feb. 11
---------------------------------------------------------------
The United States Trustee for Region 13 will convene a meeting of
creditors of Acceptance Insurance Companies Inc. and its
debtor-affiliates at 9:30 a.m., on Feb. 11, 2005, at the U.S.
Trustee Meeting Room located in the Roman L. Hruska Courthouse,
111 South 18th Plaza in Omaha, Nebraska. This is the first
meeting of creditors required under 11 U.S.C. Sec. 341(a) in all
bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Council Bluffs, Iowa, Acceptance Insurance
Companies Inc. -- http://www.aicins.com/-- owns, either directly
or indirectly, several companies, one of which is an insurance
company that accounts for substantially all of the business
operations and assets of the corporate groups. The Company filed
for chapter 11 protection on Jan. 7, 2005 (Bankr. D. Neb. Case No.
05-80059). The Debtor's affiliates -- Acceptance Insurance
Services, Inc., and American Agrisurance, Inc. -- filed chapter 7
petitions (Bankr. D. Neb. Case Nos. 05-80056 & 05-80058). John J.
Jolley, Esq., at Kutak Rock LLP, represents the Debtor in its
restructuring efforts. When the Debtor filed for protection from
its creditors, it listed $33,069,446 in total assets and
$137,120,541 in total debts.
ACCEPTANCE INSURANCE: 6 Creditors Appointed to Serve on Committee
-----------------------------------------------------------------
The United States Trustee for Region 13 appointed five creditors
to serve on an Official Committee of Unsecured Creditors in
Acceptance Insurance Companies Inc. chapter 11 case:
1. Mammel Foundation
Attn: Carl G. Mammel
8805 Indian Hills Drive, Suite 375
Omaha, Nebraska 68114
Tel: 402-384-8500, email: laurie@mammelfoundation.org
2. Grace-Meyer Insurance
Attn: Arnold Joffe
10050 Regency Circle
Omaha, Nebraska 68114
Tel: 402-397-5050, email: arnoldj@gracemayer.com
3. First and Grand
Attn: Bill Brush
P.O. Box 40
North Loup, Nebraska 68859
Tel: 308-496-4781, email: mormac@nctc.net
4. Alan Parsow
2222 Skyline Drive
P.O. Box 818
Elkhom, Nebraska 68022
Tel: 402-289-3217, email: aparsow@aol.com
5. Industrial Label
Attn: Mike Erman
4130 South 94th Street
Omaha, Nebraska 68127
Tel: 402-339-9944, email: merman@industriallabel.com
6. Steve Lococo
11422 Miracle Hills Drive
Omaha, Nebraska 68154
Tel: 402-445-9333, email: slococo@footprint.com
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 Council Bluffs, Iowa, Acceptance Insurance
Companies Inc. -- http://www.aicins.com/-- owns, either directly
or indirectly, several companies, one of which is an insurance
company that accounts for substantially all of the business
operations and assets of the corporate groups. The Company filed
for chapter 11 protection on Jan. 7, 2005 (Bankr. D. Neb. Case No.
05-80059). The Debtor's affiliates -- Acceptance Insurance
Services, Inc., and American Agrisurance, Inc. -- filed chapter 7
petitions (Bankr. D. Neb. Case Nos. 05-80056 & 05-80058). John J.
Jolley, Esq., at Kutak Rock LLP, represents the Debtor in its
restructuring efforts. When the Debtor filed for protection from
its creditors, it listed $33,069,446 in total assets and
$137,120,541 in total debts.
ADELPHIA COMMS: Offers $300M to Settle SEC Action & DOJ Probe
-------------------------------------------------------------
In its Form 10-K filed with the United States Securities and
Exchange Commission on December 23, 2004, Adelphia Communications
Corporation and its debtor-affiliates disclosed that they offered
$300,000,000 to:
-- settle the SEC civil action against ACOM and certain
members of the Rigas Family; and
-- resolve the U.S. Department of Justice's ongoing
investigation of ACOM.
Of the $300 million, $125,000,000 will be funded from potential
proceeds from litigation by or on behalf of ACOM.
As previously reported, the SEC filed on July 24, 2002, a civil
enforcement action, alleging various securities fraud and improper
books and records claims arising out of actions allegedly taken or
directed by certain members of the Rigas Management.
ACOM Chairman and Chief Executive Officer William T. Schleyer
relates that the SEC Civil Case is pending in the U.S. District
Court for the Southern District of New York and settlement
discussions are in progress among the ACOM Debtors and
representatives of the SEC and the DoJ. The SEC's claim filed in
the ACOM Debtors' Chapter 11 cases includes claims for penalties,
disgorgement and pre-judgment interest in an unspecified amount.
ACOM believes that the SEC's claims for disgorgement and civil
penalties could amount to billions of dollars.
The SEC Civil Action is stayed by order of the District Court
until April 29, 2005. The SEC Civil Action is not subject to the
automatic stay provisions of the Bankruptcy Code. The ACOM
Debtors expect that the outcome of the SEC Civil Action could
include civil penalties, disgorgement, and the imposition of
mandatory governance guidelines or other restrictions imposed on
ACOM.
ACOM remains subject to continuing investigation and further
action by the DoJ, Mr. Schleyer states. The outcome of the
investigation by the DoJ could include the criminal indictment of
ACOM or its Managed Cable Entities, monetary remedies, and
remedies restricting ACOM's conduct.
Even if the ACOM Debtors cannot foresee the ultimate resolution of
the SEC Civil Action or the DoJ investigation, they recorded a
$175,000,000 reserve in their financial statements to reflect
their settlement offer.
Headquartered in Coudersport, Pennsylvania, Adelphia
Communications Corporation (OTC: ADELQ) is the fifth-largest cable
television company in the country. Adelphia serves customers in
30 states and Puerto Rico, and offers analog and digital video
services, high-speed Internet access and other advanced services
over its broadband networks. The Company and its more than 200
affiliates filed for Chapter 11 protection in the Southern
District of New York on June 25, 2002. Those cases are jointly
administered under case number 02-41729. Willkie Farr & Gallagher
represents the ACOM Debtors. (Adelphia Bankruptcy News, Issue No.
76; Bankruptcy Creditors' Service, Inc., 215/945-7000)
AERO PLASTICS: Taps Lamberth Cifelli as Bankruptcy Counsel
----------------------------------------------------------
Aero Plastics, Inc., asks the U.S. Bankruptcy Court for the
Northern District of Georgia, Atlanta Division, for permission to
employ Lamberth, Cifelli, Stokes & Stout, PA, as its counsel, nunc
pro tunc Jan. 6, 2005.
Lamberth Cifelli is expected to:
a) advise, assist, and represent the Debtor with respect to
its rights, powers, duties, and obligations in the
administration of this case, and the collection,
preservation, and administration of assets of the estate;
b) advise, assist, and represent the Debtor with regard to
any claims and causes of action which the estate may have
against various parties including, without limitation,
claims for preferences, fraudulent conveyances, improper
disposal of assets, and other claims or rights to recovery
granted to the estate; institute appropriate adversary
proceedings or other litigation and represent the Debtor
therein with regard to such claims and causes of action;
and advise and represent the Debtor with regard to the
review and analysis of any legal issues incident to any of
the foregoing;
c) advise, assist, and represent the Debtor with regard to
investigation of the desirability and feasibility of the
rejection or assumption and potential assignment of any
executory contracts or unexpired leases, and advise,
assist, and represent the Debtor with regard to liens and
encumbrances asserted against property of the estate and
potential avoidance actions for the benefit of the estate,
within the Debtor's rights and powers under the Bankruptcy
Code, and the initiation and prosecution of appropriate
proceedings in connection therewith;
d) advise, assist, and represent the Debtor in connection
with all applications, motions, or complaints concerning
reclamation, sequestration, relief from stays, disposition
or other use of assets of the estate, and all other
similar matters;
e) advise, assist, and represent the Debtor with regard to
the preparation, drafting, and negotiation of a plan or
plans of reorganization or liquidation and accompanying
disclosure statement, or negotiation with other parties
presenting a plan of reorganization or liquidation and
accompanying disclosure statement; and advise,
assist, and represent the Debtor in connection with the
sale or other disposition of any assets of the estate,
including without limitation the investigation and
analysis of the alternative methods of effecting same;
employment of auctioneers, appraisers, or other persons to
assist with regard thereto; negotiate with prospective
purchasers and the evaluation of any offers received;
draft appropriate contracts, instruments of
conveyance, and other documents with regard thereto;
prepare, file, and serve as required of appropriate
motions, notices, and other pleadings as may be necessary
to comply with the Bankruptcy Code with regard to all of
the foregoing; and represent the Debtor in connection with
the consummation and closing of any such transactions;
f) prepare pleadings, applications, motions, reports, and
other papers incidental to administration, and to conduct
examinations as may be necessary pursuant to Bankruptcy
Rule 2004 or as otherwise permitted under applicable law;
g) provide support and assistance to the Debtor with regard
to the proper receipt, disbursement, and accounting for
funds and property of the estate;
h) provide support and assistance to the Debtor with regard
to the review of claims against the Debtor, the
investigation of amounts properly allowable and the
appropriate priority or classification of same, and the
filing and prosecution of objections to claims as
appropriate;
i) perform any and all other legal services incident or
necessary to the proper administration of this case and
the representation of the Debtor in the performance of its
duties and exercise of its rights and powers under the
Bankruptcy Code.
J. Michael Lamberth, Esq., is the lead attorney in this
proceeding. The Debtor paid Lamberth Cifelli a $41,000 retainer.
Professionals at Lamberth will charge the Debtor at their current
hourly rates:
Designation Rate
----------- ----
Attorneys $150 - $335
Legal Assistants $60
To the best of the Debtor's knowledge, Lamberth Cifelli is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Headquartered in Leominster, Massachusetts, Aero Plastics, Inc. --
http://www.aeroplastics.com/-- manufactures household products.
The Company filed for chapter 11 protection on Jan. 6, 2005(Bankr.
N.D. Ga. Case No. 05-60451). When the Debtor filed for protection
from its creditors, it estimated assets and debts between
$10 million to $50 million.
AERO PLASTICS: Section 341(a) Meeting Slated for Feb. 17
--------------------------------------------------------
The United States Trustee for Region 21 will convene a meeting of
Aero Plastics, Inc.'s creditors at 10:00 a.m., on Feb. 17, 2005,
at Room 365, Russell Federal Building, 75 Spring Street in
Atlanta, Georgia. This is the first meeting of creditors required
under 11 U.S.C. Sec. 341(a) in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Leominster, Massachusetts, Aero Plastics, Inc. --
http://www.aeroplastics.com/-- manufactures household products.
The Company filed for chapter 11 protection on Jan. 6, 2005(Bankr.
N.D. Ga. Case No. 05-60451). J. Michael Lamberth, Esq., at
Lamberth, Cifelli, Stokes & Stout, PA, represents the Debtor in
its restructuring efforts. When the Debtor filed for protection
from its creditors, it estimated assets and debts between
$10 million to $50 million.
AFC ENTERPRISES: Completes Sale of Church's Chicken to Crescent
---------------------------------------------------------------
AFC Enterprises, Inc. (Nasdaq: AFCE), the franchisor and operator
of Popeyes(R) Chicken & Biscuits, has completed the sale of its
Church's brand to an affiliate of Crescent Capital Investments,
Inc., an Atlanta-based private equity firm. The agreement to sell
Church's was previously announced on Nov. 1, 2004. In connection
with the closing of that transaction, certain real estate and
restaurant facilities were excluded and are being sold to Church's
franchisees. The Church's franchisees are paying AFC
approximately $3.7 million to purchase land, and in some cases,
the related restaurants previously leased to them by the Company.
Aggregate gross proceeds from the transactions, subject to
customary closing adjustments, are approximately $390 million
comprised of $383 million in cash and a subordinated note from an
affiliate of Crescent Capital for $7 million. The Company expects
net proceeds, after tax considerations, to be approximately
$275 million. AFC's Board of Directors is currently evaluating
the most appropriate use of the proceeds to enhance value to AFC
shareholders.
Frank Belatti, Chairman and CEO of AFC Enterprises, stated, "With
this sale, we complete a process that began early last year to
reshape our portfolio and focus on Popeyes as our growth vehicle
for the future. Popeyes' performance continues to improve under
Ken Keymer's leadership, as we take actions to drive the business
forward. Ongoing improvement in Popeyes, coupled with deploying
the net proceeds from the Church's sale, will continue our efforts
to maximize stakeholder value and put the Company in the best
possible position to succeed."
About the Company
AFC Enterprises, Inc. -- http://www.afce.co/-- is the franchisor
and operator of 3,373 restaurants as of November 28, 2004, prior
to the closing of the Church's sale described in this press
release, in the United States, Puerto Rico and 28 foreign
countries under the brand names Popeyes(R) Chicken & Biscuits and
Church's Chicken(TM). AFC's primary objective is to be the
world's Franchisor of Choice(R) by offering investment
opportunities in highly recognizable brands and exceptional
franchisee support systems and services.
* * *
As reported in the Troubled Company Reporter on Nov. 9, 2004,
Moody's Investors Service placed all ratings of AFC Enterprises,
Inc., under review for upgrade. The company's announcement that
it has signed a definitive agreement to sell Church's for net
proceeds of about $275 million and Moody's expectation that
proceeds will be used to pay down substantially all rated debt
prompted the review. The bank agreement requires the company to
pay down the bank loan (currently comprised of a $75 million
Revolving Credit Facility with $18 million utilized, a $32 million
Term Loan A, and a $56 million Term Loan B) with proceeds from
asset sales.
Ratings placed under review for upgrade are:
-- $162 million secured bank facility of B1,
-- Senior Implied Rating of B1, and the
-- Issuer Rating of B2.
AIR CANADA: WestJet Executives Added to $220 Million Lawsuit
------------------------------------------------------------
On December 23, 2004, the Honorable Mr. Justice Nordheimer of the
Ontario Superior Court of Justice issued an Order adding Clive
Beddoe, Chairman, President and CEO of WestJet as well as WestJet
executives, Scott Butler, Donald Bell, William Lamberton and
Brenda Trockstad as defendants to Air Canada's lawsuit against
WestJet. Mr. Justice Nordheimer also allowed Air Canada to file
an amended statement of claim.
The motion was not opposed by WestJet.
As previously reported, Air Canada is seeking to recover
$220 million from WestJet in a lawsuit commenced in April 2004
arising out of corporate espionage on a massive scale against Air
Canada for approximately a year. Mark Hill, a former WestJet
executive, has admitted under oath that WestJet surreptitiously
accessed Air Canada's password-protected employee Web site
approximately a quarter of a million times during that time, and
created automated technology to download and analyze passenger
load and booking information.
By obtaining access to this confidential information, including
the number of passengers booked on any flight on any route Air
Canada flies anywhere in the world up to a year in advance, Air
Canada alleges that WestJet was able to compile computer-generated
reports for its own strategic planning, routing and pricing
decisions, with a high degree of accuracy and very little risk.
Air Canada filed for CCAA protection on April 1, 2003 (Ontario
Superior Court of Justice, Case No. 03-4932) and filed a Section
304 petition in the U.S. Bankruptcy Court for the Southern
District of New York (Case No. 03-11971). Mr. Justice Farley
sanctioned Air Canada's CCAA restructuring plan on Aug. 23, 2004.
Sean F. Dunphy, Esq., and Ashley John Taylor, Esq., at Stikeman
Elliott LLP, in Toronto, serve as Canadian Counsel to the carrier.
Matthew A. Feldman, Esq., and Elizabeth Crispino, Esq., at Willkie
Farr & Gallagher serve as the Debtors' U.S. Counsel. When the
Debtors filed for protection from its creditors, they listed
C$7,816,000,000 in assets and C$9,704,000,000 in liabilities.
On September 30, 2004, Air Canada successfully completed its
restructuring process and implemented its Plan of Arrangement.
The airline exited from CCAA protection raising $1.1 billion of
new equity capital and, as of September 30, has approximately
$1.9 billion of cash on hand. (Air Canada Bankruptcy News, Issue
No. 54; Bankruptcy Creditors' Service, Inc., 215/945-7000)
AMES TRUE: Moody's Rates Proposed $150 Million Senior Notes at B3
-----------------------------------------------------------------
Moody's Investors Service has assigned a B3 rating to Ames True
Temper's proposed $150 million floating rate senior notes due
2012. All other ratings have been affirmed. Outlook has been
changed to negative.
These rating has been assigned:
* $150 million floating rate senior notes at B3;
These ratings have been affirmed:
* Senior implied rating at B2;
* $150 million senior subordinated notes at Caa1;
* Senior unsecured issuer rating at B3;
* Speculative grade liquidity rating at SGL-2;
* $75 million senior secured revolving credit facility at B2;
* $140 million senior secured term loan B at B2
The floating rate senior notes will be issued by Ames True Temper.
Proceeds from the senior notes are expected to be used to repay
the $140 million term loan B and outstanding amounts on the
revolver. A new asset-based revolver (unrated) will be entered
into to replace the existing revolver. The ratings on the
revolver and the term loan B will be withdrawn upon the
restructuring of the bank facility.
The new senior notes rating and ratings affirmations reflect Ames
True Temper's leading brand names (Ames and True Temper) and its
competitive/market share position in the lawn & garden industry
offset by high customer concentration, increased leverage and
margin pressures. The projected weakening in Ames True Temper's
credit metrics is caused principally by increased commodity
prices, which the company has not been able to fully recapture
with its three recent price increases.
The increased business and financial risks are mitigated by the
company's history of new product introduction and innovation
(approximately 25% of annual sales come from products developed in
the previous two years) and from favorable demographic trends in
the lawn and garden care category due to aging baby boomers, the
robust housing market and growing interest in gardening.
Furthermore, Ames True Temper's unique position in servicing the
"big box" home center retailers, which have become the dominant
distribution channel in the lawn and garden category, provide
differentiated brand strategy although at the expense of customer
concentration.
The affirmation of the SGL-2 reflects Moody's anticipation that
the company will maintain good liquidity over the next twelve
months. The company's weakening cash flows will be partially
offset by anticipated declines in working capital needs. The
company's operating cash flow is expected to improve in 2005.
The B3 rating on Ames True Temper senior notes reflects their
senior position but effective subordination to the secured
revolving credit facility. The rating also recognizes the fact
that Ames True Temper will have relatively few secured assets
(Moody's expects a maximum revolver draw of approximately
$40 million). The senior notes are guaranteed by Ames True
Temper's parent -- ATT Holding -- on a senior unsecured basis.
Provisions in the indenture are expected to restrict additional
indebtedness, dividends, investments, liens, asset sales,
affiliate transactions, and mergers and acquisitions.
The negative ratings outlook reflects Moody's belief that Ames
True Temper's EBITDA and cash flow generation could further
deteriorate because of rising commodity prices, which the company
may not be able to fully recoup. Moody's expects management to
sustain its strategic direction, which is centered around having
approximately 50% of its manufacturing capabilities overseas,
continual new product developments, differentiated brands for
different retailers and improved profitability.
Moody's will consider stabilizing the ratings if Ames True Temper
achieves greater profitability from cost saving initiatives and a
stabilization of commodity prices. Negative ratings actions could
be considered through continued profitability measure
deterioration or a change in strategic direction, which materially
impedes debt reduction or compromises the company's liquidity
position.
Ames True Temper is the leading North American manufacturer and
marketer of non-powered lawn and garden tools and accessories.
For the year ending September 25, 2004, the company had net sales
of approximately $440 million and adjusted EBITDA of
$54.7 million.
ARGUS CORPORATION: Borrows $251K from Ravelston to Pay Dividends
----------------------------------------------------------------
Argus Corporation Limited (TSX:AR.PR.A)(TSX:AR.PR.D)(TSX:AR.PR.B)
had declared regular quarterly dividends to be paid on
Feb. 1, 2005, to the holders of record of its Class A and Class B
Preference Shares at the close of business on January 20, 2005.
The dividends to be paid are respectively Cdn. 62-1/2 cents per
share on the Class A Preference Shares $2.50 Series, Cdn. 65 cents
per share on the Class A Preference Shares $2.60 Series and
Cdn. 67-1/2 cents per share on the Class B Preference Shares 1962
Series.
Argus has previously disclosed that it needed to obtain additional
funds in order to continue to pay dividends on the Class A and
Class B Preference Shares on an uninterrupted basis, including the
dividends that are to be paid on February 1, 2005.
The Ravelston Corporation Limited, the parent of Argus, agreed to
provide a loan to Argus for Cdn. $251,703, the amount of the
dividends to be paid by Argus on February 1, 2005, so that these
dividends could be declared and paid.
Ravelston holds all of the Common Shares and Class C Preference
Shares of Argus and 2,900 of Argus' 55,893 issued Class A
Preference Shares $2.60 Series. The loan is to be made by
Ravelston on an interest-free basis pursuant to a Promissory Note
and will be repayable on Feb. 28, 2006.
Argus will require additional funds to be able to continue to pay
future dividends on its Class A and Class B Preference Shares on
an uninterrupted basis, including an additional amount of
approximately Cdn. $251,703 for dividends that are scheduled to be
paid on May 1, 2005.
Argus intends to make efforts to ensure that the dividend payments
can be made on May 1, 2005, and continue to be made thereafter on
an uninterrupted basis.
Argus Corporation Limited is a holding company and its assets
consist principally of an investment in the retractable common
shares of Hollinger, Inc., a Canadian public company listed on the
Toronto Stock Exchange, a receivable from The Ravelston
Corporation Limited, the Company's parent company and cash.
Based on the company's alternative financial reporting, as of
September 30, 2004, Argus has a $44,034,263 stockholders' deficit
compared to $6,522,159 positive equity at Dec. 31, 2003.
ARTHUR ANDERSEN: U.S. Supreme Court Agrees to Review Conviction
---------------------------------------------------------------
The United States Supreme Court agreed to consider an appeal from
Arthur Andersen, LLP, of the firm's criminal conviction on
June 15, 2002, on charges of obstructing an SEC proceeding when
Andersen personnel helped destroy Enron-related documents.
A Grand Jury assembled in the Southern District of Texas returned
an indictment against Andersen on March 7, 2002, charging the Firm
with one count of violating 18 U.S.C. Sec. 1512(b)(2). The
full-text of the Indictment is reprinted in the March 18, 2002,
edition of the Troubled Company Reporter. Andersen denied
wrongdoing. The case went to trial on May 6, 2002, and lasted six
weeks. Following 70-some hours of deliberation stretched over ten
days, the jury voted to convict Andersen. Foreman Oscar H. Criner
(a professor in mathematics and computer science at Texas Southern
University) related that the jury's deliberative process started
with six votes to convict and six votes to acquit. As he and his
five acquittal-proponents continued to review the evidence, they
concluded that the facts militated in favor of a conviction.
U.S. District Judge Melinda F. Harmon entered a formal order of
conviction and, at a sentencing hearing on Oct. 11, 2002, fined
the auditing firm $500,000.
Because convicted felons aren't allowed to audit public companies'
financial statements, the conviction brought an end to Andersen's
audit practice.
Andersen appealed from the conviction to the United States Court
of Appeals. Pointing to errors in four evidentiary rulings,
misconduct by the prosecutor in his rebuttal jury summation, and
two legal contentions regarding the required proof under Sec.
1512(b)(2), Andersen urged the Appeals Court to reverse the
conviction. The Fifth Circuit declined. A full-text copy of the
Fifth Circuit's 42-page decision affirming the conviction is
available at no charge at:
http://www.ca5.uscourts.gov/opinions/pub/02/02-21200-CR0.wpd.pdf
The U.S. Supreme Court entered an order on January 7, 2005, saying
that it would grant certiorari. Andersen tells the High Court
that the jury instructions Judge Harmon were vague and ambiguous.
The justices will explore what it means to "corruptly persuade"
someone to destroy something "with intent to impair the object's
integrity or availability for use in an official proceeding."
"We are hopeful that the court will confirm that [the
Government's] reading of the obstruction laws is far too broad and
places Americans at unfair risk of prosecution of unwitting
violations of the law," Maureen E. Mahoney, Esq., at Latham &
Watkins LLP, told reporters for The Wall Street Journal. Ms.
Mahoney represents Andersen in its appeal to the U.S. Supreme
Court.
The proceeding before the High Court is captioned Arthur Andersen
LLP v. United States, Case No. 04-368.
"It may end up being a good result for a corpse," E. Lawrence
Barcella, Esq., Jr., a white-collar defense lawyer at Paul,
Hastings, Janofsky & Walker LLP, told Greg Stohr at Bloomberg
News.
Tens of thousands of Andersen employees lost their jobs when the
Firm's auditing practice ended in 2002.
ASSET BACKED: Moody's Assigns Ba1 Rating to Class M7 Certificates
-----------------------------------------------------------------
Moody's Investors Service has assigned a rating of Aaa to the
senior certificates issued by Asset Backed Securities Corporation
Home Equity Loan Trust, Series 2004-HE8 and ratings ranging from
Aa2 to Ba1 to the subordinate certificates in the deal.
The securitization is backed by New Century Mortgage Corp.
originated adjustable-rate (83.77%) and fixed-rate (16.23%)
sub-prime mortgage loans. The ratings are based primarily on the
credit quality of the loans, past performance of collateral from
this originators, and on the protection from subordination,
overcollateralization -- OC, and excess spread. In addition, the
Class A1 certificates benefit from a certificate guaranty
insurance policy issued by Financial Security Assurance, Inc. --
FSA -- whose insurance financial strength rating is Aaa. Under
the policy, the certificate holder is guaranteed timely interest
and repayment of full principal balance by the legal final
maturity of the deal. The credit enhancement requirements reflect
some benefit for due diligence performed on the collateral. The
credit quality of the loans backing this deal is in line with
previous securitizations by this issuer.
Ocwen Federal Bank FSB will service the loans. Moody's has
assigned its above average servicer quality rating -- SQ2 -- to
Ocwen for primary servicing of sub-prime loans.
The complete rating actions are as follows:
Issuer: Asset Backed Securities Corporation Home Equity Loan
Trust, Series 2004-HE8
Issue: Asset Backed Pass-Through Certificates, Series 2004-HE8
* Class A1, rated Aaa
* Class A2, rated Aaa
* Class M1, rated Aa2
* Class M2, rated A2
* Class M3, rated A3
* Class M4, rated Baa1
* Class M5, rated Baa2
* Class M6, rated Baa3
* Class M7, rated Ba1
ATA AIRLINES: Pilots Reject Tentative Pact on 15% Wage Cuts
-----------------------------------------------------------
ATA Airlines flight deck crewmembers, as represented by the Air
Line Pilots Association, International -- ALPA -- have rejected a
proposed Interim Relief tentative agreement that would have cut
pay by as much as 15 percent for some crewmembers. Out of 988
crewmembers eligible to vote, 79.2% voted against the agreement.
"Our crewmembers sent a message loud and clear: they have lost
confidence in our current senior management," ATA Airlines Master
Executive Council Chairman, Capt. Erik Engdahl said in a press
statement. "It is obvious that new management is vitally
important to the success of ATA and future negotiations with ALPA.
ATA already has some of the lowest labor costs in the airline
industry, and the Company never provided an interim business plan
that showed a need for immediate cuts. We urge the Company to
look at all aspects of the airline's operations before they ask us
again to surrender any of the contract gains we won just two years
ago."
The Interim Relief Tentative Agreement would have temporarily
reduced salaries by 15% for Lockheed L-1011 crewmembers, 12% for
Boeing 757 crewmembers, and 8% for Boeing 737 crewmembers. It
would also have cut company contributions into a pilot retirement
plan by 50%. The package would have been in effect for 120 days
and saved the airline $6 million. ATA flight crewmembers ratified
a $43 million concessions package on June 30, 2004.
Founded in 1931, ALPA is the world's oldest and largest pilot
union and represents 64,000 airline pilots at 42 airlines in the
U.S. and Canada. Visit the ALPA website at http://www.alpa.org/
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.
ATHLETE'S FOOT: Section 341(a) Meeting Slated for Jan. 20
---------------------------------------------------------
The U.S. Trustee for Region 2 will convene a meeting of creditors
of Athlete's Foot Stores, LLC, and its debtor-affiliate at
2:30 p.m., on Jan. 20, 2005, at Office of the U.S. Trustee,
80 Broad Street, Second Floor, New York, New York 10004-1408.
This is the first 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, Athlete's Foot Stores, LLC,
-- http://www.theathletesfoot.com/-- operates approximately
125 athletic footwear specialty retail stores in 25 states. The
Company and its debtor-affiliate filed for chapter 11 protection
on December 9, 2004 (Bankr. S.D.N.Y. Case No. 04-17779). Bonnie
Lynn Pollack, Esq., and John Howard Drucker, Esq., at Angel &
Frankel, P.C. represents the Debtors in their restructuring
efforts. When the Company filed for protection from its
creditors, it listed total assets of $33,672,000 and total debts
of $39,452,000.
AVALON DIGITAL: Emerges from Bankruptcy Protection
--------------------------------------------------
Avalon Digital Marketing Systems, Inc., emerged from Chapter 11
Bankruptcy, and received a concurrent capital infusion of
approximately $1.3 million. The United States Bankruptcy Court
for the District of Utah, Central Division, entered an order on
November 3, 2004, confirming Avalon's First Amended Plan of
Reorganization Pursuant to Chapter 11 of the United States
Bankruptcy Code. The Plan became effective on November 18, 2004,
with the closing of the financing and related confirmation matters
effective December 9, 2004.
"This is an exciting day for the 'new' Avalon Digital," said Tyler
Thompson, who will serve as CEO for the reorganized company. "We
appreciate the loyalty of our customers, the dedication of our
employees and the support from our creditors and new investors
during this process. We have labored diligently over the past
year in our efforts to position Avalon for future success. We are
pleased to have been able to continue our business and develop new
products and services while operating under Chapter 11, and we
look forward to growing the company and creating value for our
shareholders."
Headquartered in Provo, Utah, Avalon Digital Marketing Systems is
a provider of email marketing management software and strategic
digital marketing services. On September 5, 2003, Avalon Digital
Marketing Systems, Inc., filed a voluntary petition for
reorganization under Chapter 11 of the United States Bankruptcy
Code in the U.S. Bankruptcy Court in Salt Lake City, Utah. The
case has been assigned to Judge Glen E. Clark and is being
administered under Case No. 03-35180.
BEVERLY ENTERPRISES: $215 Million Exchange Offer Expires Feb. 11
----------------------------------------------------------------
Beverly Enterprises, Inc. (NYSE: BEV) disclosed an offer to
exchange up to $215 million in aggregate principal amount of its
7-7/8% Senior Subordinated Notes due 2014, which have been
registered under the Securities Act of 1933 as amended, for its
outstanding unregistered 7-7/8% Senior Subordinated Notes due
2014.
The exchange offer will expire on Friday, Feb. 11, at 5 p.m. (ET).
The exchange agent is:
BNY Midwest Trust Company
c/o Bank of New York
Reorganization Unit
101 Barclay Street, 7 East
New York, NY 10286
Attn: Ms. Carolle Montreuil
About the Company
Beverly Enterprises, Inc., and its operating subsidiaries are
leading providers of healthcare services to the elderly in the
United States. Beverly currently operates 351 skilled nursing
facilities, as well as 18 assisted living centers, and 52 hospice
and home health centers. Through Aegis Therapies, Beverly also
offers rehabilitative services on a contract basis to facilities
operated by other care providers.
* * *
As reported in the Troubled Company Reporter on June 18, 2004,
Fitch Ratings has assigned a 'B+' rating to Beverly Enterprises,
Inc.'s planned up-to $225 million, 10-year, subordinated debt
issue. Proceeds from the new issue will be used to fund the recent
tender offer for the company's 'BB-' rated, $200 million, 9-5/8%
senior unsecured notes due 2009.
Those 9-5/8% Notes trade around 112, according to pricing obtained
from the Bloomberg Professional Service. S&P rates the 9-5/8%
Notes at B+ and Moody's gives them its B1 rating.
In conjunction, Fitch affirmed the company's 'BB' secured bank
facility, 'BB-' senior unsecured debt and 'B+' rated subordinated
convertible notes. Fitch's Rating Outlook is Stable.
Fitch notes that BEV's credit profile is improving following a
difficult 2003 that saw profitability negatively impacted by
rising patient liability costs and reduced Medicare reimbursement.
Key factors Fitch sees driving the improvement include strong
volume growth, increased Medicare and Medicaid per-diem rates, a
significant reduction in patient liability-related costs and lower
interest costs due to refinancing activities.
BODY MASTERS SPORTS: Case Summary & 19 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Body Masters Sports Industries, Inc.
Post Office Box 259
Rayne, Louisiana 70578
Bankruptcy Case No.: 05-50059
Type of Business: The Debtor designs, manufactures and markets
exercise equipment.
See http://www.body-masters.com/
Chapter 11 Petition Date: January 10, 2005
Court: Western District of Louisiana (Lafayette/Opelousas)
Debtor's Counsel: Kenneth A. Back, Esq.
P.O. Box 51778
Lafayette, LA 70505
Tel: 337-237-3429
Fax: 337-237-3493
Estimated Assets: $500,000 to $1 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 19 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Bank Of Commerce & Trust Bank loan $5,651,000
Company Value of Collateral:
P.O. Box 49 $3,000,000
Rayne, LA 70578 Unsecured Value:
$2,651,000
Ryerson Tull, Inc. Trade debt $473,639
Dept. 0643
P.O. Box 120643
Dallas, TX 75312
Star Trac By Unisen Trade debt $92,861
Post Office Box 30547
Los Angeles, CA 90030
Fuyang Technology Trade debt $63,036
Larry Savoie Trade debt $54,059
Marco Design Company Trade debt $52,900
Northcoast Health & Fitness Trade debt $51,299
Product
Design Works Trade debt $48,928
Hub City Express, Inc. Trade debt $43,427
& American Bank
DXP Enterprises, Inc. Trade debt $36,172
ET Fasteners Trade debt $34,284
Mid-Atlantic Fit Resource Trade debt $32,962
Midwest Commercial Fitness, Trade debt $31,118
Inc.
USA Sports, Inc. Trade debt $30,450
First Louisiana National Bank loan $28,000
Bank
Lucas Industrial Trade debt $26,991
Becker Powder Coatings Trade debt $25,850
Westcoast Fitness, Inc. Trade debt $25,514
Cemco Physical Fitness Trade debt $24,160
Products
CATHOLIC CHURCH: Trustee Names Spokane Tort Claimants' Committee
----------------------------------------------------------------
The United States Trustee for Region 18 appoints five claimants of
the Diocese of Spokane to the Official Committee of Tort Claimants
in Spokane's case:
(1) Richard Frizzell
c/o Duane Rasmussen
P.O. Box 730
Liberty Lake, Washington 99019
Also c/o Michael Pfau
One Union Square
600 University, Suite 2100
Seattle, Washington 98101
(2) Michael Shea
c/o Frank Conklin
818 W. Riverside Avenue
Spokane, Washington 99201
(3) Steve Denny
6525 N Austin Road #104
Spokane, Washington 99208
(4) Brynne Malone
(5) Marjorie Garza
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. 14; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
CATHOLIC CHURCH: Spokane Wants to Hire Turner as General Counsel
----------------------------------------------------------------
William S. Skylstad, Bishop of the Diocese of Spokane, seeks
permission from the U.S. Bankruptcy Court for the Eastern
District of Washington to employ Turner, Stoeve & Gagliardi,
P.S., as general counsel for non-bankruptcy matters.
Turner has served as outside general counsel to Spokane since
1978 and is familiar with all aspects of the Diocese of Spokane's
business and all encountered legal issues. According to Bishop
Skylstad, it is important to retain continuity in the
representation of Spokane so that the Diocese will be fully
represented in the most efficient and cost-effective manner.
Turner will be paid an hourly rate of $135 for attorney time
incurred.
Bishop Skylstad assures the Court that Turner is disinterested and
does not hold or represent any interest adverse to Spokane.
Bishop Skylstad discloses that before the Petition Date Turner
gives general counsel to Spokane for a retainer of $200 per month.
On occasion and for no additional charge, Turner gives general
counsel to Catholic-related entities, including:
-- Spokane Catholic Investment Trust,
-- Immaculate Heart Retreat Center,
-- Catholic Charities of Spokane, and
-- Catholic Cemeteries of Spokane.
Turner also represented Catholic Charities in a probate dispute a
few years ago.
With the exception of Immaculate Heart Retreat Center, the
Catholic-related entities of Spokane are separately incorporated
entities.
Turner does not believe that its infrequent, pro bono
representation of the entities in matters totally unrelated to
Spokane's reorganization case constitute an actual or potential
conflict of interest. Turner will not provide any advice, pro
bono, or otherwise, to the entities during the pendency of
Spokane's reorganization case.
In 1990, Turner drafted a will for Bishop Skylstad. The services
were paid by Spokane through the retainer arrangement between the
Parties. Turner assures the Court that there are no actual or
potential conflicts from the past representation.
Besides the $200 monthly non-refundable retainer, the firm's past
representation included an hourly rate of $135 for specific
matters such as litigation.
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. 14; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
CHARLESTOWNE AT CAVALIER MUTUAL: Voluntary Chapter 11 Case Summary
------------------------------------------------------------------
Debtor: Charlestowne at Cavalier Mutual Homes, Inc.
1590 Darren Circle
Portsmouth, Virginia 23701
Bankruptcy Case No.: 05-70108
Type of Business: The Debtor is engaged in multifamily mortgagor
operations.
Chapter 11 Petition Date: January 10, 2005
Court: Eastern District of Virginia (Norfolk)
Debtor's Counsel: Joseph T. Liberatore, Esq.
Marcus, Santoro & Kozak, P.C.
1435 Crossways Boulevard, Suite 300
Chesapeake, Virginia 23320
Tel: (757) 222-2224
Fax: (757) 333-3390
Estimated Assets: $50,000 to $100,000
Estimated Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20 Largest Unsecured
Creditors.
CONCORDE 1998 LTD: Case Summary & 24 Largest Unsecured Creditors
----------------------------------------------------------------
Lead Debtor: Concorde 1998 Ltd.
1349 East Broad Street
Columbus, Ohio 43205
Bankruptcy Case No.: 05-50291
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Rockrimmon Elderly Housing LP 05-50336
Rockrimmon Family Housing Limited Partnership 05-50338
Type of Business: The Debtors operate the McGregor Woods
Apartments.
Chapter 11 Petition Date: January 10, 2005
Court: Southern District of Ohio (Columbus)
Debtor's Counsel: Robert G. Kennedy, Esq.
Robert E. Giffin, Esq.
4924 B Reed Road
Columbus, Ohio 43220
Tel: (614) 326-1222
Fax: (614) 326-1080
Total Assets Total Debts
------------ -----------
Concorde 1998 Ltd. $0 $1,797,734
Rockrimmon Elderly Housing LP $1,220,000 $873,537
Rockrimmon Family Housing
Limited Partnership $825,000 $844,583
A. Concorde 1998 Ltd.'s 8 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Fifth / Third Bank $490,216
21 East State Street
Columbus, Ohio 43215
Way Architects, PC $107,364
318 North Tejon Street
Colorado Springs, Colorado 80903
Law & Mariotti Consultants, Inc. $37,591
619 North Cascade Avenue, Suite 206
Colorado Springs, Colorado 80903
Retherford, Mullen, Johnson, & Bruce, LLC $26,041
121 South Tejon Street, Suite 601
Colorado Springs, Colorado 80903
Descon Engineers, Inc. $25,370
d/b/a RMG PC Engineers
318 North Tejon Street
Colorado Springs, Colorado 80903
Mark Denny $23,680
1085 Kenilworth Pl
Columbus, Ohio 43209
CTL/ Thompson Engineering Inc. $18,297
5240 Mark Dabling Boulevard
Colorado Springs, Colorado 80918
Sherman & Howard LLC $11,927
90 South Cascade Avenue, Suite 1500
Colorado Springs, Colorado 80903
B. Rockrimmon Elderly Housing LP's 8 Largest Unsecured
Creditors:
Entity Claim Amount
------ ------------
Affiniti Management LLC $397,147
1349 East Broad Street
Columbus, Ohio 43205
Joseph J. Recchie $17,852
3758 Lancaster Road
Granville, Ohio 43023
Retherford, Mullen,Johnson & Bruce, LLC $13,021
121 Tejon Street
Colordo Springs, Colorado 80903
Concord Capital Corporation $12,702
1349 East Broad Street
Columbus, Ohio 43205
Mark Denny $11,840
1085 Kenilworth Pl
Columbus, Ohio 43209
Community Building Systems $7,221
1349 East Broad Street
Columbus, Ohio 43205
Sherman and Howard, LLC $5,964
90 South Cascade Avenue, Suite 1500
Colorado Springs, Colorado 80903
Drexel Homes $2,500
1349 East Broad Street
Columbus, Ohio 43205
C. Rockrimmon Family Housing Limited Partnership's 8 Largest
Unsecured Creditors:
Entity Claim Amount
------ ------------
Affiniti Management, LLC $421,324
1349 East Broad Street
Columbus, Ohio 43205
Sandra J. Damron $53,788
Treasurer, El Paso County
27 East Verminto Avenue
Colorado Springs, Colorado 80903
Retherford, Mullen, Johnson & Bruce, LLC $13,021
121 South Tejon Street
Colorado Springs, Colorado 80903
Concorde Capital Corporation $12,702
1349 East Broad Street
Columbus, Ohio 43205
Mark Denney $11,840
1085 Kenworth Place
Columbus, Ohio 43209
Sherman & Howard, LLC $5,964
90 South Cascade Avenue, Suite 1500
Coloraodo Springs, Colorado 80903
Drexel Homes $2,500
1349 East Broad Street
Columbus, Ohio 43205
Community Building Systems $1,771
1349 East Broad Street
Columbus, Ohio 43205
CSFB MORTGAGE: Moody's Junks Five Security Classes
--------------------------------------------------
Moody's Investors Service has upgraded 29 classes of mezzanine and
subordinated tranches from 7 fixed rate mortgage securitizations
issued by Credit Suisse First Boston Mortgage Securities Corp. in
2002. In addition, Moody's has confirmed the ratings on
12 classes of mezzanine and subordinated tranches from 4 mortgage
securitizations issued by Credit Suisse First Boston Mortgage
Securities Corp. in 2002. Moody's has also downgraded 13 classes
of mezzanine and subordinated tranches from 6 fixed rate mortgage
securitizations issued by Credit Suisse First Boston Mortgage
Securities Corp. in 2002. According to Michael Labuskes,
Associate Analyst, "The actions are based on the fact that the
bonds' current credit enhancement levels, including excess spread
where applicable, are either high or low compared to the current
projected loss numbers for the current rating level."
According to Mr. Labuskes, "In general, the securitizations being
upgraded have benefited from rapid prepayments resulting in the
deleveraging of the transactions. In addition, many of these
mortgage pools underlying most of these securitizations have
performed better than our original expectations."
The securitizations being downgraded suffer primarily from the
performance of the underlying loans with cumulative losses
exceeding our original expectations. Existing credit enhancement
levels may be low given the current projected losses on the
underlying pools.
The complete rating actions are:
Issuer: Credit Suisse First Boston Mortgage Securities Corp.
Upgrade:
* Series 2002-9; Group 2; Class II-M-1, upgraded to Aa1 from
Aa2
* Series 2002-19; Group 1; Class C-B-1, upgraded to Aaa from
Aa3
* Series 2002-19; Group 1; Class C-B-2, upgraded to Aaa from A3
* Series 2002-19; Group 1; Class C-B-3, upgraded to A2 from
Baa3
* Series 2002-19; Group 1; Class C-B-4, upgraded to Baa3 from
Ba3
* Series 2002-5; Group 1; Class C-B-1, upgraded to Aaa from Aa3
* Series 2002-5; Group 1; Class C-B-2, upgraded to Aaa from A3
* Series 2002-5; Group 1; Class C-B-3, upgraded to A2 from Baa2
* Series 2002-5; Group 1; Class C-B-4, upgraded to Baa3 from
Ba3
* Series 2002-7; Class M-1, upgraded to Aaa from Aa2
* Series 2002-7; Class M-2, upgraded to Aaa from A2
* Series 2002-7; Class B, upgraded to A2 from Baa2
* Series 2002-24; Group 1; Class I-B-1, upgraded to Aaa from
Aa1
* Series 2002-24; Group 2; Class C-B-1, upgraded to Aaa from
Aa2
* Series 2002-24; Group 2; Class C-B-2, upgraded to Aa2 from A2
* Series 2002-24; Group 2; Class C-B-3, upgraded to A2 from
Baa2
* Series 2002-26; Group 1; Class I-B-2, upgraded to Aaa from
Aa2
* Series 2002-26; Group 1; Class I-B-4, upgraded to Baa2 from
Baa3
* Series 2002-26; Group 2; Class II-B-1, upgraded to Aaa from
Aa1
* Series 2002-26; Group 4; Class IV-B-1, upgraded to Aaa from
Aa3
* Series 2002-26; Group 4; Class IV-B-2, upgraded to Aaa from
A2
* Series 2002-26; Group 4; Class IV-B-3, upgraded to A2 from
Baa3
* Series 2002-26; Group 4; Class IV-B-4, upgraded to Baa2 from
Ba3
* Series 2002-34; Group 1; Class D-B-1, upgraded to Aaa from
Aa3
* Series 2002-34; Group 1; Class D-B-2, upgraded to Aa3 from A3
* Series 2002-34; Group 1; Class D-B-3, upgraded to Baa1 from
Baa3
* Series 2002-34; Group 3; Class C-B-1, upgraded to Aaa from
Aa3
* Series 2002-34; Group 3; Class C-B-2, upgraded to Aa2 from A3
* Series 2002-34; Group 3; Class C-B-3, upgraded to Baa1 from
Baa3
Confirm:
* Series 2002-10; Group 1; Class I-B, confirmed at Baa2
* Series 2002-10; Group 2; Class II-B-3, confirmed at Baa3
* Series 2002-5; Group 4; Class IV-B-5 confirmed at Ba3
* Series 2002-26; Group 1; Class I-B-3, confirmed at A2
* Series 2002-26; Group 2; Class II-B-2, confirmed at Aa3
* Series 2002-26; Group 2; Class II-B-3, confirmed at A3
* Series 2002-29; Group 1; Class I-B-1, confirmed at Aa2
* Series 2002-29; Group 1; Class I-B-2, confirmed at A3
* Series 2002-29; Group 1; Class I-B-3, confirmed at Baa2
* Series 2002-29; Group 1; Class I-B-4, confirmed at Ba2
* Series 2002-29; Group 2; Class II-B-4, confirmed at Ba3
* Series 2002-30; Group 1; Class D-B-1, confirmed at Aa3
Downgrade:
* Series 2002-9; Group 1; Class I-B-3, downgraded to Baa3 from
Baa2
* Series 2002-9; Group 1; Class I-B-4, downgraded to B1 from
Ba2
* Series 2002-9; Group 1; Class I-B-5, downgraded to Caa2 from
B3
* Series 2002-10; Group 2; Class II-B-4, downgraded to B2 from
Ba3
* Series 2002-10; Group 2; Class II-B-5, downgraded to Ca from
B3
* Series 2002-18; Group 1; Class I-M-1, downgraded to A1 from
Aa2
* Series 2002-18; Group 1; Class I-M-2, downgraded to Caa2 from
Baa2
* Series 2002-19; Group 2; Class II-M-1, downgraded to A2 from
Aa2
* Series 2002-19; Group 2; Class II-M-2, downgraded to Caa1
from A2
* Series 2002-26; Group 3; Class III-M-3, downgraded to Baa2
from A2
* Series 2002-26; Group 3; Class III-B, downgraded to Ba1 from
A3
* Series 2002-22; Group 1; Class I-M-2, downgraded to Baa2 from
A1
* Series 2002-22; Group 1; Class I-M-3, downgraded to Caa1 from
A3
DATATEC SYSTEMS: U.S. Trustee Picks 7-Member Creditors Committee
----------------------------------------------------------------
The United States Trustee for Region 3 appointed seven creditors
to serve on the Official Committee of Unsecured Creditors of
Datatec Systems, Inc., and its debtor-affiliate's chapter 11 case:
1. Sunrise Square, LLC
Attn: Rex Baker
200 Market Place, Suite 110
Roswell, Georgia 30075
Phone: 770-645-9411, Fax: 770-645-9164
2. American Express
Attn: William T. Burnett
20022 North 31st Ave.
Phoenix, Arizona 85027
Tel: 623-492-2790, Fax: 602-744-8867;
3. Worldnet Corporation
Attn: James Connelly McBride
1355 Remington, Ste. E
Schaumburg, Illinois 60173
Phone: 847-274-0123, Fax: 847-839-9124;
4. Ace Electric Inc.
Attn: David B. Maurer
813 N. 4th St.
Allentown, Pennsylvania 18102
Phone: 610-782-0275 x 11, Fax: 610-782-0278
5. Nextgen Fiber Optics
Attn: Paul J. Napolitano
4 Tesseneer Drive
Highland Heights, Kentucky 41076
Phone: 859-572-8739, Fax: 859-572-9564;
6. Anixter, Inc.
Attn: Rod Shoemaker
2301 Patriot Blvd.
Glenview, Illinois 60026
Phone: 224-521-8205, Fax: 224-521-8542;
7. Grabar Electric Company Inc.
Attn: Red Morgan
P.O. Box 6774
1510 Tomlynson St.
Richmond, Virginia 23230
Phone: 804-354-1322, Fax: 804-354-1308.
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 Alpharetta, Georgia, Datatec Systems, Inc., --
http://www.datatec.com/-- specializes in the rapid, large-scale
market absorption of networking technologies. The Company and its
debtor-affiliate filed for chapter 11 protection on Dec. 14, 2004
(Bankr. D. Del. Case No. 04-13536). John Henry Knight, Esq., at
Richards, Layton & Finger, P.A. and Bruce Buechler, Esq., at
Lowenstein Sandler PC represent the Debtors' restructuring. When
the Company filed for protection from its creditors, it listed
total assets of $26,400,000 and total debts of $47,700,000.
DATATEC SYSTEMS: Can Continue Hiring Ordinary Course Professionals
------------------------------------------------------------------
The Honorable Peter J. Walsh of the U.S. Bankruptcy Court for the
District of Delaware gave Datatec Systems, Inc., and its
debtor-affiliate permission to continue retaining, employing and
paying professionals they turn to in the ordinary course of their
business without bringing formal employment applications to the
Court.
In the day-to-day management of their business affairs, the
Debtors regularly call on certain professionals to provide them
with services essential to their operations, including labor and
employment, general corporate, and collections services. The
uninterrupted services of the Ordinary Course Professionals who
are already familiar with the Debtors' operations are vital in
their ordinary business affairs.
The Debtors explain that it would be costly, impractical and
inefficient for them to require each Ordinary Course Professional
who receives relatively small fees to submit individual employment
and compensation applications to the Court.
The Debtors assure the Court that:
a) no Ordinary Course Professional will be paid in excess of
$25,000 per month or $100,000 per year in the aggregate;
b) in the event that an Ordinary Course Professional's
compensation exceeds $25,000 per month or $100,00 per year
in the aggregate, that Professional will be required to
apply for a formal fee application to the Court; and
c) every 120 days after the Court's order, the Debtors will
file with the Court, the U.S. Trustee and the Creditors
Committee a report indicating all the fees and expenses of
of the Ordinary Course Professionals.
Although some of the Ordinary Course Professionals may hold minor
amount of unsecured claims, the Debtors do not believe that any of
them have an interest adverse to the Debtors, their creditors and
other parties in interest.
Headquartered in Alpharetta, Georgia, Datatec Systems, Inc., --
http://www.datatec.com/-- specializes in the rapid, large-scale
market absorption of networking technologies. The Company and its
debtor-affiliate filed for chapter 11 protection on Dec. 14, 2004
(Bankr. D. Del. Case No. 04-13536). John Henry Knight, Esq., at
Richards, Layton & Finger, P.A. and Bruce Buechler, Esq., at
Lowenstein Sandler PC represent the Debtors' restructuring. When
the Company filed for protection from its creditors, it listed
total assets of $26,400,000 and total debts of $47,700,000.
DEL LAB: Moody's Rates Planned $260M Senior Secured Debts at B1
---------------------------------------------------------------
Moody's Investors Service has assigned a first-time B1 senior
implied rating to Del Laboratories, Inc., and rated the company's
proposed $260 million senior secured credit facilities and
$150 million senior subordinated notes at B1 and B3, respectively.
In addition, Moody's has assigned Del a speculative grade
liquidity rating of SGL-3. This is the first time Moody's has
rated Del. Transaction proceeds will fund the acquisition of Del
by affiliates of Kelso & Company in a transaction that values Del
at approximately $475 million, excluding fees and expenses.
The long-term ratings recognize the high debt levels and limited
free cash flow generation resulting from the highly debt-financed
acquisition, which are particularly concerning given the
prospective nature of cost savings that are anticipated to
validate a full purchase price. The ratings are supported by the
stable and leading market positions of Del's core Sally Hansen and
Orajel product lines and by the company's consistent track record
of growth and innovation under its experienced management team.
The rating outlook is stable.
These ratings were assigned:
* Senior implied rating, B1;
* $50 million senior secured revolving credit facility due
2011, B1;
* $210 million senior secured term loan B facility due 2011,
B1;
* $150 million senior subordinated notes due 2012, B3;
* Senior unsecured issuer rating, B2;
* Speculative grade liquidity rating, SGL-3.
Proceeds from the debt transactions, along with $143 million in
equity contribution (largely cash from Kelso), will fund the
acquisition of Del and the refinancing of its debt. The total
consideration (excluding transaction fees) represents around 9.5x
Del's reported LTM EBITDA at September 2004, but identified cost
savings are anticipated to moderate the purchase multiple to
around 7.0x. On this adjusted basis, LTM debt-to-EBITDA is
expected to be approximately 5.3x at close of transaction.
Del's long-term ratings are restrained and weakly positioned in
their respective categories due to the company's high leverage and
low free cash flow expectations, which heighten its reliance on
realizing prospective cost savings and profit levels, and on
maintaining existing market positions and brand values. Adjusting
debt levels for approximately $15 million in underfunded pension
plans moderately increases Del's leverage profile. Although
identified cost savings are largely achievable (particularly those
related to operating efficiency gains and the salary/expenses of
former officers), Moody's recognizes that certain key risks
inherent in its businesses could challenge the full realization of
anticipated profit improvement. In particular, Moody's notes that
the U.S. mass cosmetics market continues to struggle under weak
category growth and fast-changing consumer preferences, which
necessitates new product introductions that in the aggregate can
involve significant development, promotion, and display/capex
spending, but may not be well received by consumers. Additional
risks include:
(1) the presence of larger and well-resourced companies in
Del's highly-competitive categories (L'Oreal, Procter &
Gamble, Revlon, Wyeth);
(2) the increasing bargaining power of Del's large retail
customers, including the growing threat of private labels
in OTC categories; and
(3) ever-present regulatory and product liability concerns.
Nonetheless, the ratings and stable outlook are supported by Del's
stable, long-lived, and leading-to-dominant market positions in
its product categories, with a strong track record of successful
product innovations and brand development. These factors
underscore the value of its brands and somewhat offset the
above-cited industry risks. Importantly, Moody's notes that Sally
Hansen's focus on functional beauty products (e.g., nail
treatment, nail enamel, implements, bleaches, and depilatories)
and its value-price orientation mitigates its exposure to industry
fashion risks. Sally Hansen maintains a 25% share in nail care,
but holds positions of 30-50% in specific product lines.
Similarly, the high-profit Orajel line has a 28% share in oral
analgesics, but has 57% and 70% shares in toothache and teething
lines, respectively. These shares have been consistent over the
past five years in categories with modest, but stable growth.
Both within its core brands and through internal brand
development, Del has organically grown sales by an 11% annual rate
over the past four years. A key example of its brand development
capabilities has been the emergence of its NYC Color line in the
value/teen cosmetics arena, which was launched in 1999 and now
generates annual revenues of around $40 million. The company's
continuous brand and product development efforts (e.g., the
well-received Airbrush Legs line and several Orajel branded
launches), extensions into non-nail color cosmetics, and ongoing
international expansion provide further growth opportunities.
Given these strengths, Moody's expects Del to sustain or improve
upon its somewhat weak pro forma September 2004 credit metrics:
* debt-to-EBITDA 5.3x,
* EBITDA less capex interest coverage 1.9x, and
* free cash flow to funded debt around 6%.
Importantly, the stable outlook anticipates that most cost savings
can be achieved, but that savings may be needed to cover margin or
competitive pressures and that certain cost control initiatives
may constrain sales growth potential. Given these concerns, Del's
modest size and brand diversity, and its limited debt reduction
capacity, Moody's does not anticipate positive rating pressures
over the coming twelve months, but could consider favorable
actions if the company achieves greater-than-anticipated profit
growth and reduces debt more rapidly than expected. A rating
upgrade would require the demonstration of substantial and
sustained debt reduction (3.5x EBITDA), profit improvement, and
free cash flow gains (to 10-12% of funded debt) over the
longer-term.
Conversely, negative rating actions, including a ratings
downgrade, could be prompted by an erosion in credit metrics over
the next year due to the inability to achieve pro forma profit and
cash flow expectations. Moreover, negative rating actions would
likely result if Del deviates from its long-term strategic
objectives of organic growth and debt-reduction. In particular,
Moody's would likely consider negative rating actions if credit
metrics decline such that leverage increases beyond 5.5x, interest
coverage declines below 1.5x, or free cash flow drops materially
below 5% of funded debt.
The SGL-3 rating recognizes the adequate liquidity provided by
Del's proposed $50 million revolving credit facility. Moody's
believes that the size of the facility is sufficient to meet
anticipated borrowing needs, even if the company should struggle
to achieve pro forma profit levels. The company's modest
seasonality and debt amortization ($2.1 million per annum) support
this view. Further, Moody's anticipates customary covenant levels
(set around 15-20% relative to FY2004 projections), thereby
providing an adequate cushion for smooth borrowing access should
the company experience moderate operating challenges. However,
the SGL rating is materially constrained by modest free cash flow
generation expectations and minimal cash balances, the latter of
which will not grow appreciably due to an anticipated 75% excess
cash flow sweep. The SGL rating is further constrained by Del's
limited alternative liquidity sources, as the vast majority of the
company's assets will be pledged to the senior secured credit
facilities.
The senior secured credit facilities are rated at the B1 senior
implied level due to their significant position in the pro forma
debt structure and the fact that tangible asset support may not be
sufficient to fully cover borrowings in a distressed scenario.
However, Moody's notes that the company's powerful brands could
provide intangible asset support. The facilities will be
guaranteed by an intermediate parent holding company and by
domestic subsidiaries, and will be will be secured by all tangible
and intangible assets of the company and guarantors. In addition,
the facilities will be secured by 100% of the capital stock of the
company and its domestic subsidiaries, by 65% of the capital stock
of foreign subsidiaries, and by all inter-company debt. Financial
covenants will include minimum interest coverage, maximum capital
expenditures, and maximum leverage. Mandatory prepayments will be
initially set at 75% of excess cash flow, subject to reduction to
50% or none if certain leverage levels are met. The B3 rating on
the senior subordinated notes reflects their contractual and
effective subordination to a material amount of senior secured
debt. As such, a high EBITDA multiple would be required to
fully-return principal under a distressed scenario.
Del Laboratories, Inc., with headquarters in Uniondale, New York,
is a leading manufacturer and marketer of cosmetics and
over-the-counter pharmaceuticals, primarily under the Sally Hansen
and Orajel brands. Pro forma net sales for the twelve-month
period ended September 2004 were approximately $397 million.
DEL MONTE: Launching $300 Million Senior Debt Offering
------------------------------------------------------
Del Monte Foods Company and its wholly-owned subsidiary, Del Monte
Corporation, has commenced a cash tender offer and consent
solicitation for any and all of its $300 million aggregate
principal amount of 9-1/4% Senior Subordinated Notes due 2011.
The Tender Offer and the Consent Solicitation are described in the
Offer to Purchase and Consent Solicitation Statement dated
Jan. 10, 2005.
The consideration for each $1,000 principal amount of Notes
tendered and accepted for payment pursuant to the Tender Offer
shall be:
(1) a price, calculated in accordance with standard market
practice, intended to result in a yield to the earliest
redemption date for the Notes (May 15, 2006) equal to the
sum of:
(i) the yield to maturity of the applicable reference
security (2.00% U.S. Treasury Note due May 15,
2006), as calculated by the dealer managers in
accordance with standard market practice based on
the bid-side price for such reference security as
of 2:00 p.m., New York City time, on the second
business day preceding the expiration time, and
(ii) a fixed spread of 75 basis points, minus
(2) an amount equal to the consent payment of $40.00 per
$1,000 principal amount of Notes.
Holders will also be paid accrued interest to, but not including,
the settlement date. As of 2:00 p.m., New York City time, on
Jan. 7, 2005, the reference treasury yield was 3.005% and, based
on such yield, the consideration for each $1,000 principal amount
of Notes as calculated above would be $1,071.51, assuming a
settlement date of Feb 8, 2005. In addition, Del Monte will pay a
consent payment of $40.00 for each $1,000 principal amount of
Notes tendered and consents delivered prior to 5:00 p.m., New York
City time, on Monday, Jan. 24, 2005, unless extended. Holders
that tender Notes after the Consent Time will not be eligible to
receive the consent payment.
The Tender Offer will expire at 12:00 midnight, New York City
time, on Monday, Feb. 7, 2005 unless extended. Payment for Notes
validly tendered and accepted for payment and not validly
withdrawn will be made in same day funds one business day
following expiration of the Tender Offer, or as soon thereafter as
practicable. No consent payments will be made in respect of Notes
tendered after the Consent Time. Tendered Notes may not be
withdrawn and consents may not be revoked after the Consent Time,
except in limited circumstances. Any extension, delay,
termination or amendment of the Offer will be followed as promptly
as practicable by a public announcement thereof.
Del Monte has engaged Morgan Stanley and Banc of America
Securities as Joint Dealer Managers and Solicitation Agents for
the Tender Offer and Consent Solicitation.
Del Monte Foods Company, with revenues of $3.2 billion, has
headquarters in San Francisco, California. The company's senior
implied rating is Ba3 with a stable outlook.
* * *
As reported in the Troubled Company Reporter on Dec. 22, 2004,
Moody's Investors Service downgraded Del Monte Foods Company's
speculative grade liquidity rating to SGL-2 from SGL-1 due to the
scheduled tightening of financial covenants in Jul 2005. The
SGL-2 rating indicates good liquidity. Moody's also affirmed Del
Monte's Ba3 senior implied rating and stable outlook.
Moody's expects Del Monte to generate significant free cash flow
over the next twelve months, which the company could direct to
term debt repayment, share repurchases, and acquisitions. Due to
seasonality, the company relies on its revolver on an interim
basis during the year, with utilization typically at a low in
May/June and peaking in Sept/Oct, during the harvest and packing
season, after which utilization quickly decreases. Del Monte's
$300 million revolving credit commitment provides an adequate
cushion of unused revolver availability to meet peak working
capital needs. The SGL rating could be raised again if additional
debt paydown and earnings improvement enhance covenant cushions
under the tighter required levels beginning in July 2005. Given
the seasonal nature of its cash flow, the company's maintenance of
a solid liquidity position is an important factor for its
long-term ratings and outlook (Ba3 senior implied with a stable
outlook).
Del Monte generates relatively stable and predictable operating
cash flow. The company benefits from product diversity across
several food categories with relatively stable consumption trends,
well-known brands, and leading shares in most of its product
categories. Operating cash flow after capital spending (about
$188 million in the LTM ending 10/31/05) is expected to remain
strong despite cost pressures. Required debt amortization is
limited over the next twelve months ($6 million). Working capital
will be a material source of cash in the next six months, but the
company's working capital is highly seasonal due to the annual
crop cycle, so the company will likely need to draw on its
revolver in the autumn to fund a seasonal working capital build.
At 1/25/04, $142 million was drawn under the revolver and about
$50 million of the commitment was utilized for letters of credit,
leaving over $100 million of availability at seasonally high time
of usage. The $300 million revolver matures in 2008. The
company's cushion under financial covenants has been comfortable,
but covenants tighten in F1Q06 (ending Jul 2005), which would
leave a narrower cushion unless debt is paid down and earnings
increase. Del Monte's business diversity provides some scope to
sell assets without impairing remaining assets and enterprise
value, but the assets are largely encumbered.
ENRON: Wants Court Nod on Connecticut Resources Settlement Pact
---------------------------------------------------------------
Enron Power Marketing, Inc., and Connecticut Resources Recovery
Authority are parties to a series of contracts that were part of
a complex three-party transaction that also included Connecticut
Light & Power Company.
Under the Contracts, CRRA released Connecticut Light from its
existing obligation to CRRA. The Release was later replaced with
a new transaction in which EPMI received about $220,000,000, and
in exchange agreed to make "steam payments" and "capacity
payments" to CRRA aggregating around $2,375,000 a month for 12
years. In return, Connecticut Light agreed to purchase power
from CRRA at a lower price than in previously agreed in the
Release. The Payments to CRRA commenced in April 2001 and ceased
shortly before EPMI's filing for bankruptcy on December 2, 2001.
As credit support for the Contracts, Enron Corp. issued a
guarantee in CRRA's favor.
According to Melanie Gray, Esq., at Weil, Gotshal & Manges, LLP,
in New York, all of CRRA's rights, titles and interests in and to
the Contracts were pledged to U.S. Bank National Association, as
Trustee and successor to State Street Bank and Trust Company,
under the Resolution Authorizing the Issuance of Mid-Connecticut
System Bonds adopted in March 13, 1985, as amended.
On September 30, 2002, the Trustee appointed Reliance Trust
Company to serve as co-trustee under the Resolution, during which
Claim Nos. 14318 and 14338 were filed in the Debtors' bankruptcy
proceedings. Reliance resigned as co-trustee on July 22, 2004,
after assigning the Reliance Claims to U.S. Bank.
CRRA Adversary Proceeding
On July 22, 2002, CRRA commenced an adversary proceeding against
the Debtors. The Court, however, dismissed the case. CRRA,
consequently, appealed to the United States District Court for
the Southern District of New York, which also affirmed the
Bankruptcy Court's ruling with prejudice. CRRA is currently
appealing the District Court's decision to the U.S. Court of
Appeals for the Second Circuit.
EPMI and Connecticut Light entered into an Energy Purchase
Agreement, dated December 22, 2000, which was one of the
Contracts. EPMI filed a notice of rejection of the EPA that
became effective December 12, 2002.
Ms. Gray tells the Court that the Debtors, the Trustee and CRRA
have held numerous discussions to resolve issues surrounding the
Contracts together with any and all negotiations, payments,
including the Guarantee Agreement, the Resolution, and together
with the entire complex three-party transaction including
Connecticut Light, including the Adversary Proceeding and the
Claims.
The Settlement Agreement
CRRA and Connecticut Light reached a settlement of disputes
between them relating to the Contracts and related negotiations.
Furthermore, the Debtors and Connecticut Light have held various
discussions to resolve the issues surrounding the Contracts,
including the EPA and the Claims.
The Settlement Parties wish to amicably resolve the Claims to the
extent set forth in a Settlement Agreement to avoid the
uncertainty and costs associated with further litigation. On
November 17, 2004, the Debtors, CRRA and the Trustee executed the
Settlement Agreement.
As consideration for the release and settlement of all Claims,
the Settlement Parties agree that:
(1) CRRA will dismiss with prejudice the Appeal and the
Adversary Proceeding;
(2) CRRA will withdraw with prejudice Claim Nos. 11187 and
11191 filed against ENA;
(3) CRRA will not object to the expungement, with prejudice,
of any and all Scheduled Liabilities related to CRRA;
(4) CRRA will forbear from instituting or causing to be
instituted any causes of action in any forum or
jurisdiction against the Debtors based on the Contracts
and the Guarantee Agreement;
(5) the Settlement Parties acknowledge and accept the July 22,
2004, assignment of Claim No. 14318 against Enron Corp.
and Claim No. 14338 against EPMI from Reliance Trust to
the Trustee, evidence of which was filed in the Debtors'
bankruptcy proceeding on July 28, 2004;
(6) the Trustee will withdraw with prejudice Claim No. 14318
against Enron Corp. and Claim No. 14338 against EPMI and
forbear from instituting or causing to be instituted any
causes of action in any forum or jurisdiction against the
Debtors based on the Contracts and the Guarantee
Agreement;
(7) Claim No. 11188 filed by CRRA will be allowed as an
unsecured claim against Garden State, to be treated as an
unsecured claim in Class 24 pursuant to the Plan;
(8) Claim No. 11189 filed by CRRA will be allowed as an
unsecured claim against Enron Corp., based on the
Guarantee Agreement, to be treated as a guarantee claim in
Class 185 pursuant to the Plan; and
(9) Claim No. 11190 filed by CRRA will be allowed as an
unsecured claim against EPMI, to be treated as an
unsecured claim in Class 6 pursuant to the Plan.
Ms. Gray assures the Court that the Settlement Agreement is a
product of arm's-length bargaining by and among the Parties.
"If the Debtors cannot enter into the Settlement . . . and settle
and limit the issues regarding the Transaction consensually,
additional future litigation is possible," Ms. Gray says. "The
Debtors recognize that there is uncertainty and risk inherent in
any litigation."
"Even assuming the Debtors were to prevail in litigation, such
litigation would be costly, time consuming, and distracting to
management and employees alike," Ms. Gray adds.
Accordingly, the Debtors ask the Court to approve the Settlement
Agreement.
Headquartered in Houston, Texas, Enron Corporation is in the midst
of restructuring various businesses for distribution as ongoing
companies to its creditors and liquidating its remaining
operations. Before the company agreed to be acquired, controversy
over accounting procedures had caused Enron's stock price and
credit rating to drop sharply.
Enron filed for chapter 11 protection on December 2, 2001 (Bankr.
S.D.N.Y. Case No. 01-16033). Judge Gonzalez confirmed the
Company's Modified Fifth Amended Plan on July 15, 2004, and
numerous appeals followed. Martin J. Bienenstock, Esq., and Brian
S. Rosen, Esq., at Weil, Gotshal & Manges, LLP, represent the
Debtors in their restructuring efforts.
FAIRPOINT COMMS: S&P Puts Low-B Ratings on CreditWatch Positive
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on FairPoint
Communications Inc. ('B+') -- a rural local exchange company -- on
CreditWatch with positive implications. The CreditWatch placement
is due to the company's potential deleveraging efforts resulting
from a proposed initial public offerings, as indicated in a recent
Form S-1 filing with the SEC. S&P's resolution of the
CreditWatch listings will depend on the ultimate size of the IPO
and the capital structure. In reviewing the company, S&P will
assess the impact of the cash dividend associated with the common
stock on free cash flow and the ability to meet debt maturities
and longer-term competitive pressures.
"The RLEC industry has experienced limited competition to date
because of the demographics of its service area, relatively stable
cash flows, and healthy EBITDA margins in the 50% area," said
Standard & Poor's credit analyst Rosemarie Kalinowski. "Annual
access line losses, generally in the 2%-3% range, have resulted
from the replacement of second lines with digital subscriber line
-- DSL -- and a slow economic recovery. However, the replacement
of second lines by DSL results in higher incremental revenue.
Since the majority of the RLECs' network upgrades have been
completed, capital expenditures are not anticipated to be
significant in the near term."
FASTNET CORP: Files Joint Liquidation Plan in Pennsylvania
----------------------------------------------------------
Fastnet Corporation (n/k/a FN Estate Inc.) filed a proposed Joint
Plan of Liquidation, together with the Disclosure Statement
describing the Plan, with the U.S. Bankruptcy Court for the
Eastern District of Pennsylvania. A full-text copy of the Plan is
available at no charge at:
http://www.sec.gov/Archives/edgar/data/1092536/000101968704002954/fnestate_8
kex99-1.txt
The Plan provides for the liquidation of the Debtor's assets to
pay secured and unsecured creditors. As previously reported, the
Debtors have sold substantially all of their assets as a result of
several Sec. 363 sale transactions between December 15, 2003 and
May 4, 2004.
Under the terms of the proposed Plan:
-- administrative claims, U.S. Trustee fees, priority tax
claims, and priority non-tax claims will be paid in full;
-- general unsecured creditors will receive their pro rata
share of all remaining cash after payment in full of all
allowed claims; and
-- Daslic creditors and equity holders will neither receive nor
retain any property or interest in the Debtors' assets.
An initial Administrative Agent will be installed as of the Plan's
effective date to:
-- conduct an orderly liquidation of the Debtor's remaining
assets pursuant to the terms of the Plan;
-- control and authorize over the management and disposition of
the Debtor's assets;
-- authorize the retention and compensation of professionals;
and
-- consult with the Oversight Board regarding material issues
affecting the Debtors' assets.
The Debtors and the Creditors' Committee believe that the Plan
will enable all creditors entitled to distributions to realize the
greatest possible recovery on their respective Claims with the
least possible delay.
A Bankruptcy Court hearing to determine the adequacy of the
Disclosure Statement and the Equity Holder Disclosure Statement is
currently scheduled for Jan. 27, 2005.
On June 10, 2003, Fastnet Corporation (n/k/a FN Estate, Inc.) and
on June 13, 2003, each of its subsidiaries (excluding the
Company's wholly-owned subsidiary "DASLIC", a Delaware Holding
Company) filed voluntary chapter 11 petitions (Bankr. E.D. Pa.
Jointly Administered Case No. 03-23143).
FEDERAL-MOGUL: Cooper Wants Voting Procedures Order Enforced
------------------------------------------------------------
Stephen M. Miller, Esq., at Morris, James, Hitchens & Williams,
LLP, in Wilmington, Delaware, relates that in 1994, Wagner
Electric Corporation, a subsidiary of Cooper Industries, Inc.,
purchased certain assets and assumed certain liabilities of Pneumo
Abex Corporation's friction products division. Cooper guaranteed
Wagner's performance under the purchase agreement. After the
sale, Wagner merged with Moog Automotive Products, Inc., another
Cooper subsidiary, with Moog as the surviving entity.
In 1998, Federal-Mogul Corporation and its debtor-affiliates
purchased Moog from Cooper and named it Federal-Mogul Products,
Inc. As part of the sale, the Debtors assumed certain pending
litigation, including asbestos personal injury cases that had been
filed against Wagner as well as asbestos personal injury cases
against Pneumo Abex for which Wagner had agreed to indemnify
Pneumo Abex.
Cooper contends that the Debtors assumed all liabilities relating
to Cooper's guaranty under the Pneumo Abex transaction. The
Debtors also purportedly agreed to indemnify Cooper for claims
arising out of the assumed liabilities.
Cooper's Claims
On March 1, 2003, Cooper filed proofs of claim against the
Debtors, arising out of the transactions. The most substantial
claim category was titled "Asbestos Claims."
The proofs of claim have been updated and amended twice. On the
Second Amended Proofs of Claim, Cooper's liquidated Class H
Unsecured Claims total $2,418,655. Furthermore, since
Oct. 1, 2001, through September 30, 2004, Cooper incurred
$103,073,400 in actual out-of-pocket defense, indemnity and other
costs with respect to asbestos claims for which FM Products and
Federal-Mogul Corporation and certain of its affiliates are
responsible.
In addition, as of September 30, 2004, Cooper entered into
settlements requiring it to pay $27,523,416 with respect to future
claims, and it has been billed $2,050,991 in defense costs.
Cooper stated that the amounts are liquidated. As of September
30, 2004, Cooper has liquidated 47,774 direct Asbestos Personal
Injury Claims on behalf of F-M Products, Federal-Mogul Corporation
and its affiliates. This is also the number of votes in Class J
that Cooper should be deemed to have as of September 30, 2004.
Voting on the Plan
Cooper notes that no party objected to its multi-million dollar
liquidated and non-contingent unsecured and asbestos-related
claims. But the Debtors belatedly sent Cooper ballots that
improperly attempt to assign it a voting amount of $1.00, which
the Voting Procedures strictly reserves for claims that are
"wholly unliquidated, contingent and/or disputed."
As allowed by the ballot instructions and the Voting Procedures,
Cooper amended its ballots by hand to reflect the proper amount of
its vote as of the Voting Deadline, voted to reject the Plan and
timely mailed the ballots to the Voting Agent.
Cooper amended its Class H Unsecured Claims ballots with respect
to Federal-Mogul Corporation and FM Products to specify it was
casting one ballot in each case with $2,418,655 in voting amount.
Cooper also amended its Class J Indirect Asbestos Personal Injury
Claims ballots with respect to Federal-Mogul Corporation and FM
Products to specify that it was casting 47,774 ballots with
$132,656,808 in total voting amount.
Because the Plans for F-M UK Holding Limited and FM International,
LLC, do not have a Class J, Cooper voted its entire $135,075,462
liquidated claim amount against those entities as Unsecured Claims
in Class H as the Voting Procedures specifically allow.
Cooper asks the Court to:
(a) enforce the Voting Procedures Order; or
(b) otherwise temporarily allow Cooper's claims for voting
purposes under Rule 3018(a) of the Federal Rules of
Bankruptcy Procedure, by entering an order stating that:
(1) Cooper's ballots to reject the Plans for each of
Federal-Mogul Corporation and FM Products will be
tabulated as:
-- 1 Class H vote to reject with a total dollar
amount of $2,418,655; and
-- 47,774 Class J votes to reject with a total dollar
amount of $132,656,808; and
(2) Cooper's ballots to reject the Plans for each of F-M
UK Holding Limited and FM International will be
tabulated as 1 Class H vote to reject with a total
dollar amount of $135,075,462.
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. 70; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
FINOVA GROUP: To Make Partial Prepayment on Notes on January 18
---------------------------------------------------------------
The FINOVA Group Inc. will make a partial principal prepayment on
January 18, 2005, to holders of record as of 5:00 p.m., New York
City time, on January 10, 2005, on its 7.5% Senior Secured Notes
Due 2009 with Contingent Interest Due 2016. According to Richard
Lieberman, the Company's Senior Vice President, General Counsel &
Secretary, the partial principal prepayment is $178,076,940,
together with accrued interest on the portion of the principal
being repaid up to but excluding the Prepayment Date.
On December 1, 2004, FINOVA advised The Bank of New York, the
Trustee of the Notes, that it would make the partial prepayment.
Including the January 2005 prepayment, FINOVA will have prepaid
33.0% of the $2,967,949,000 principal amount outstanding as of
December 31, 2003.
That prepayment plus the other prepayments of principal that
FINOVA has made on the Notes are:
Cumulative %
Principal of Principal
Prepayment Date Record Date Amount Prepaid
--------------- ----------- --------- ------------
May 15, 2004* May 10, 2004 $237,500,000 About 8%
August 16, 2004 August 9, 2004 $326,410,310 19%
October 15, 2004 October 7, 2004 $118,717,960 23%
November 15, 2004 November 5, 2004 $118,717,960 27%
January 18, 2005 January 10, 2005 $178,076,940 33%
* Paid on May 17, 2004
The Trustee has agreed to issue this Notice of Partial Prepayment
to holders of Notes:
NOTICE OF PARTIAL PREPAYMENT
The FINOVA Group Inc.
7.5% Senior Secured Notes Maturing 2009
With Contingent Interest Due 2016
CUSIP No. 317928AA7*
To: The Holders of the FINOVA Group Inc.'s 7.5% Senior Notes
due (the Notes)
NOTICE IS HEREBY GIVEN, pursuant to Sections 3.03 and 3.07
of the Indenture dated as of August 22, 2001 (the
"Indenture") between The FINOVA Group Inc., as Issuer, and
The Bank of New York, as Trustee, that $178,076,940
aggregate principal amount (the "Partial Prepayment") of the
Issuer's 7.5% Senior Secured Notes Maturing 2009, with
Contingent Interest Due 2016 (the "Notes") will be prepaid
January 18, 2005 (the "Prepayment Date"), together with
accrued interest on the portion of principal being repaid up
to but excluding the Prepayment Date. Prepayments will be
made to holders of record as of 5:00 p.m., New York City
time, on January 10, 2005 (the "Record Date"), which is the
fifth business day preceding the Prepayment Date. Payments
will be made pro-rata on the Notes.
Payment of the Partial Prepayment on the Notes will be
payable without physical presentation and surrender of the
Notes to the Trustee, as Paying Agent. The Trustee
can be reached at the following address:
If by Mail: If by Delivery [sic.]:
----------- ----------------------
The Bank of New York The Bank of New York
P.O. Box 396 111 Sanders Creek Parkway
East Syracuse, New York 13057 East Syracuse, New York 13057
Attn: Corporate Trust Attn: Corporate Trust
Operations Operations
Provided that the Issuer makes the Partial Prepayment, the
portion of the Notes prepaid will no longer be outstanding
after the Prepayment Date other than the right of holders
thereof to receive their pro rata share of the Partial
Prepayment, and all rights with respect to the Notes to the
extent of the Partial Prepayment will cease to accrue on the
Prepayment Date. Interest on the Notes to the extent of the
Partial Prepayment will cease to accrue on and after the
Prepayment Date.
IMPORTANT NOTICE
Federal tax law requires that the Trustee withhold 30% of
your payment unless (a) you qualify for an exemption or (b)
you provide the Trustee with your Social Security Number or
Federal Employer Identification Number and certain other
required certifications. You may provide the required
information and certifications by submitting a Form W-9,
which may be obtained at a bank or other financial
institution.
By: The Bank of New York
as Trustee
December __, 2004
* The Trustee is not responsible for the selection or use of
the CUSIP number, nor is any representation made as to its
correctness. The CUSIP number is included solely for
convenience of the Holders.
Headquartered in Scottsdale, Arizona, The Finova Group, Inc.,
provides commercial financing to small and mid-sized businesses;
other services include factoring, accounts receivable management,
and equipment leasing. The firm has three segments: Commercial
Finance, Specialty Finance, and Capital Markets. FINOVA targets
such markets as transportation, wholesaling, communication, health
care, and manufacturing. Loan write-offs had put the firm on
shaky ground. The Company and its debtor-affiliates and
subsidiaries filed for Chapter 11 protection on March 7, 2001
(U.S. Bankr. Del. 01-00697). Daniel J. DeFranceschi, Esq., at
Richards, Layton & Finger, P.A., represents the Debtors. FINOVA
has since emerged from Chapter 11 bankruptcy. Financial giants
Berkshire Hathaway and Leucadia National Corporation (together
doing business as Berkadia) own FINOVA through the almost
$6 billion lent to the commercial finance company.
FOSTER WHEELER: Joint Venture with SNC-Lavalin Wins Bid for Goro
----------------------------------------------------------------
Foster Wheeler Ltd. (OTCBB: FWHLF) and its subsidiary, Foster
Wheeler (Qld) Pty Ltd., in a joint venture with SNC-Lavalin
Australia Pty Ltd., has been awarded a new contract by Goro Nickel
SA to provide services related to the engineering, procurement and
construction management of Goro Nickel's US$1.878 billion Goro
nickel-cobalt project in New Caledonia.
The 50-50 joint venture is known as the CEG Joint Venture.
Personnel from CEG will provide services as part of Goro Nickel's
integrated team, led by Inco Australia Management Pty Ltd. -- IAM.
The project will be included in Foster Wheeler's fourth-quarter
bookings for 2004.
The estimated AU$200 million (approximately US$150 million)
contract with CEG follows CEG's involvement in a comprehensive
study to re-examine the Project, which identified value
improvement measures and provided detailed engineering to optimize
project capital costs.
Robin Marshall, Project Director for Goro Nickel Project, said:
"We are pleased that we have reached and finalized this agreement
and look forward to continuing our relationship with CEG to
deliver a successful project."
"This is a significant win for Foster Wheeler," commented Steve
Davies, Chairman and Chief Executive Officer, Foster Wheeler
Energy Limited. "It reflects the quality of our engineering,
procurement, and construction management services, plus our proven
ability to manage logistically challenging, complex, world-scale
projects." Mike Beaumont, Director - Operations, who has been
Foster Wheeler's Executive Sponsor from the beginning of this
project, added: "We are proud to have made an active contribution
to the successful conclusion of the Phase 2 review and the
decision to proceed and participate in the engineering,
procurement and construction phase of this major investment."
The Goro mine will be designed for an estimated annual capacity of
60,000 tonnes of nickel and over 4,000 tonnes of cobalt. Based on
the final results of the project review, construction should begin
in early 2005 and be carried out over a period of approximately
35 months. Initial production is estimated to begin in September
2007.
"Inco has concluded that Goro can be a viable project at a
reasonable capital cost, and we're delighted to have won this
contract so we can help Goro Nickel make it a reality," said
Pierre Duhaime, Executive Vice-President, SNC-Lavalin Group, Inc.
"SNC-Lavalin has considerable experience in the execution of
large-scale mining and metallurgy projects and we're looking
forward to applying it to Goro, which will be one of the largest
projects of its kind in the world."
About the Company
Foster Wheeler Ltd. is a global company offering, through its
subsidiaries, a broad range of design, engineering, construction,
manufacturing, project development and management, research and
plant operation services. Foster Wheeler serves the refining, oil
and gas, petrochemical, chemicals, power, pharmaceuticals,
biotechnology and healthcare industries. The corporation is based
in Hamilton, Bermuda, and its operational headquarters are in
Clinton, New Jersey, USA.
At Sept. 24, 2004, Foster Wheeler's balance sheet showed a
$441,238,000 stockholders' deficit, compared to an $872,440,000
deficit at Dec. 26, 2003.
GLOBAL CROSSING: AGX Trustee Moves for First Interim Distribution
-----------------------------------------------------------------
In light of the significant cash amount presently available for
distribution to the creditors of Asia Global Crossing Ltd. and
Asia Global Crossing Development Co., Robert L. Geltzer -- as AGX
Chapter 7 Trustee -- believes that an interim distribution is
appropriate.
The AGX Trustee reports that as of November 2004, AGX's liquid
assets are comprised of cash totaling $90,000,000. AGX also
possesses unliquidated assets in the form of anticipated
recoveries on actions to avoid prepetition transfers. Although
the collective amounts sought in the Recovery Actions exceed
$33,000,000, the amount to be realized is not yet determined.
The liabilities of AGX's estate are comprised of:
Aggregate Face
Amount of Claims
----------------
Secured Claims $5,349,469,831
Chapter 7 Professional Fees and
Expenses incurred through 08/31/04
and Statutory Commission 3,319,137
Estimated Chapter 7 Professional
Fees and Expenses and Statutory
Commission incurred through Case
Closing 7,210,000
Other Estimated Chapter 7
Administrative Claims incurred
through Case Closing 600,000
Administrative Claims incurred after
Petition Date and prior to the
Conversion Date 73,720,949
Priority Unsecured Claims 27,900
General Unsecured Claims 4,750,507,995
Equity Claims 9,955
----------------
Total liabilities of AGX $10,184,865,768
AGX Development has no liquid assets and the AGX Trustee does not
propose making any distribution to its creditors. AGX
Development possesses unliquidated assets in the form of certain
of the Recovery Actions. Although the collective amounts sought
total roughly $1,100,000, the amount to be realized is not yet
known.
The liabilities of AGX Development's estate are comprised of:
Aggregate Face
Amount of Claims
----------------
Secured Claims -
Chapter 7 Professional Fees and
Expenses incurred through 08/31/04 -
Estimated Chapter 7 Professional Fees
and Expenses incurred through Case Closing -
Other Estimated Chapter 7
Administrative Claims incurred
through Case Closing -
Administrative Claims incurred after
Petition Date and prior to the
Conversion Date $939,674
Priority Unsecured Claims 18,304
General Unsecured Claims 3,751,556
----------------
Total liabilities of AGX Development $4,709,534
In accordance with the requirements of Sections 105(a) and 726 of
the Bankruptcy Code, and at the AGX Trustee's request, the Court
authorizes the interim distribution to creditors of AGX's estate:
(a) 100% to holders of allowed administrative claims, totaling
$3,267,629;
(b) 3.6% to the Bank of New York on behalf of the record date
holders of AGX's 13.375% Senior Notes due 2010,
aggregating $15,857,903; and
(c) 5.3% to other holders of allowed general unsecured claims,
totaling $820.
After giving effect to the first interim distribution and
establishing reserves for disputed claims and projected
administrative expenses, the AGX estate will still maintain a
surplus of more than $5,000,000. The AGX Trustee believes that
$5,000,000 is ample to cover any unforeseen contingencies, like
late-filed claims, which may arise in connection with the AGX
Chapter 7 case.
A full-text copy of AGX's First Interim Distribution is available
for free at:
http://bankrupt.com/misc/agx_interimdistribution.pdf
Establishment of Reserves
Jonathan L. Flaxer, Esq., at Golenbock Eiseman Assor Bell &
Peskoe, LLP, in New York, tells the Court that for holders of
disputed claims not to be prejudiced by the interim distribution,
the AGX Trustee has computed reserves for the AGX estate
including:
(i) certain disputed claims against the AGX estate;
(ii) projected fees and expenses of administering the AGX
estate, including those of retained professionals through
the anticipated closing of the case;
(iii) allowed and disputed claims against AGX Development; and
(iv) unknown and unquantifiable claims against the AGX estate.
Similarly, the AGX Trustee has computed reserves for the AGX
Development estate. Given the fact that the AGX Development
estate presently has no liquid assets at its disposal, the AGX
Trustee proposes to establish reserves for allowed and disputed
claims against AGX Development with cash available in the AGX
estate.
With limited exception, the AGX Trustee adhered to 10 guidelines
in determining appropriate reserves for both the AGX and AGX
Development estates.
Type of Claim Reserve
------------- -------
Duplicate, Amended/Superseded or Multiple $0.0
Unliquidated $0.0
Disputed Secured 100.0%
Disputed Administrative 100.0%
Disputed Priority 100.0%
Disputed Unsecured 5.3%
Disputed Claims Based on Equity Interests $0.0
Accrued but Unpaid Administrative Expenses 100.0%
Projected Administrative Claims 100.0%
Unknown and Unquantifiable Claims $5,047,395.0
A full-text copy of AGX's Reserve Analysis is available for free
at:
http://bankrupt.com/misc/agx_reserveanalysis.pdf
Mr. Flaxer cites exceptions to the guidelines that apply in four
instances:
(1) Claims of Pacific Crossing Ltd.
PCL filed four general unsecured proofs of claim against
AGX asserting "not less than $677,000,000." In addition,
PCL filed two administrative proofs of claims against AGX
for $10,000,000 and $12,200,000. In accordance with a
letter agreement dated November 15, 2004, the AGX Trustee
and PCL have agreed that to establish the reserve:
* the claim amount of the PCL General Unsecured Claims
will be $350,000,000 in the aggregate; and
* PCL Administrative Claims' amount will aggregate
$12,200,000.
In all other regards, the AGX Trustee will treat the PCL
General Unsecured Claim and the PCL Administrative Claim
similarly with other disputed AGX creditors.
(2) Claims of Asia Netcom Corporation
Asia Netcom filed an unsecured proof of claim against the
AGX estate of "not less than $677,000,000." This proof of
claim alleges liability on AGX's part based on a
contribution or indemnification theory, namely, that in
the event that Asia Netcom is sued by PCL for the
liability alleged in the PCL Unsecured Claim, Asia Netcom
reserves the right to assert a claim against AGX. As set
forth in the AGX Trustee's first omnibus objection, the
AGX Trustee has objected to this proof of claim on the
basis that all claims by and against Asia Netcom and PCL
were settled. Moreover, in accordance with the PCL
Agreement, reserves have already been established on
behalf of PCL for the gravamen of this claim.
Accordingly, the AGX Trustee will reserve no amount on
account of the Asia Netcom claim.
(3) Claims of KDDI Submarine Cable Systems, Inc., and NEC
Corporation
KDDI and NEC filed proofs of claim against the AGX estate
for $70,550,000 and $242,636,332, each alleging a security
interest in certain AGX assets. However, the liabilities
alleged in the KDDI and NEXC Proofs of Claim were
specifically assumed by Asia Netcom as part of the Asia
Netcom Sale. Hence, the AGX Trustee will reserve no
amount on account of those claims.
(4) Claims of Global Crossing Ltd. and its affiliates
GX filed 16 proofs of claim against the AGX estate in
which the right of set-off, and therefore a security
interest in AGX assets, is alleged. All of these claims
were settled in accordance with an approved settlement
agreement between the GX and AGX Debtors on March 5, 2003.
Accordingly, the AGX Trustee will not establish a reserve
on account of the GX Claims.
Accordingly, Judge Bernstein permits the AGX Trustee to establish
the reserves with assets of AGX's estate.
Solely with respect to Claim No. 6 filed by the Bank of New York
against AGX, the AGX Trustee is authorized to:
(a) increase the assumed amount of the Bank's general
unsecured claim from $420,712,303 to $421,517,249; and
(b) make a supplementary distribution to BNY on account of
that possible increase in an amount not to exceed $30,588,
representing the sum of $421,517,249 less $420,712,303,
multiplied by the distribution percentage of 3.8%.
Headquartered in Florham Park, New Jersey, Global Crossing Ltd. --
http://www.globalcrossing.com/-- provides telecommunications
solutions over the world's first integrated global IP-based
network, which reaches 27 countries and more than 200 major cities
around the globe. Global Crossing serves many of the world's
largest corporations, providing a full range of managed data and
voice products and services. The Company filed for chapter 11
protection on January 28, 2002 (Bankr. S.D.N.Y. Case No.
02-40188). When the Debtors filed for protection from their
creditors, they listed $25,511,000,000 in total assets and
$15,467,000,000 in total debts. Global Crossing emerged from
chapter 11 on December 9, 2003.
HD PARTNERS LLC: Case Summary & 16 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: HD Partners, LLC
330 South River Drive
Tempe, Arizona 85281
Bankruptcy Case No.: 05-00370
Chapter 11 Petition Date: January 11, 2005
Court: District of Arizona (Phoenix)
Judge: George B. Nielsen Jr.
Debtor's Counsel: John R. Clemency, Esq.
Greenberg Traurig LLP
2375 East Camelback Road, Suite 700
Phoenix, AZ 85016
Tel: 602-445-8575
Fax: 602-445-8100
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 16 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Telecast Fiber Trade Debt $872,329
102 Grove Street
Worcester, MA 01605
AZCAR USA, Inc. Trade Debt $513,653
121 Hillpointe Dr., Ste. 700
Canonsberg, PA 15317
EVS Broadcast Trade Debt $441,694
9 Law Drive
Fairfield, NJ 07004
IKEGAMI Trade Debt $406,295
2631 Manhattan Beach Blvd.
Redondo Beach, CA 90278
Joseph Electric Trade Debt $154,849
Pesa Trade Debt $122,278
Pinnacle Trade Debt $116,849
Gearhouse Trade Debt $76,360
Bexel Trade Debt $68,243
SSL Trade Debt $65,030
Evertz Trade Debt $64,032
Sony Trade Debt $58,523
Gerling & Associates Trade Debt $20,858
Bennett Systems Trade Debt $2,832
Graybar Trade Debt $482
HEALTH & NUTRITION: Court Confirms Amended Plan of Reorganization
-----------------------------------------------------------------
Health & Nutrition Systems International, Inc., (OTC Bulletin
Board: HNNSQ) reported that, on January 10, 2005, the Company's
Amended Plan of Reorganization was approved by the U.S. Bankruptcy
Court for the Southern District of Florida, in Fort Lauderdale,
Florida. HNS filed its Chapter 11 case on October 15, 2004. The
Plan provides for the sale by HNS of substantially all of its
operating assets to TeeZee, Inc. The order confirming the Amended
Plan of Reorganization is subject to appeal for a 10-day period
following entry of the order on the docket of the Bankruptcy Court
by parties in interest, that is, by those who hold a financial
interest in the HNS bankruptcy estate.
Headquartered in West Palm Beach, Florida, Health & Nutrition
Systems International, Inc. -- http://www.hnsglobal.com/--
develops and markets weight management products in over 25,000
health, food and drug store locations. The Company's products can
be found in CVS, GNC, Rite Aid, Vitamin Shoppe, Vitamin World,
Walgreens, Eckerd and Wal-Mart. The Company's HNS Direct division
distributes to independent health food stores, gyms and
pharmacies. The Company filed for chapter 11 protection on
Oct. 15, 2004 (Bankr. S.D. Fla. Case No. 04-34761). Arthur J.
Spector, Esq., at Berger Singerman, represents the Debtor in its
restructuring efforts. When the Company filed for protection from
its creditors, it listed $1,182,382 in total assets and $2,196,129
in total Debts as of June 30, 2004.
HOLLINGER: $39 Million Dividend Need Not be Lodged as Collateral
----------------------------------------------------------------
Hollinger, Inc., (TSX:HLG.C)(TSX:HLG.PR.B) corrected a statement
it made on December 17, 2004. Following the announcement by
Hollinger International, Inc., on December 16, 2004, of the
declaration by its Board of Directors of a special dividend in the
amount of US$2.50 per share on its Class A Common Stock and its
Class B Common Stock, Hollinger had stated that substantially all
of its share of the special dividend was required to be lodged as
collateral in support of the US$93 million principal amount of
Hollinger's outstanding Senior Secured Notes.
This statement was based upon preliminary legal advice. Upon
further analysis, and following the receipt of further particulars
in respect of the Hollinger International special dividend and the
views of the trustee and collateral agent for the Notes, Hollinger
has determined that none of the special dividend is required to be
lodged as collateral security for the Notes at this time. The
Notes already are adequately collateralized under the existing
loan documentation.
The Hollinger International special dividend is payable on
Jan. 18, 2005. As previously announced, Hollinger will receive an
aggregate of US$39,432,307.50 in respect of the special dividend.
Hollinger has not yet made any determination as to the use of the
proceeds of the special dividend, which determination will be made
by its Board of Directors.
In announcing the declaration of the special dividend, aggregating
US$227 million, Hollinger International stated that it would be
distributing a total of US$500 million to its shareholders,
including the special dividend. According to management of
Hollinger International, the earnings from which the special
dividend will be paid derive from the proceeds of the sale of The
Telegraph Group. The proposal is to distribute the balance of
these proceeds in the form of a tender offer for shares of Common
Stock of Hollinger International after it publishes its delinquent
financial statements and other reports, or as a further special
dividend. Although the second distribution is expected to be
effected in the first quarter of 2005, Hollinger International has
given no assurances that it would distribute further cash to
shareholders in either form.
Hollinger's principal asset is its interest in Hollinger
International, Inc., which is a newspaper publisher the assets of
which include the Chicago Sun-Times, a large number of community
newspapers in the Chicago area, a portfolio of news media
investments and a variety of other assets.
* * *
As reported in the Troubled Company Reporter on August 31, 2004,
as a result of the delay in the filing of Hollinger's 2003 Form
20-F (which would include its 2003 audited annual financial
statements) with the United States Securities and Exchange
Commission by June 30, 2004, Hollinger is not in compliance with
its obligation to deliver to relevant parties its filings under
the indenture governing its senior secured notes due 2011.
Approximately $78 million principal amount of Notes is outstanding
under the Indenture. On August 19, 2004, Hollinger received a
Notice of Event of Default from the trustee under the Indenture
notifying Hollinger that an event of default has occurred under
the Indenture. As a result, pursuant to the terms of the
Indenture, the trustee under the Indenture or the holders of at
least 25 percent of the outstanding principal amount of the Notes
will have the right to accelerate the maturity of the Notes.
Approximately $5 million in interest on the Notes was due on
September 1, 2004. Hollinger has deposited the full amount of the
interest payment with the trustee under the Indenture and
noteholders will receive their interest payment in a timely
manner.
There was in excess of $267.4 million aggregate collateral
securing the $78 million principal amount of the Notes
outstanding.
Hollinger also received notice from the staff of the Midwest
Regional Office of the U.S. Securities and Exchange Commission
that they intend to recommend to the Commission that it authorize
civil injunctive proceedings against Hollinger for certain alleged
violations of the U.S. Securities Exchange Act of 1934 and the
Rules thereunder. The notice includes an offer to Hollinger to
make a "Wells Submission", which Hollinger will be making, setting
forth the reasons why it believes the injunctive action should not
be brought. A similar notice has been sent to some of Hollinger's
directors and officers.
HOLLINGER CANADIAN: Distributes $0.005 Cash Dividend per Unit
-------------------------------------------------------------
Hollinger Canadian Newspapers, Limited Partnership provided an
update in accordance with Ontario Securities Commission Policy
57-603 Defaults by Reporting Issuers in Complying with Financial
Statement Filing Requirements. Certain management and other
insiders of the Partnership are currently subject to a cease trade
order in respect of securities of the Partnership issued by the
OSC on June 1, 2004. The cease trade order results from the delay
in filing the Partnership's annual financial statements (and
related MD&A) for the year ended December 31, 2003, its interim
financial statements (and related MD&A) for the three months ended
March 31, 2004, and its Annual Information Form by the required
filing dates. In addition, the Partnership has not yet filed its
interim financial statements (and related MD&A) for the six months
ended June 30, 2004 or for the nine months ended Sept. 30, 2004.
The cease trade order will remain in place until two business days
following receipt by the OSC of all filings that the Partnership
is required to make pursuant to Ontario securities laws.
The Partnership believes that it needs additional time to review
the report of the Special Committee of the board of directors of
Hollinger International, Inc., established to investigate
allegations raised by certain shareholders of Hollinger
International and to assess, together with the auditors of the
Partnership, its impact, if any, on its results of operations of
the Partnership before the Partnership can complete and file the
financial statements (and related MD&As) and the AIF in question.
The report of the Special Committee was filed with the U.S.
District Court for the Northern District of Illinois on
Aug. 30, 2004. The Partnership will continue to provide bi-weekly
updates, as contemplated by the OSC Policy, until the financial
statements (and related MD&As) and AIF have been filed.
On December 30, 2004, the Partnership paid a special cash
distribution of $0.005 per Unit to holders of Units of record as
of the close of business on December 23, 2004.
Hollinger Canadian Newspapers, Limited Partnership owns and
operates of 13 daily and non-daily community newspapers, 55 trade
magazines and directories, 7 newsletters, the Northern Miner
weekly industry newspaper, and four business publications in
electronic formats (TSX: HCN.UN)
* * *
As reported in the Troubled Company Reporter on Aug. 23, 2004, the
Toronto Stock Exchange formally suspended Hollinger Canadian's
Units from trading on the TSX as of 5:00 p.m. Toronto time on
August 6, 2004. The Units were suspended from trading on the TSX
due to the failure of Hollinger Canadian Newspapers G.P., Inc.,
the general partner of the Partnership to have at least two
independent directors on its board of directors, as required by
the TSX continued listing requirements. The Limited Partnership
Agreement governing the Partnership requires the General Partner
to have at least three independent directors. The General Partner
currently has one independent director.
HOMEBASE ACQUISITION: S&P Puts Low-B Ratings on CreditWatch Pos.
-------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Homebase
Acquisition LLC (Consolidated Communications; 'B+') -- a rural
local exchange company -- on CreditWatch with positive
implications. The CreditWatch placement is due to the company's
potential deleveraging efforts resulting from a proposed initial
public offerings, as indicated in a recent Form S-1 filing with
the SEC. S&P's resolution of the CreditWatch listings will
depend on the ultimate size of the IPO and the capital structure.
In reviewing the company, S&P will assess the impact of the cash
dividend associated with the common stock on free cash flow and
the ability to meet debt maturities and longer-term competitive
pressures.
"The RLEC industry has experienced limited competition to date
because of the demographics of its service area, relatively stable
cash flows, and healthy EBITDA margins in the 50% area," said
Standard & Poor's credit analyst Rosemarie Kalinowski. "Annual
access line losses, generally in the 2%-3% range, have resulted
from the replacement of second lines with digital subscriber line
-- DSL -- and a slow economic recovery. However, the replacement
of second lines by DSL results in higher incremental revenue.
Since the majority of the RLECs' network upgrades have been
completed, capital expenditures are not anticipated to be
significant in the near term."
INDYMAC HOME: Fitch Places BB+ Rating on $7.50M Private Offering
----------------------------------------------------------------
IndyMac Home Equity Mortgage Loan Asset-Backed Trust, Series SPMD
2004-C, is rated by Fitch Ratings:
-- $596.25 million class A-I-1, A-I-2, A-I-3, A-II-1, A-II-2
and A-II-3 'AAA',
-- $36 million class M-1 'AA+';
-- $21.38 million class M-2 'AA';
-- $12.75 million class M-3 'AA-';
-- $12.75 million class M-4 'A+';
-- $10.50 million class M-5 'A';
-- $9.75 million class M-6 'A-';
-- $7.50 million class M-7 'BBB+';
-- $7.50 million class M-8 'BBB';
-- $7.50 million class M-9 'BBB-';
-- $7.50 million privately offered class M-10 'BB+'.
Credit enhancement for the 'AAA' rated class A certificates
reflects the 17.75% subordination provided by:
* classes M-1, M-2, M-3, M-4, M-5, M-6, M-7, M-8, M-9, M-10,
* monthly excess interest and
* initial overcollateralization -- OC -- of 2.75%.
Credit enhancement for the 'AA+' rated class M-1 certificates
reflects the 12.95% subordination provided by:
* classes M-2, M-3, M-4, M-5, M-6, M-7, M-8, M-9, M-10,
* monthly excess interest and
* initial OC.
Credit enhancement for the 'AA' rated class M-2 certificates
reflects the 10.10% subordination provided by:
* classes M-3, M-4, M-5, M-6, M-7, M-8, M-9, M-10,
* monthly excess interest and
* initial OC.
Credit enhancement for the 'AA-' rated class M-3 certificates
reflects the 8.40% subordination provided by:
* classes M-4, M-5, M-6, M-7, M-8, M-9, M-10,
* monthly excess interest and
* initial OC.
Credit enhancement for the 'A+' rated class M-4 certificates
reflects the 6.70% subordination provided by:
* classes M-5, M-6, M-7, M-8, M-9, M-10,
* monthly excess interest and
* initial OC.
Credit enhancement for the 'A' rated class M-5 certificates
reflects the 5.30% subordination provided by
* classes M-6, M-7, M-8, M-9, M-10,
* monthly excess interest and
* initial OC.
Credit enhancement for the 'A-' rated class M-6 certificates
reflects the 4% subordination provided by:
* class M-7, M-8, M-9, M-10,
* monthly excess interest and
* initial OC.
Credit enhancement for the 'BBB+' rated class M-7 certificates
reflects the 3% subordination provided by:
* class M-8, M-9, M-10,
* monthly excess interest and
* initial OC.
Credit enhancement for the 'BBB' rated class M-8 certificates
reflects the 2% subordination provided by:
* classes M-9, M-10,
* monthly excess interest and
* initial OC.
Credit enhancement for the 'BBB-' rated class M-9 certificates
reflects the 1% subordination provided by:
* class M-10,
* monthly excess interest and
* initial OC.
Credit enhancement for the 'BB+' rated class M-10 certificates
reflects monthly excess interest and initial OC.
In addition, the ratings reflect the integrity of the
transaction's legal structure as well as the capabilities of
IndyMac Bank, F.S.B. as master servicer. Deutsche Bank National
Trust Company will act as trustee.
On the closing date, the depositor will place approximately
$73,627,685 which will be held by the trustee in a pre-funding
account relating to mortgage loans in Group I and approximately
$76,372,315 relating to the mortgage loans in Group II. The
amount on deposit in each account will be used to purchase
subsequent mortgage loans during the period from the closing date
up to and including Jan. 12, 2005.
The certificates are supported by two groups of mortgage loans.
The Group 1 mortgage pool consists of first-lien fixed-rate and
adjustable-rate mortgage loans with a statistical date pool
balance of $247,006,834.61. Approximately 18.26% of the Group 1
mortgage loans are fixed-rate and approximately 81.74% of the
Group 1 mortgage loans are adjustable-rate mortgage loans. The
weighted average loan rate is approximately 7.545%. The weighted
average remaining term to maturity -- WAM -- is 358 months. The
average principal balance of the loans is approximately
$168,146.00. The weighted average original loan-to-value -- OLTV
-- ratio is 78.38% and the weighted average FICO score is 609.
The properties are primarily located in:
* California (22.84%),
* Florida (10.30%) and
* New Jersey (7.74%).
The Group 2 mortgage pool consists of first-lien fixed-rate and
adjustable-rate mortgage loans with a statistical date pool
balance of $256,214,545.23. Approximately 23.37% of the Group 2
mortgage loans are fixed-rate and approximately 76.63% are
adjustable-rate mortgage loans. The weighted average loan rate is
approximately 7.198%. The WAM is 353 months. The average
principal balance of the loans is approximately $218,055. The
OLTV is 77.55% and the weighted average FICO is 618.
The properties are primarily located in:
* California (30.85%),
* Florida (6.70%) and
* New Jersey (6.25%).
IndyMac ABS, Inc., the depositor, purchased the mortgage loans
from IndyMac Bank, F.S.B., the mortgage loan seller, and caused
the mortgage loans to be assigned to the trustee for the benefit
of holders of the certificates. For federal income tax purposes,
an election will be made to treat the trust fund as multiple real
estate mortgage investment conduits.
INDUSTRIAL WHOLESALE: Judge Donovan Formally Closes Chap. 11 Case
-----------------------------------------------------------------
The Honorable Thomas B. Donovan of the U.S. Bankruptcy Court for
the Central District of California, Los Angeles Division, formally
closed the bankruptcy case filed by Industrial Wholesale Electric
Co. on December 28, 2004. Judge Donovan dismissed the Debtor's
bankruptcy case on October 28, 2004, pursuant to Section 1112(b)
of the Bankruptcy Code.
Judge Donovan based his decision on the motion to convert the case
to a chapter 7-liquidation proceeding or dismiss the chapter 11
case filed by Bruce S. Schildkraut, the representative of the U.S.
Trustee for Region 15. Mr. Schildkraut filed the motion on
September 21, 2004.
The Court's order also prohibits the Debtor from filing another
bankruptcy petition for a period of 180 days from the October 28,
2004, dismissal ruling.
The U.S. Trustee's court documents that cites the facts for its
motion to convert the Debtor's case to a chapter 7 proceeding or
dismiss the chapter 11 case is not downloadable from the Court's
website.
Headquartered in Los Angeles, California, Industrial Wholesale
Electric Co., filed for chapter 11 protection on August 10, 2004
(Bankr. C.D. Calif. 04-27379). The Court formally closed the case
on December 28, 2004. David A. Tilem, Esq., at Law Offices of
David A. Tilem represented the Debtor. When the Debtor filed for
chapter 11 protection, it listed $2,797,100 in total assets
and $6,646,928 in total debts.
INTEGRATED ELECTRICAL: S&P Junks Subordinated Debt
--------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' corporate
credit rating and 'CCC' subordinated debt rating to Integrated
Electrical Services Inc. -- IES. The outlook is developing.
At Sept. 30, 2004, the Houston, Texas-based provider of electrical
contracting services had approximately $230 million of total debt
outstanding, including about $173 million of subordinated debt.
"The rating reflects the company's weak liquidity, large near-term
debt amortization relative to free cash flow, well-below-average
business risk profile, and challenging financial covenants with
some compliance tests contingent on the timing and proceeds of
asset sales," said Standard & Poor's credit analyst Paul Kurias.
IES' business position has weakened as a result of declining
market share and eroding competitive strength caused by restricted
access to bonding and surety facilities. The restrictions
followed a decline in IES' liquidity, which began mid-2004. This
has limited the scope and size of projects the company can take
on. IES' near-term strategy is focused on retrenching from
certain commercial and industrial -- C&I -- markets that require
higher surety bonding than its housing operations. The company
has publicly noted segments equaling $289 million of sales that it
hopes to divest, as well as other businesses that it may divest in
the near term.
"We believe that it may be difficult to sell these assets at book
value given their mixed operating history and that additional
charges may be necessary," Mr. Kurias said.
A positive rating action could result from a near-term divestment
of assets at favorable prices, which more than satisfy senior
creditor's debt outstanding, as well as from signs that the
remaining operations are performing satisfactorily. A negative
action could result if the company trips financial covenants for
reasons that include insufficient proceeds from asset sales or
lower-than-expected EBITDA. A negative action could also result
from a larger-than-expected negative free cash flow, which would
further reduce liquidity. Given the near-term actions we expect
the company to take, the outlook and ratings could change within
the next 12 months.
INTERSTATE BAKERIES: Walks Away from 50 Real Property Leases
------------------------------------------------------------
Interstate Bakeries Corporation and its debtor-affiliates sought
and obtained the authority of the U.S. Bankruptcy Court for the
Western District of Missouri to reject Real Property Leases for
50 locations to reduce postpetition administrative costs, maximize
distributions to creditors and return property to the Lessors
quickly. The Real Property Leases covering each of the Leased
Premises no longer serve any benefit to the Debtors.
The Debtors rejected 25 Real Property Leases effective
November 24, 2004:
Lessor Address of Leased Premises Lease Date
------ -------------------------- ----------
Roberta and Philip 23rd & Commerce, Wellsburg 02/03/1970
Brown West Virginia
ADA Holdings, LLC 7243 N. Nebraska Ave, Tampa 06/01/1982
Florida
Richard W. Young 4850 Clyde Park, Wyoming 09/10/1986
and Eleanor Y. Michigan
Shireling c/o
Behler-Young Corp.
Smoky Row Plaza, LLC 1866-68 Hard Road 09/22/1986
Worthington, Ohio
Walker-Franklin 1401 N. Missouri Street 03/24/1987
Partnership West Memphis, Arkansas
Johnny C. Roberts 2609-2611 15th St. 11/09/1988
Hueytown, Alabama
BAR 7202, Inc. 7202 Sheldon Rd., Tampa 05/01/1992
Florida
Robert Carroll 5410-12 Johnson Drive 10/09/1992
d/b/a Carroll Mission, Kansas
Building Company
J.W. Wright, Jr., 60 East Franklin Shopping 09/25/1994
East Franklin Center, Franklin, North
Shopping Center Carolina
Wilson Family 2456 Anderson Road 12/21/1994
Real Estate, LLC Crescent Springs, Kentucky
3 Rivers 772 U.S. Highway 26 07/08/1997
Construction, Inc. Alpine, Wyoming
Doug Sears 2401 Highway 202, Suite A 11/07/1997
Anniston, Alabama
Randy and Connie 448 W. Edmond Rd., Edmond 05/13/1998
Black Oklahoma
MIE Properties, Inc. 8347-8351 N. Steven Road 11/18/1998
Milwaukee Wisconsin
Chaffey Plaza 10431 Lemon Avenue, Rancho 10/07/1999
Cucamonga, California
Jerry Hickenbottom 3348 Main Joplin, Missouri 11/27/1999
Forty Six Realty 410 Route 46, East Totowa 12/03/1999
Associates, LP, (c/o New Jersey
Richard Mainardi)
STV Properties, LLC 207 NE Front St., Milford 12/03/1999
Delaware
Perris Plaza, LLC 12312 Chenal Pwky, Suite 2 02/14/2000
Little Rock, Arkansas
A. B. Properties, 12871 Perkins Rd., Baton 04/12/2000
Inc. Rouge, Louisiana
Dr. William Heaton 1117 Florence Blvd. 06/05/2000
Florence, Alabama
Persons Family, LP, 656 Shurling Drive, Macon 09/27/2002
Triple M. Holdings, Georgia
LP, Sally Murphey
Heard Trust,
Harriett Murphey
Durkee Trust
Thomas L. Metzger 119 Pike Street, Marietta 04/24/2002
Ohio
T. & M. Plex, LLC 2369 Airline, Dr. Bossier 11/15/2002
City, Louisiana
Dan Kaaline 1212 N. Parsons Ave. 04/8/2003
Brandon, Florida
In addition, the Debtors rejected 25 other Real Property Leases
effective December 14, 2004:
Lessor Address of Leased Premises Lease Date
------ -------------------------- ----------
Mats Group, Inc. c/o State Hwy 112 Medford, Long 11/01/1954
Gary Rosen Island, New York
SanOak Management Co. 6195 Coliseum I, Oakland 10/25/1988
California
SanOak Management Co. 6195 Coliseum H, Oakland 05/05/1989
California
Realty Development- 833 E. Pittsburgh Blvd. 07/07/1989
Eastland, Inc. North Versailles
Pennsylvania
P.F.W. Properties, 516 West Belmont, Calhoun 04/01/1990
Inc. Georgia
SSC Governor's Plaza 9114 Union Cemetery 08/01/1990
WM, LLC Cincinnati, Ohio
Paul E. Iocono 41601 Albrae Fremont 04/01/1991
California
Rodco Properties, 4854 General Meyer, New 09/10/1992
Inc. (c/o Jack Orleans, Louisiana
Stumpf Associates,
Inc.)
The Hoffmann 1987 4321 Anthony Court - Unit C 07/26/1993
Revocable Trust Rocklin, California
Gateway Associates Route 33 East Stonecoal 09/27/1993
c/o Charles Wilson Addition, Weston, West
Virginia
Currie & Walker, LLC 700 West McNeese, Lake 11/11/1994
(c/o Jim Walker) Charles, Louisiana
G. Antonini Realty, 603 MacDade Blvd. 05/06/1996
Inc. c/o Robert Collingdale, Pennsylvania
Antonini
Bingham Transfer & Highway 60, Safford 11/01/1996
Storage Arizona
Steven G. Gregory 8247 W. State Street 06/16/1997
Garden City, Idaho
Concord Towers, Inc. 2097 Philadelphia Pike 07/09/1998
Claymont, Delaware
Pioneer Plaza of 100 Mary Lynn Dr., 19 09/30/1998
Georgetown, LLC Georgetown, Kentucky
Aston Associates 10 W. Dutton Mill Rd. 05/27/1999
c/o Andrew Cocco Aston, Pennsylvania
GRP-Bricktown, LLC 6520 West Fullerton 12/16/1999
Chicago, Illinois
YMCA 1101 North Rt. 48 Decatur 01/19/2000
Illinois
M & R Sales, LLC 1287 W. 12600, South 08/13/2001
Riverton, Utah
Fisal Taaziah 12405 & 12407 N. Main St. 12/05/2001
Jacksonville, Florida
The Pantry, Inc. 724 Kingsley Avenue, Orange 02/11/2002
Park, Florida
Weathers Properties, 3580 Washington Blvd. 05/16/2002
L.C. c/o Val A. Ogden, Utah
Weathers
Tremigo Boise, LLC 5634 State St., Boise 06/13/2003
Idaho
Highway 1 Mini 6055 Highway 1, South 10/13/2003
Storage Jonesboro, Arkansas
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. (Interstate Bakeries
Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
KAISER ALUMINUM: PBGC Settlement Pact Draws Fire
------------------------------------------------
As previously reported, Kaiser Aluminum Corporation and its
debtor-affiliates ask Judge Fitzgerald to approve the Pension
Benefit Guaranty Corporation Settlement Agreement and dismiss as
moot the Law Debenture Objection.
The Law Debenture Objection is rendered moot by the parties'
agreement regarding the allowance of the PBGC general unsecured
claim and administrative claim.
PBGC Wants Proceeding on
Law Debenture's Claims Objection Stayed
The Pension Benefit Guaranty Corporation asks Judge Fitzgerald to
stay proceedings with respect to the objection of Law Debenture
Trust Company of New York to 24 proofs of claim filed by the PBGC
until the United States Bankruptcy Court for the District of
Delaware rules on the PBGC's settlement agreement with the
Debtors.
James J. Keightley, PBGC's General Counsel, explains that the
Settlement addresses the arguments raised by Law Debentures in the
Objection. If approved, the Settlement will render the Objection
moot.
Law Debenture serves as indenture trustee for the 12-3/4% Senior
Subordinated Notes issued by Kaiser Aluminum & Chemical
Corporation in 1993. Law Debenture makes four fundamental
arguments with respect to the PBGC's claims:
1. The PBGC's unfunded liability claims are overstated in
amount and should be significantly reduced. The PBGC's
claims should be valued using a "prudent investor rate."
Law Debenture, however, failed to state exactly what rate,
or even what range of rates, it contends should be used;
2. The PBGC's unfunded liability claims are general unsecured
claims not entitled to administrative or tax priority;
3. The PBGC's claims for minimum funding contributions, to
the extent allowed, should be treated as general unsecured
claims and are not entitled to administrative expense or
tax priority status; and
4. With respect to the PBGC's claims for statutory insurance
premium, Law Debenture is not aware that the Debtors
failed to pay any premiums before the Petition Date and
that the PBGC should be required to demonstrate the basis
for any claims related to postpetition premiums.
The PBGC asserts that Law Debenture is wrong in arguing that its
claims amount to more than its "actual costs." The PBGC contends
that the amount of its claims for unfunded benefit liabilities is
based on applicable substantive non-bankruptcy law embodied in the
Employee Retirement Income Security Act and the Agency's
legislative regulation. Moreover, every cent that is recovered on
the PBGC's Claims will go to reimburse the PBGC for its payment of
guaranteed benefits or pay the Pension Plan participants
additional benefits provided under the ERISA. No "windfall" will
result from the allowance of the Claims in full because the
Pension Plan participants will receive their share of any recovery
the PBGC receives above the amount of guaranteed benefits.
The PBGC is prepared to support its Claims by expert testimony
from economists and actuaries. The PBGC will prove that its
methodology is consistent with the principles of economics for
valuation of the liabilities giving rise to the Claims and
accurately replicates the market value of the costs of annuitizing
the Pension Plans' unfunded benefit liabilities.
The PBGC also insists that its Claims are entitled to priority
because they represent costs incurred in preserving the Debtors'
estates or taxes incurred by the estates. Moreover, those Claims
for premiums that became due after the Petition Date are entitled
to administrative priority.
Mr. Keightley informs Judge Fitzgerald that the Debtors, supported
by the Official Committee of Unsecured Creditors, recognized that
litigation over the amount and priority of the PBGC Claims would
both be costly and would delay reorganization of the Debtors'
estates. As a result, the Debtors and the PBGC agreed to settle
the issues between them. The PBGC compromised its position
significantly, in part to avoid a difficult and complex litigation
of its Claims.
If Law Debenture's Objection goes forward to trial, Mr. Keightley
notes that a limited period of discovery will be needed by both
the PBGC and Law Debenture to prepare their cases for an
evidentiary hearing. Mr. Keightley contends that it is unfair to
the PBGC and the Debtors' estates to incur the cost and delay of
litigating the claims that they resolved.
Debtors Want Law Debenture
Claim Objection Dismissed
The Debtors assert that Law Debenture's objection to the claims of
the PBGC should be dismissed if the PBGC Settlement is approved.
The Debtors emphasize that the Settlement resolves all of the
PBGC's Claims in a manner favorable to their estates and creditors
as well as the issues associated with the termination of the
pension plans and implementation of replacement pension plans
without the risk, cost and delay associated with the litigation of
the issues. Continued litigation of issues resolved under the
Settlement would significantly delay, if not jeopardize, the
Debtors' emergence.
The Debtors also note that there is uncertainty regarding the
probability of success of litigation of the various issues
compromised by the PBGC Settlement, including the calculation of
the Agency's unfunded benefit liability claims. Regardless of
whether some of Law Debenture's assertions on the claims for
unfunded benefit liabilities have merit, the Debtors submit that
the proposed resolution is in their best interest.
Creditors Committee Supports Settlement
The Official Committee of Unsecured Creditors notes that there are
three main litigation issues that are being resolved as part of
the Settlement Agreement:
1. The PBGC's appeal of the Court order:
-- determining that the financial requirements set forth
in ERISA Section 4041(c)(2)(B) for a distress
termination of the Debtors' Pension Plans were
satisfied;
-- authorizing the Debtors to terminate the Pension Plans;
and
-- approving the Debtors' implementation of hourly and
salaried replacement plans;
2. The PBGC's concerns that the replacement pension plans are
abusive; and
3. The issues surrounding the amount and priority of the
PBGC's claims.
The Creditors Committee believes that the high degree of
uncertainty inherent in litigating the three main issues favors
Court approval of the PBGC Settlement. The Committee asserts that
the Settlement is in the paramount interest of creditors.
The Creditors Committee points out that the issues are highly fact
intensive and involve many uncertain areas of the law, and
therefore, the outcomes are difficult to predict. The Committee
explains that the PBGC Settlement resolves the PBGC's Appeal by
providing that KACC will retain the five smaller pension plans and
the PBGC will assume the Kaiser Aluminum Pension Plan. The end
result, the Committee says, is that the Debtors will be relieved
of over 90% of their pension liabilities.
Pursuant to the PBGC Settlement, the PBGC will consent to the
replacement pension plans and issue a "no-action" letter with
respect to the replacement pension plans. This is critical
because it will enable the Debtors to implement the replacement
pension plans and clear the path for the PBGC's assumption of the
KAP Plan, both of which are necessary for the Debtors to file
plans of reorganization or liquidation and exit bankruptcy.
The Debtors and the United Steelworkers of America have agreed to
modify their collective bargaining agreements and adopt the
replacement pension plans. Without the PBGC Settlement, the
Debtors, the USWA and the PBGC would be forced to litigate the
issues surrounding the replacement pension plans. Due to the fact
that the KAP Plan was terminated, the vast majority of the
Debtors' workforce would not be accruing benefits under the
replacement pension plans during the lengthy litigation process.
Absent approval of the Settlement, the Debtors would be in
violation of the collective bargaining agreements.
The Creditors Committee further notes that the probability of the
Debtors' success in litigating over the PBGC Claims is
sufficiently uncertain to warrant approval of the Settlement.
The proper methodology for calculating unfunded benefit
liabilities of a distress-terminated plan is highly uncertain and
it is unclear whether the Court might utilize the ERISA
regulations or the prudent investor rate to determine the proper
discount rate.
Objections to PBGC Settlement
A. Law Debenture
Law Debenture Trust Company of New York asks the Court to deny the
Debtors' request for approval of the PBGC Settlement.
Francis A. Monaco, Jr., Esq., at Monzack and Monaco, P.A., in
Wilmington, Delaware, asserts that the request violates Law
Debenture's statutory rights as a creditor, in its capacity as
Indenture Trustee, to object to the PBGC's claims and prosecute
that objection to an adjudicated or compromised resolution. The
Debtors' request is a thinly veiled attempt to force Law
Debenture, as representative of the Senior Subordinated
Noteholders, to accept a settlement of the PBGC's claims that is
highly prejudicial to its Noteholders' interests. The Settlement
is of no force and effect in light of the pendency of Law
Debenture's Claims Objection.
Mr. Monaco reminds the Court that Section 502(a) of the
Bankruptcy Code gives Law Debenture the right to object to the
PBGC Claims. The PBGC must prove its Claims by a preponderance of
evidence.
Mr. Monaco relates that Law Debenture will demonstrate at a
hearing on the Settlement that Debtors have no economic interest
in the amount of the PBGC Claims at the subsidiary estates from
which the Senior Subordinated Noteholders stand to recover. The
size of the PBGC Claims at the Jamaican and Australian debtor
companies is nothing more than an inter-creditor dispute in which
the Debtors have interjected themselves at the bidding of the PBGC
and other creditor constituencies. Thus, Mr. Monaco says, the
aspect of the Settlement that deal with the PBGC Claims at the
subsidiary estates is a matter that should properly be litigated
or resolved among the parties who are the actual stakeholders,
namely Law Debenture and the PBGC. The Debtors should not be
permitted to interfere.
Law Debenture also seeks permission to take discovery with respect
to the proper interest rate to be applied and the other actuarial
issues raised. Law Debenture wants to ascertain:
-- how the PBGC arrived at the amounts set forth in its
Claims;
-- what the prudent investor rate is under the circumstances;
and
-- the actual Claim amounts in light of the discovered
information.
B. Asbestos Committee and Asbestos Representative
The Official Committee of Asbestos Claimants and Martin J. Murphy,
the legal representative for future asbestos claimants, complain
that the PBGC Claim Settlement is not fair and reasonable. The
ISA among the Debtors and the Official Committee of Unsecured
Creditors provides that Kaiser Aluminum & Chemical Corporation
will pay the PBGC's proposed $14,000,000 allowed administrative
claim, in full and in cash, under certain circumstances, prior to
other administrative creditors receiving payment on account of
their claims. The ISA also provides that if the PBGC
Administrative Claim is paid prior to the consummation of KACC's
plan of reorganization, a super-priority administrative claim
against KACC is created in favor of Kaiser Alumina Australia
Corp., Alpart Jamaica, Inc., or Kaiser Jamaica Corp., as
applicable, equal to the amount the Debtor paid on account of the
PBGC Administrative Claim, plus a 12% interest per annum. Sharon
M. Zieg, Esq., at Young Conaway Stargatt & Taylor, LLP, in
Wilmington, Delaware, tells Judge Fitzgerald that the provision is
inequitable because an administrative claim is now being exchanged
for a claim with higher priority.
If the ISA and the PBGC Settlement are approved, the PBGC's
recovery on account of its unfunded benefit liabilities and
premiums claims from Alpart Jamaica, Kaiser Jamaica, Kaiser
Australia and Kaiser Finance Corp., will be 32% of the Net
Distributable Proceeds and, accordingly, the creditors of those
estates had no incentive to challenge the size of the PBGC's
claims. As a result, regardless of the allowed amount of the
Unfunded Benefit Liabilities and Premiums Claim, the PBGC's
recovery at the Alpart Jamaica/Kaiser Jamaica estates and the
Kaiser Australia/Kaiser Finance estates is limited to 32% of the
Net Distributable Proceeds. Ms. Zieg contends that the amount of
the Unfunded Benefit Liabilities and Premiums Claim is not
reasonable.
Ms. Zieg explains that determining the proper PBGC Claim amount is
of great importance to the Asbestos Committee and the Asbestos
Representative and other unsecured creditors of the KACC estate,
as well as the unsecured creditors of the other Debtors estate.
The allowed amount of the Unfunded Benefit Liabilities and
Premiums Claim will be a claim against all of the estate and will
directly, and potentially dramatically, affect the pro rata
distribution to unsecured creditors.
Headquartered in Houston, Texas, Kaiser Aluminum Corporation --
http://www.kaiseral.com/-- operates in all principal aspects of
the aluminum industry, including mining bauxite; refining bauxite
into alumina; production of primary aluminum from alumina; and
manufacturing fabricated and semi-fabricated aluminum products.
The Company filed for chapter 11 protection on February 12, 2002
(Bankr. Del. Case No. 02-10429). Corinne Ball, Esq., at Jones
Day, represent the Debtors in their restructuring efforts. On
June 30, 2004, the Debtors listed $1.619 billion in assets and
$3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 56;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
LAIDLAW INT'L: Details 2003 Equity & Performance Incentive Plan
---------------------------------------------------------------
Laidlaw International, Inc.'s 2003 Equity and Performance
Incentive Plan was originally approved by the U.S. Bankruptcy
Court on February 27, 2003, as part of the emergence process and
has not previously been approved by Laidlaw stockholders.
Kevin E. Benson, President and Chief Executive Officer of Laidlaw
International, Inc., explains that in December 2004, subject to
stockholder approval, the original plan was amended and restated
into the form of the Amended and Restated 2003 Incentive Plan.
The Amended and Restated 2003 Incentive Plan is being submitted
to stockholders for approval so that grants under the plan may
qualify as performance-based compensation and be deductible by
Laidlaw under Section 162(m) of the Internal Revenue Code of
1986, and so that stock options granted there may qualify as
incentive stock options under Section 422 of the IRC. The
Amended Incentive Plan provides for the grant of stock options,
stock appreciation rights, restricted shares, deferred shares,
performance shares, and performance units to employees, officers
and non-employee directors of Laidlaw and its subsidiaries.
The Amended Incentive Plan provides for and have reserved
5,000,000 shares of Laidlaw common stock for issuance under
Awards, which may either be original issue shares or treasury
shares. This was the original number of shares authorized by the
original 2003 Incentive Plan. Laidlaw is not increasing the
number of shares available under the plan at this time.
The Amended Incentive Plan provides for appropriate adjustments
in the number, kind of shares subject to the Plan, and to
outstanding awards under the Plan, in the event of a stock split,
stock dividend or certain other types of transactions. If any
portion of an Award terminates or is otherwise forfeited under
the Amended Incentive Plan, the shares subject to the terminated
or forfeited portion of the Award will continue to be available
for issuance under the Plan. If any restricted shares are
surrendered or if Laidlaw repurchase restricted shares, those
shares will also be available for re-issuance under the Plan.
Generally, Mr. Benson relates, Laidlaw's Compensation Committee
administers the Amended Incentive Plan. The Compensation
Committee consists of at least two members of the Board who are
both "non-employee" directors for purposes of Section 16-b of the
Exchange Act and "outside directors" under Section 162(m) of the
IRC. The Compensation Committee determines which individuals are
to receive Awards, the type of Awards to be received, the number
of shares subject to the Award, the price, or payment terms or
method, and the expiration date applicable to each Award. The
Compensation Committee also may adopt, amend and rescind rules
relating to the administration of the Amended Incentive Plan.
Laidlaw employees, officers and non-employee directors are
eligible to participate in the Amended Incentive Plan as selected
by the Compensation Committee in its discretion. Accordingly, 80
employees, nine officers and seven non-employee directors may be
eligible for Awards under the Plan.
Employees and officers may be granted each type of Award
available under the Amended Incentive Plan. Directors may be
granted options, SARs, restricted shares and deferred shares but
are not eligible for grant of performance shares or performance
units.
The principal features of the various Awards that may be granted
under the Amended Incentive Plan are:
* Options
Options provide for the right to purchase Laidlaw common
stock at a specified price and, unless another period is
specified in the option agreement, will become exercisable,
to the extent of one-third of the number of shares covered,
on each first, second and third year anniversaries of the
date on which they were granted.
* Appreciation Rights
Stock appreciation rights provide for a payment to the
holder based on increases in the price of Laidlaw common
stock over a set base price.
* Restricted Shares
A grant of restricted shares constitutes an immediate
transfer of the ownership of Laidlaw common stock to the
Participant in consideration of the performance of services.
* Deferred Shares
Deferred shares represent the right to receive common shares
in the future subject to the fulfillment of certain
conditions as the Compensation Committee may establish,
during a period of not less than one year, except in the
event of a change in control.
* Performance Shares and Performance Units
Performance shares and performance units are payable upon
achievement of specified performance goals during a
performance period based on specified levels of or growth in
one or more of these criteria:
-- earnings,
-- earnings per,
-- share price,
-- total stockholder return,
-- return on invested capital,
-- equity or assets,
-- operating earnings,
-- sales growth, or
-- productivity improvements.
The number of shares available under the Amended Incentive Plan
will be adjusted to account for shares relating to awards that
expire, are forfeited or are transferred, surrendered or
relinquished upon the payment of any exercise price by the
transfer to Laidlaw of Common Stock or upon satisfaction of any
withholding amount.
Headquartered in Arlington, Texas, Laidlaw, Inc., now known as
Laidlaw International, Inc., -- http://www.laidlaw.com/-- is
North America's #1 bus operator. Laidlaw's school buses transport
more than 2 million students daily, and its Transit and Tour
Services division provides daily city transportation through more
than 200 contracts in the US and Canada. Laidlaw filed for
chapter 11 protection on June 28, 2001 (Bankr. W.D.N.Y. Case No.
01-14099). Garry M. Graber, Esq., at Hodgson Russ LLP, represents
the Debtors. Laidlaw International emerged from bankruptcy on
June 23, 2003.
* * *
As reported in the Troubled Company Reporter on Dec. 27, 2004,
Moody's Investors Service has placed the long-term debt ratings of
Laidlaw International, Inc., under review for possible upgrade.
The review is prompted by the recent announcement by the company
that it had entered into a definitive agreement to sell both of
its healthcare businesses to Onex Partners LP, an affiliate of
Onex Corporation, for $820 million. Net proceeds after fees and
assumption of a small amount of debt by the buyer is estimated at
$775 million, with a majority of the proceeds intended to be used
to repay substantial levels of Laidlaw's existing debt. Moody's
has also assigned a Speculative Grade Liquidity Rating of SGL-2 to
Laidlaw International, Inc. As part of the rating action, Moody's
has reassigned to Laidlaw International, Inc., certain ratings,
including the senior implied and senior unsecured issuer ratings,
originally assigned at Laidlaw, Inc., in order to reflect more
appropriately the company's current organizational structure.
As reported in the Troubled Company Reporter on Dec. 9, 2004,
Standard & Poor's Ratings Services placed its ratings, including
its 'BB' corporate credit rating, on Laidlaw International, Inc.,
on CreditWatch with positive implications. The rating action
follows Laidlaw's announcement that it has entered into definitive
agreements to sell both of its health care companies, American
Medical Response and Emcare, to Onex Partners L.P. for
$820 million. Laidlaw expects to receive net cash proceeds of
$775 million upon closing of the transaction, which is expected by
the end of March 2005. Naperville, Illinois-based Laidlaw
currently has about $1.5 billion of lease-adjusted debt.
LESLIE'S POOLMART: Moody's Rates $170M Sr. Unsec. Notes at B2
-------------------------------------------------------------
Moody's Investors Service downgraded the senior implied rating of
Leslie's Poolmart, Inc., to B2 from B1, and assigned a B2 rating
to the company's planned $170 million senior unsecured note
offering. Proceeds from the note offering will partially fund a
recapitalization of the company. The rating outlook is stable.
The downgrade of the senior implied rating reflects the
significantly increased leverage on the company's balance sheet as
a result of the company's recapitalization. The B2 note rating is
the result of its majority position in the company's capital
structure and its position behind the senior secured credit
facility. The stable ratings outlook reflects Moody's expectation
that operating performance will enable only modest improvement in
leverage over the intermediate term.
Moody's ratings actions were:
* Senior implied -- to B2 from B1,
* Senior unsecured issuer rating -- affirmed at B2,
* $170 million senior unsecured notes, due 2013 -- B2 assigned,
* $70 million senior unsecured notes, due 2008 -- B2 to be
withdrawn,
* Rating outlook -- Stable.
Moody's does not rate Leslie's proposed $75 million senior secured
bank credit facility and did not rate the company's existing
$75 million senior secured bank credit facility. Ratings on the
existing $70 million of senior unsecured notes will be withdrawn
when the transaction closes and they are retired. The foregoing
senior unsecured notes due 2013 have not been registered under the
Securities Act of 1933, as amended, and may not be offered or sold
in the absence of such registration or an available exemption
therefrom.
Leslie's ratings reflect the increased leverage of the company
with the prospective recapitalization, which brings pro forma debt
to EBITDA to 4.5X from 1.6X in fiscal 2004 and increases pro forma
adjusted debt to EBITDAR to 5.8X from 3.8X. The ratings also
reflect:
(1) the highly seasonal nature of Leslie's business, with the
majority of revenues and earnings occurring over the summer
months;
(2) its relatively small size ($356 million revenue base);
(3) its product concentration; and
(4) volatility due to unpredictable weather patterns.
Free cash flow is modest relative to debt; returns on assets are
low, given the significant amount of goodwill associated with the
recapitalization; and the pro forma balance sheet will have a
substantial intangible component (62% of total assets).
Leslie's ratings are supported by:
(1) its improved operating margins over the last few years,
(2) its ability to finance seasonal needs from internal cash
flow, and
(3) the expectation that free cash flow will be used to repay
drawings under the bank facility (approximately $30 million
pro forma upon closing the transaction).
Leslie's improved its operating margin to over 9% for its fiscal
year ended September 2004, nearly double its operating margin in
fiscal 2001. Moody's expects that operating margins to be
sustained at this higher level over the intermediate term. The
ratings also reflect Leslie's success at maintaining its market
position despite competition from discounters and home stores
during its critical summer season, the company's increasing
geographical diversification, and the steady growth of its store
base (30 to 40 new stores annually on an existing base of 474
stores). Moody's notes that Leslie's has attempted to moderate
the seasonality and weather volatility by opening stores in areas
that have warmer weather patterns all year round and by marketing
to commercial customers such as hotel chains that have a need for
pool products all year round.
The stable rating outlook reflects Moody's expectation that excess
cash flow will be used to reduce leverage on its secured credit
facility over the intermediate term, and that even with debt
reduction, debt protection measures will improve only modestly
over that period. Moody's also expects that Leslie's improved
margins will be sustainable and working capital investments for
store growth will remain minimal. Leslie's ratings could gain
upward pressure if the company reduces total debt/EBITDA
consistently below 3.75X and adjusted debt/EBTIDAR consistently
below 5.5X. Ratings could come under pressure with any further
increase in leverage due to deteriorating operating performance or
delays in debt reduction, bringing total debt/EBITDA to above 5.0X
and/or adjusted debt/EBITDAR above 6.0X.
Leslie's will be closing on a new $75 million committed revolving
credit facility, which is secured by all of the assets of the
company. The facility size can be increased during peak borrowing
periods providing the company with additional liquidity. The size
of the current facility should be sufficient to cover the seasonal
swings in Leslie's operations.
The senior unsecured notes are and the secured bank facility are
both issued by Leslie's Poolmart, Inc. The unrated senior secured
bank facility is secured by all of the company's assets including
inventory and accounts receivable. The notes also have
limitations on restricted payments including the payment of
dividends and the redemption of any class of capital stock.
Leslie's Poolmart, Inc., with headquarters in Phoenix, Arizona, is
the largest retail chain for specialized pool supplies in the U.S.
Leslie's operated 474 retail stores and generated revenues of
$356 million in its fiscal year ended September 2004.
LEVI STRAUSS: Prices New $450 Million 7% Notes Due 2006
-------------------------------------------------------
Levi Strauss & Co. disclosed the pricing of its previously
announced cash tender offer for up to $450,000,000 of its
outstanding 7.00% Notes due 2006.
The purchase price to be paid for each $1,000 principal amount of
Notes validly tendered and not withdrawn is $1,052.23, plus
accrued and unpaid interest up to, but not including, the
settlement date, which is expected to be Thursday, January 13,
2005. The purchase price was determined by reference to a yield
based on a fixed spread of 75 basis points over the yield to
maturity on the 2.50% U.S. Treasury Note due Oct. 31, 2006, based
on the bid price for such security at 2:00 p.m., New York City
time, on Jan. 10, 2005. The purchase price includes an early
tender premium of $20.00 per $1,000 principal amount of Notes to
be paid in respect of Notes validly tendered prior to midnight,
New York City time, on Jan. 12, 2005.
The tender offer is scheduled to expire at midnight, New York City
time, on Jan. 12, 2005. As of Jan. 10, 2005, approximately
$366,746,000 of the $450,000,000 aggregate principal amount of
Notes had been tendered and not withdrawn.
All of the terms and conditions of the tender offer, including the
consideration for the Notes and the expiration date, remain
unchanged. The Withdrawal Date (as that term is defined in the
Offer to Purchase) prior to which Notes tendered may be validly
withdrawn has passed, and Notes tendered through the expiration
date of the tender offer may not be validly withdrawn except under
the circumstances described in the Offer to Purchase.
Full details of the terms and conditions of the tender offer are
included in the Company's Offer to Purchase dated Dec. 15, 2004,
as amended.
Citigroup Global Markets Inc. is the Dealer Manager for the tender
offer. Requests for documents may be directed to Georgeson
Shareholder Communications Inc., the Information Agent, at 212-
440-9800 or 877-868-4958.
This press release is neither an offer to purchase nor a
solicitation of an offer to sell the Notes or any other security.
The tender offer is made only by an Offer to Purchase dated
Dec. 15, 2004, as amended. Persons with questions regarding the
tender offer should contact the Dealer Manager at 212-723-6106 or
800-558-3745. Statements in this press release regarding the
offering of debt securities shall not constitute an offer to sell
or a solicitation of an offer to buy such debt securities.
About the Company
Levi Strauss & Co. is one of the world's leading branded apparel
companies, marketing its products in more than 110 countries
worldwide. The company designs and markets apparel for men, women
and children under the Levi's(R), Dockers(R) and Levi Strauss
Signature(TM) brands.
Bankruptcy Risk
While any company with debt obligations could make the same
statement, Levi Strauss said in a Form 8-K filed with the SEC on
Dec. 16, 2004:
"If we are unable to service our indebtedness or repay or
refinance our indebtedness as it becomes due, we may be forced to
sell assets or we may go into default, which could cause other
indebtedness to become due, result in bankruptcy or an
out-of-court debt restructuring, preclude full payment of the
notes and adversely affect the trading value of the notes."
The statement was included in a list of updated risk factors in
connection with the private placement transaction. A full-text
copy of the regulatory filing containing this disclosure is
available at no charge at:
http://www.sec.gov/Archives/edgar/data/94845/000119312504214234/d8k.htm
* * *
As reported in the Troubled Company Reporter on Oct. 21, 2004,
Fitch Ratings does not anticipate any rating implications from
Levi Strauss & Co.'s announcement that it will retain the Dockers
business.
Fitch rates Levi's:
* $1.7 billion senior unsecured debt 'CCC+',
* $650 million asset-based loan, ABL, 'B+', and
* $500 million term loan 'B'.
The Rating Outlook is Negative.
LIBERATE TECH: Posts $8.1 Million Net Loss in Second Quarter
------------------------------------------------------------
Liberate Technologies (Pink Sheets: LBRT), a leading provider of
software for digital cable systems, reported financial results for
its second fiscal quarter ended Nov. 30, 2004.
Liberate's revenues for its second fiscal quarter were
$0.6 million, compared to $1.2 million for the same quarter of the
prior fiscal year. The net loss for the quarter was $8.1 million,
compared to a loss of $8.5 million for the same quarter of the
prior fiscal year.
As of November 30, 2004, Liberate had cash and cash equivalents of
$208.0 million, a decrease of $2.0 million during the quarter. In
addition to cash and cash equivalents, the Company had
$10.7 million in restricted cash held as security for office
leases. During the quarter, Liberate collected $4.5 million of
non-refundable payments for contract fees and monthly subscription
fees from customers pursuant to its subscription license
agreements. Revenue under such agreements is being deferred until
future obligations for product delivery and product updates have
been met.
Liberate had reached agreement to sell substantially all of the
assets of its North American business to Double C Technologies,
LLC, a joint venture majority owned and controlled by Comcast
Corporation with a minority investment by Cox Communications,
Inc., for consideration of approximately $82 million. The
agreement will not become effective until the dismissal of
Liberate's bankruptcy appeal, which Liberate has agreed to
actively pursue. To that end, Liberate is filing a motion in the
U.S. District Court for Northern California to dismiss the appeal
of its bankruptcy case dismissal. The agreement is also subject
to Liberate shareholder approval, Hart-Scott-Rodino antitrust
approval, and other customary closing conditions.
"Over the past two years, we have worked hard to restructure the
Company and resolve outstanding liabilities and other
uncertainties," said David Lockwood, Chairman and CEO of Liberate.
"[Monday]'s announcement of the purchase of our North American
business by industry leaders Comcast and Cox demonstrates the
strategic importance of the technology we have built and our
commitment to deliver value to shareholders."
About Liberate Technologies
Liberate Technologies is a leading provider of software for
digital cable systems. Based on industry standards, Liberate's
software enables cable operators to run multiple services --
including interactive programming guides, high-definition
television, video on demand, personal video recorders and games --
on multiple platforms. Headquartered in San Mateo, California,
Liberate has offices in Ontario, Canada, and the United Kingdom.
Liberate and the Liberate design are registered trademarks of
Liberate Technologies. Other product names used in association
with these registered trademarks are trademarks of Liberate
Technologies.
Bankruptcy History
Headquartered in San Mateo, California, Liberate Technologies
provides software and services for digital cable systems. The
Company filed for chapter 11 protection on April 30, 2004 (Bankr.
D. Del. Case No. 04-11299, transferred, May 12, 2004, to Bankr.
N.D. Calif., Case No. 04-31394). When the Company filed for
bankruptcy protection, it listed $257,000,000 in total assets and
more than $21,700,000 in total debts. Liberate filed a proposed
Plan of Reorganization providing for the payment of 100% of valid
creditor claims. The Landlord for the company's former San Carlos
headquarters complained that the Debtor's attempt to reject the
lease under 11 U.S.C. Sec. 365 and cap his rejection claim under
Sec. 506 of the Bankruptcy Code was an abuse of the system.
Seeing more cash than debt, the Honorable Thomas E. Carlson
agreed, and dismissed the solvent debtor's chapter 11 case on
Sept. 8, 2004. Liberate is appealing that ruling (N.D. Calif.
Case No. 04-03854). In the Bankruptcy Court and U.S. District
Court, Crista L. Morrow, Esq., Desmond J. Cussen, Esq., Fred L.
Pillon, Esq., Jonathan Landers, Esq., and Jayesh Sanatkumar Hines-
Shah, Esq., at Gibson Dunn & Crutcher LLP, represent Liberate.
The disgruntled landlord, Circle Star Center Associates, L.P., is
represented by Douglas J. McGill, Esq., Andrew C. Kassner, Esq.,
and Michael W. McTigue, Jr., at Drinker Biddle & Reath LLP, and
Michael P. Brody, Esq., James R. Stillman, Esq., and Diane K.
Hanna, Esq., at Ellman Burke Hoffman & Johnson. James L Lopes,
Esq., Janet A. Nexon, Esq., and Jason Gerlach, Esq., at Howard,
Rice, Nemerovski, Canady, Falk & Rabkin, represent an ad hoc
equity holders' committee.
Landlord Sues
Circle Star Center Associates, L.P., turned to the California
Superior Court for the County of San Mateo for a $3.9 million
judgment against Liberate Technologies. Circle Star complains
that since Liberate didn't make its rent payments in July, August
and September, the lease agreement is in default. Liberate owes
it a bundle on account of legal fees incurred during Liberate's
excursion through a flawed chapter 11 proceeding. For good
measure, Circle Star adds counts to its lawsuit alleging
conversion and defamation.
Circle Star filed its lawsuit on Sept. 29, 2004, and delivered an
amended complaint to the Court on Oct. 6, 2004. The case number
is CIV442164, and Kenneth N. Burns, Esq., at Ellman, Burke,
Hoffman & Johnson, is Circle Star's attorney of record. The
California State Court has scheduled a case management conference
at 9:00 a.m. on Feb. 2, 2005.
MADISON RIVER: S&P Puts Low-B Ratings on CreditWatch Positive
-------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Madison
River Telephone Co. LLC ('B') -- a rural local exchange company --
on CreditWatch with positive implications. The CreditWatch
placement is due to the company's potential deleveraging efforts
resulting from a proposed initial public offerings, as indicated
in a recent Form S-1 filing with the SEC. S&P's resolution of
the CreditWatch listings will depend on the ultimate size of the
IPO and the capital structure. In reviewing the company, S&P will
assess the impact of the cash dividend associated with the common
stock on free cash flow and the ability to meet debt maturities
and longer-term competitive pressures.
"The RLEC industry has experienced limited competition to date
because of the demographics of its service area, relatively stable
cash flows, and healthy EBITDA margins in the 50% area," said
Standard & Poor's credit analyst Rosemarie Kalinowski. "Annual
access line losses, generally in the 2%-3% range, have resulted
from the replacement of second lines with digital subscriber line
-- DSL -- and a slow economic recovery. However, the replacement
of second lines by DSL results in higher incremental revenue.
Since the majority of the RLECs' network upgrades have been
completed, capital expenditures are not anticipated to be
significant in the near term."
MAL FOODS INC: Case Summary & 9 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Mal Foods Inc.
20 South La Grange Road, Suite 1D
Frankfort, Illinois 60423
Bankruptcy Case No.: 05-60127
Type of Business: The Debtor is a retailer of food products.
Chapter 11 Petition Date: January 10, 2005
Court: Northern District of Indiana (Hammond Division)
Judge: J. Philip Klingeberger
Debtor's Counsel: Samuel T. Miller, Esq.
9335 Calumet Avenue, Suite C
Munster, IN 46321
Tel: 219-836-2423
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 9 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Princeton Builders $676,000
17324 Queen Ann Lane
Tinley Park, 60477
Indiana Dept. of Revenue $270,000
Bankruptcy Section N 203
100 N. Senate Avenue
Indianapolis, IN 46204
Cook County Treasurer $43,000
16501 Kedzie Avenue
Markham, IL 60426
Illinois Dept. of Revenue $35,000
Lake County Treasurer $29,000
HME $13,276
LaPorte County Treasurer $13,000
MUZAK $8,000
Fatouros Media $5,200
NATIONAL CENTURY: Trust Asks Court to Disallow L. Poulsen Claims
----------------------------------------------------------------
Lance Poulsen, one of the original founders of National Century
Financial Enterprises, Inc., served in numerous capacities for
numerous Debtors. Until November 8, 2002, Mr. Poulsen served as:
-- President of NCFE,
-- President and Treasurer of National Premier Financial
Services, Inc.,
-- President and Treasurer of NPF VI, Inc., and
-- President and Treasurer of NPF XII, Inc.
He also served as a director of NCFE, NPFS, NPF VI, NPF X, Inc.
and NPF XII until November 8, 2002.
Lance Poulsen Claims
In April 2003, Mr. Poulsen filed Claim Nos. 352 and 695, asserting
certain claims to compensation. On January 14, 2004, the Debtors
objected to the two Poulsen Claims.
In March 2004, Mr. Poulsen filed Claim No. 887 as an "amendment"
to the April 2003 claims, not specifying which particular claim.
In April 2004, Mr. Poulsen filed Claim No. 895, expressly
"amending" only Claim No. 695 and suggesting that Claim No. 887
was intended as an amendment only to Claim No. 352.
The May 2000 Agreements
Substantially all of the Poulsen Claims appear to spring from an
Employment Agreement dated May 31, 2002, signed by Mr. Poulsen and
Donald Ayers, a co-founder and officer of the Debtors, and a
certain "Action by the Compensation Committee of the Board of
Directors" dated May 21, 2002, also signed by Mr. Ayers.
Sydney Ballesteros, Esq., at Gibbs & Bruns, LLP, in Houston,
Texas, notes that the May Agreements were executed just months
before the Petition Date, at a time when NCFE was insolvent and
its demise imminent. The Agreements allegedly purport to lavish
Mr. Poulsen with compensation, benefits and "perks" even if, for
example, Mr. Poulsen resigns, the company plunges into bankruptcy,
or if Mr. Poulsen is terminable for egregious cause.
Mr. Poulsen worked no more than about five months under the
agreements, receiving at least his full pay during that time, and
now claims at least $12 million of additional compensation,
benefits and perks still payable to him.
No independent board has approved the Agreements.
Accordingly, the Unencumbered Assets Trust and Erwin I. Katz,
Ltd., as Trustee, objects to Mr. Poulsen's claims.
Fraudulent Transfer
Ms. Ballesteros asserts that any benefits or obligations
purportedly bestowed on Mr. Poulsen in the May Agreements are
subject to recovery or avoidance as a fraudulent transfer under
Sections 544 and 548 of the Bankruptcy Code.
NCFE was hopelessly insolvent prior to the execution of the May
Agreements. Mr. Poulsen did not provide NCFE with value of
anything near the amount of the compensation and benefits he
claims the Agreements may give him. Furthermore, Mr. Poulsen
initiated the agreement himself, with knowledge of NCFE's
precarious financial position and with the actual intent to
defraud and hinder creditors, Ms. Ballesteros contends.
Equitable Subordination
Mr. Poulsen has engaged in inequitable conduct that has given
them an unfair advantage and has resulted in injury to all other
competing classes of creditors of the Debtors and their estates,
Ms. Ballesteros asserts.
Thus, the Trust seeks equitable subordination of all of the
Poulsen Claims.
Other Objections to Lance Poulsen Claims
(a) Duplicative Claims
Mr. Poulsen filed Claim Nos. 887 and 895 expressively to
amend Claim Nos. 352 and 695, without indicating to
supersede, replace or withdraw the prior claims. Claim Nos.
352 and 695 are duplicative of the Amended Claims.
Furthermore, all of Claim No. 887, with the apparent
exception of the $257,400 claim for "consulting," is wholly
duplicative of Claim No. 895.
(b) Claims of an Insider
The May 31 Agreement identifies Mr. Poulsen as President
and Chairman of NCFE. The claim seeks compensation and
benefits far in excess of the reasonable value of services
Mr. Poulsen provided during the five months he purportedly
worked under the May Agreements. The "value" of Mr.
Poulsen's services is zero.
(c) Inadequate Evidence to Support Claims
(1) The $5,436,600 claim for "Supplemental Pension" in Claim
No. 895 is unsupported. No obligation exists to provide
the asserted benefits. The calculation is in error and
unreasonable and the documentation provided does not
support a claim. The claim appears to be part and parcel
of a claim previously asserted by Mr. Poulsen which was
subsequently dismissed with prejudice.
(2) Because Mr. Poulsen was terminated for "cause," even the
May 31 Agreement itself would provide for no more than
one year's compensation. Thus, the calculations in Claim
No. 895, based on 24 or 46 months, are inapplicable.
(3) The purported bonus calculation, based on a percentage of
NCFE's net income, is in error because NCFE had no actual
income but instead was insolvent with massive losses, in
significant part due to Mr. Poulsen's own malfeasance.
(4) Claims for "aviation" benefits are unsupportable even
under the language of the May 31 Agreement because the
agreement:
-- contemplates only 24 flights, not 24 per year; and
-- only permits use of "Employer's aviation resources,"
which is of no value because the Debtors have no
remaining aviation resources.
(5) Claims for "secretarial services are of no value and
not enforceable where none of the services are
available.
(d) Administrative Claim for Alleged Consulting Services
Claim No. 352 includes a $257,000 administrative claim for
services rendered to the estate from November 10, 2002,
through February 4, 2003. Claim No. 887 includes an
identical amount, described as "Board Approved Additional
Compensation." Claim No. 695 includes what appears to be the
same claim, for "Compensation under the consulting
arrangement calculated based on base salary and benefits" for
$283,835.
The Claims should be disallowed because:
(1) they are duplicative of one another;
(2) they are expressly administrative claims but were not
submitted or approved in accordance with the Court's
deadline, approvals and procedures for administrative
expenses and claims; and
(3) Mr. Poulsen did not in fact provide valuable services
to the Debtors to earn any amounts.
(e) Unenforceable Under State Law
The May Agreements are unenforceable against the Debtors
under the applicable state law, including the doctrines of
prior material breach, unjust enrichment, unclean hands,
breach of fiduciary duty, equitable estoppel, and the failure
to obtain necessary consents to self dealing transactions.
Accordingly, the Trust asks the Court to disallow Lance Poulsen's
Claims or, in the alternative, subordinate his Claims to every
other class of creditors of the Debtors' estates.
Headquartered in Dublin, Ohio, National Century Financial
Enterprises, Inc. -- http://www.ncfe.com/-- through the CSFB
Claims Trust, the Litigation Trust, the VI/XII Collateral Trust,
and the Unencumbered Assets Trust, is in the midst of liquidating
estate assets. The Company filed for Chapter 11 protection on
November 18, 2002 (Bankr. D. Ohio Case No. 02-65235). The Court
confirmed the Debtors' Fourth Amended Plan of Liquidation on
April 16, 2004. Paul E. Harner, Esq., at Jones Day, represents
the Debtors in their restructuring efforts. (National Century
Bankruptcy News, Issue No. 50; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
NATIONAL ENERGY: Wants Until Feb. 28 to Object to Claims
--------------------------------------------------------
Pursuant to National Energy & Gas Transmission, Inc.'s plan of
reorganization, all objections to proofs of claim must be filed
with the U.S. Bankruptcy Court for the District of Maryland and
served on the applicable claimant by 90 days after the later of:
(a) the Plan effective date; and
(b) the date a claim is filed with the Court and served on
counsel for Reorganized NEG.
The Plan became effective on October 29, 2004. Accordingly, the
current deadline for filing objections to claims is January 29,
2005 -- 90 days after the Effective Date.
Martin T. Fletcher, Esq., at Whiteford, Taylor & Preston, LLP, in
Baltimore, Maryland, relates that in the course of its Chapter 11
case, Reorganized NEG diligently reviewed every claim filed
against it and completed the filing and service of numerous claim
objections. The filed omnibus objections resulted to an
overwhelming majority of expunged claims. Additionally,
Reorganized NEG filed a number of individual claim objections in
circumstances where a separate contested matter proceeding was
needed for a particular claim. However, several Claim Objections
remain pending before the Court.
Reorganized NEG and certain claimants are presently in
negotiations and have reached agreements in principle to settle
six disputed claims:
Claimant Claim No. Claim Amount
-------- --------- ------------
BP Canada Energy Co. 296 $2,437,002
BP Canada Energy Marketing Co. 288 2,437,002
BP Corporation North America, Inc. 300 2,437,002
BP Energy Company 283 2,437,002
IGI Resources, Inc. (BP entity) 292 2,437,002
Brascan Energy Marketing, Inc. 353 7,537,550
Reorganized NEG anticipates that the Outstanding Claims will be
resolved pursuant to either:
(a) the Court-approved procedures for settling trading
contracts; or
(b) a settlement under Rule 9019 of the Federal Rules of
Bankruptcy Procedure, which will require Court approval.
As Reorganized NEG must comply with timelines set forth in the
Settlement Protocol and Bankruptcy Rules 3007 and 9006(b)(1),
there is no guarantee that the Outstanding Claims will be finally
resolved before the Claim Objection Deadline. Moreover, in the
event that additional claims are filed late, Reorganized NEG will
need time to evaluate those claims and file any required
objections.
Accordingly, Reorganized NEG asks the Court to extend the Claim
Objection Deadline through and including February 28, 2005, to
permit it to object to:
(a) the Outstanding Claims;
(b) any further Late-Filed Claims; and
(c) any Claims that were improperly filed or improperly
docketed.
Mr. Fletcher assures the Court that the extension is not sought
for purposes of delay and will not prejudice any claimants or
other parties-in-interest. Mr. Fletcher notes that any creditor
may file a request to shorten the time to review his or her Claim
if he or she believes a shortening of time is warranted.
Headquartered in Bethesda, Maryland, PG&E National Energy Group,
Inc. -- http://www.pge.com/-- (n/k/a National Energy & Gas
Transmission, Inc.) develops, builds, owns and operates electric
generating and natural gas pipeline facilities and provides energy
trading, marketing and risk-management services. The Company and
its debtor-affiliates filed for Chapter 11 protection on
July 8, 2003 (Bankr. D. Md. Case No. 03-30459). Matthew A.
Feldman, Esq., Shelley C. Chapman, Esq., and Carollynn H.G.
Callari, Esq., at Willkie Farr & Gallagher, and Paul M. Nussbaum,
Esq., and Martin T. Fletcher, Esq., at Whiteford, Taylor &
Preston, L.L.P., represent the Debtors in their restructuring
efforts. When the Company filed for protection from its
creditors, it listed $7,613,000,000 in assets and $9,062,000,000
in debts. NEGT received bankruptcy court approval of its
reorganization plan in May 2004, and that plan took effect on
Oct. 29, 2004. (PG&E National Bankruptcy News, Issue No. 33;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
OMNICARE INC: Extends Offer for NeighborCare Shares Until Feb. 4
----------------------------------------------------------------
Omnicare, Inc. (NYSE: OCR) has extended its offer for all of the
outstanding shares of NeighborCare, Inc. (NASDAQ: NCRX) common
stock for $30.00 per share in cash. The offer, which was to have
expired on Friday, Jan. 7, 2005 at 5:00 p.m., New York City time,
has been extended until 5:00 p.m., New York City time, on Feb. 4,
2005, unless further extended.
As of the close of business on Jan. 7, 2005, a total of 15,676,855
shares of NeighborCare common stock had been tendered. This
represents approximately 35.5% of NeighborCare's outstanding
shares (or approximately 34.6% of NeighborCare's outstanding
shares, calculated on a fully diluted basis).
Omnicare commenced a tender offer last June 4, 2004 for all of the
outstanding shares of NeighborCare common stock for $30 per share
in cash. This price represents a 70% premium over NeighborCare's
closing stock price on May 21, the last day of trading before the
offer was made public on May 24. It is also a 40% premium over
the 30-day trading average prior to the announcement of the offer,
a 30% premium to Wall Street's median price target for
NeighborCare's stock over the next 12 months(1) and $4.00 more
than NeighborCare's previous all-time high.
About Omnicare, Inc.
Omnicare, Inc. (NYSE:OCR), a Fortune 500 company based in
Covington, Kentucky, is a leading provider of pharmaceutical care
for the elderly. Omnicare serves residents in long-term care
facilities comprising approximately 1,071,000 beds in 47 states,
making it the nation's largest provider of professional pharmacy,
related consulting and data management services for skilled
nursing, assisted living and other institutional healthcare
providers. Omnicare also provides clinical research services for
the pharmaceutical and biotechnology industries in 30 countries
worldwide.
* * *
As reported in the Troubled Company Reporter on May 26, 2004,
Standard & Poor's Ratings Services placed its ratings on Omnicare
Inc., including the 'BBB-' corporate credit ratings, on
CreditWatch with negative implications after the long-term care
pharmacy provider disclosed an all-cash offer to purchase
competitor NeighborCare Inc.
At the same time, the ratings on NeighborCare, including the 'BB-'
corporate credit rating, were also placed on CreditWatch with
negative implications, as the pro forma combination is likely to
have a markedly weaker financial profile than NeighborCare. The
purchase price of $1.5 billion includes the assumption or
repayment of a $250 million NeighborCare debt issue. Estimating
the effect of additional debt and not assuming any cost savings,
total debt to EBITDA is expected to rise to over 4x, while funds
from operations to total debt will fall to less than 15%.
"We expect to meet with Omnicare management to determine what cash
flow benefits can be realized and the ultimate nature of the
financial structure of the combined company before resolving the
CreditWatch listing," said Standard & Poor's credit analyst David
Lugg.
OPTIMAL GEOMATICS: Equity Deficit Widens to $17.3M at Oct. 31
-------------------------------------------------------------
Optimal Geomatics, Inc. (TSX-V: OPG) reported the financial
results for the third quarter and fiscal year end of its nine
month transition year ending October 31, 2004.
Optimal's third quarter revenue was $1.81 million, an increase of
2% over the $1.77 million of revenue in the preceding quarter, and
an increase of 135% over revenue for the same period of the
previous year. The total revenue for the nine months transition
year (year end changed from January 31st to October 31st) was
$4.9 million, an increase of $418,363 compared to the twelve
months fiscal year ended January 31, 2004.
The net loss for the nine months ended October 31st, 2004 was
$1.1 million, a significant improvement compared to the net loss
of $1.9 million during the same period last year and the net loss
of $2.2 million for the last fiscal year ended January 31st, 2004.
This substantial decrease in the net loss is due to the Company's
focus on tight expense control and successful marketing strategy
and sales effort, which leads to a broadened customer-base and
increased sales wins. The Company experienced a cash outflow of
$619,512 from operating activities in the current quarter compared
with a cash outflow from operating activities of $387,640 in the
preceding quarter and $103,461 in the same quarter of the prior
year. The Company ended the quarter with cash and cash
equivalents of $291,898. The Company has ended the current fiscal
year with no long-term debt.
Highlights for the year include:
-- established seven new customers:
* Balfour Beatty,
* Central Networks,
* Duke Power,
* Kansas Gas Service,
* Texas Gas, and
* Southern Maryland Electric Cooperative
-- maintained strong relationships with seven current
customers:
* Connectiv,
* Dominion East Ohio,
* Oklahoma Natural Gas,
* East Kentucky Power Coop,
* TXU,
* Xcel Energy, and
* United Utilities
-- converted and redeemed debentures into common stock at a
price of $0.29 per share
-- strengthen management team
-- received Supplemental Type Certificate -- STC -- in Canada
for Proprietary Technology
-- hosted Gas Pipeline Symposium for regulators and regulated
within the pipeline utilities
-- completed private placement of $1.4 million at $0.21
Colum Caldwell, President and CEO commented, "2004 was a pivotal
year for Optimal, revenues for the nine months ending
Oct. 31, 2004, were $4.9 million, a significant gain since the
commencement of the restructuring in 2002, when revenues for the
fiscal year ended Jan. 31, 2002, were reported as $398,580. In
addition, the acquisition of our United States and the United
Kingdom subsidiaries are proving to be a positive investment for
the company."
Optimal Geomatics specializes in providing highly accurate
geomatic services and software to a customer-base, which is
primarily composed of Electric powerline and Gas pipeline
utilities. Geomatics is best described as the acquisition,
storage, management, retrieval, manipulation, and distribution of
spatial or geographically referenced data. Optimal employs a
number of acquisition systems, including its proprietary
technology, for aerial data acquisition, and applies innovative
technology, techniques, and expertise for in-house processing.
The Company's unique mapping products and services help utilities
reduce cost, improve efficiency, and better-manage their assets by
turning raw data into highly valuable geospatial information and
engineering reports. Optimal's customers include many of the
major utilities across the United States and the United Kingdom.
As of October 31, 2004, Optimal Geomatic's stockholders' deficit
widened to $17,297,785, compared to a $1,025,067 stockholders'
deficit at July 31, 2004.
OPTIMAL GEOMATICS: Receives Contracts Totaling Over $2.6 Million
----------------------------------------------------------------
Optimal Geomatics, Inc., TSXV: OPG received several orders
totaling over $2.6 million. These contracts have been received in
Q1 2005 and most are expected to be shipped in fiscal 2005.
These new customers include:
* Terasen Gas, the third largest utility in Canada and the
largest natural gas distributor in British Columbia,
* Georgia Power, the largest of five electric utilities that
make up Southern Company, who's been providing electricity to
Georgia State for more than a century,
* Pacific Corp, providing more than 1.5 million customers with
reliable, and
* Sempra Energy, servicing the largest customer base of any
energy utility in the United States.
Repeat customers this quarter to date include:
* Oklahoma Natural Gas, a natural gas distribution company,
which serves approximately 812,000 residential, commercial,
and industrial customers in Oklahoma,
* Cinergy, a regulated public utility in Ohio, Indiana, and
Kentucky, which serves 1.5 million electric customers and
about 500,000 gas customers, and
* Kansas Gas Service, a natural gas provider to more than
650,000 customers in Kansas and northeast Oklahoma.
Colum Caldwell, Optimal's President, and Chief Executive Officer
commented, "Early Success this quarter will help facilitate the
Company's achieving its targets for this fiscal year. The
continual growth in our customer base proves Optimal is a major
participant in the geomatics industry. We now have good
visibility on 70% of this year's revenue targets."
Optimal Geomatics specializes in providing highly accurate
geomatic services and software to a customer-base, which is
primarily composed of Electric powerline and Gas pipeline
utilities. Geomatics is best described as the acquisition,
storage, management, retrieval, manipulation, and distribution of
spatial or geographically referenced data. Optimal employs a
number of acquisition systems, including its proprietary
technology, for aerial data acquisition, and applies innovative
technology, techniques, and expertise for in-house processing.
The Company's unique mapping products and services help utilities
reduce cost, improve efficiency, and better-manage their assets by
turning raw data into highly valuable geospatial information and
engineering reports. Optimal's customers include many of the
major utilities across the United States and the United Kingdom.
As of October 31, 2004, Optimal Geomatic's stockholders' deficit
widened to $17,297,785, compared to a $1,025,067 stockholders'
deficit at July 31, 2004.
OWENS CORNING: Has Until June 30 to Solicit Plan Acceptances
------------------------------------------------------------
As reported in the Troubled Company Reporter on Dec 1, 2004, Owens
Corning and its debtor-affiliates asked the U.S. Bankruptcy Court
for the District of Delaware to further extend their exclusive
period to solicit plan votes through and including June 30, 2005.
The Debtors require more time to complete the procedures necessary
to gain approval from the U.S. District Court for the District of
Delaware of an amended disclosure statement and solicit
acceptances of an amended plan of reorganization.
CSFB Objects
Credit Suisse First Boston, as agent for the Debtors prepetition
lenders, notes the Debtors' request for an extension of their
exclusive solicitation period is based largely on the erroneous
proposition that the Debtors' proposed plan of reorganization
enjoys the support of nearly all creditor constituencies -- with
the sole exception of the Banks. "This proposition is
demonstrably false," Rebecca L. Butcher, Esq., at Landis Rath &
Cobb, LLP, in Wilmington, Delaware, says. In addition to the
Banks, Ms. Butcher notes, holders of the public bonds issued by
Owens Corning would likely also vote against the proposed plan.
In fact, Ms. Butcher asserts, it appears that only two bondholders
-- with aggregate holding of only 6% of the outstanding Bonds --
supported the so-called "Bonds/Trade Term Sheet," and one of those
Bondholders has since sold its holdings and resigned from the
official committee of unsecured creditors, leaving a single
Bondholder on record supporting the proposed plan. Moreover, Ms.
Butcher continues, the Debtors have never claims that the asbestos
property damage claimants would support the proposed plan. "In
sum, the proposed plan seems to principally, if not exclusively,
enjoy the support of only the asbestos claimants, who have even
conditioned their support of the proposed plan on a finding that
the Debtors' aggregate asbestos liability be estimated at no less
than an astronomical $16 billion, an amount nearly triple the
figure reported in the Debtors' current SEC filings, and more than
quadruple the amount the Debtors disclosed in prepetition SEC
filings," Ms. Butcher observes. "Capitulation to the unreasonable
demands of the asbestos claims is not cause to extend the
Solicitation Period."
Thus, CSFB asks the Court to deny the Debtors' request.
Exclusivity Preserved
Judge Fitzgerald declined the Banks' invitation to terminate
exclusivity at this juncture in Owens Corning's Chapter 11
proceedings.
At the Dec. 20 Hearing, Judge Fitzgerald told Owens Corning that
it can have six more months to solicit acceptances of its Chapter
11 Plan without interference from any other party-in-interest.
That bench ruling expends Owens Corning's exclusive solicitation
period runs through June 30, 2005.
But, Judge Fitzgerald ruled, that extension is not absolute. If
the Banks prevail in their appeal of Judge Fullam's Substantive
Consolidation Ruling to the Third Circuit, Judge Fitzgerald will
require Owens Corning to return to court to make its case why the
plan process should not be opened up to other parties-in-interest.
Headquartered in Toledo, Ohio, Owens Corning --
http://www.owenscorning.com/-- manufactures fiberglass
insulation, roofing materials, vinyl windows and siding, patio
doors, rain gutters and downspouts. The Company filed for chapter
11 protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837).
Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom,
represents the Debtors in their restructuring efforts. At
Sept. 30, 2004, the Company's balance sheet shows $7.5 billion in
assets and a $4.2 billion stockholders' deficit. The company
reported $132 million of net income in the nine-month period
ending Sept. 30, 2004. (Owens Corning Bankruptcy News, Issue No.
91; Bankruptcy Creditors' Service, Inc., 215/945-7000)
OXFORD AUTOMOTIVE: Section 341(a) Meeting Slated for Today
----------------------------------------------------------
The United States Trustee for Region 9 will convene a meeting of
Oxford Automotive, Inc.'s creditors today, Jan. 12, 2005, at
2:00 p.m. at the U.S. Trustee Meeting Room located in Room 743,
211 West Fort Street, Detroit, Michigan. This is the first
meeting of creditors required under 11 U.S.C. Sec. 341(a) in all
bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible officer 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 Troy, Michigan, Oxford Automotive, Inc. --
http://www.oxauto.com/-- is a Tier 1 supplier of specialized
metal-formed systems, modules, assemblies, components and related
services for the automotive industry. Oxford's primary products
include structural modules and systems, exposed closure panels,
suspension systems and vehicle opening systems, many of which are
critical to the structural integrity and design of the vehicle.
The Company and its debtor-affiliates filed for chapter 11
protection on December 7, 2004 (Bankr. E.D. Mich. Case No.
04-74377). I. William Cohen, Esq., at Pepper Hamilton LLP
represents the debtors in their restructuring efforts.
OXFORD AUTOMOTIVE: Creditors Must File Proofs of Claim by Jan. 18
-----------------------------------------------------------------
The United States Bankruptcy Court for the Eastern District of
Michigan, Southern Division set Jan. 18, 2004, as the deadline for
all creditors owed money by Oxford Automotive affiliates:
-- Oxford Automotive, Inc.
-- Oxford Automotive Alabama, Inc.
-- Lobdell Emery Corporation
-- Howell Industries, Inc.
-- Oxford Suspension, Inc.
-- RPI Holdings, Inc.
-- Prudenville Manufacturing, Inc.
-- RPI, Inc.
-- OASP, Inc.
-- OASP II, Inc.
-- CE Technologies, Inc.
-- Tool and Engineering Company
on account of claims arising prior to Dec. 7, 2004, to file their
proofs of claim.
Creditors must file written proofs of claim on or before the
January 18 Claims Bar Date and those forms must be delivered to:
If sent by mail:
Oxford Automotive, Inc., et al.
c/o The BMC Group, Inc.
PO Box 977
El Segundo, California 90245-0977
If sent by messenger or overnight courier:
Oxford Automotive, Inc., et al.
c/o The BMC Group, Inc.
1330 East Franklin Avenue
El Segundo, California 90245
The January 18 Bar Date applies to all non-governmental claims.
For governmental claims, the deadline is set on Apr. 7, 2004.
Headquartered in Troy, Michigan, Oxford Automotive, Inc. --
http://www.oxauto.com/-- is a Tier 1 supplier of specialized
metal-formed systems, modules, assemblies, components and related
services for the automotive industry. Oxford's primary products
include structural modules and systems, exposed closure panels,
suspension systems and vehicle opening systems, many of which are
critical to the structural integrity and design of the vehicle.
The Company and its debtor-affiliates filed for chapter 11
protection on December 7, 2004 (Bankr. E.D. Mich. Case No.
04-74377). I. William Cohen, Esq., at Pepper Hamilton LLP
represents the debtors in their restructuring efforts.
PARKER COMMUNITY: Case Summary & Largest Unsecured Creditor
-----------------------------------------------------------
Debtor: Parker Community Property Trust
P.O. Box 52863
Lafayette, Louisiana 70505
Bankruptcy Case No.: 05-50054
Type of Business: Revocable Grantor Trust
Chapter 11 Petition Date: January 10, 2005
Court: Western District of Louisiana (Lafayette/Opelousas)
Judge: Gerald H. Schiff
Debtor's Counsel: Barry W. Miller, Esq.
Barry W. Miller, P.L.C.
P.O. Box 86279
Baton Rouge, LA 70879
Tel: 225-296-0600
Fax: 225-296-0569
Total Assets: $585,300
Total Debts: $2,954,144
Debtor's Largest Unsecured Creditor:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Advocate Financial House and real $2,839,144
Attn: Simoneaux, Manager property located at
P.O. Box 80839 Lot 20 and a
Baton Rouge, LA 70898 triangular portion
of Lot 21 of
Greenbriar Court
Subdivision, Lafayette
Parish, Louisiana
Secured Value:
$450,000
PARMALAT USA: Asks Court to Establish Solicitation Procedures
-------------------------------------------------------------
Parmalat USA Corporation and its U.S. debtor-affiliates seek to
establish procedures and deadlines to facilitate the solicitation
and tabulation of votes to accept or reject their Plan of
Reorganization.
Record Date
Pursuant to Rule 3017(d) of the Federal Rules of Bankruptcy
Procedure, the U.S. Debtors ask the U.S. Bankruptcy Court for the
Southern District of New York to fix the approval date of their
Disclosure Statement as the record date for purposes of
determining creditors entitled to vote on the Plan or, in the case
of non-voting classes, to receive a Notice of Non-Voting Status.
Solicitation Packages and Procedures
The U.S. Debtors propose to mail no later than January 18, 2005,
solicitation packages containing copies of:
-- the order approving the Disclosure Statement;
-- a notice of the hearing to confirm the Plan;
-- the Disclosure Statement and the Plan.
The Debtors will provide additional solicitation materials in the
Solicitation Packages. Holders of claims and equity interests in
classes entitled to vote to accept or reject the Plan will
receive:
(a) a form of Ballot and a return envelope;
(b) a letter from the Official Committee of Unsecured
Creditors recommending acceptance of the Plan; and
(c) other materials as the Court may direct.
Consistent with Sections 1126(f) and (g) of the Bankruptcy Code
and Bankruptcy Rule 3017(d), Solicitation Packages for holders of
claims against or equity interests in the U.S. Debtors within a
class under the Plan that is deemed to accept or reject the Plan
will not include a Ballot. The Solicitation Packages for those
holders of claims and equity interests will include a Notice of
Non-Voting Status.
The Debtors also will not distribute copies of the Plan or
Disclosure Statement to any holder of a claim or equity interest
within a class that is deemed to accept or reject the Plan, unless
that party makes a specific request in writing.
Solicitation Packages will not be sent to creditors that have
claims already paid in full. However, if, and to the extent that,
any creditor would be entitled to receive a Solicitation Package
for any reason other than by virtue of the fact that its claim had
been scheduled, then that creditor will be sent a Solicitation
Package in accordance with the Solicitation Procedures.
Ballot Form
The U.S. Debtors propose to distribute to certain creditors one or
more ballots substantially in the form based on Official
Form No. 14, but modified to (i) address the particular aspects of
the Debtors' Chapter 11 cases and (ii) include certain additional
information relevant and appropriate for each class of claims that
is entitled to vote to accept or reject the Plan. The appropriate
Ballot form will be distributed to holders of claims and equity
interests in:
* PUSA Class 3 (General Unsecured Claims against Parmalat
USA);
* PUSA Class 4 (Equity Interests in PUSA);
* Farmland Class 3a (General Unsecured Claims against
Farmland);
* Farmland Class 3b (Master Lease Claim);
* Farmland Class 3c (Convenience Claims);
* MPA Class 3a (General Unsecured Claims against MPA);
* MPA Class 4 (Equity Interests in MPA),
which are impaired and, therefore, entitled to vote.
Voting Deadline
The U.S. Debtors anticipate commencing the solicitation period
within five days after the Disclosure Statement is approved. To
be counted as a vote to accept or reject the Plan, each Ballot
must be properly executed, completed, and delivered to Bankruptcy
Services, LLC, the Debtors' solicitation and tabulation agent, so
as to be received no later than 4:00 p.m. on February 17, 2005.
Vote Tabulation Procedure
Solely for purposes of voting to accept or reject the Plan and not
for the purpose of the allowance of, or distribution on account
of, a claim, each holder of a claim within a class entitled to
vote on the Plan will be entitled to vote the amount of its claim
as set forth in the Schedules unless the holder has timely filed a
proof of claim, in which event that holder would be entitled to
vote the amount of the claim as set forth in the proof of claim.
The Voting Procedure will be subject to these exceptions:
(a) If a claim is deemed allowed under the Plan, that claim is
allowed for voting purposes in the deemed allowed amount
set forth under the Plan, including the claims of
insiders, but only for the purposes of voting to accept or
reject the Plan;
(b) If a claim for which a proof of claim has been timely
filed is, by its terms, contingent or unliquidated in
whole or in part, that claim is accorded one vote valued
at $1.00 for voting purposes only, and not for purposes of
allowance or distribution;
(c) If a claim has been estimated or otherwise allowed for
voting purposes by a Court order, that claims is
temporarily allowed in the amount so estimated or allowed
by the Court for voting purposes only, and not for
purposes of allowance or distribution;
(d) If a claim is listed in the Schedules and a proof of claim
subsequently is filed in an amount that is liquidated,
non-contingent and undisputed, the claim is temporarily
allowed in the amount set forth on the proof of claim,
unless each claim is disputed.
(e) If a claim is listed in the Schedules as contingent or
unliquidated and a proof of claim was not (i) filed by the
applicable bar date or (ii) deemed timely filed by a Court
order prior to the Voting Deadline, unless the Debtors
consent in writing, that claim is disallowed for voting
purposes;
(f) A claim will be temporarily disallowed for voting purposes
only and not for purposes of allowance or distribution if:
-- a claim is listed in the Schedules as disputed;
-- if a claim for which a proof of claim has been timely
filed is, by its terms, disputed; or
-- the Debtors have served an objection, complaint or
request for estimation as to a claim at least 10 days
before the Voting Deadline,
except to the extent and in the manner as may be set forth
in the objection, complaint for estimation.
(g) Each entity that holds or has filed more than one
unsecured claim against a particular Debtor will not be
entitled to aggregate those unsecured claims for purposes
of voting, classification and treatment under the Plan;
(h) The Voting Agent, in its discretion, may contact voters to
cure any defects in the Ballots and is authorized to so
cure any defects; and
(i) There will be a rebuttable presumption that any claimant
who submits a properly completed superseding Ballot or
withdrawal of Ballot on or before the Voting Deadline has
sufficient cause, within the meaning of Bankruptcy Rule
3018(a), to change or withdraw that claimant's acceptance
or rejection of the Plan.
Whenever a creditor casts more than one Ballot voting the same
claims before the Voting Deadline, the last Ballot received before
the Voting Deadline be deemed to reflect the voter's intent and,
thus, to supersede any prior Ballots. Creditors must vote all of
their claims within a particular class under the Plan, either to
accept or reject the Plan, and may not split their vote.
These Ballots will not be counted or considered for any purpose in
determining whether the Plan has been accepted or rejected:
(a) Any Ballot that is properly completed, executed, and
timely returned to the Debtors' Voting Agent, but does not
indicate an acceptance or rejection of the Plan, or that
indicates both an acceptance and rejection of the Plan;
(b) Any Ballot received after the Voting Deadline unless the
Debtors will have granted in writing an extension of the
Voting deadline with respect to that Ballot;
(c) Any Ballot that is illegible or contains insufficient
information to permit the identification of the claimant;
(d) Any Ballot cast by a person or entity that does not hold a
claim in a class that is entitled to vote to accept or
reject the Plan; and
(e) Any Ballot transmitted to the Debtors' Voting Agent by
facsimile or other electronic means.
Rule 3018(a) Motions
Any creditor seeking to challenge the allowance of its claim for
voting purposes must file a motion for an order pursuant to
Bankruptcy Rule 3018(a) temporarily allowing that claim in a
different amount for purposes of voting to accept or reject the
Plan on or before the 10th day after the later of the date of (i)
service of the Confirmation Hearing Notice and (ii) service of
notice of an objection or request for estimation, if any, as to
that claim.
The U.S. Debtors propose that, as to any creditor filing a 3018
Motion, that creditor's Ballot will not be counted unless
temporarily allowed by a Court order entered at least five days
before the Voting Deadline.
Confirmation Hearing
The U.S. Debtors ask Judge Drain to set the hearing on the
confirmation of their Plan on March 1, 2005. The Confirmation
Hearing may be continued from time to time by the Court or the
U.S. Debtors without further notice other than adjournments
announced in open court.
Objections to the confirmation of the Plan or proposed
modifications to the Plan must filed and served no later than
4:00 p.m. on February 18, 2005. Objections must:
(a) be in writing;
(b) state the name and address of the objecting party and the
amount and nature of the claim or interest of that party;
and
(c) state with particularity the basis and nature of any
objection to the Plan.
The proposed timing for service of objections and proposed
modifications, the Debtors believe, will afford them and other
significant parties-in-interest sufficient time to consider the
objections and proposed modifications and file any replies while
leaving the Court sufficient time to consider the objections and
replies before the Confirmation Hearing.
Headquartered in Wallington, New Jersey, Parmalat USA Corporation
-- http://www.parmalatusa.com/-- generates more than 7 billion
euros in annual revenue. The Parmalat Group's 40-some brand
product line includes milk, yogurt, cheese, butter, cakes and
cookies, breads, pizza, snack foods and vegetable sauces, soups
and juices and employs over 36,000 workers in 139 plants located
in 31 countries on six continents. The Company filed for chapter
11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No.
04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at
Weil, Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts. On June 30, 2003, the Debtors listed
EUR2,001,818,912 in assets and EUR1,061,786,417 in debts.
(Parmalat Bankruptcy News, Issue No. 39; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
PG&E NATIONAL: Wants Court Nod on Seminole Canada Settlement Pact
-----------------------------------------------------------------
In February 2003, NEGT Energy Trading - Gas Corporation and
Seminole Canada Gas Company entered into a Share Purchase
Agreement pursuant to which ET Gas sold shares of its subsidiary
to Seminole Canada. Moreover, ET Gas agreed to indemnify
Seminole Canada for post-closing claims arising under the Share
Purchase Agreement and employee-related claims.
As required by the Share Purchase Agreement, ET Gas deposited
funds into two separate escrow accounts to support its
indemnification obligations. Accordingly, on March 18, 2003, ET
Gas and Seminole Canada entered into:
(a) the Share Purchase Escrow Agreement relating to the
Potential Share Purchase Claims, which has a $1,912,657
current balance, plus accrued interest; and
(b) the Employee Escrow Agreement in connection with the
Potential Employee Claims, which has a CN$1,552,041
current balance, plus accrued interest.
Seminole Canada asserts that it has made payments totaling
CN$1,500,000 to settle various employee-related claims.
Settlement Agreement
On December 9, 2004, ET Gas sought and obtained the Court's
permission to enter into a settlement agreement and mutual
release with Seminole Canada.
Pursuant to the Settlement Agreement, the funds contained within
the Share Purchase Escrow will be distributed to ET Gas, and the
funds contained within the Employee Escrow will be distributed to
Seminole Canada. Furthermore, ET Gas and Seminole Canada grant
each other releases for all claims arising from and relating to
the Escrow Agreements, including without limitation, any
avoidance or recovery claims or causes of action.
Headquartered in Bethesda, Maryland, PG&E National Energy Group,
Inc. -- http://www.pge.com/-- (n/k/a National Energy & Gas
Transmission, Inc.) develops, builds, owns and operates electric
generating and natural gas pipeline facilities and provides energy
trading, marketing and risk-management services. The Company and
its debtor-affiliates filed for Chapter 11 protection on
July 8, 2003 (Bankr. D. Md. Case No. 03-30459). Matthew A.
Feldman, Esq., Shelley C. Chapman, Esq., and Carollynn H.G.
Callari, Esq., at Willkie Farr & Gallagher, and Paul M. Nussbaum,
Esq., and Martin T. Fletcher, Esq., at Whiteford, Taylor &
Preston, L.L.P., represent the Debtors in their restructuring
efforts. When the Company filed for protection from its
creditors, it listed $7,613,000,000 in assets and $9,062,000,000
in debts. NEGT received bankruptcy court approval of its
reorganization plan in May 2004, and that plan took effect on
Oct. 29, 2004. (PG&E National Bankruptcy News, Issue No. 32;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
PIERRE FOODS: Earns $2.1 Million of Net Income in Third Quarter
---------------------------------------------------------------
Pierre Foods, Inc., a leading manufacturer and marketer of high-
quality, differentiated processed food solutions, reported for its
third quarter of fiscal 2005, which ended Dec 4, 2004, net
revenues of $112.0 million versus $93.8 million for the same
period last year, an increase of 19.4%. For the thirty-nine week
year- to-date period, net revenues were $303.0 million versus
$256.5 million for the same period last year, an increase of
18.1%. The increase in net revenues both for the third quarter
and year-to-date period is primarily due to increases in net
revenues across most of the Company's end-market segments,
including the substantial development of national business with an
existing customer and the advent of other new business.
The Company reported net income of $2.1 million during the third
quarter, compared with net income of $1.8 million during the third
quarter last year. The increase in earnings for the third quarter
was primarily due to the continued improvement in net revenues,
which is primarily the result of substantial volume growth. Volume
growth was up 18.6% in the third quarter and 14.2% for the year-
to-date period. Increases in customer pricing, taken in the first
and second quarter to help offset increases in raw material
prices, also contributed to the improvement. The weighted average
prices the Company paid for beef, pork, chicken and cheese in the
third quarter 2005 versus the prior year comparable period varied
by commodity. Beef prices were 3.5% lower, pork prices were 51.2%
higher, chicken prices were 13.2% lower and cheese prices were
4.1% higher but in the aggregate, the cost of these four raw
materials was 3.6% higher than the prior year comparable period.
The weighted average prices the Company paid for beef, pork,
chicken and cheese in the third quarter 2005 versus the weighted
average prices the Company paid for these raw materials in the
second quarter 2005, also varied by commodity. Beef prices were
0.6% higher, pork prices were 4.3% higher, chicken prices were
45.8% lower, and cheese prices were 6.0% lower but in the
aggregate, the cost of these four raw materials was 13.9% lower
than the previous quarter. Income in the third quarter was also
negatively impacted by a purchase
Pierre Foods, Inc., manufactures and markets high-quality,
differentiated processed food solutions, focusing on formed,
pre-cooked protein products and hand-held convenience sandwiches.
Headquartered in Cincinnati, Ohio, Pierre Foods, Inc., markets its
sandwiches under a number of well-known brand names, such as Fast
Choice(R), Rib-B-Q(R), Hot 'n' Ready(R) and Big AZ(R), and has
licenses to sell sandwiches using well-known brands, such as
Checkers(R), Krystal(R), Tony Roma's(R), NASCAR CAFE(R) and
Nathan's Famous(R).
* * *
As reported in the Troubled Company Reporter on June 15, 2004,
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Cincinnati, Ohio-based prepared foods
manufacturer Pierre Foods Inc. At the same time, Standard &
Poor's assigned its 'B+' bank loan rating and a recovery rating of
'3' to the company's proposed $190 million senior secured credit
facilities. The issue is part of a financing plan in which Pierre
will be acquired by Madison Dearborn Partners.
The ratings are based on preliminary offering statements and are
subject to review upon final documentation. The bank loan rating
is the same as the corporate credit rating; this and the '3'
recovery rating indicate the expectation of a meaningful (50%-80%)
recovery of principal in the event of default. Standard & Poor's
has also assigned a 'B-' rating to Pierre Foods' proposed
$125 million senior subordinated notes due 2012, to be issued
under Rule 144A with registration rights.
The outlook is negative.
QUANTEGY INC: Case Summary & 62 Largest Unsecured Creditors
-----------------------------------------------------------
Lead Debtor: Quantegy, Inc.
P.O. Box 190
Opelika, Alabama 36803
Bankruptcy Case No.: 05-10049
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Quantegy International Incorporated 05-10050
QM, Inc. 05-10051
Quantegy Media Corporation 05-10052
Quantegy Holdings Incorporated 05-10053
Quantegy Acquisition Corp. 05-10055
GoProAudio.com, Inc. 05-10056
GoProDirect.com, Inc. 05-10058
Type of Business: The Debtor provides a full line of audio,
video, data, storage, logging and
instrumentation recording media products.
See http://www.quantegy.com/
Chapter 11 Petition Date: January 10, 2005
Court: Middle District Of Alabama (Dothan)
Debtors' Counsel: Cameron-RRL A. Metcalf, Esq.
Espy, Metcalf & Poston, PC
P.O. Drawer 6504
Dothan, AL 36302
Tel: 334-793-6288
Estimated Assets Estimated Debts
---------------- ---------------
Quantegy, Inc. $1 M to $10 M $10 M to $50 M
Quantegy International Inc. $1 M to $10 M $10 M to $50 M
QM, Inc. $0 to $50,000 $10 M to $50 M
Quantegy Media Corporation $0 to $50,000 $10 M to $50 M
Quantegy Holdings Incorporated $1 M to $10 M $10 M to $50 M
Quantegy Acquisition Corp. $1 M to $10 M $10 M to $50 M
GoProAudio.com, Inc. $0 to $50,000 $10 M to $50 M
GoProDirect.com, Inc. $0 to $50,000 $10 M to $50 M
A. Quantegy, Inc.'s 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Ampex Corp. $1,665,861
P.O. Box 99247
Chicago, IL 60693
Titron Media HK Ltd. $731,912
11 West Tower, Room 1109
Hong Kong
ATEK $211,839
Ncb-74
P.O. Box 1414
Minneapolis, MN 55480
Toray Plastics of America $182,845
Inabata America Corporation $178,747
Uti United States Inc. $152,210
Sony Corp. Recording Media $135,523
Sony Electronics Inc - Chicago $130,856
Mitsubishi Polyester Film $125,844
AKOT International Inc. $117,661
Deloitte & Touche $83,275
Isk Magnetics, Inc. $66,114
Nexpak $50,314
Sojitz Corp. Of America $48,020
Huntsman Ployurethaes $44,836
Seaboard Group II $43,758
Atlanta Packaging Spec. $41,489
Menlo Logistics $38,221
Sedco Chemical, Inc. $26,187
Custom-Pak $24,786
B. Quantegy International Inc.'s 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Tainahong Trading Limited $84,150
Units E,F,G. 14/F, Genstar Tower
Hunghom, Hong Kong
I-Beam Broadcast Equipment Co. Ltd. $41,056
No. 56 10/F Sec 1
Taiwan
Indo Foriegn Trading Co. $19,147
Suite 233-235, 2/F
Tst East, Hong Kong
Fuji Photo Film USA Inc. $16,590
Wonderland Batteries Co. Ltd. $14,513
Parkwood Cavanaugh Ltd. $7,535
Shun Hing Technology Ltd. $6,141
Videolux Canada Inc. $4,517
Zhuhai Doumen Jiade Co. Ltd. $4,008
East-West Logistics Ltd. $3,989
Sameday Right Way Courier $2,613
Promedia International Ltd. $2,574
Guangzhou Ri Hui $2,500
Nexpak $1,611
Distribution Magnetique Inc. $1,150
Quikx Transportation $1,005
The Secret Service $847
The Tape House $658
Lex International Ltd. $410
Win Tech Co. $353
C. QM, Inc.'s 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
City of Opelika $141,698
P.O. Box 2168
Opelika, AL 36803
Alagasco $91,014
P.O. Box 11407
Birmingham, AL 35246
Inabata America Corporation $63,900
1270 Avenue of the Americas
New York, NY 10020
Facilities Management $61,089
Fairview Machine $24,816
Roll Technology Corporation $19,030
Mitsubishi Polyester Film $11,958
Shaw Environmental $11,135
Imation Corp. - Chicago $11,000
BOC Gases $10,488
Elarbee, Thompson, Sapp & Wils $7,936
Imation-Whapeton $7,550
Airgas Sough, Inc. $6,349
Employment Resources $6,169
Ondeo Nalco $6,167
Davis-Dyar Supply Co. $3,936
Alabama Industrial Service $3,483
Sedco Chemical Inc. $3,146
Toyo Color America, LLC $2,970
Luis J. Perez Equiarte $2,920
D. GoProAudio.com, Inc.'s 2 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
PeopleSoft $42,000
Department 770
Denver, CO 80271
JD Edwards World Solutions Co. $1
3225 Cumberland Blvd., Suite 600
Atlanta, GA 30339
R.H. DONNELLEY: Plans $300 Million Senior Debt Private Offering
---------------------------------------------------------------
R.H. Donnelley Corporation (NYSE: RHD), is planning an offering of
$300 million of senior notes to certain institutional investors in
an offering exempt from the registration requirements of the
Securities Act of 1933.
R.H. Donnelley Corporation intends to use the proceeds from the
offering to repurchase a portion of its Preferred Stock and for
general corporate purposes.
The senior notes to be offered have not been registered under the
Securities Act of 1933 and may not be offered or sold in the
United States absent registration or an applicable exemption from
registration requirements. This press release shall not
constitute an offer to sell or a solicitation of an offer to buy
such notes and is issued pursuant to Rule 135c under the
Securities Act of 1933.
About R.H. Donnelley
R.H. Donnelley is a leading yellow pages publisher and directional
media company. Directional media is where consumers go to find
who sells the goods and services they are ready to purchase. R.H.
Donnelley publishes approximately 260 directories under the Sprint
Yellow Pages(R) brand in 18 states, with major markets including
Las Vegas, Orlando, and Lee County, Florida. The Company also
offers online city guides and search web sites in these major
markets under the Best Red Yellow Pages brand at
http://www.bestredyp.com/In addition, R.H. Donnelley also
publishes 129 SBC directories under the SBC(R) Yellow Pages brand
in Illinois and Northwest Indiana. R.H. Donnelley serves more
than 260,000 local and national advertisers. For more
information, visit R.H. Donnelley at http://www.rhd.com/
* * *
As reported in the Troubled Company Reporter on August 12, 2004,
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit ratings on R.H. Donnelley Corp. and its operating
subsidiary, R.H. Donnelley Inc., as well as RHDI's 'B+'
subordinated debt rating. In addition, Standard & Poor's placed
its 'B+' senior unsecured debt rating on RHDI on CreditWatch with
positive implications. The outlook is stable.
The ratings affirmations follow RHD's agreement to acquire SBC
Communications Inc.'s directory publishing business in Illinois
and northwest Indiana, including SBC's 50% interest in the DonTech
partnership, for $1.42 billion in cash or about 8.3x acquired 2004
EBITDA. The purchase price is after the settlement of a
$30 million liquidation preference related to DonTech, which is an
existing partnership between SBC and RHD for local sales into the
Illinois and northwest Indiana SBC yellow pages. The acquisition
will be financed with an amendment and increase in RHD's existing
credit facilities. The transaction is expected to close in the
2004 third quarter, subject to regulatory approval and certain
closing conditions. RHD is expected to have about $3.4 billion of
debt outstanding following the acquisition.
The CreditWatch listing of RHDI's $325 million 8.875% senior notes
due 2010 reflects the plan that this debt will be secured ratably
with the senior secured credit facilities in connection with the
transaction. This rating will be raised to 'BB' and removed from
CreditWatch when the SBC acquisition is completed.
RICHTREE INC: Under CCAA Protection Until January 31
----------------------------------------------------
Richtree, Inc., (TSX:MOO.SV.B) and its operating subsidiary,
Richtree Markets, Inc., reported that on January 7, 2005, the
Ontario Superior Court of Justice has extended the protection
period granted to Richtree under the Companies' Creditors
Arrangement Act from January 7, 2005 to January 31, 2005.
The Court also authorized Richtree to enter into a further
extension from January 7, 2005 to January 31, 2005 of the debtor-
in-possession term sheet originally dated October 18, 2004,
between Richtree and Catalyst Fund General Partner I, Inc. The
maximum amount available to the Corporation under the DIP term
sheet is $3.0 million. Richtree is continuing in discussions
with Catalyst with respect to the next steps in the Corporation's
CCAA restructuring process and Catalyst has agreed to the further
extensions of the CCAA protection period and the DIP financing to
January 31, 2005, in order that during this period certain
restructuring alternatives can be further examined.
Colin T. West, President and CEO of Richtree, noted "the continued
consideration of restructuring alternatives and the extension of
the CCAA protection period are in the best interests of Richtree's
stakeholders having an economic interest in its operations,
including, in particular, Richtree's employees." Richtree
operates its market-concept restaurants in Ontario and Quebec.
The Court also approved the activities of PricewaterhouseCoopers
Inc., in its capacity as monitor of Richtree, as set out in the
third report of the Monitor to the Court dated Dec. 15, 2004, and
the fourth report of the Monitor to the Court dated Jan. 5, 2005.
Richtree again confirmed its view that the shareholders of
Richtree, Inc., are unlikely to recover any value for their Class
B Subordinate Voting shares (MOO.SV.B) from the Richtree
restructuring process and therefore do not likely have any
continuing economic interest in Richtree.
Richtree, Inc., is the holder of exclusive master franchise rights
from M"venpick Group of Switzerland to operate and sub-franchise
M"venpick March, and Marchelino restaurants in Canada and the
United States and to operate M"venpick restaurants in Canada. The
Company owns and operates 4 March, restaurants, 6 Marchelino
restaurants, 2 Take-me! March, outlets and 4 M"venpick restaurants
in Toronto, Ottawa, Montreal and Boston. In addition, the Company
operates 12 Take-me! March, outlets in a joint venture with
Loblaws.
ROGERS COMMS: Reports Subscriber Results for 2004 Fourth Quarter
----------------------------------------------------------------
Rogers Communications, Inc., (TSX: RCI; NYSE: RG) reported
selected preliminary fourth quarter 2004 subscriber results for
its wireless and cable operations.
"Rogers ended 2004 with strong quarterly wireless and cable
subscriber results, reflecting our continued success in delivering
innovation, convenience and value for our customers and the
execution of our recent strategic initiatives," said Ted Rogers,
President and CEO of Rogers Communications. "The markets for
wireless, cable and high-speed Internet services have continued to
be robust, and as we enter 2005, our focus will remain on the
disciplined execution of our strategy of profitable growth, the
integration of our recently acquired wireless assets and the
continued deployment of unique and innovative products that add
value to our customers' lives."
--------------------------------------
-
WIRELESS Three Months Ended December 31,
------------------------------------------------------------------------
-
(Subscriber statistics in
thousands except churn) 2004 2003 Chg % Chg
------------------------------------------------------------------------
-
Postpaid Voice and Data
-----------------------
Gross additions (1) 397.4 338.4 59.0 17.4
Net additions (1)(2) 185.8 166.2 19.6 11.8
Acquisition of Microcell (3) 752.0 - 752.0 -
Total postpaid retail
subscribers (2)(4)
Churn (%)(2) 1.89% 1.99% (0.10%) (5.0)
Prepaid
-------
Gross additions (1) 126.7 67.4 59.3 88.0
Net additions (1)(5) 58.9 6.4 52.5 -
Acquisition of Microcell (3) 541.8 - 541.8 -
Adjustment to subscriber base (6)
Total prepaid retail subscribers
Churn (%)(5) 2.16% 2.73% (0.57%) (20.9)
Total - Postpaid and Prepaid
----------------------------
Gross additions (1) 524.1 405.8 118.3 29.2
Net additions (1)(2) 244.7 172.6 72.1 41.8
Acquisition of Microcell (3) 1,293.8 - 1,293.8 -
Adjustment to subscriber base (6) - - - -
Total retail subscribers (2)(4)
Wholesale subscribers (1) (4)
------------------------------------------------------------------------
-
--------------------------------------
-
WIRELESS Twelve Months Ended December 31,
------------------------------------------------------------------------
-
(Subscriber statistics in
thousands except churn) 2004 2003 Chg % Chg
------------------------------------------------------------------------
-
Postpaid Voice and Data
-----------------------
Gross additions (1) 1,161.5 1,021.5 140.0 13.7
Net additions (1)(2) 446.1 400.2 45.9 11.5
Acquisition of Microcell (3) 752.0 - 752.0 -
Total postpaid retail
subscribers (2)(4) 4,184.1 3,029.6 1,154.5 38.1
Churn (%)(2) 1.81% 1.88% (0.07%) (3.7)
Prepaid
-------
Gross additions (1) 319.0 257.4 61.6 23.9
Net additions (1)(5) 32.5 2.0 30.5 -
Acquisition of Microcell (3) 541.8 - 541.8 -
Adjustment to subscriber base (6) - (20.9) 20.9 -
Total prepaid retail subscribers 1,334.1 759.8 574.3 75.6
Churn (%)(5) 2.94% 2.82% 0.12% 4.3
Total - Postpaid and Prepaid
----------------------------
Gross additions (1) 1,480.5 1,278.9 201.6 15.8
Net additions (1)(2) 478.6 402.2 76.4 19.0
Acquisition of Microcell (3) 1,293.8 - 1,293.8 -
Adjustment to subscriber base (6) - (20.9) 20.9 -
Total retail subscribers (2)(4) 5,518.2 3,789.4 1,728.8 45.6
Wholesale subscribers (1) (4) 91.2 - 91.2 -
------------------------------------------------------------------------
-
--------------------------------------
-
CABLE Three Months Ended December 31,
------------------------------------------------------------------------
-
(Subscriber statistics
in thousands) 2004 2003 Chg % Chg
------------------------------------------------------------------------
-
Homes passed
Basic cable subscribers
Basic cable, net
additions (losses) 5.9 8.6 (2.7) -
Internet subscribers (7)
Internet, net additions (7) 57.1 41.3 15.8 38.3
Digital terminals in service
Digital terminals, net additions 66.5 50.9 15.6 30.6
Digital households
Digital households, net additions 48.4 43.2 5.2 12.0
------------------------------------------------------------------------
-
--------------------------------------
-
CABLE Twelve Months Ended December 31,
------------------------------------------------------------------------
-
(Subscriber statistics
in thousands) 2004 2003 Chg % Chg
------------------------------------------------------------------------
-
Homes passed 3,291.1 3,215.4 75.7 2.4
Basic cable subscribers 2,254.6 2,269.4 (14.8) (0.7)
Basic cable, net
additions (losses) (14.8) (0.9) (13.9) -
Internet subscribers (7) 936.6 777.8 158.8 20.4
Internet, net additions (7) 158.8 149.3 9.5 6.4
Digital terminals in service 795.7 613.6 182.1 29.7
Digital terminals, net additions 182.1 157.5 24.6 15.6
Digital households 675.4 535.3 140.1 26.2
Digital households, net additions 140.1 133.8 6.3 4.7
------------------------------------------------------------------------
-
(1) Subscriber activity includes Microcell beginning November 9, 2004.
(2) Effective December 1, 2004, voluntarily deactivating subscribers are
required to continue billing and service for 30 days from the date
termination is requested, consistent with the subscriber agreement
terms and conditions, resulting in approximately 15,900 additional
net postpaid subscribers being included in the quarter.
(3) Microcell subscriber base upon closing of acquisition on
November 9, 2004.
(4) Effective at the beginning of fourth quarter 2004, wholesale
subscribers are reported separately under 'wholesale'. Accordingly,
approximately 43,600 Rogers Wireless wholesale subscribers were
reclassified from the postpaid subscriber base to the 'wholesale'
category.
(5) Effective November 9, 2004, the deactivation of prepaid subscribers
acquired from Microcell are recognized after 180 days of no usage to
conform to the Rogers Wireless prepaid churn definition.
(6) In 2003, we determined that subscribers who only had non-revenue
usage should not have been included in the prepaid subscriber base
and, as such, made an adjustment to the second quarter of 2003
opening prepaid subscriber base.
(7) Effective in the third quarter of 2004, the reporting of Internet
subscribers was modified to include only those subscribers with
service installed, operating and on billing and to exclude those
subscribers who have subscribed to the service but installation of
the service was still pending. Prior period results for Internet
subscribers and net additions have been conformed to this current
presentation.
Rogers Communications expects to release fourth quarter 2004
financial and operating results on or about February 9, 2005.
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.
SECURITIZED ASSET: Moody's Places Ba1 Rating on Class B-4 Certs.
----------------------------------------------------------------
Moody's Investors Service has assigned a rating of Aaa to the
senior certificates issued by Securitized Asset Backed Receivables
LLC Trust 2004-NC3 and ratings ranging from Aa2 to Ba1 to the
mezzanine and subordinate certificates in the deal.
The securitization is backed by New Century originated
adjustable-rate (100%) sub-prime mortgage loans with interest only
feature. The ratings are based primarily on the credit quality of
the loans, past performance of hybrid adjustable-rate collateral
from this originator, and on the protection from subordination,
overcollateralization -- OC, and excess spread. The credit
enhancement requirements reflect some benefit for due diligence
performed on the collateral. The loans backing this deal are of
better than average quality relative to the industry's sub-prime
mortgage pools and in line with previous securitizations of this
type of collateral by this issuer.
Litton Loan Servicing LP will service the loans. Moody's has
assigned its top servicer quality rating (SQ1) to Litton for
primary servicing of subprime loans.
The complete rating actions are:
Issuer: Securitized Asset Backed Receivables LLC Trust 2004-NC3
Securities: Mortgage Pass-Through Certificates, Series 2004-NC3
* Class A-1, rated Aaa
* Class A-2, rated Aaa
* Class M-1, rated Aa2
* Class M-2, rated A2
* Class M-3, rated A3
* Class B-1, rated Baa1
* Class B-2, rated Baa2
* Class B-3, rated Baa3
* Class B-4, rated Ba1
SOLUTIA: CPFilms Wants to Enter into 3M Global Supply Agreement
----------------------------------------------------------------
Minnesota Mining and Manufacturing Corporation is CPFilms, Inc.'s
second largest customer. CPFilms is one of Solutia Inc.'s debtor-
affiliate. Historically, CPFilms and 3M have entered into a
number of separate purchase agreements each governing a specific
product and containing their own terms and conditions.
CPFilms has determined that entering into one global supply
agreement that sets forth uniform terms for purchases, which would
then be supplemented with specific subcontracts would be
beneficial to its business. In addition, 3M has indicated that
the existence of a global supply agreement could grant CPFilms
greater access to future sales to 3M because many of 3M's sites
will only do business with a supplier that has entered into a
global supply agreement. Moreover, under the terms of one or more
of the specific Subcontracts, to permit CPFilms to manufacture
product under the Master Agreement and the Subcontracts, 3M may
license its technology to CPFilms, permit CPFilms to utilize 3M
equipment at CPFilms' facilities and provide CPFilms with 3M
tooling, parts and materials to be maintained at CPFilms'
facilities.
Therefore, CPFilms has decided to enter into a Master Agreement
with 3M. The Master Agreement establishes a business relationship
in which 3M may request that CPFilms produce, package, process or
store certain products for 3M at agreed-on pricing and in
accordance with 3M's packaging and product specifications and
other written instructions. When CPFilms and 3M identify certain
Products that a specific 3M business unit will purchase from
CPFilms on a recurring basis, the parties will enter into an
exhibit to the Master Agreement that will describe those Products,
their prices, and any Subcontract variations from the Master
Agreement. In addition, 3M will order Products and CPFilms will
accept orders, by issuing an individual purchase order or a
release from a blanket purchase order. The terms of the Master
Agreement will also apply to those purchase orders.
Although the specific prices for products will be as set forth in
a Subcontract or purchase order, the Master Agreement provides a
mechanism for price adjustments. If CPFilms and 3M cannot agree
on any Product's price adjustment, an independent auditor may be
hired, at 3M's expense, to review CPFilms' records and determine
the appropriate price change.
M. Natasha Labovitz, Esq., at Gibson, Dunn & Crutcher LLP, in New
York, relates that the Master Agreement neither obligates CPFilms
to sell nor obligates 3M to purchase any Products not specifically
set forth in a Subcontract or purchase order. CPFilms anticipates
that it will enter into number of Subcontracts and purchase orders
governing the supply of Products in the ordinary course of its
business. If the entry of any Subcontract or purchase order is
outside of the ordinary course of its business, CPFilms will file
a separate motion with the Court seeking permission to enter into
the Subcontract or purchase order.
CPFilms asks the Court to approve its entry into the Master
Agreement.
Headquartered in St. Louis, Missouri, Solutia, Inc. --
http://www.solutia.com/-- with its subsidiaries, make and sell a
variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications. The Company
filed for chapter 11 protection on December 17, 2003 (Bankr.
S.D.N.Y. Case No. 03-17949). When the Debtors filed for
protection from their creditors, they listed $2,854,000,000 in
assets and $3,223,000,000 in debts. (Solutia Bankruptcy News,
Issue No. 29; Bankruptcy Creditors' Service, Inc., 215/945-7000)
STATE VOLUNTEER: S&P Cuts Credit & Fin'l Strength Ratings to BBpi
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its counterparty credit
and financial strength ratings on State Volunteer Mutual Insurance
Co. -- SVMI -- to 'BBpi' from 'BBBpi'.
"The downgrade reflects the company's weak operating performance
and very high product-line and geographical concentrations,
partially offset by its extremely strong capitalization,"
explained Standard & Poor's credit analyst Terence Tan.
Based in Brentwood, Tennessee, SVMI writes medical malpractice
insurance. The company, which commenced operations in 1976, is
100%-owned by its policyholders and operates principally in
Tennessee. It is governed by a board of 18 persons, the great
majority of whom are physicians. In 2003, the company entered
into a three-year aggregate stop-loss reinsurance agreement
effective Jan. 1, 2003. The agreement is with General Cologne
Reinsurance Co. Ltd. (Dublin), a subsidiary of the General
Reinsurance Group, which is part of the Berkshire Hathaway group
of companies. Under the terms of this agreement, the company
cedes 25.95% of its net earned premiums and losses in excess of a
specified attachment point to the reinsurer.
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.
SUNRISE SENIOR: Raises $24.6 Million in Trust Units Offering
------------------------------------------------------------
Sunrise Senior Living Real Estate Investment Trust (TSX: SZR.UN)
reported that in connection with its initial public offering, the
underwriters have exercised their option to purchase an additional
2.46 million trust units at $10 per unit to cover over-allotments.
As a result of the exercise and closing of the over-allotment
option, Sunrise REIT raised gross proceeds of $24.6 million. This
is in addition to the $246 million gross proceeds raised upon the
initial closing of the offering on December 23, 2004, which was
underwritten by a syndicate of underwriters led by TD Securities
Inc. and Scotia Capital, Inc., and including RBC Capital Markets,
BMO Nesbitt Burns, Inc., CIBC World Markets, Inc., National Bank
Financial, Inc., and Canaccord Capital Corporation. Sunrise REIT
now has 27,086,719 trust units issued and outstanding.
The net proceeds received from the closing of the over-allotment
option will be used indirectly by Sunrise REIT to repay existing
indebtedness and for general purposes.
Sunrise REIT was formed to indirectly acquire, own and invest in
income-producing senior living communities located in major
metropolitan markets and their surrounding suburban areas in
Canada and the United States. The REIT will also indirectly
acquire interests in newly developed senior living communities
through long-term development and financing arrangements with
Sunrise Senior Living, Inc.
* * *
As reported in the Troubled Company Reporter on Dec. 19, 2003,
Standard & Poor's Ratings Services raised its corporate credit
rating on assisted living and senior housing facility operator
Sunrise Senior Living, Inc., to 'BB-' from 'B+', and the
subordinated debt rating on the company to 'B' from 'B-'. The
outlook is stable.
TEXAS DOCKS: Wants to Employ Harrell Browning as Counsel
--------------------------------------------------------
Texas Docks & Rail Company Ltd. and its debtor-affiliate seek
permission from the U.S. Bankruptcy Court for the Southern
District of Texas, Corpus Christi Division, to retain Harrell Z.
Browning, Esq., as its counsel.
Mr. Browning will:
a) advise and consult with the Debtors concerning legal
questions which may arise in the administration and
reorganization of the Debtors' estate;
b) provide legal services to the Debtors regarding the sale
of assets outside the ordinary course of business;
c) assist the Debtors in obtaining confirmation and
consummation of a plan of reorganization;
d) assist the Debtors in preserving and protecting the
property of the estates, including prosecution of
litigation;
e) investigate and prosecute preference, fraudulent transfer
and other actions arising under the Debtors' avoidance
powers, and any causes of action arising under state law;
f) prepare pleadings, motions, answers, notices, orders and
reports that are required for the orderly administration
of the Debtors' estates; and
g) perform any and all other legal services for the Debtors
that are necessary and appropriate to faithfully discharge
their duties as debtors-in-possession.
Mr. Browning will charge the Debtors for his professional services
at his customary hourly rate of $325. The Debtor paid Mr.
Browning a $20,000 retainer.
Mr. Browning believes that he is "disinterested" within the
meaning of Section 101(14) of the Bankruptcy Code.
Headquartered in Corpus Christi, Texas, Texas Docks & Rail Ltd. --
http://www.texdockrail.com/-- is a marine terminal operator and
stevedore for ports of Corpus Christi and South Texas. The
Company and its debtor-affiliate filed for chapter 11 protection
on Jan. 7, 2005 (Bankr. S.D. Tex. Case No. 05-20047). When the
Debtor filed for protection from its creditors, it listed
$38,097,085 in total assets and $20,435,639 in total debts.
THORNBURG MORTGAGE: Moody's Rates Classes B-4 & B-5 at Low-B
------------------------------------------------------------
Moody's Investors Service has assigned a Aaa rating to the senior
certificates issued by Thornburg Mortgage Security Trust 2004-4.
Moody's also assigned ratings of Aa2 through B2 to the subordinate
certificates of the same transaction.
Tamara Zaliznyak, a Moody's analyst, said the ratings are based on
the credit support provided through subordination, the integrity
of the cash flows, and the legal structure of the transaction.
The securitization is backed by prime quality hybrid and
adjustable-rate jumbo mortgage loans, which were mostly originated
or acquired by Thornburg Mortgage Home Loans, Inc in accordance
with their underwriting guidelines. The credit quality of the
loan pool is in line with the resent Thornburg securitizations.
The pool has weighted average FICO score of 741 and weighted
average LTV of 68%. The average loan balance is approximately
$518,058.
Thornburg Mortgage Home Loans and First Republic Bank will service
approximately 95.46% of the loans and Wells Fargo Bank, N.A. will
act as master servicer.
The complete rating actions are as follows:
Thornburg Mortgage Securities Trust 2004-4
Mortgage Loan Pass-Through Certificates, Series 2004-4
* $354,186,000 Class I-A , rated Aaa
* Interest Only Class I-AX , rated Aaa
* $221,244,000 Class II-A , rated Aaa
* Interest Only Class II-AX , rated Aaa
* $295,636,000 Class III-A , rated Aaa
* Interest Only Class III-AX , rated Aaa
* $87,680,000 Class IV-A , rated Aaa
* Interest Only Class IV AX , rated Aaa
* $139,057,000 Class V-A , rated Aaa
* Interest Only Class V AX , rated Aaa
* $50 Class R-I , rated Aaa
* $50 Class R-II , rated Aaa
* $14,168,000 Class B-1 , rated Aa2
* $9,068,000 Class B-2 , rated A2
* $5,101,000 Class B-3 , rated Baa2
* $2,267,000 Class B-4 , rated Ba2
* $1,700,000 Class B-5 , rated B2
TORCH OFFSHORE: Taps King & Spalding as Bankruptcy Co-Counsel
-------------------------------------------------------------
Torch Offshore, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Eastern District of Louisiana for
permission to employ King & Spalding LLP as their general
bankruptcy co-counsel.
King & Spalding is expected to:
a) provide legal advice to the Debtors with respect to their
powers and duties as debtors in possession in the continued
management and operation of their businesses and properties;
b) attend meetings with representatives of their creditors and
other parties in interest;
c) take all necessary action to protect and preserve the
Debtors' estates, including:
(i) the prosecution of actions on the Debtors' behalf,
(ii) the defense of any action commenced against the
Debtors, and
(iii) negotiations concerning litigation in which the
Debtors are involved and objections to claims
filed against the Debtors' estates;
d) prepare on behalf of the Debtors motions, applications,
answers, orders, reports, and papers necessary to the
administration of the Debtors' estates;
e) negotiate and prepare on the Debtors' behalf a plan of
reorganization, a disclosure statement, and all related
agreements and documents, and take any necessary action on
behalf of the Debtors to obtain confirmation of the plan;
f) appear before the Court to protect the interests of the
Debtors; and
g) perform all other necessary legal services and legal advice
to the Debtors in connection with their chapter 11 cases.
Lawrence A. Larose, Esq., a Member at King & Spalding, is the lead
attorney for the Debtors. Mr. Larose discloses that the Firm
received a $150,000 retainer. Mr. Larose will bill the Debtors
$625 per hour for his services.
Mr. Larose reports King & Spalding's professionals bill:
Professional Designation Hourly Rate
------------ ----------- -----------
George B. South Counsel $605
Gary A. Saunders Counsel 515
Mr. Larose reports King & Spalding's other professionals bill:
Designation Hourly Rate
----------- -----------
Attorneys $225 - 650
Paralegals 150 - 170
King & Spalding assures the Court that it does not represent any
interest adverse to the Debtors or their estates.
Headquartered in Gretna, Louisiana, Torch Offshore, Inc., provides
integrated pipeline installation, sub-sea construction and support
services to the offshore oil and gas industry, primarily in the
Gulf of Mexico. The Company and its debtor-affiliates filed for
chapter 11 protection (Bankr. E.D. La. Case No. 05-10137) on
Jan. 7, 2005. Jan Marie Hayden, Esq., at Heller, Draper, Hayden,
Patrick & Horn, L.L.C., represents the Debtors in their
restructuring efforts. When the Company filed for protection from
its creditors, it listed $201,692,648 in total assets and
$145,355,898 in total debts.
TORCH OFFSHORE: Wants Until Feb. 21 to File Bankruptcy Schedules
----------------------------------------------------------------
Torch Offshore, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Eastern District of Louisiana for more
time to file their Schedules of Assets And Liabilities, Statement
Of Financial Affairs, Schedules Of Current Income And
Expenditures, And Schedules Of Executory Contracts and Unexpired
Leases. The Debtor wants until February 21, 2005, to file those
documents.
The Debtors give the Court three reasons militating in favor for
an extension to file their bankruptcy schedules:
a) the complexity and diversity of the Debtors' business
operations and limited manpower will make them unable to
complete and file their Schedules and Statement within 15
days after the Petition Date as required by Bankruptcy Rule
1007(c);
b) the Debtors must compile information from books, records and
documents relating to a multitude of transactions at two
locations in the U.S. and with respect to a number of
different vessels; and
c) since the Petition Date, the Debtors' time and resources
have been focused on obtaining financing of their ongoing
business operations and addressing operations and employee
related issues in relation with their chapter 11 cases.
The Debtors assure the Court that the requested extension will
give them more time in working diligently with their professional
advisors and other employees in expediting the preparation and
completion of their Schedules and Statements.
Headquartered in Gretna, Louisiana, Torch Offshore, Inc., provides
integrated pipeline installation, sub-sea construction and support
services to the offshore oil and gas industry, primarily in the
Gulf of Mexico. The Company and its debtor-affiliates filed for
chapter 11 protection (Bankr. E.D. La. Case No. 05-10137) on
Jan. 7, 2005. Jan Marie Hayden, Esq., at Heller, Draper, Hayden,
Patrick & Horn, L.L.C., and Lawrence A. Larose, Esq., at King &
Spalding LLP represents the Debtors in their restructuring
efforts. When the Company filed for protection from its
creditors, it listed $201,692,648 in total assets and $145,355,898
in total debts.
UAL CORP: Asks Court to Bless Deal with Flight Controllers Union
----------------------------------------------------------------
UAL Corporation and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Northern District of Illinois for authorization to
enter into a Letter Agreement with the dispatchers represented by
the Professional Airline Flight Control Association.
The Debtors have been trying to modify collective bargaining
agreements with their unions for some time. On November 5, 2004,
the Debtors filed their motion pursuant to Section 1113(c) of the
Bankruptcy Code to reject the PAFCA collective bargaining
agreement, among others. However, the Debtors have repeatedly
stated that consensual agreements with the unions are preferable.
Also, on November 5, the Debtors presented their unions,
including the PAFCA, with opening proposals to modify the
collective bargaining agreements. Since that time, the Debtors
have engaged in intense discussions with the PAFCA's negotiating
committee to agree on a contract that would achieve the needed
cost reductions, while avoiding Section 1113(c) relief against
the PAFCA.
James H.M. Sprayregen, Esq., at Kirkland & Ellis, in Chicago,
Illinois, reports that the bargaining process was ultimately
successful. Dispatcher pay rates will be reduced by 5.2%,
effective January 1, 2005. Monthly rates will be reduced by an
additional 1.6% for January through June 2005. Following the
expiration of the temporary reduction, dispatcher wage rates will
not increase again until 2006.
If the Debtors seek to terminate the United Airlines Management,
Administrative and Public Contact Defined Benefit Pension Plan,
which governs the PAFCA pension, the PAFCA will waive any claims
that the termination violates its collective bargaining
agreement. The PAFCA will not oppose the Debtors' termination
efforts. If the Plan is terminated, the Debtors will make an
additional monthly contribution to the PAFCA's defined
contribution plan equal to 5% of dispatcher compensation.
The PAFCA will share in the Debtors' recovery. The PAFCA's
members will be rewarded through a profit-sharing program if the
Debtors' results exceed specified profit margins. Under any plan
of reorganization proposed by the Debtors, the PAFCA will receive
$400,000 in Convertible Notes and percentage distributions of
equity or other consideration provided to general unsecured
creditors. The Debtors will also reimburse the PAFCA for certain
reasonable fees and expenses. This will motivate the Debtors'
dispatchers to provide high quality service while restructuring
imperatives continue.
If the PAFCA Letter Agreement is terminated, the PAFCA will be
entitled to an allowed administrative expense under Section
503(b) equal to the cash savings provided to the Debtors from the
Effective Date through termination. The PAFCA will not be
entitled to the claim if its pension is maintained.
Mr. Sprayregen says the Court should approve the PAFCA Letter
Agreement. The terms were reached after careful deliberation and
extensive, intense and complex negotiations. The modifications
equitably address the financial, transformational and labor
relations imperatives facing the Debtors in a cooperative manner.
The PAFCA Letter Agreement will help the Debtors achieve near-
term earnings improvements, satisfy DIP financing covenants,
obtain exit financing and cope with the current difficult airline
industry environment.
Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the
holding company for United Airlines -- the world's second largest
air carrier. The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts. (United Airlines
Bankruptcy News, Issue No.72; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
UAL CORPORATION: Wells Fargo Holds Allowed $4.1 Million Claim
-------------------------------------------------------------
Wells Fargo Bank is Security Trustee, acting on behalf of UFJ
Bank Limited, New York Branch, as Lender to a Leveraged Lease.
The Leveraged Lease finances a Boeing 777-222 aircraft with Tail
No. N775UA. Wells Fargo filed Claim No. 36512 in an unliquidated
amount against UAL Corporation and its debtor-affiliates. As a
result of negotiations, the parties have agreed to resolve matters
relating to the Claim.
The Claim will be amended and replaced by a Participation
Agreement, which provides for an aggregate Claim amount of
$4,100,000. Judge Wedoff has approved the Stipulation.
Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the
holding company for United Airlines -- the world's second largest
air carrier. The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts. (United Airlines
Bankruptcy News, Issue No. 71; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
ULTIMATE ELECTRONICS: Files for Chapter 11 Protection in Delaware
-----------------------------------------------------------------
Ultimate Electronics, Inc., (Nasdaq: ULTEE) voluntarily filed to
reorganize under Chapter 11 of the U.S. Bankruptcy Code in order
to provide it with the necessary time to complete an operational
and financial restructuring.
The Company also entered into a Stock Purchase Agreement with Mark
Wattles Enterprises, LLC, to purchase 6.85 million shares of
Company common stock for $4.4 million and a two-year Option
Agreement with Wattles to purchase 1.85 million shares of Company
common stock for $1.2 million. The Company has received a
commitment for up to $113 million in debtor-in-possession from
Wells Fargo Retail Finance and $5.6 million in
debtor-in-possession financing from Wattles.
The Company said the filing in U.S. Bankruptcy Court for the
District of Delaware will allow it to continue business operations
while the Company works with Mr. Wattles to formulate the
restructuring plan. The postpetition financing, which is subject
to Bankruptcy Court approval, is expected to provide the Company
with funding to support its post-petition trade and employee
obligations, as well as the Company's ongoing operating needs
during the restructuring process.
In addition, in support of the transaction, the Company's founder
and Chairman of the Board, William J. Pearse, has entered into a
two-year Option Agreement to sell 1.8 million shares of Company
common stock to Wattles with an exercise price of the lower of
$.65 or the average closing stock price for the five-day period
preceding the date of exercise and a Voting Agreement to allow
Wattles to vote the shares that are subject to the option.
Various Pearse family trusts have also entered into a Voting
Agreement with respect to their shares of Company common stock to
allow Wattles to vote their shares. Pursuant to the terms of the
Stock Purchase Agreement, all of the Company's directors,
including Mr. Pearse, have resigned from the Company's Board of
Directors effective as of the closing of the transaction, which
occurred earlier today, and Mark J. Wattles has been named the
Chairman of the Board.
"After weighing all available alternatives, we believe this is the
best solution for Ultimate to remain a viable business going
forward," said Dave Workman, Ultimate Electronics' President and
Chief Executive Officer. "We welcome the significant retail
experience and resources that Mr. Wattles brings to our current
situation. We look forward to working with him as we position the
company for future profitability."
"As a retailer, I've always admired the Ultimate Electronics and
Soundtrack chains," said Mark J. Wattles, the Company's new
Chairman of the Board. "I'm excited to be part of this company's
future and am committed to seeing it return to the growth company
it was."
In conjunction with the filing, the Company filed a variety of
"first day motions":
(1) to support its employees, vendors, customers and other
stakeholders;
(2) to obtain interim financing authority and maintain existing
cash management programs;
(3) to retain legal, financial and other professionals;
(4) to support the company's reorganization case; and
(5) for other relief.
The Company expects that during the restructuring process,
vendors, suppliers and other business partners will be paid under
normal terms for goods and services provided during the
reorganization.
During this process, the Company expects to continue to provide
the same high-quality goods and services as it has in the past.
All stores are currently open and serving customers. In its first
day motions, the Company has requested authority from the
Bankruptcy Court to continue to honor its customer service
policies, such as returns, exchanges, credits and layaway programs
at each store location. Further, the Company has requested
authority from the Bankruptcy Court to continue to pay employee
wages and salaries, to offer the same medical, dental, life
insurance, disability and other benefits and to accrue vacation
time without interruption.
Headquartered in Thornton, Colorado, Ultimate Electronics, Inc. --
http://www.ultimateelectronics.com/-- is a specialty retailer of
consumer electronics and home entertainment products located in
the Rocky Mountain, Midwest and Southwest regions of the United
States. The Company operates 65 stores and focuses on mid- to
high-end audio, video, television and mobile electronics products.
The Company and six affiliates filed for chapter 11 protection on
January 11, 2005 (Bankr. D. Del. Lead Case No: 05-10104). Gregg
M. Galardi, Esq., & J. Eric Ivester, Esq., at Skadden, Arps,
Slate, Meagher & Flom, LLP, represent the Debtors in their
restructuring efforts. When they filed for bankruptcy protection,
the Debtors reported assets amounting to $329,106,000 and debts
amounting to $160,590,000.
ULTIMATE ELECTRONICS: Case Summary & Largest Unsecured Creditors
----------------------------------------------------------------
Lead Debtor: Ultimate Electronics, Inc.
321 West 84th Avenue, Suite A
Thornton, Colorado 80260
Bankruptcy Case No.: 05-10104
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Fast Trak, Inc. 05-10106
Ultimate Intangibles Corporation 05-10108
Ultimate Leasing Corporation 05-10109
Ultimate Electronics Partners Corporation 05-10110
Ultimate Electronics Leasing LP 05-10112
Ultimate Electronics Texas LP 05-10113
Type of Business: The Debtor is a specialty retailer of
consumer electronics and home entertainment
products located in the Rocky Mountain, Midwest
and Southwest regions of the United States.
The Company operates 65 stores and focuses on
mid- to high-end audio, video, television and
mobile electronics products.
See http://www.ultimateelectronics.com/
Chapter 11 Petition Date: January 11, 2005
Court: District of Delaware
Judge: Peter J. Walsh
Debtors' Counsel: Gregg M. Galardi, Esq.
J. Eric Ivester, Esq.
Skadden, Arps, Slate, Meagher & Flom, LLP
One Rodney Square
Wilmington, Delaware 19899
Tel: (302) 651-3000
Fax: (302) 651-3001
Special
Corporate
Counsel: Hogan & Hartson L.L.P.
1200 17th Street, Suite 1500
Denver, Colorado 80202
Restructuring
Advisor: FTI Consulting, Inc.
Consolidated Financial Condition as of October 31, 2004:
Total Assets: $329,106,000
Total Debts: $160,590,000
Consolidated List of Debtor's 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Monster Cable Products, Inc. Trade $6,631,240
455 Valley Drive
Brisbane, California 94005
Attn: Noel Lee
The Head Monster
Phone: (415) 840-2000
Fax: (415) 468-0311
Monster LLC Trade $4,225,091
455 Valley Drive
Brisbane, California 94005
Attn: Noel Lee
The Head Monster
Phone: (415) 840-2000
Fax: (415) 468-0311
Vertis Contract $3,060,801
250 West Pratt Street
Baltimore, Maryland 21201
Attn: Luke Brandonisio,
Corporate, Director of Credit
Phone: (410) 361-8659
Fax: (410) 454-0887
Klipsch, LLC Trade $1,514,030
3502 Woodview Trace, Suite 200
Indianapolis, Indiana 46269
Attn: Nancy Mills
Senior Vice President
Phone: (317) 860-8100
Fax: (317) 860-9178
Denon Electronics Trade $1,433,525
19 Chapin Road
P.O. Box 864
Pinebrook, New Jersey 07058
Attn: John Henderson
National Credit
Manager, D&M Holdings US Inc.
Phone: (973) 396-0810
Fax: (973) 396-7455
Sharp Electronics Corporation Trade $1,285,838
Sharp Plaza
Mahwah, New Jersey 07430
Attn: Warren V. Ciafardini,
Associate Director of Credit
Phone: (201) 529-8773
Fax: (201) 684-6021
Yamaha Electronics Corporation Trade $1,220,726
6660 Orangethorpe Avenue
Buena Park, California 90620
Attn: Aurora Castro,
Senior Regional Credit Manager
Phone: (714) 522-9258
Fax: (714) 522-9961
Winthrop Resources Corporation Contract $1,209,253
11100 Wayzatta Boulevard, Suite 800
Minnetonka, Minnesota 55305
Attn: Richard Pieper
Phone: (952) -936-0226
Fax: (952) -936-0201
Sony Electronics, Inc. Trade $1,158,927
218 Route 17 North, 4th Floor
Rochelle Park, New Jersey 07662
Attn: Kenneth Frisco
Senior Financial Services Manager
Phone: (201) 599-3506
Fax: (201) 930-7782
Definitive Technology, LLP Trade $1,043,555
11433 Cronridge Drive, Suite K
Owings Mills, Maryland 21117
Attn: Sandy Gross, President
Phone (410): 363-7148
Fax: (410) 363-9998
Apple Computer Trade $1,009,474
1 Infinite Loop
Cupertino, California 95014
Attn: Alyssa McBay
Phone: (408) 996-1010
Fax: (408) 974-2113
Infinity Systems, Inc. Trade $922,429
250 Crossways Park Drive
Woodbury, New York 11797
Attn: Chet Simon
Senior Vice President, Finance
Phone: (516) 682-6403
Fax: (516) 682-3502
Audiovox Corporation Trade $817,385
150 Marcus Boulevard
PO Box 18000
Hauppauge, New York 11788
Attn: Loriann Shelton, CFO
Phone: (800) 645-7750
Fax: (631) 434-3995
Funai Corporation Trade $735,779
19900 Van Ness Avenue
Torrence, California 90501
Attn: Augstine Fraga
Credit Manager
Phone: (310) 787-3000 ext. 219
Fax: (310) 320-0634
KEF America, Inc. Trade $633,379
10 Timber Lane
Marlboro, New Jersey 07746
Attn: Alec Chanin, President
Phone: (732) 683-2356
Fax: (732) 683-2358
Alpine Electronics of America Trade $621,058
19145 Gramercy Place
PO Box 2859
Torrance, California 90501
Greg Gaconi
Corporate Credit Manager
Phone: (213) 326-8000
Fax: (310) 782-8127
Pioneer Electronics USA Trade $616,442
2265 East 220th Street
Long Beach, California 90801
Attn: Gary H. Hickman
Vice President Corporate Credit
Phone: (310) 952-2256
Fax: (310) 952-2199
Bose Corporation Trade $564,551
The Mountain
Framingham, Massachusetts 01701
Attn: Colleen Caldwell
Credit Manager
Phone: (508) 766-9251
Fax: (508) 766-9611
Delphi Product & Service Trade $554,434
1441 West Long Lake Road
Troy, Michigan 48098
Attn: Nancy Carbaugh
Phone: (248) 267-8655
Fax: (248) 267-8877
Philips Consumer Electronics Trade $456,195
64 Perimeter Center East
Atlanta, Georgia 30346
Attn: Jay Tate, Credit Manager
Phone: (770) 821-3205
Fax: (770) 821-3266
Terk Technologies Corporation Trade $451,876
63 Mall Drive
Commack, New York 11725
Attn: Lucille Jupiter
AR Administrator
Phone: (631) 543-1900
Fax: (631) 543-8088
Eastman Kodak Trade $450,726
343 State Street
Rochester, New York 14650
Attn: Terry Kirkpatrick
Phone: (525) 724-4000
Fax: (585) 724-1089
Omnimount Trade $399,498
8201 South 48th Street
Phoenix, Arizona 85044
Attn: Claudia Rios
Phone: (480) 829-8000
Fax: (480) 756-9000
Ingram Entertainment Trade $388,445
12600 Southeast Highway 212
Building B
Clackamas, Oregon 97015
Attn: Gene Zimmerman
Regional Vice President
Western Region
Phone: (503) 722-0771 ext. 6992
Fax: (615) 287-4982
Rockford Corporation Trade $381,027
600 South Rockford Drive
Tempe, AZ 85281
Attn: Wayne Erting
Phone: (480) 517-3085
Fax: (480) 966-3983
St Louis Post-Dispatch Trade $376,952
900 North Tucker Boulevard
St. Louis, Missouri 63101
Attn: Ann Kealing
Phone: (314) -340-8462
Fax: (314)-340-3125
Directed Electronics, Inc. Trade $375,355
1 Viper Way
Vista, California 92083
Attn: Merry Steck
Phone: (800) 876-0800 ext 1247
Fax: (760) 599-1355
Kenwood USA Corporation Trade $323,150
2201 East Dominguez Street
Long Beach, California 90810
Attn: Patricia Boyd
Phone: (310) 761-8312
Fax: (310) 669-9850
Thales Navigation Trade $284,612
471 El Camino Real
Santa Clara, California 95050
Attn: Karen Breilien
Phone: (909) 394-6046
Fax: (909) 394-7070
Tomax Trade $260,174
224 South 200 Street
Salt Lake City, Utah 84101
Attn: Eric Olafson, President
Phone: (801) 990-0909
Fax: (801) 924-3400
US AIRWAYS: Galileo Wants $4 Million Administrative Expense Paid
----------------------------------------------------------------
Galileo International, L.L.C., asks the U.S. Bankruptcy Court for
the Eastern District of Virginia to:
(a) allow and direct payment of its administrative expense;
and
(b) compel US Airways, Inc., and its debtor-affiliates to assume
or reject their Global Airline Distribution Agreement dated
December 16, 1993.
Pursuant to the Agreement, the Debtors paid Galileo to display
schedules and fares, build connections, display flight
availability status and provide booking capability. The Debtors
provided Galileo with complete, timely and accurate data. Galileo
submitted monthly invoices to the Debtors for charges and other
sums due under the Agreement.
Galileo was allowed to settle its invoices through the Airline
Clearing House, a common practice in the airline industry. Scott
A. Zuber, Esq., at Pitney Hardin, in Morristown, New Jersey,
explains that the ACH is merely an electronic means of
transferring funds. An airline that is invoiced through the ACH
may dispute the invoice by completing a Rejection Memo. The
Rejection Memo explains why the billing is not acceptable, along
with supporting information. If the parties cannot reach an
agreement, a trier of fact determines the matter.
On the bankruptcy petition date, the Debtors owed Galileo
$4,019,516 for August 2004 and September 1, 2004 through September
11, 2004 services. On September 12, 2004, the Debtors sought
permission to pay their Critical Vendors, which included Galileo.
Pursuant to the authority granted by the Court, the Debtors paid
Galileo $4,019,516. Later, Galileo was notified by the ACH that,
nearly two months after payment, the Debtors rejected the invoices
for $4,019,516. As a result, the ACH set off $4,019,516 against
amounts due by the Debtors to Galileo on account of postpetition
services. The Debtors' basis for rejection of the invoices was
that the payment was made on account of prepetition services.
Galileo continues to provide the Debtors with postpetition
services.
Mr. Zuber asserts that the rejection of the invoices was "improper
and legally unjustifiable." The Debtors owe Galileo $4,019,516.
Galileo is entitled to the allowance and payment of an
administrative expense. The Court should compel the Debtors to
assume or reject the Agreement. In the alternative, the automatic
stay should be lifted to allow Galileo to terminate the Agreement.
The Debtors have had ample time to make a prudent decision about
Galileo's services. Uncertainty over the Agreement has left
Galileo in doubt about its status with the Debtors and its future
operations.
Galileo clearly stands to suffer greater hardship, Mr. Zuber says.
Galileo will be forced to perform services for which it has not
been paid $4,019,516 postpetition. Meanwhile, the Debtors will
continue to enjoy the benefits of Galileo's services.
Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of:
* US Airways, Inc.,
* Allegheny Airlines, Inc.,
* Piedmont Airlines, Inc.,
* PSA Airlines, Inc.,
* MidAtlantic Airways, Inc.,
* US Airways Leasing and Sales, Inc.,
* Material Services Company, Inc., and
* Airways Assurance Limited, LLC.
Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts. In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts. (US Airways Bankruptcy News, Issue
No. 77; Bankruptcy Creditors' Service, Inc., 215/945-7000)
USGEN: Judge Mannes Approves Skadden Employment as Special Counsel
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maryland gave USGen
New England, Inc., permission to employ Skadden, Arps, Slate,
Meagher, & Flom, LLP, and its affiliated law practice entities as
special regulatory counsel. Skadden Arps will provide USGen with
legal services solely in connection with litigation pending at the
Federal Energy Regulatory Commission concerning "Locational ICAP"
captioned Devon Power, LLC, Docket No. ER03-563.
Headquartered in Bethesda, Maryland, USGen New England, Inc., an
affiliate of PG&E Generating Energy Group, LLC, owns and operates
several electric generating facilities in New England and
purchases and sells electricity and other energy-related products
at wholesale. The Debtor filed for Chapter 11 protection on July
8, 2003 (Bankr. D. Md. Case No. 03-30465). John E. Lucian, Esq.,
Marc E. Richards, Esq., Edward J. LoBello, Esq., and Craig A.
Damast, Esq., at Blank Rome, LLP, represent the Debtor in their
restructuring efforts. When it sought chapter 11 protection, the
Debtor reported assets amounting to $2,337,446,332 and debts
amounting to $1,249,960,731.
VALOR TELECOM: S&P Puts Low-B Ratings on CreditWatch Positive
-------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Valor
Telecommunications LLC ('B+' corporate credit rating) -- a rural
local exchange company -- on CreditWatch with positive
implications. The CreditWatch placement is due to the company's
potential deleveraging efforts resulting from a proposed initial
public offerings, as indicated in a recent Form S-1 filing with
the SEC. S&P's resolution of the CreditWatch listings will
depend on the ultimate size of the IPO and the capital structure.
In reviewing the company, S&P will assess the impact of the cash
dividend associated with the common stock on free cash flow and
the ability to meet debt maturities and longer-term competitive
pressures.
"The RLEC industry has experienced limited competition to date
because of the demographics of its service area, relatively stable
cash flows, and healthy EBITDA margins in the 50% area," said
Standard & Poor's credit analyst Rosemarie Kalinowski. "Annual
access line losses, generally in the 2%-3% range, have resulted
from the replacement of second lines with digital subscriber line
-- DSL -- and a slow economic recovery. However, the replacement
of second lines by DSL results in higher incremental revenue.
Since the majority of the RLECs' network upgrades have been
completed, capital expenditures are not anticipated to be
significant in the near term."
VERITAS DGC: Questerre Files Statement of Claim in Alberta
----------------------------------------------------------
Questerre Energy Corporation (TSX:QEC) filed a statement of claim
against Veritas DGC, Inc., and Veritas Energy Services, Inc.
The claim filed in the Court of Queen's Bench of Alberta relates
to seismic processing services provided by Veritas to Questerre
and its wholly owned subsidiary, Questerre Beaver River Inc.
About Questerre Energy
Questerre Energy Corporation is a Calgary-based independent
resource company actively engaged in the exploration for and
development, production and acquisition of large-scale natural gas
projects in Canada.
On April 1, 2004, Questerre Energy's wholly owned subsidiary,
Questerre Beaver River, Inc., applied for and was granted an order
by the Court of Queen's Bench of Alberta providing for creditor
protection under the Companies' Creditors Arrangement Act.
On June 22, 2004, Questerre Energy sought and was granted
protection under the CCAA and was added as a petitioner in
Questerre Beaver's CCAA proceedings.
On August 9, 2004, Questerre Energy filed Plans of Compromise or
Arrangement for Questerre Energy and Questerre Beaver under the
CCAA for the settlement of all outstanding claims. Pursuant to
the Plans proposed by Questerre Energy and Questerre Beaver,
unsecured creditors would receive either the lesser of the amount
of their claim or $2,000. Alternatively, unsecured creditors
could elect instead to receive a cash dividend of $0.05 plus one
Common Share of Questerre Energy for each dollar of their claim.
The Common Shares of Questerre Energy would be subject to a
contractual escrow and released in two equal installments on the
four and eight-month anniversary of the date the Plans received
final Court approval.
The Plans were approved by the requisite majority of unsecured
creditors at meetings of creditors of Questerre Beaver and
Questerre Energy held on August 31, 2004. The Plans were
subsequently sanctioned by the Court of Queen's Bench of Alberta
on September 9, 2004. A total of $0.56 million in cash and
9,623,012 Common Shares of Questerre Energy were issued on the
implementation of these Plans. Questerre Energy and Questerre
Beaver subsequently emerged from Court protection on
October 8, 2004.
Veritas DGC Inc., headquartered in Houston, Texas, is a leading
provider of integrated geophysical, geological and reservoir
technologies to the petroleum industry worldwide.
* * *
As reported in the Troubled Company Reporter on March 2, 2004,
Standard & Poor's Ratings Services affirmed its ratings on Veritas
DGC Inc. (BB+\Negative\--) following the company's announcement
that it will refinance a large portion of its secured debt by
issuing new unsecured convertible notes. The outlook remains
negative.
W.R. GRACE: United States Trustee Objects to Disclosure Statement
-----------------------------------------------------------------
Roberta A. DeAngelis, the Acting United States Trustee for Region
3, complains that:
(a) The Disclosure Statement filed by W.R. Grace & Co., and
its debtor-affiliates to explain their chapter 11 Plan
does not adequately explain and support the proposed
treatment of asbestos claimants in that it asserts that
these claimants are unimpaired and will be paid in full
but does not fully explain the basis on which they can
conclude that the payments will be fully funded;
(b) The procedures described in the Disclosure Statement and
the Plan for objecting to claims after confirmation are
contrary to law to the extent that they purport to divest
the U.S. Trustee and other parties of statutory rights to
object to claims that are provided for under Section 502
of the Bankruptcy Code or otherwise. In particular, but
without limitation, the U.S. Trustee objects to the extent
that the Debtors seek to preclude the U.S. Trustee or
other interested parties from objecting to applications
for final professional compensation as well as
applications for "substantial contribution" awards or the
like. Because final professional fee applications, as
well as applications for administrative claim awards in
the nature of substantial contribution awards under
Section 503(b) of the Bankruptcy Code, may not all be
filed until after the Plan Effective Date, this provision
would have the effect of divesting the U.S. Trustee of the
right and power to review and object to professional fees
in the case, which the U.S. Trustee enjoys pursuant to
numerous statutory provisions, including Sections 586
(a)(3)(A) and (G) of the Judicial Procedures Code, and
Sections 307 and 502(a) of the Bankruptcy Code;
(c) The procedures described in the Disclosure Statement and
in the Plan regarding the disallowance of certain claims
are contrary to law. Taken literally, the provision that
the Confirmation Order "shall constitute an order
disallowing all Claims (other than Asbestos Claims) to the
extent such Claims are not allowable under any provision
of Bankruptcy Code S502" would mean that the mere filing
of an objection to any claim on the day before
confirmation would result in the claim being permanently
disallowed and discharged, without the necessity for
adjudicating the objection. This section also appears to
cut off arbitrarily the rights of holders of claims for
reimbursement or contribution to have their claims fixed
and determined under Section 502(e)(2) of the Bankruptcy
Code;
(d) The Disclosure Statement proposes a plan that is
unconfirmable as a matter of law, in that the Plan
purports to release claims of unsecured creditors and
interest holders against numerous third parties without
requiring the express consent of the parties to these
releases. Releases of third-party claims cannot be
accomplished without "the affirmative agreement of the
creditor affected." Linking the release to an affirmative
vote or to a receipt of distributions is not permissible.
Furthermore, the release appears to be quite overbroad in
that taken literally, the injunction would bar any claim
that any creditor has against any party that is released
under the Plan, including apparently claims having nothing
to do with the Debtors or the case; and
(e) The exculpatory provision of the Plan is contrary to law
in that it is facially overbroad and does not comport with
Third Circuit authority, because it does not except from
the exculpation liability for gross negligence or willful
misconduct.
Headquartered in Columbia, Maryland, W.R. Grace & Co., --
http://www.grace.com/-- supplies catalysts and silica products,
especially construction chemicals and building materials, and
container products globally. The Company and its debtor-
affiliates filed for chapter 11 protection on April 2, 2001
(Bankr. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at
Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, represent the Debtors in
their restructuring efforts. (W.R. Grace Bankruptcy News, Issue
No. 77; Bankruptcy Creditors' Service, Inc., 215/945-7000)
WESTERN WIRELESS: S&P Places B- Ratings on CreditWatch Positive
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings for Little
Rock, Arkansas-based diversified telecommunications provider
ALLTEL Corp., including the 'A' long-term and 'A-1' short-term
corporate credit ratings, and related entities on CreditWatch with
negative implications. At the same time, ratings for Bellevue,
Washington-based regional wireless communications provider Western
Wireless Corp., including the 'B-' corporate credit rating, were
placed on CreditWatch with positive implications. These actions
follow today's announced agreement by ALLTEL to purchase Western
Wireless in a stock and cash transaction.
Under the terms of the pending merger, ALLTEL will acquire the
stock of Western Wireless for approximately $3.5 billion of stock
and $1.0 billion of cash. ALLTEL will also assume Western
Wireless' net debt, which is expected to total about $1.5 billion
at closing. The additional debt could place some incremental
pressures on ALLTEL's credit measures in the near term.
Standard & Poor's will meet with management to discuss their
financing and integration plans for these properties in evaluating
the impact of this transaction on the ratings. "ALLTEL has been
consistently improving its overall financial profile over the past
few years through a combination of wireless EBITDA growth and debt
pay-downs," noted Standard & Poor's credit analyst Catherine
Cosentino. "Net free cash flow from operations has provided the
source for the de-leveraging. As such, any downgrade in the
current ratings of ALLTEL is likely to be limited to one notch."
WESTPOINT STEVENS: Wants to Enter into Mariana & Columbia Leases
----------------------------------------------------------------
As part of their restructuring efforts, WestPoint Stevens, Inc.
and its debtor-affiliates determined it necessary to consolidate
certain of their non-profitable facilities to minimize associated
financial exposure. Thus, the Debtors have been searching for
suitable office and warehouse space within close proximity of
their Chipley, Florida and Abbeville, Alabama plants to relocate
their operations.
The Debtors seek the United States Bankruptcy Court for the
Southern District of New York's authority to enter into
nonresidential real property leases with:
(a) Arquette Development Corp. for the lease of a property in
Mariana, Florida; and
(b) HouseCalls International for the lease of a property in
Columbia, Alabama.
Marianna Lease
Following an extensive search of the area within close proximity
of their Chipley, Florida plant, the Debtors found a warehouse in
Marianna, Florida located at 3521 Russell Road that is suitable
for their warehousing and distribution requirements. As the area
surrounding the Debtors' Chipley, Florida plant is relatively
underdeveloped, the Mariana property is the most attractive
available space that can meet the Debtors' unique needs.
After extensive, arm's-length negotiations with Arquette, the
Debtors agreed to the terms of a real property lease. The
premises subject to the Marianna Lease will consist of a 260,000-
square foot warehouse facility, which the Debtors will convert to
suit their specific needs. The Marianna Lease will have a term of
three years with monthly rent of $43,333 payable during the first
year and $53,083 thereafter.
Columbia Lease
The Debtors also want to relocate certain of their operations to
an area in Alabama within close proximity of their Abbeville
sewing plant. Following an extensive search and analysis of the
real estate market in the area, the Debtors identified a 42,680-
square foot industrial office building located at 101 Industrial
Parkway in Columbia, Alabama, which is suitable for their needs.
The Debtors engaged in arm's-length negotiations with HouseCalls
on the terms of a real property lease. The parties agree that the
initial term of the Columbia Lease will be for one year with an
option for three one-year extensions. The rent under the lease is
$5,500 per month and it will increase by 10% for each renewal
period.
The Debtors believe that the Marianna Lease and the Columbia
Lease will offer them substantial flexibility as they continue to
pursue restructuring alternatives.
Headquartered in West Point, Georgia, WestPoint Stevens, Inc., --
http://www.westpointstevens.com/-- is the #1 US maker of bed
linens and bath towels and also makes comforters, blankets,
pillows, table covers, and window trimmings. It makes the Martex,
Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux
brands, as well as the Martha Stewart bed and bath lines; other
licensed brands include Ralph Lauren, Disney, and Joe Boxer.
Department stores, mass retailers, and bed and bath stores are its
main customers. (Federated, J.C. Penney, Kmart, Sears, and Target
account for more than half of sales.) It also has nearly 60 outlet
stores. Chairman and CEO Holcombe Green controls 8% of WestPoint
Stevens. The Company filed for chapter 11 protection on
June 1, 2003 (Bankr. S.D.N.Y. Case No. 03-13532). John J.
Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, represents the
Debtors in their restructuring efforts. (WestPoint Bankruptcy
News, Issue No. 36; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
WISTON XIV: U.S. Trustee Will Meet Creditors on February 4
----------------------------------------------------------
The United States Trustee for Region 20 will convene a meeting of
Wiston XIV Limited Partnership's creditors at 9:30 a.m., on
Feb. 4, 2005, at the U.S. Trustee Meeting Room, Roman L. Hruska
Courthouse, 111 South 18th Plaza in Omaha, Nebraska. This is the
first meeting of creditors required under 11 U.S.C. Sec. 341(a) in
all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Stilwell, Kansas, Wiston XIV Limited Partnership
and filed for chapter 11 protection on Jan. 5, 2005 (Bankr. D.
Nebr. Case No. 05-80037). Robert V. Ginn, Esq., at Brashear &
Ginn represents the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors, it estimated
assets between $10 million and $50 million and estimated debts
from $10 million to $50 million.
YUKOS OIL: Fulbright & Jaworski Files Supplemental Disclosure
-------------------------------------------------------------
As previously reported, Yukos Oil Company wants to employ
Fulbright & Jaworski, LLP, as bankruptcy counsel. The Debtor
selected Fulbright & Jaworski because the firm has substantial
expertise and experience in bankruptcy matters, and will be able
to provide the full range of services the Debtor needs in the
case.
Fulbright & Jaworski Files Supplement
On January 4, 2005, at the U.S. Trustee's request, Fulbright &
Jaworski supplemented its previous disclosure regarding its
representation of the Debtor in the Chapter 11 case.
A full-text copy of Fulbright & Jaworski's First Supplemental
Disclosure is available for free at:
http://bankrupt.com/misc/fulbright&jaworski_1stsupplementaldisc.pdf
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. (Yukos Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
* Navigant Adds Senior Level Professionals to National Practice
---------------------------------------------------------------
Navigant Consulting, Inc. (NYSE:NCI), a specialized independent
consulting firm providing litigation, financial, healthcare,
energy and operational consulting services to government agencies,
legal counsel and large companies facing the challenges of
uncertainty, risk, distress and significant change, reported that
seven new senior professionals have joined the Company's national
Corporate Finance practice. The new additions, in Navigant
Consulting's New York and Los Angeles offices, strengthen the
Company's service offerings in the areas of financial and
operational restructuring and valuation services.
"The addition of these senior level corporate finance
professionals adds breadth and experience to our practice's core
areas of focus and enhances the level of national service we can
provide our clients," stated Jon Berger, Managing Director of
Navigant Consulting's Corporate Finance practice. "We continue to
deliver on our goal of strategically placing Corporate Finance
assets where they can help build a dynamic, national practice
rooted in specialized knowledge and deep experience across a
variety of services, including financial and operational
restructuring, middle-market merger and acquisition advisory,
valuation and other core Corporate Finance related services."
The new members of Navigant Consulting's Corporate Finance
national team include:
-- Frank Conway brings more than 20 years of corporate
restructuring experience to his role as leader of Navigant
Consulting's Financial Restructuring team in New York.
Conway's experience has focused on assisting senior
executives and board members of troubled and financially
distressed companies as they seek to improve operating
performance. In addition, he has worked with creditor
constituencies and equity stakeholders to preserve or
improve enterprise value, restructure existing indebtedness
and evaluate strategic alternatives. Conway has led
numerous national and cross-boarder assignments across a
variety of industry segments. Prior to joining Navigant
Consulting, Conway served as the National Managing Director
of the Reorganization Services Group for Deloitte.
-- Ken Simon will lead the firm's Creditor Rights practice in
New York. Simon specializes in providing services to
unsecured creditors' committees and has been a financial
advisor to hundreds of committees over the past 22 years.
As a reorganization specialist, Simon is well versed in
analyzing cash flow projections, business plans and plans of
reorganization, evaluating the ongoing viability of troubled
companies and preparing comprehensive financial reports for
the benefit of creditors' committees. Prior to joining
Navigant Consulting, Simon led Deloitte's national Creditor
Rights practice.
-- Stephen Jones will lead the Valuation Services team
nationally and brings more than 20 years experiences in
consulting with Fortune 500 companies regarding mergers,
acquisitions, intellectual property and commercial damages.
His experience valuing intangible assets encompasses
patents, trademarks, licenses and royalty rates, as well as
copyrights and trade secrets. Prior to joining Navigant
Consulting, Jones led the Valuation Services Group for Kroll
Zolfo Cooper, and was a member of the Kroll Zolfo Cooper
Management Committee.
-- Jim Wilson joins Navigant Consulting from Kroll Zolfo
Cooper, where he was a Managing Director in the Financial
Services Group responsible for the Los Angeles market and
served as the National Technical Director for valuation
services. Wilson's expertise includes more than 20 years
experience in valuation consulting, primarily in the high
technology, information, telecommunication and biotech
industries.
-- Tim Croushore has nearly 20 years of valuation consulting
experience, with a range of industry expertise including
retail, entertainment, sports franchises and restaurant
industries. Prior to joining Navigant Consulting, Croushore
was a Partner with Deloitte, where he recently served as the
National Director of the Entertainment and Sports Valuation
practice, as well as the Pacific Southwest valuation leader
for the Restaurant/Consumer Business industry group.
-- Ben Gonzalez has joined Navigant Consulting as a Director in
the firm's Financial Restructuring practice in New York.
Gonzalez has more than 15 years of diverse operating and
corporate finance experience. Prior to joining Navigant
Consulting, Gonzalez was in the reorganization practices at
Deloitte and Alix Partners.
-- Jim Peko has joined Navigant Consulting as a Director in the
Financial Restructuring Practice in New York. Peko has more
than 15 years experience in restructuring and corporate
finance and specializes in assisting clients in evaluating
strategic alternatives with a focus on financial
restructuring. Prior to joining Navigant Consulting, Peko
served as a Senior Manager in the Reorganization Services
Group at Deloitte. He was also in the Corporate Finance
Group of The Nikko Securities Co., International.
About Navigant Consulting
Navigant Consulting, Inc. (NYSE:NCI) is a specialized independent
consulting firm providing litigation, financial, healthcare,
energy and operational consulting services to government agencies,
legal counsel and large companies facing the challenges of
uncertainty, risk, distress and significant change. The Company
focuses on industries undergoing substantial regulatory or
structural change and on the issues driving these transformations.
"Navigant" is a service mark of Navigant International, Inc.
Navigant Consulting, Inc. (NCI) is not affiliated, associated, or
in any way connected with Navigant International, Inc. and NCI's
use of "Navigant" is made under license from Navigant
International, Inc. More information about Navigant Consulting
can be found at http://www.navigantconsulting.com/
* Sen. Lawrence Borst Joins Baker & Daniels as Policy Consultant
----------------------------------------------------------------
Long-time Indiana State Sen. Lawrence M. Borst will join Baker &
Daniels as a senior public policy consultant effective Nov. 8,
2004. Sen. Borst, chairman of the Senate finance committee for
more than three decades, will work with the firm's state
government affairs group to advise clients on issues before the
Indiana General Assembly and other governmental entities.
Sen. Borst, who began his political career in 1961 in precinct and
ward politics, was first elected to the state Senate in 1968,
after serving two years in the Indiana House of Representatives.
His political career has been one of the longest in Indiana
history.
The senator is best known throughout Indiana for his leadership as
chairman of the Senate Finance Committee, a position he held under
five different governors. He's also the past chairman and a past
member of the Indiana State Budget Committee.
During his tenure in the legislature, Sen. Borst has been
recognized for his role in several major tax-restructuring plans,
the dedication of money from the tobacco settlement for public
health programs and securing a balanced budget requirement for the
state. He also played a key role in bringing pari-mutuel horse
racing to Indiana, creating the Hoosier Lottery and developing
Unigov, the 1969 legislation that combined much of Marion County
and the City of Indianapolis governments.
"Sen. Borst has a breadth of knowledge and experience with budget
and finance issues that is unsurpassed in the state," said Brian
Burke, firm managing partner. "Baker & Daniels is fortunate to
have Sen. Borst join our team of professionals. He will help our
clients understand these issues and develop effective strategies
to present their position on them to the legislature and other
government entities."
During his time in the Indiana General Assembly, Borst represented
District 36, which includes the south side of Marion County and
northern Johnson County.
Because of his success as a legislator, he has received numerous
awards, including being named the National Republication
Legislator of the Year by the National Republican Legislators
Association. A veterinarian, Borst began practicing veterinary
medicine in Indiana in 1952 and opened the Shelby Street Animal
Clinic in 1958. He has held various offices in national, state
and local veterinary associations, and was named Veterinarian of
the Year by the Indiana Veterinary Medical Association in 1988.
"I have dedicated my adult life to serving Indiana in two arenas -
practicing veterinary medicine and working for the citizens in my
Senate district," Sen. Borst said. "I am excited about assuming
this new role and the opportunity to do so at one of the state's
most respected law firms."
Founded in 1863, Baker & Daniels has nearly 400 professionals
serving clients in regional, national and international business
matters from its offices in Washington, D.C., Indiana and China.
For more information, visit http://www.bakerdaniels.com/
* Cadwalader Welcomes Peter Clark as New Litigation Partner
-----------------------------------------------------------
Peter Clark, the former Deputy Chief of the Fraud Section of the
Criminal Division of the US Department of Justice, has joined
Cadwalader, Wickersham & Taft LLP as a partner in its Litigation
Department, resident in the Washington, D.C. office.
Specifically, Mr. Clark joins the firm's nationally and
internationally renowned Business Fraud and Complex Litigation
Group. H. Lowell Brown, former Assistant General Counsel at
Northrop Grumman Corporation and outside compliance monitor for
several major corporations, Philip Urofsky, former Assistant Chief
of the Fraud Section of the Criminal Division of the US Department
of Justice, and Stephanie J. Meltzer, former Assistant United
States Attorney for the District of Columbia, have also joined the
firm as Special Counsel, resident in the Washington, DC office.
"Peter is an outstanding addition both to our DC office and our
litigation practice with extremely strong credentials," stated
Robert O. Link, Jr., Cadwalader's Chairman. "He, along with
Lowell, Philip, and Stephanie will continue the successful
expansion of Cadwalader's business fraud practice and litigation
department in our Washington DC office."
"Peter will provide support and greater depth to expand the
already successful compliance and Foreign Corrupt Practices Act
("FCPA") practices of Ray Banoun and Dale Turza," stated Gregory
A. Markel, Chairman of Cadwalader's Litigation Department. "With
experience in the securities enforcement area and as a highly
regarded prosecutor, he also enjoys a fine reputation in law
enforcement, at the SEC and in corporate circles," Mr. Markel
added.
Mr. Clark stated, "I look forward to working on the same side of
the table with Greg, Ray, Dale, Jim Robinson, Michael Horowitz and
Jonathan Polkes. This is perhaps the best and most comprehensive
team of litigators in this area today. I hope to be able to
expand the practice pursuing new fraud and FCPA opportunities
encountered by corporations on a global basis."
"Peter has a worldwide reputation in matters involving compliance
and international fraud generally," stated Raymond Banoun,
Managing Partner of Cadwalader's Washington DC office and Head of
the firm's Business Fraud and Complex Litigation Group. "He
played an important role in the eventual enactment of the Foreign
Corrupt Practices Act and the creation of the case law in that
area in the United States. He was also instrumental in the
negotiation and ultimate adoption in 1998 by the OECD of the
Convention on the bribery of public officials, and in the
extensive monitoring program conducted by the OECD Bribery Working
Group" Mr. Banoun added.
"Peter, along with Philip, Stephanie and Lowell each bring
valuable expertise and perspective with them. They join an
impressive group of partners and special counsel all actively
engaged in this area. No other firm can boast this breadth of
expertise in such a broad range of complex litigation matters,
white collar criminal actions, corporate governance litigation,
compliance and internal investigations," Mr. Banoun concluded.
Cadwalader's Business Fraud and Complex Litigation Group is
staffed by nationally and internationally recognized leaders in
the field. The group represents corporations, their boards of
directors, audit committees, and senior officers, law firms,
international bodies and individuals in federal and state
criminal, civil and administrative proceedings and litigation, as
well as in congressional investigations and hearings. The group
has extensive expertise in the areas of corporate compliance and
governance, having represented major international corporations,
banks, brokerage firms and investment banks.
Mr. Clark served as the Deputy Chief of the Fraud Section of the
Criminal Division of the US Department of Justice since 1991 and
was Senior Litigation Counsel in the Fraud Section between 1987
and 1991. Prior to 1991, he was Special Counsel in the Division
of Enforcement of the SEC from 1971 to 1979, the last two years of
which he was detailed to the Fraud Section of the US Department of
Justice where he successfully prosecuted the first transnational
bribery cases brought by the Government.
Prior to his service in government, Mr. Clark was with New York's
Hall, Casey, Dickler & Howley, where he worked on securities and
tax litigation matters. In 1971, he joined the SEC staff at the
request of William Casey, then SEC Chairman. He is a graduate of
Brown University and the University of Pennsylvania Law School.
Prior to joining Cadwalader in June, 2004, Mr. Brown was in
private practice. From 1991-2000, he was Assistant General
Counsel at Northrop Grumman Corporation where he headed all
investigations and compliance. His experience also includes
tenures as an Assistant United States Attorney in Washington, DC;
Assistant General Counsel at the Commodity Futures Trading
Commission; and partner at the law firm Heron, Burchette, Ruckert
& Rothwell in Washington, DC. Mr. Brown has served as special
outside compliance monitor for the Raytheon Company and other
corporations, and is a Director to Siemens Government Services,
Inc. He is the author of Bribery in International Commerce, A
Treatise on the FCPA published by Thompson-West. Mr. Brown
received a B.A. in Economics from Syracuse University in 1969 and
J.D. from Antioch School of Law in 1976.
Mr. Urofsky has served in the Department of Justice since 1992,
first as a Trial Attorney, later as a Special Counsel for
International Litigation, and finally as the Assistant Chief of
the Criminal Division. Mr. Urofsky successfully litigated several
major FCPA federal money laundering cases, criminal and
administrative appeals stemming from business fraud actions.
In addition to his extensive litigation experience, Mr. Urofsky
has broad ranging knowledge and expertise in international
business fraud issues. He earned both his B.A. and J.D. from the
University of Virginia, was a member of the Virginia Law Review
and graduated Order of the Coif. Following law school, he clerked
for the Hon. James M. Sprouse of the United States Court of
Appeals for the Fourth Circuit.
Ms. Meltzer was an associate in the Business Fraud and Complex
Litigation Group at Cadwalader from 1994 until 2000, when she was
appointed as an Assistant United States Attorney for the District
of Columbia where she served with great distinction. In that
capacity, Ms. Meltzer oversaw and directed fraud related
investigations involving a variety of government agencies,
including the Federal Bureau of Investigation, the Department of
State, the Department of Labor, the Department of the Treasury,
the Postal Inspection Service, the Secret Service, and the
Department of Housing and Urban Development. Ms. Meltzer earned
her B.A. from the University of Michigan and her J.D., cum laude,
from Tulane Law School, where she was on the editorial board of
the Tulane Law Review.
Cadwalader, Wickersham & Taft, established in 1792, is one of the
world's leading international law firms, with offices in New York,
Charlotte, Washington and London. Cadwalader serves a diverse
client base, including many of the world's top financial
institutions, undertaking business in more than 50 countries in
six continents. The firm offers legal expertise in
securitization, structured finance, mergers and acquisitions,
corporate finance, real estate, environmental, insolvency,
litigation, health care, banking, project finance, insurance and
reinsurance, tax, and private client matters. More information
about Cadwalader can be found at http://www.cadwalader.com/
* Dewey Ballantine Inks 15-Year Lease for New Washington Office
---------------------------------------------------------------
Dewey Ballantine LLP, an international law firm, has signed a 15-
year lease for 90,156 square feet at 975 F Street, N.W. (known as
Carroll Square) in Washington, D.C. The firm will move from its
current location at 1775 Pennsylvania Avenue N.W. into the newly-
constructed building by January 2007. As the building's anchor
tenant, Dewey Ballantine will have the opportunity to place its
branding on the exterior of the building. Real estate brokerage
firms Byrnam Wood, LLC, based in New York City, and West, Lane &
Schlager ONCOR International, based in Washington, D.C.,
negotiated the transaction on behalf of Dewey Ballantine.
Dewey Ballantine has pre-leased a portion of the first floor and
the entire concourse, second and sixth through ninth floors of
Carroll Square. Located adjacent to St. Patrick's Church in the
heart of Washington's prime East End submarket, the 160,000-
square-foot premier building will preserve the existing facades of
several historic row houses as part of the development of the
overall project.
"The firm's presence in Washington, D.C. has continually grown
since the office first opened in the early 1970s," said Alan
Wolff, International Trade Group head and managing partner of
Dewey Ballantine's Washington, D.C. office. "As we continue to
expand our practices, which include tax, international trade,
energy and intellectual property, and hire attorneys to service
our global clients, the new office space will provide the
infrastructure to achieve these goals. Both Byrnam Wood and West,
Lane & Schlager provided exceptional service throughout the lease
negotiation process. They were responsive and attentive to our
requirements and exhibited flexibility with regards to the lease
agreement terms."
Throughout the past two years, Dewey Ballantine has also
constructed new office space in East Palo Alto, Austin, London,
Milan, Rome and Frankfurt.
Joseph Thanhauser, chairman of Byrnam Wood said, "This lease is
unique in that it provides Dewey Ballantine with tight control of
occupancy costs and excellent flexibility with respect to space
requirements over the long term."
According to Richard Lane, a principal at West, Lane & Schlager
and its law firm specialist, "We are extremely pleased with both
the overall financial package and the expansion capabilities
afforded to Dewey Ballantine in this lease, especially given
Washington, D.C.'s current competitive market environment in which
large blocks of contiguous, Class-A space are extremely limited."
In addition to negotiating the 15-year lease for Dewey Ballantine,
the brokerage team provided extensive preliminary market analysis;
conducted an extensive search of the entire downtown Washington,
D.C. marketplace; performed comprehensive financial analysis; and
negotiated the letter of intent and lease.
About Dewey Ballantine
Dewey Ballantine LLP, founded in 1909, is an international law
firm with more than 550 attorneys and locations in New York,
Washington, D.C., Los Angeles, East Palo Alto, Houston, Austin,
London, Warsaw, Frankfurt, Milan, Rome and an associated office in
Prague. Through its network of offices, the firm handles some of
the largest, most complex corporate transactions, litigation and
tax matters in areas such as M&A, private equity, project finance,
corporate finance, corporate reorganization and bankruptcy,
antitrust, intellectual property, sports law, structured finance
and international trade. Industry specializations include energy
and utilities, healthcare, insurance, financial services, media,
consumer and industrial goods, consumer electronics, technology,
telecommunications and transportation.
About Byrnam-Wood
New York-based Byrnam Wood, LLC is a global real estate services
firm and a seven-time winner of the Real Estate Board of New
York's annual "Ingenious Deal of the Year" award.
About West, Lane & Schlager Realty Advisors
Founded in 1996, West, Lane & Schlager Realty Advisors, L.L.C., is
a full-service commercial real estate brokerage firm. The
independently owned company provides tenant services, landlord
services, investment services, and project management; and
specializes in the representation of law firms, not-for-profit
organizations, and local corporations. With ten brokers and
annual sales over $160 million, West, Lane & Schlager ranks among
the top brokerage firms in the Washington, D.C., metro area,
according to the Washington Business Journal. For additional
information about West, Lane & Schlager, visit
http://www.wlsrealty.com/
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
January 19, 2005
PRACTISING LAW INSTITUTE
Emerging Issues in Workouts & Bankruptcies
New York, NY
Contact: 1-800-260-4PLI; 212-824-5710 or info@pli.edu
February 9, 2005
NACHMAN HAYS BROWNSTEIN, INC.
Due Diligence Symposium 2005
Hilton Woodbridge, Iselin, New Jersey
Contact: 1-888-622-4297 or info@nhbteam.com
February 10-12, 2005
AMERICAN BANKRUPTCY INSTITUTE
10th Annual Rocky Mountain Bankruptcy Conference
Westin Tabor Center Denver, Colorado
Contact: 1-703-739-0800 or http://www.abiworld.org/
February 11, 2005
AMERICAN BANKRUPTCY INSTITUTE
Canadian-American Symposium on Cross Border Insolvency Law
Marriott Eaton Center, Toronto, Ontario
Contact: 1-703-739-0800 or http://www.abiworld.org/
March 2-3, 2005
PRACTISING LAW INSTITUTE
27th Annual Current Developments in Bankruptcy &
Reorganization
New York, NY
Contact: 1-800-260-4PLI; 212-824-5710; or info@pli.edu
March 3, 2005
AMERICAN BANKRUPTCY INSTITUTE
Bankruptcy Fundamentals: Nuts & Bolts for Young
Practitioners (L.A.)
The Century Plaza Los Angeles, California
Contact: 1-703-739-0800 or http://www.abiworld.org/
March 4, 2005
AMERICAN BANKRUPTCY INSTITUTE
12th Annual Bankruptcy Battleground West
Looking Ahead to the Next Bankruptcy Cycle
The Westin Century Plaza Hotel & Spa Los Angeles, Calif.
Contact: 1-703-739-0800 or http://www.abiworld.org/
March 9-12, 2005
TURNAROUND MANAGEMENT ASSOCIATION
2005 Spring Conference
JW Marriott Desert Ridge, Phoenix, Arizona
Contact: 312-578-6900 or http://www.turnaround.org/
March 10-12, 2005
AMERICAN BAR ASSOCIATION
Bench and Bar Bankruptcy Conference
Washington, DC
Contact: 800-238-2667-5147 or
http://www.abanet.org/jd/bankruptcy/
April 7-8, 2005
PRACTISING LAW INSTITUTE
27th Annual Current Developments in Bankruptcy &
Reorganization
San Francisco, CA
Contact: 1-800-260-4PLI; 212-824-5710 or info@pli.edu
April 13, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Mediation in Turnarounds & Bankruptcies
Milleridge Cottage Long Island, NY
Contact: 312-578-6900 or http://www.turnaround.org/
April 14-15, 2005
BEARD GROUP AND RENAISSANCE AMERICAN MANAGEMENT CONFERENCES
The Sixth Annual Conference on Healthcare Transactions
Successful Strategies for Mergers, Acquisitions,
Divestitures and Restructurings
The Millennium Knickerbocker Hotel, Chicago
Contact: 1-800-726-2524; 903-595-3800 or
dhenderson@renaissanceamerican.com
April 28, 2005
AMERICAN BANKRUPTCY INSTITUTE
Bankruptcy Fundamentals: Nuts & Bolts for Young
Practitioners (East)
J.W. Marriott Washington, D.C.
Contact: 1-703-739-0800 or http://www.abiworld.org/
April 28- May 1, 2005
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
J.W. Marriot, Washington, D.C.
Contact: 1-703-739-0800 or http://www.abiworld.org/
May 9, 2005
AMERICAN BANKRUPTCY INSTITUTE
New York City Bankruptcy Conference
Millenium Broadway New York, New York
Contact: 1-703-739-0800 or http://www.abiworld.org/
May 12-14, 2005
ALI-ABA
Fundamentals of Bankruptcy Law
Washington, D.C.
Contact: 1-800-CLE-NEWS or http://www.ali-aba.org/
May 12-14, 2005
ALI-ABA
Fundamentals of Bankruptcy Law
Santa Fe, NM
Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/
May 13, 2005
AMERICAN BANKRUPTCY INSTITUTE
Bankruptcy Fundamentals: Nuts & Bolts for Young
Practitioners (N.Y.C.)
Association of the Bar of the City of New York, New York
Contact: 1-703-739-0800 or http://www.abiworld.org/
May 19-20, 2005
BEARD GROUP AND RENAISSANCE AMERICAN MANAGEMENT CONFERENCES
The Second Annual Conference on Distressed Investing Europe
Maximizing Profits in the European Distressed Debt Market
Le Meridien Piccadilly Hotel London UK
Contact: 1-800-726-2524; 903-595-3800 or
dhenderson@renaissanceamerican.com
May 23-26, 2005
AMERICAN BANKRUPTCY INSTITUTE
Litigation Skills Symposium
Tulane University Law School New Orleans, Louisiana
Contact: 1-703-739-0800 or http://www.abiworld.org/
June 2-4, 2005
ALI-ABA
Partnerships, LLCs, and LLPs: Uniform Acts, Taxation,
Drafting, Securities and Bankruptcy
Omni Hotel, San Francisco
Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/
June 9-11, 2005
ALI-ABA
Chapter 11 Business Reorganizations
Charleston, South Carolina
Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/
June 16-19, 2005
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort Traverse City, Michigan
Contact: 1-703-739-0800 or http://www.abiworld.org/
June 23-24, 2005
BEARD GROUP AND RENAISSANCE AMERICAN MANAGEMENT CONFERENCES
The Eighth Annual Conference on Corporate Reorganizations
Successful Strategies for Restructuring Troubled Companies
The Millennium Knickerbocker Hotel, Chicago
Contact: 1-800-726-2524; 903-595-3800 or
dhenderson@renaissanceamerican.com
July 14 -17, 2005
AMERICAN BANKRUPTCY INSTITUTE
Ocean Edge Resort, Brewster, Massachusetts
Contact: 1-703-739-0800 or http://www.abiworld.org/
July 27- 30, 2005
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
Kiawah Island Resort and Spa, Kiawah Island, S.C.
Contact: 1-703-739-0800 or http://www.abiworld.org/
September 8-11, 2005
AMERICAN BANKRUPTCY INSTITUTE
Southwest Bankruptcy Conference
(Including Financial Advisors/Investment Bankers Program)
The Four Seasons Hotel Las Vegas, Nevada
Contact: 1-703-739-0800 or http://www.abiworld.org/
September 26, 2005
AMERICAN BANKRUPTCY INSTITUTE
International Insolvency Workshop
Site to Be Determined London, England
Contact: 1-703-739-0800 or http://www.abiworld.org/
October 7, 2005
AMERICAN BANKRUPTCY INSTITUTE
Views from the Bench
Georgetown University Law Center Washington, D.C.
Contact: 1-703-739-0800 or http://www.abiworld.org/
October 19-23, 2005
TURNAROUND MANAGEMENT ASSOCIATION
2005 Annual Convention
Chicago Hilton & Towers, Chicago
Contact: 312-578-6900 or http://www.turnaround.org/
November 2-5, 2005
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
Seventy Eighth Annual Meeting
San Antonio, Texas
Contact: http://www.ncbj.org/
December 1, 2005
AMERICAN BANKRUPTCY INSTITUTE
Bankruptcy Fundamentals: Nuts & Bolts for Young
Practitioners (West)
Hyatt Grand Champions Resort Indian Wells, California
Contact: 1-703-739-0800 or http://www.abiworld.org/
December 1-3, 2005
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Hyatt Grand Champions Resort, Indian Wells, Calif.
Contact: 1-703-739-0800 or http://www.abiworld.org/
March 30 - April 1, 2006
ALI-ABA
Partnerships, LLCs, and LLPs: Uniform Acts, Taxation,
Drafting, Securities, and Bankruptcy
Scottsdale, AZ
Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/
April 18-22, 2006
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
JW Marriott Washington, D.C.
Contact: 1-703-739-0800 or http://www.abiworld.org/
June 15-18, 2006
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort Traverse City, Michigan
Contact: 1-703-739-0800 or http://www.abiworld.org/
July 13-16, 2006
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Newport Marriott Newport, Rhode Island
Contact: 1-703-739-0800 or http://www.abiworld.org/
July 26-29, 2006
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Ritz Carlton Amelia Island Amelia Island, Florida
Contact: 1-703-739-0800 or http://www.abiworld.org/
October 11-14, 2006
TURNAROUND MANAGEMENT ASSOCIATION
2006 Annual Conference
Milleridge Cottage Long Island, NY
Contact: 312-578-6900 or http://www.turnaround.org/
November 30-December 2, 2006
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Hyatt Regency at Gainey Ranch Scottsdale, Arizona
Contact: 1-703-739-0800 or http://www.abiworld.org/
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via e-mail
to conferences@bankrupt.com are encouraged.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
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, Dylan
Carlo Gallegos, Jazel P. Laureno, Cherry Soriano-Baaclo, Marjorie
Sabijon, Terence Patrick F. Casquejo 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 ***